As OPEC declines to pump more crude, U.S. energy secretary pushes alternatives to foreign oil

<br>TOKYO (AP) _ The recent surge in oil prices and OPEC's decision to hold output steady have underscored the need for America and the European Union to find alternatives to petroleum imports, their

Friday, September 20th 2002, 12:00 am

By: News On 6

TOKYO (AP) _ The recent surge in oil prices and OPEC's decision to hold output steady have underscored the need for America and the European Union to find alternatives to petroleum imports, their energy chiefs said Friday.

The two giant consumers said they would like to turn more toward nuclear power, while the United States wants to carry out more domestic crude drilling and the EU said it might seek closer ties to Russia's oil sector.

U.S. Energy Secretary Spencer Abraham and EU Energy and Transport Commissioner Loyola de Palacio made their remarks in separate appearances in Tokyo _ a day after OPEC ministers met in Osaka and rejected calls from the West to put more crude on the market and bring prices lower.

``The one thing each of these deliberations demonstrates is that countries take action that is in their best interest, and that is what the United States must do,'' Abraham told The Associated Press following a luncheon speech.

``We can produce more oil and gas in Alaska and do it in an environmentally safe fashion, and it makes sense for the United States to do so for our own reasons and for global energy reasons,'' Abraham said.

A controversial element of President Bush's energy plan would involve opening Alaska's Arctic National Wildlife Refuge to oil drilling _ an idea that faces massive opposition from environmental interests.

Many of the world's top energy figures are in Japan to attend a global conference of energy producers and consumers that opens Saturday in the western industrial city of Osaka.

The conference is intended to promote stability in energy markets by facilitating dialogue between buyers and sellers, but OPEC's decision Thursday to leave output unchanged _ and the cool reaction from the West _ shows a wide divide between the sides that will not be narrowed easily.

De Palacio said lower oil prices were necessary to assist in a global economic recovery and said she wanted OPEC to better account for its stance.

``We have heard from OPEC their positions, but I think it's important that they explain a little bit more to us,'' de Palacio said. She added: ``In the last decades, every economic recession has been linked to dramatic increases in oil prices.''

The EU energy chief said she would meet with the Russians to discuss closer cooperation on oil sales.

Washington has been lobbying for more crude, as have other big consumers, but OPEC ministers said the market seems well supplied at present.

OPEC predicts only moderate economic growth for the rest of the year, and many of its ministers say the price has been pushed to around $30 per barrel only by a ``war premium'' built up on fears the United States will attack Iraq.

Earlier Friday, the International Energy Agency, a Paris-based industry watchdog group representing Western consuming nations, reiterated its view that OPEC should pump more.

``We hope we're all moving into a situation of an economic recovery, which could be helped by a lower oil price,'' IEA Executive Chairman Robert Priddle told Dow Jones Newswires.

Priddle predicted that OPEC's decision will stir up volatility in the oil markets, and added it won't do anything to assist the global economy.