Nigeria Branded ‘Unreliable Source of Energy’

From Constance Ikokwu in Washington, D.C., 02.11.2009

As the United States steps up its quest for energy independence, the Brookings Institute has rolled out a blueprint that would enable the new government achieve this objective.
Brookings, an influential Washington, D.C.-based independent research and policy institute, has also warned the US government against oil imports from Nigeria and other countries that, according to its study, remain “politically volatile”.
The blueprint entitled “Energy Discovery-Innovation Institutes: A Step Toward America’s Energy Sustainabi-lity”, lumped Nigeria, Russia and Venezuela together as “unreliable sources of energy”.
“Many oil exporting countries are politically volatile including Venezuela, Nigeria and recently Russia,” observed the blueprint, which was launched Monday.
“America’s economic and national security is threatened by its dependency on oil imports from politically unstable regions of the world,” it adds.
Nigeria is believed to supply at least 15 per cent of US oil needs. Almost half of Nigeria’s oil exports are to the US.
Conflict in the Niger Delta has, however, threatened the country’s production in recent times, giving another big exporter Angola, an opportunity to rival its output.
There have also been discussions in Nigeria about the impact of alternative sources of energy on the country’s revenue, mainly based on oil income.
Apart from instability, concern about the environment has prompted a flurry of research on energy sustainability in the US.
The Brookings blueprint noted that although Canada is currently the largest supplier of oil to the US, 45 per cent of the nation’s oil needs in June 2008 was from the Organisation of Petroleum Exporting Countries (OPEC) nations. Another 18 per cent, it said, was imported from the Persian Gulf.
Explaining the challenges facing the country, it pointed out that nearly 77 per cent of the world’s oil reserves is controlled by national oil companies (NOCs), while only 10 per cent is controlled by Western oil companies.
Thus, the country’s vulnerability to oil has led it to “costly military engagements in areas such as the Persian Gulf, which continue to pose an immediate threat to the nation’s security,” said the blueprint.
It further noted that “additional security threats arise from terrorist organizations (supported in part by oil wealth), piracy and underdeveloped security over critical energy infrastructure within the US and abroad.”
The study advised the government to act by taking the following steps: encourage price signals by placing a price on greenhouse gas emissions in order to spur innovation into low-carbon and carbon-free energy alternatives.
It said government should subsidise energy research and development (R&D) especially particular types of research that are neglected by private firms; focus on transnational research that links scientific and technical R&D with commercial development; leverage additional private investment through policy mechanisms such as the R&D tax credit or public-private partnerships; improve the clarity and accessibility of information on proven energy technologies.
The blueprint added that current comparisons the federal investment in public health, national defence and space exploration suggests a need to increase that of energy.
“An investment in federal energy R&D and order of magnitude greater than current levels, growing to perhaps $20 to $30 billion per year, with most of this flowing to existing research players and programmes (e.g. national laboratories and industry),” it said.
The blueprint was authored by James Duderstadt, Gary Was, Robert McGrath, Mark Muro, Michael Corradini, Linda Katehi, Rick Shangraw and Andrea Sarzynski of the Metropolitan Policy Program at Brookings.
Brookings described the Metropolitan Policy Programme as an arm that provides decision makers with cutting edge research and policy ideas for improving the health and prosperity of cities and metropolitan areas including their component cities, suburbs and rural areas.