Who's Right About Oil?

To hear Al Gore tell it, George W. Bush and Dick Cheney are the oil-industry candidates, the men with Texas crude flowing through their veins. But in reality it is the Democrats who have the clout to meddle in the petroleum market. Last Thursday, Gore proposed that the U.S. control rising oil prices by tapping a small portion of the national Strategic Petroleum Reserve. A day later the Clinton Administration announced that it was releasing 30 million of the 570 million bbl. now stockpiled in salt caves along the Gulf Coast of Texas and Louisiana. The idea, said Energy Secretary Bill Richardson, is to correct extreme shortages in the heating-oil supply. "This is not political," he said. "The President wants to help the American people...have enough heat in their homes."

Six weeks before a presidential election, nothing that happens in official Washington is not political. And though many news reports have called this the first peacetime release of oil from the strategic reserve, it is not. The Clinton Administration has played election-year politics with the SPR before. In the spring of 1996, as Clinton was running for re-election against Bob Dole, gasoline prices shot up 20% in some states. Dole proposed repealing Clinton's 1993 gas-tax increase, and three days later the President responded. He seized on an obscure part of a bipartisan deficit-reduction bill and spun it as a relief measure for motorists. On a campaign trip to Florida, a state he had lost in 1992, the President announced that he had ordered the sale of 12 million bbl. from the SPR because the "rise in the price of gasoline...affects the take-home pay of working people who have to commute."

Sound familiar? Maybe SPR stands for Strategic Political Reserve. Clinton used it to inoculate himself against Dole. And Gore has used it to inoculate himself against Bush, who for months has been hammering Clinton-Gore for having no coherent energy policy. But unlike the one in 1996, this year's release was not something that fell into the Democrats' lap. It was debated for months--and initially Gore and Clinton were opposed.

Richardson began talking about the idea last January, and Gore let it be known during the primaries that he thought it was an ineffective way to lower prices. But as oil prices continued to climb, the Vice President's policy team became deeply involved in a months-long White House debate about tapping the reserve. Treasury Secretary Lawrence Summers opposed the release in a much publicized Sept. 13 memo, but a week before he wrote it, sources tell TIME, Clinton was already telling Saudi Crown Prince Abdullah that he was strongly considering tapping the reserve. They met in a suite at the Waldorf-Astoria in New York City during the U.N. Millennium Summit. Clinton's "objective was to get quiet support from the Saudis," says a source close to the talks. A few days later the President dispatched Richardson to Los Angeles to brief Prince Saud al-Faisal, the Saudi Foreign Minister. It couldn't have been a surprise to Clinton when Gore called him from the campaign trail last Tuesday and said he was going to come out in favor of an SPR release. Clinton was happy to let Gore propose the idea first so the Vice President could get a tactical boost just as Bush seemed to be regaining his balance.

And so the question is not whether the oil release is a pander but whether the pander is a good one or bad one--an effective policy that also wins votes or just a hollow gesture. The answer depends on whether this is a true oil emergency--and whether 30 million bbl. will help solve it.

Anyone who has paid for a tank of home heating oil recently knows the problem is real. Heating oil now costs 67% more than it did a year ago; depleted inventories and high worldwide demand, along with forecasts of a colder than average winter, are expected to boost prices even higher. Last week 111 members of Congress--Democrats and Republicans, mostly from the Northeast and the Midwest--sent a letter to Clinton asking him to deploy the SPR. To dramatize the problem Friday, Gore held an event in Pittsburgh that featured a number of people battered by rising oil prices, including an elderly woman named Annie Young who said she didn't know how she was going to pay for heating oil since she already couldn't pay for her prescription drugs. "These prices are skyrocketing," said Gore. "It's hurting those on a fixed income, it's hurting young families... I want to reject the agenda of Big Oil and stand up to the apologists for Big Oil."

As soon as Gore came out for the oil release, Bush pounced on him for "playing politics." A Bush adviser calls Gore's position "manna from heaven" because it reinforces the claim that the Vice President will say and do anything to get elected. "The strategic reserve should not be used as an attempt to drive down oil prices right before an election," Bush said. "It should not be used for short-term political gain at the cost of long-term national security."