US senators ask White House to 'loan' emergency oil (again):
By Tom Doggett
WASHINGTON, June 16 (Reuters) - The Clinton administration
came under pressure Friday from a bipartisan group of senators to release oil from the nation's Strategic Petroleum Reserve to fight what they called OPEC's tight production policy.
The lawmakers urged Clinton to immediately authorize loans
of oil from the emergency stockpile to energy companies, who could then sell the crude in the open market and bring down prices with the additional supplies.
The so-called oil ``swaps'' are needed, the senators argued, because the Organization of Petroleum Exporting Countries' ``continued manipulation'' of the global oil market has caused record high U.S. gasoline prices that threaten the American economy.
``Mr President, it is simply unacceptable for us to allow our economy, and the world's economy, to be placed in jeopardy by a foreign cartel,'' they said.
Democratic Senator Charles Schumer of New York, who was one of the lawmakers who wrote the president, said the administration should swap 1 million barrels of reserve oil a day for 45 days to counter OPEC.
``We are at the point where America is completely at the mercy of OPEC where the price of gas and oil are concerned,'' he told reporters at a Capitol Hill briefing. ``The attempts to cajole OPEC into increasing production have not worked and it is time for the U.S. to play a little hardball.''
OPEC members meet next week in Vienna to decide whether to ramp up production. Saudi Arabia, the largest U.S. oil supplier and most influential member of OPEC, is reportedly pushing for cartel to increase output by about 1 million barrels a day (bpd).
Schumer said Energy Secretary Bill Richardson should use the threat of a oil swap as leverage in his talks with OPEC ministers.
The senator said he has been talking with Richardson and White House officials about the need to swap reserve oil. ``They are again, I believe, quietly looking at this option,'' he said.
Richardson said earlier this week that releasing oil from would have the final say on the issue.
The administration has previously ruled out tapping the emergency stockpile, which currently holds 570 million barrels, arguing the reserve should be used if oil supplies are disrupted and not to control prices.
Schumer pointed out that the administration's decision on Thursday to loan 500,000 barrels reserve oil to Citgo - enabling the firm to supply one of its refiners with crude to make gasoline - was proof the White House is willing to intervene in the oil market when necessary.
``The fact that they're releasing a small amount of oil toa help a certain refinery shows they're willing to have the (U.S.) government influence the market,'' Schumer said. ``You've got eleven governments influencing the market the other way,'' he said, referring to OPEC.
The Energy Department said Friday its decision to help Citgo does not mean more oil releases from the reserve are planned, but it would consider such emergency loan requests from other oil firms.
Production at Citgo's huge 310,000 bpd Lake Charles refinery was threatened after the Calcasieu Ship Channel was closed because of a sunken dry dock. The ship channel is the refinery's primary route for incoming crude oil shipments.
Conoco (NYSE:COCa - news) said on Friday it was in talks to also draw oil from the SPR as its Louisiana refinery was
affected and has had to cut runs by 50,000 bpd to 190,000 bpd. |
