While the wave of unrest in the Middle East could continue to spread – and the outcome in Libya is highly uncertain – main oil producer Saudi Arabia is not expected to be next, guests told Platts Energy Week television, an independent, all-energy news and talk show, on Sunday.
“I don’t look for Saudi Arabia to be engulfed by this wave sweeping the Middle East,” said former US Senator Bennett Johnston, a Democrat from Louisiana. He first entered the Senate during the oil crisis in the 1970s, and served as chairman of the Energy Committee. After leaving Congress in 1997, he now works as a lobbyist in Washington for the oil industry.
Protests in Saudi Arabia have been fairly mild so far, and its leaders have recently announced a generous social spending package.
Saudi Arabia is “moving forward with a series of programmes that are likely to sustain stability there,” said Lou Pugliaresi, president of the Energy Policy Research Foundation and a former official with several government agencies including the US State Department and National Security Council.
Saudi Arabia wants “an evolution, not a revolution,” said Randa Hudome, president of the Fahmy Hudome International consulting firm. A former lobbyist for Libya in Washington, she said that demands for a more democratic process in Saudi Arabia will likely come gradually, and the country’s leadership seems willing to some concessions.
Libya, however, is a different story. Although oil companies rushed to work there in 2004 after the US lifted several economic sanctions, they may now reconsider these investments there even in the long term. In the short term, many oil companies have evacuated workers and reduced output. Protests there have helped send oil above US$100 per barrel in the past week.
“But many [oil companies] right now are questioning … this is the second time they have had to leave Libya in three decades,” Hudome said.
Saudi Arabia has said it will make up for any oil production curtailed by political unrest among its neighbours, which will likely stabilise supply if needed but not necessarily prices, Pugliaresi said.
“An interruption anywhere results in a shift in prices everywhere,” he said.
Other guests, in the programme’s “Libya Unrest Panel Discussion” segment, called – again – for the US to try to avoid being constantly ensnared in the global turmoil over energy supply.
“We’ve been talking about being less dependent on unstable sources of fuel for decades,” said Tom Ridge, former Homeland Security Secretary under President George Bush.
The Middle East is “unstable, [and] it’s going to be unstable for the foreseeable future.”
As an advisor to the Marcellus Shale Coalition and former Pennsylvania governor, he also pushed for the US to use its natural gas supplies.
“It is a national security issue, but it is also a competitive issue,” he said. “Natural gas is a play that, frankly, needs to be advanced.”
But neither he nor former Senator Johnston saw much hope for an overarching US national energy policy in the near future.
Compared with the 1970s, Johnston said coordinating such a policy would be even more difficult now.
“It’s a much bigger challenge in the sense that Congress is dysfunctional now,” he said. “There seems to be no centre.”
