very much like the conditions we are experiencing today. Yet, their sense of security did not last long, as high prices inevitably undermined demand while stimulating capacity expansion. In both cases energy security was merely a mirage. Energy security can not be maintained when prices are at extremes - too low or too high. Truly sustainable energy security for consumers and producers requires three conditions - price stability, supply and demand reliability, and affordability. These are the three pillars of sustainable energy security. Affordability applies to both consumers and producers. If producers are forced to sell their energy resources at too low a price they eventually cannot "afford" to make the capital investments required to maximize long-term capacity. On the other hand, producers undermine their own security when their resources are not affordable to consumers. The foundation for sustainable energy security is a price low enough to avoid harming consumers, yet high enough to ensure adequate return on investment for producers. President Bush and King Abdullah, in their wisdom, recognized and reaffirmed this fact at their meeting in Crawford last year. I believe our energy problems are global in scope, and that the stability and predictability we desire can only be achieved when countries work together. I say this because oil markets are part of a globalized system. The negative consequences of withdrawing from the global economy far outweigh any perceived benefits. Long-term energy security cannot be achieved at the expense of others; it must be a win-win proposition. This means that energy prices must be higher than some consumers would like and lower than what some producers would like. However, the idea that the energy security is best achieved in cooperation with others is not universally accepted. As is common in periods of market turmoil like we see today, there are some who argue for self-reliance or going it alone. While self-reliance is appealing, the efficacy of such an approach for achieving long-term energy security is an illusion built on the myth that security can be achieved through protectionist measures aimed at blocking certain types of imports or goods and investments from certain regions of the world. Such measures are a retreat from the gains afforded by globalization. Those countries backsliding into protectionism believe that they are better off by withdrawing. The reality is that the world is becoming more interdependent and prosperity today, and in the future, is tied to full participation in the global trading system. Not only is a country worse off when it builds walls around itself and slips into protectionism, but the global system as a whole suffers. --more 2135 Local Time 1835 GMT
