U.S. energy independence? Don't bet on it

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) and Secretary of State Condoleezza Rice served on Chevron Corp's (CVX.N) 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), which reported the highest-ever profit for a U.S. company in the fourth quarter of 2007.

A DRY HOLE

One 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.