Gore urges SPR drawdown to combat high oil prices
Vice Pres. Al Gore Thursday urged President Clinton to draw down part of the government's Strategic Petroleum Reserve to force down oil prices before the onset of winter. Gore, the Democratic Party�s presidential candidate, also urged Congress to appropriate $400 million in additional energy assistance for low income families and tax credits to heating oil distributors to help them build stocks.
WASHINGTON, DC�Vice Pres. Al Gore Thursday urged President Clinton to draw down part of the government's Strategic Petroleum Reserve to force down oil prices before the onset of winter.
Gore, the Democratic Party�s presidential candidate, also urged Congress to appropriate $400 million in additional energy assistance for low income families and tax credits to heating oil distributors to help them build stocks.
Under Gore�s plan, about 5 million bbl of oil would be offered from the 571-million-bbl SPR. He said if those releases succeeded in reducing prices and easing product supplies, more sales would be made �to further stabilize prices.''
Under the plan, oil companies would submit bids to take crude in the near future and repay it several months later.
Gore again attacked oil companies. �Crude oil prices are at a 10-year high, while the big oil companies have seen their profits increase by two to three times in the past year.''
Gore said, �One of the central choices we face in this election is whether we will have a president who's willing to stand up to the big oil interests and fight for our families.�
He announced his energy proposals during a campaign stop at a heating oil distribution company in St. Mary's County, southern Maryland.
On Wednesday, Gov. George W. Bush of Texas, the Republican candidate, had charged that Gore and the Clinton administration should �be held accountable for a failed energy policy.�
Gore said, if elected, he would encourage domestic drilling and allow exploration on the coastal plain of the Arctic National Wildlife Refuge of northeastern Alaska.
Earlier, members of Congress asked Energy Sec. Bill Richardson if the administration was considering a drawdown. He said �all options remain on the table,'' and the administration would not allow consumers suffer from high heating oil princes.
President Bill Clinton told reporters a decision on the SPR would be made after the US has time to assess the oil market�s reaction to the recent production increase by the Organization of Petroleum Exporting Countries. OPEC agreed to raise production 800,000 b/d beginning Oct. 1.
"We have some time before it would be too late to affect the supplies and availability of all the products we'll need as the cold weather sets in," Clinton said.
Sens. Ted Kennedy (D-Mass.) and Charles Schumer (D-NY) said they would seek a meeting with President Clinton if the government doesn't release SPR oil within the next few days.
Sec. Richardson, who met with the senators, said afterward the President has not decided whether the US will participate in a summit France has proposed between the US and European nations and oil-producing countries.
US House of Representatives Majority Whip Tom DeLay (R-Tex.) said, �Today, Al Gore provided his comprehensive energy strategy�shift the blame and tap the reserve. Tapping the SPR will not lower the price of home heating oil since American refineries are producing home heating oil at near full capacity already.
�The President and Vice-President would like to blame high oil prices on oil businesses and OPEC, but this argument rings hollow. The Clinton-Gore administration's hostility toward domestic production has increased our dependence on foreign oil; at the same time, this administration has squandered our good relations with OPEC nation's following the Gulf War.
�Domestic sources of oil have been neglected because the Clinton-Gore administration has refused to open up federal lands with known supplies of oil, such as in Alaska.
�I cannot understand why Al Gore and Energy Sec. Bill Richardson are recommending that the President tap the Strategic Petroleum Reserve, while his own Treasury Secretary, Lawrence Summers, and Federal Reserves Chairman Alan Greenspan have called it a 'major and substantial policy mistake.'
�The only reasonable explanation is that Gore and Richardson are playing politics with a national security asset. The President should not tap the SPR just to give a campaign boost to his Vice-President and his wife.�
The American Petroleum Institute said, �This country�s current situation has been a long time coming, and it cannot be remedied overnight. The SPR was established by Congress to address supply disruptions. It was not intended, and should never be used, to manipulate prices. History has shown time and again that government interference in the marketplace will lead to negative consequences such as the long gas lines of the 1970s. America learned a painful lesson then, and the last thing we need is a return to those bad old days.
�We agree with Treasury Sec. Lawrence Summers and Federal Reserve Chairman Alan Greenspan that a release now would be �a major and substantial policy mistake.�
�As our economy has continued to grow, the demand for energy has also grown. Our country�s oil and natural gas industry is working all-out to meet the continued strong demand by American consumers for fuel to keep their homes comfortable, transport their goods to market, and go where they need to go. In fact, refineries are operating at close to full capacity.
�While tight worldwide crude oil supplies have caused the cost of all petroleum products to increase, our companies are doing everything they can to supply consumers with home-heating oil, natural gas and other fuels they will need in the coming winter.�
API urged the administration to increase assistance to low and fixed-income consumers to heat their homes and said the US should consider drafting a comprehensive energy policy.
David Nemtzow, president of the Alliance to Save Energy, said the administration should renew its focus on promoting energy efficiency.
�The cause for the steep price increases is basic Economics 101�growth in demand is fast outstripping supply. We can easily and comfortably reduce demand and be less dependent on OPEC nations and oil companies by simply supporting and using energy-efficient technologies that are available in the marketplace today. The SPR is at best a short-term response.�