Clinton makes further moves to lower cost of heating oil

Sunday, September 24th 2000, 12:00 am
By: News On 6

WASHINGTON – President Clinton has released $400 million from a fund that provides emergency energy assistance to low-income families and directed federal agencies to begin buying heating oil now to prevent price spikes later in the heating season.

Mr. Clinton announced the measures Saturday morning, a day after his controversial decision to release 30 million barrels of oil from the Strategic Petroleum Reserve to help keep prices down and ensure adequate supplies of home heating oil.

Both actions serve to elevate the already high profile of energy issues in a presidential campaign where Vice President Al Gore has frequently attacked "big oil" and highlighted his opponent's former business ties to the oil industry.

Mr. Clinton's announcement Friday that he was releasing 30 million barrels of oil from the reserve came one day after a call by Mr. Gore to do so and was denounced by the Republican presidential campaign of Gov. George W. Bush as a naked political ploy.

The biggest financial beneficiary of Saturday's decision to release funds from the Low-Income Home Energy Assistance Program is New York, where Hillary Rodham Clinton is running for the Senate. New York will get nearly $55 million of the $400 million. The money is allocated to states based on a formula that includes factors such as the number of families in poverty, the severity of the weather and other resources available. Four other states that are key campaign battlegrounds – Illinois, Michigan, Ohio and Pennsylvania – are the next-largest beneficiaries, with each receiving more than $20 million.

Some Republican lawmakers, including Mrs. Clinton's opponent, Republican Rep. Rick Lazio, signed a letter last month urging the president to take steps to address an anticipated heating crisis. Among the proposed measures was the release of $400 million from the assistance program.

The money goes directly to states, which can choose how to use the funds. Uses include raising benefit levels or increasing the income ceiling for recipients, administration officials said.

Oil prices have climbed over the summer, despite production increases by members of the Organization of Petroleum Exporting Countries, as demand has increased. Refiners have been reluctant to buy oil at high prices to build up inventories of home heating oil, and inventories have shrunk, raising fears that a cold snap could drive prices out of reach of some buyers.

"The overriding purpose for our action is to increase supply and help consumers make it through the cold winter," Mr. Clinton said Saturday.

The cost of heating oil is an issue principally in the Northeast, where more than a third of all families rely on oil for home heat. The concern that the price could spike and that supplies might not be adequate stems from both the low level of inventories and the virtual certainty that this winter will be colder than last. The 1999-2000 heating season was the warmest in about 25 years, so the probability that this winter will be colder than last year is 95 percent, Energy Department officials said.