A Better Approach To Energy

By Jim Hoagland (THE WASHINGTON POST, 30/04/06):

German motorists shrug off gasoline prices that have gradually climbed above $6 a gallon. So while President Bush scrambles to show angry voters that he is fighting gas prices of more than $3 a gallon, Chancellor Angela Merkel leisurely turns her thoughts to summit meetings and vision statements.

This seeming contrast will feed the stereotype of car-happy, wasteful Americans getting their comeuppance while energy-circumspect Europeans smugly motor on. Three decades of high gasoline taxes -- they are 60 percent or more of the retail price in much of Europe -- have apparently numbed Europeans to oil supply shocks and forced them to accept fuel conservation as a way of life.

But take a closer look at Merkel's meeting in Russia with Vladimir Putin last week and her upcoming trip to Washington this week. Energy anxiety leads Merkel's summit lists with an urgency and importance that match American desperation on oil. The anxiety is expressed differently -- natural gas and nuclear energy are the hot buttons here -- but it surfaces throughout the Continent.

Energy resources and shortages, in their many forms, dominate the global agenda today as dramatically and as dangerously as they did in the multiple "energy crises" of the 1970s. No underlying issue unites and then divides citizens and countries more than do the man-made scarcities and misuse of fossil-fuel, nuclear and alternative energy.

Those problems require a global response from consumers rather than the fractured, nation-by-nation competition that currently prevails. Amazingly, the mechanism for such cooperation already exists. What is lacking is the political will to use it effectively.

So Bush scrambles and Merkel broods as she plans her agenda-setting policy declaration to the German parliament on May 11. The world's leaders are rediscovering that threats to energy supplies reach deep into national psyches, for good reasons.

Disorder and disruption of those supplies suggest to citizens that their leaders have lost control over events, a devastating blow to national confidence and trust.

In London and Berlin last week, I found officials consumed by pronouncements on natural gas supplies coming out of Putin's cash-rich and newly assertive Russia. A threat by Gazprom, the giant Russian energy supplier, to discriminate against Europe on future gas contracts in favor of China and the United States focused minds and brought conciliatory gestures toward Moscow in both capitals.

German commercial entry into Siberian natural gas fields and a pipeline under the Baltic Sea were the big items in Merkel's meeting with Putin in the western Siberian town of Tomsk last week. Putin struck the pipeline deal with Merkel's predecessor, Gerhard Schroeder. But Merkel has been careful to confirm the deal and to insulate it from her challenges to Putin on human rights and other political issues. She was more conciliatory in dealing with a Russian president who sees himself as a much more powerful figure in the world than he did when they first met three months ago.

Putin has increased his leverage over the West by playing hard to get on Iran and its double-edged energy challenge to the world. Iran's ability to disrupt world oil markets provides a shield against international pressure to abandon its nuclear enrichment program. Russia is crucial to the threat of international sanctions that Merkel and Bush hope will dissuade Iran from pursuing enrichment.

Despite -- or perhaps because of -- the war chatter coming out of Washington, the diplomatic effort to get Russia and China to support a U.N. Security Council resolution mandating that Iran suspend enrichment has made progress in recent days, according to U.S. and European officials. That resolution and the graduated campaign of new pressures that it would unlock will be discussed in a high-level six-power meeting in Paris on Tuesday.

However the Iranian case is resolved, there is fresh interest in the establishment of an international nuclear fuel bank to plug the loopholes that Iran has exploited in the nuclear Non-Proliferation Treaty. The best candidate to oversee the fuel bank is the 26-nation International Energy Agency, based in Paris.

The IEA, founded in 1974 as a counter to OPEC, has been allowed to languish since then and has a professional staff of only about 150. But it has the potential to become the effective advocate and coordinator for oil-importing countries that U.S. officials foresaw at its outset.

Western leaders urgently need not only to calm their publics about energy supplies but also to begin a long-term program to reduce their vulnerabilities to foreign upheaval and blackmail. Bush and Merkel should put revitalization and redirection of the IEA at the top of their talks, which should cover a lot more than the price of gas.