Oil Slickness

In tapping strategic reserves, Clinton misses the point

President Clinton, acting on the advice of his favored successor, Al Gore, and perhaps his candidate-wife, has hit a dry hole by draining the strategic oil reserves.

Mr. Clinton says American consumers - many of whom go shopping in 8,000-pound SUVs - "shouldn't have to drain their wallets to drive their cars or heat their homes."

So, he seeks to reduce fuel prices by about 10 percent - maybe - by releasing 5 percent of the crude stored in salt domes along the Gulf Coast. (See story on page 1.)

Never mind that those stocks, by law, are to be used only for severe supply disruptions. Heating - oil supplies are down, yes, but this late-in-the-season release won't help the supply problems in the Northeast and election-critical Midwest, analysts say.

Oil refineries are already running near their maximum. And heating-oil stocks appear low because dealers have shifted over to a "just in time" management of their inventories.

Yet, putting politics and pipelines aside for a moment, this oil-reserve release also shows Clinton has failed, like recent presidents, to come to terms with the up-and-down pricing of the OPEC cartel.

As a result, the nation continues its high dependence on imported oil, and on OPEC's pricing whims.

It is not high prices that matter as much as price fluctuations - and OPEC knows that.

A lack of stable prices over many years has dampened investment in energy alternatives and renewables, while also reducing the momentum toward energy conservation fuels.

OPEC, in its price gyrations, keeps Americans addicted to its oil exports.

Just look at what Congress has done to force gas-mileage standards on SUVs and light trucks. Nothing. Yet SUVs are now over 50 percent of new-car sales.

Simple steps like conservation or supporting hybrid gas-electric cars or building more mass transit would help keep the United States from lurching from energy crisis to energy crisis.

George W. Bush, while correct in criticizing the president's tapping of the strategic reserve, doesn't fare much better by suggesting more oil drilling, especially in delicate wilderness spots. And Republicans in Congress need to fund more research in conservation technology and renewable energies.

Perhaps the US needs a second oil reserve that can be tapped to keep prices constant enough - and high enough - so investors feel secure in seeking alternatives to oil. It could be used to stabilize oil prices in the same way the Federal Reserve stabilizes monetary supply and interest rates.

By keeping oil prices level, the US can eventually reduce consumption of a polluting, nonrenewable resource.

(c) Copyright 2000. The Christian Science Publishing Society

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