By Chris Baltimore - Analysis
WASHINGTON (Reuters) - President George W. Bush shocked world energy producers in 2006 when he pledged to slash America's reliance on Middle East oil.
But today one of every two barrels of oil consumed in the United States still comes from foreign suppliers like Saudi Arabia, and that picture is not likely to change much through 2030.
With Bush entering the final months of his presidency, the challenge of loosening the vise of U.S. import reliance will fall to his successors.
Bush entered the White House in 2001 as a Texas oil man with several energy experts on his Cabinet -- Vice President Dick Cheney was chief executive of oilfield services company Halliburton Co (HAL.N: Quote, Profile, Research) and Secretary of State Condoleezza Rice served on Chevron Corp's (CVX.N: Quote, Profile, Research) board of directors until early 2001.
As oil prices rose ever higher, Bush sought to distance himself from the industry, insisting that oil companies did not need tax breaks from Uncle Sam with crude oil prices soaring.
But he has been unable to silence attacks from Democrats and others that his administration is cozy with Texas oil giants like Exxon Mobil Corp (XOM.N: Quote, Profile, Research), which reported the highest-ever profit for a U.S. company in the fourth quarter of 2007.
A DRY HOLEOne of Bush's first acts as president was to convene a secret panel of industry executives to help draft an energy policy blueprint.
But by many metrics, the security of U.S. energy supplies has gone from bad to worse during Bush's administration.
A major power outage hit the Northeast in 2003, leaky pipelines shut down the biggest U.S. oil field in Alaska in 2006, and Venezuela President Hugo Chavez stopped oil exports to Exxon this week in a nasty contract dispute over seized assets.
"On Bush's watch, Big Oil drilled a gusher of profits, while promises to address energy security and costs were as empty as a dry hole," said Daniel Weiss, a senior fellow at the Center for American Progress, a Washington think tank.
When Bush took office in 2001, average U.S. retail gasoline prices were around $1.70 a gallon. Seven years later they average near $3 a gallon, offering U.S. consumers a constant reminder of the pain in their pocketbooks.
Oil prices more than doubled to above $90 a barrel -- adding more stress to a faltering U.S. economy - and profits for the biggest five oil companies doubled, setting off new calls in Congress for punitive tax measures on the industry.
To be fair, U.S. crude oil imports soared 33 percent during former President Bill Clinton's administration, as Americans took advantage of an unprecedented drop in crude oil prices. As well, the Asian economic boom led by China and India also has a lot to do with soaring crude.
Though "energy independence" is a catchphrase for 2008 presidential candidates on both sides of the party divide, the real numbers paint a darker picture than, say, a television commercial for General Motors touting the virtues of ethanol-burning automobiles.
"The story is that we're still going to remain heavily dependent -- over 50 percent certainly -- on oil imports to meet our consumption," said Doug MacIntyre, senior analyst for the U.S. government's Energy Information Administration.In his annual address to Congress in 2006, Bush said the United States should "make our dependence on Middle Eastern oil a thing of the past." In 2007 he followed through with a plan to boost fuel-efficiency of cars and require more ethanol use, to cut U.S. gasoline use by 20 percent in a decade.
Later that year, Congress passed a modified version of Bush's plan that required a five-fold boost in ethanol use by 2022 and the first increase in vehicle fuel-efficiency standards since 1975.
Those actions, if successful, will have some effect on U.S. oil use, MacIntyre said.
But about two-thirds of the 20 million barrels of oil used in the United States every day go to fuel cars, trucks and airplanes.
"I don't think even in the grandest schemes will ethanol replace gasoline," he said.
Current EIA data shows the share of imported crude oil and refined products holding fairly steady at about 60 percent through 2030 -- dropping briefly to about 55 percent in 2015 as new U.S. fields in Alaska and the Gulf of Mexico give some temporary respite.
To be sure, U.S. oil supply could see a boost if Congress decides to speed up action on automobile efficiency rules, or find other ways to cut U.S. transport demand -- which accounts for about half of total oil usage. But for now, the picture is decidedly bleak.
With oil production in the United States, Mexico and the North Sea set to decline, the fate of world crude oil supply will be increasingly in the hands of OPEC suppliers like Saudi Arabia, Iran and Venezuela.World oil demand will rise to 118 million barrels per day in 2030 from 83 million bpd in 2004, and new OPEC production is expected to fill about 60 percent of the extra demand, according to EIA data.
Expenditures for crude oil and refined product imports are set to soar to $316.77 billion in 2030 from $264.68 billion in 2006, according to the EIA.
With oil prices near $100 a barrel and the U.S. economy teetering on the edge of recession, oil executives have joined the list of doomsayers, and even Bush's fellow Republicans are wary about the country's precarious energy future.
"We are being sucked dry by the amount of money we have to pay to other countries to buy their oil," Sen. Pete Domenici, a New Mexico Republican, told Energy Secretary Sam Bodman at a recent hearing. "We are becoming a weaker nation by the day."
At a high-profile oil conference in Houston hosted by Cambridge Energy Research Associates, Hess Corp (HES.N: Quote, Profile, Research) Chief Executive John Hess predicted this week that "an oil crisis is coming, and sooner than people think."
(Editing by Russell Blinch and Matthew Lewis)