Gore asks Clinton to tap oil reserve

Friday, September 22nd 2000, 12:00 am
By: News On 6

HOLLYWOOD, Md. – Presidential candidates Al Gore and George W. Bush waged a political battle over oil prices Thursday as Mr. Gore called for tapping the petroleum reserve to counter oil industry "profiteering."

"You should never have to depend on the good will of the big oil companies just to heat your home or drive down the highway," Mr. Gore told supporters in southern Maryland.

Mr. Bush, campaigning in Cleveland, said the Strategic Petroleum Reserve – created in 1973 to counter emergency shortages – "should not be used as an attempt to drive down oil prices right before an election."

"It should not be used for short-term political gain at the cost of long-term national security," the Texas governor said.

As the candidates argued, November crude oil futures fell 3.5 percent on the New York Mercantile Exchange, down to $34 a barrel.

Mr. Gore is one of several administration officials who have recommended use of the strategic reserve, and administration aides said a decision by President Clinton is imminent.

The oil industry's major trade group said that the vice president is vastly overstating oil company profits and that the higher prices reflect supply and demand worldwide.

Mr. Gore outlined an energy policy as part of a weeklong attack on "powerful special interests," though this is not the first time he has gone after "big oil." While criticizing rising prices, Mr. Gore and aides have also attacked the "big oil ticket" of Mr. Bush and Dick Cheney, the former head of Dallas-based energy services giant Halliburton Co.

Speaking at a home heating oil distribution center, Mr. Gore did not mention his opponents by name but said, "I will not go along with an agenda that is of big oil, by big oil and for big oil."

Bush aides said it is absurd for Mr. Gore to blame rising prices on the governor of Texas, especially since domestic production has fallen during the Clinton-Gore years.

"It's like they're lashing out and pointing fingers at other people," Bush aide Dan Bartlett said.

The vice president, standing in front of oil storage silos, said that oil companies have doubled and tripled their profits while crude oil prices have climbed to a 10-year high.

"At a time when profits are gushing through the roof, big oil needs to stop the profiteering," Mr. Gore said.

An analyst with the American Petroleum Institute said Mr. Gore's numbers are out of context.

Companies made major gains during the first six months of this year, but that followed a depression-level year, said John Felmy, director of policy analysis and statistics for the trade group.

The industry's profit margin – net incomes divided by total sales – rose 6.8 percent for the first six months of 2000, slightly less than the national average, Mr. Felmy said.

"If you go from $1 in profits to $3 in profits, you've tripled your profits but you haven't made any money," he said.

Gore aides said their plan calls for a careful release of the 571 million barrel reserve in increments of 5 million barrels. They said the government could buy back the oil later, presumably at lower prices.

Mr. Gore also called on Congress to create a reserve for home heating oil, which many Northeast residents require in the winter. The package also calls for release of $400 million from the Low Income Home Energy Assistance program, and tax incentives designed to encourage conservation and promote alternative forms of energy.

"I will work toward the day when we are free forever of the dominance of big oil and foreign oil," Mr. Gore said.

Bush aides pointed out that Mr. Gore opposed the idea of using the strategic reserve as recently as the Democratic primaries this year. He said during a February town hall meeting that such a move could invite retaliation by foreign countries.

"All they would have to do is cut back a little bit on the supply and they'd wipe out any impact from releasing oil from that reserve," Mr. Gore said then.

Reminded of that comment Wednesday by ABC News, Mr. Gore replied, "I think that circumstances change over time."

Mr. Bartlett called this change "an election-year ploy" and "a transparent attempt to distract attention away from the Clinton-Gore administration's failed energy policies."

Mr. Gore said the Bush camp is trying to distract voters from its intimate association with the oil industry. "Bush and Cheney don't want to bring down the cost of oil because they're in the pocket of big oil," Gore spokesman Douglas Hattaway said.

The Bush campaign also cited news reports about an internal memo by Treasury Secretary Lawrence Summers, who advised President Clinton that using the reserve "would be a major and substantial policy mistake."

Administration officials said Mr. Summers was referring to another plan, not the ideas offered by Mr. Gore.

Mr. Summers issued a statement saying: "There are a number of approaches for prudent use of the Strategic Petroleum Reserve that are now on the table – including those the vice president has proposed – which could be appropriate in current circumstances."

White House spokesman Jake Siewert said Mr. Gore's proposals "are among those the president is considering. He has a range of options."