US Energy Sec. Bill Richardson defended the Clinton administration's energy policy in a National Press Club speech last week in Washington, denying that the release of 30 million bbl of oil from the Strategic Petroleum Reserve last month was politically motivated (OGJ Online, Sept. 23, 2000).
He also urged Congress to fully authorize the administration's use of the SPR. He said Congress should pass measures such as electricity restructuring legislation and tax incentives for oil and gas production and renewable energy.
"In this season of political barbs, some have said that the exchange of SPR oil was done for politics, not policy," Richardson said. "But this is a simple fiction. Good policy is always good politics."
Drawdown rationale
He said Clinton's decision to tap the reserves was made because of low US inventories of crude oil and distillate and because the National Weather Service has predicted this winter will be colder than last winter.
He noted that heating oil inventories are down 65% in New England and alluded to the potential for another weather-related price spike, such as the jump in heating oil prices that occurred during a 2-week cold snap last season. He said that September crude stocks were the lowest since 1976 and distillate inventories were lower still.
Richardson said congressmen asked him to sell SPR oil last winter, but the situation didn't meet the criteria required for sale. Instead, the administration released $300 million for the Low Income Home Energy Assistance Program and transportation assistance program. He said the administration decided to establish the Northeast Home Heating Oil Reserve (NHHOR) and tap the SPR after gasoline prices continued rising last summer. Richardson noted that oil from the SPR can be used to build the NHHOR.
He also pointed out that, in 1996 and 1997, Congress ordered the sale of 23 million bbl of SPR oil to solve budget problems, and the administration replaced it by taking royalty payments from producers in oil instead of cash.
Energy priorities
Richardson criticized Congress for threatening to eliminate funding for the administration's Partnership for the Next Generation vehicles program, which encourages automakers to design more fuel-efficient autos. He also listed six energy priorities for the next administration and Congress, including electricity restructuring legislation and promoting investments in technologies that would enable the linked power and natural gas grids-the "intergrid"-to operate at higher levels of reliability.
Richardson also said policymakers should ensure the adequacy of oil and gas supplies through technology, incentives, and international relations.
