October 20, 2019
BANGOR DAILY NEWS (BANGOR, MAINE

Collins asks Clinton to tap into petroleum reserve

WASHINGTON – Detecting a chink in the White House armor, U.S. Sens. Susan Collins, R-Maine, and Charles Schumer, D-N.Y., have asked President Clinton to tap into the Strategic Petroleum Reserve to have 30 million barrels turned into home-heating oil.

Supplies are at record low levels in Maine and other New England states, meaning prices should edge, and possibly shoot up this winter, causing potentially devastating costs to fall on the shoulders of cash-strapped families.

The Clinton administration – both the White House and the Energy Department – have stood foursquare against using any of the reserves. They have feared the Organization of Petroleum Exporting Countries would simply siphon off a like amount of fuel to keep supplies the same and prices up.

Most OPEC nations are producing at capacity – and the major player, Saudi Arabia, is signaling that adding to the world supply would be okay. Collins told State News Service that senators believed there was a change in attitude at the White House, but not yet at the Energy Department.

“I don’t see an answer other than a release from the SPR,” Collins said. “Providing this oil would help a lot of consumers have a safer winter.”

Schumer said if the White House made a decision by the end of next week to authorize a release from the reserves, it would take 45 to 60 days to bring a refined product to the home heating oil market in New York or Maine.

The action Collins and Schumer have asked the administration to take is technically a swap. It would give strapped refiners a quick, ready supply now in exchange for a replacement purchase next spring. The drawdown amounts to only a fraction of the oil in the 571 million-barrel reserve.

Schumer said market conditions and the procedures available are such that the cost of the resupply of the reserve will be at a lower rate than the cost of the oil now being held. That, he said, is a second advantage to the government.

Collins called it a “win-win situation.”

The letter to Clinton has Republican Collins, as well as Democrat Schumer, applauding White House efforts to convince OPEC to increase oil production. The letter reads, “It is clear that the latest boost in production will not be enough to stave off abnormally high oil prices which will likely translate into record heating oil prices this winter.”

In a separate letter to the President on Tuesday, Republican Sen. Olympia J. Snowe of Maine and several other senators, including Joseph Lieberman, D-Conn, urged Clinton to increase the amount of oil designated for a Northeast energy reserve.

In February, Snowe successfully cosponsored a measure in the Senate to establish a 2 million barrel oil storage facility in the Northeast.

Tuesday’s letter requested that the amount in the reserve “be increased to a level that experts agree responsibly guards the public’s health and safety.”

In yet another letter sent to the President on Tuesday, Rep. John Baldacci, D-Maine and a group of fellow Congressmen said that while they anticipated a home heating oil reserve for the Northeast will be up and running this winter, more must be done so low-income senior citizens and children will not be forced to go cold this winter.

“We ask that you immediately swap crude oil from the Strategic Petroleum Reserve (SPR) with the oil industry. …,” said the letter signed by Baldacci.

“We also urge you to demand that OPEC and other major foreign suppliers increase their production of both crude oil and home heating oil exported to the United States in order to address this problem.

Finally, we request that you immediately release $400 million in emergency Low Income Home Energy Assistance Program funding. Currently, two-thirds of LIHEAP households have incomes of less than $8,000 per year and even with the assistance, the average LIHEAP family spends over 18 percent of its income on home energy costs – compared with 6.7 percent for all households.”

At the White House Tuesday, President Clinton said, “We’re working very hard to make sure our home heating oil reserve is filled for the Northeast by the end of October, and I think we’ll get there.”

Heating oil supplies are down 62 percent this winter from last year, according to information supplied by the American Petroleum Institute.

“If we were on thin ice last year, I’m afraid we’re likely to fall through this winter,” Collins said Wednesday.

It’s not a motherhood and apple pie issue, however. Senators in oil-rich states, including Sen. Frank Murkowski, R-Alaska, chairman of the Senate Energy and Natural Resources Committee, and the ranking Democrat on the panel, Sen. Jeff Bingaman, D-N.M., oppose using any of the oil reserves. So do senators from other oil-rich states, such as Sen. John B. Breaux, D-La., and Mary Landrieu, D-La.

Last week, Collins and Schumer crafted legislation that called for the establishment of a Presidential Energy Commission to study oil and natural gas issues. The legislation was turned into an amendment and attached to the 2001 Energy and Water Appropriations bill that sailed through the Senate by a 93-1 vote.

While that measure would not have any immediate impact, it would set up a long-range strategy that would be favorable to Maine interests, Collins said.

The non-partisan commission would try to examine the causes of energy supply disruptions, look to improve refinery capacity and delivery and require a set of recommendations that would come back to Congress.

Collins and Schumer both emphasized the bipartisan nature of the congressional efforts to push the presidential commission and to draw supplies out of the SPR.

Neither presidential candidate, Republican George W. Bush or Democrat Al Gore, has taken a stand on the issue, Collins said, but she said asking her party standard-bearer to take a position on the matter may be an option if the White House doesn’t act.


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