OIL and the US presidential Campaign
From today's times (London)
by Ben Macintyre
It is slippery, expensive and highly inflammable, and it may yet affect the
outcome of the American presidential election. For oil has suddenly emerged
as an incendiary issue that could leave either candidate with severe burns.
This week Al Gore strategically placed himself alongside two vast oil
storage tanks on the shores of the Chesapeake Bay, and pledged to do
something about soaring fuel prices. The Vice-President spoke of America's
dependence on foreign oil, the profiteering of oil barons and the trials of
consumers forced to empty their wallets for petrol and heating oil. But he
was thinking about Tony Blair.
The Gore camp has been observing Britain's petrol crisis, and the Prime
Minister's plunging popularity, with queasy intensity.
Democrats need little reminding of how swiftly voters can turn on those in
office when fuel bills bite. The doubling of oil prices under Jimmy Carter
gave Ronald Reagan one of his most effective weapons in the 1980 election.
Anger over fuel costs in America has not reached anything like the level of
European outrage, but Gore's camp is acutely aware that if prices reach $50
a barrel, then the Vice-President's poll figures could follow those of
Britain's Prime Minister.
"We are watching what's happening over there pretty carefully," one senior
Gore aide said.
The Clinton-Gore Administration got a warning taste of gas-pump rage in
early summer when petrol reached $2 (£1.37) a gallon in some areas, a price
that seems impossibly low to British motorists but astronomically high to
those in the land of the gas-guzzler.
Prices fell back sufficiently to stifle protest, but they are now rising
again, and fast. The price of petrol has jumped by a quarter in the past
year, heating oil is 50 per cent more expensive than it was a year ago and
the cost of natural gas is expected to rise by up to 40 per cent.
In the chilly states of the Northeast and the Midwest, the pivotal
battlegrounds of this election, voters will be filling their tanks with
winter fuel, and gagging at the expense, in the crucial final moments before
the poll. In parts of New England there are already reports of panic-buying
of wood-burning stoves. Almost half of all homes in New York State are
heated by oil, and if prices get any higher their occupants may take it out
on President Clinton by declining to elect his wife to the Senate.
Polls show that protests over fuel prices in the US tend to follow a
distinct pattern: first consumers blame oil companies and foreign suppliers,
then they blame the Government.
The Gore team has sought to insulate the Democratic candidate in two ways.
The first is by tarring the former oil executives George W. Bush and Richard
Cheney, his running-mate, as the creatures of "Big Oil", as oleaginous
plutocrats made wealthy by black gold and deeply indebted to the oil
companies. Cheney's vast pay-off from the oil services company Halliburton
has done substantial damage to the Republican campaign.
Gore's second, and more substantial, line of defence is a proposal to tap
into America's strategic oil reserves. On Thursday he "urged" Bill Clinton
to release batches of stockpiled fuel to ease supply and bring down prices.
This was pure political mime, since he would never have made such a
recommendation without being certain the President was already preparing to
do just that.
And so the hoard of 570 million barrels of crude oil stored on the coasts of
Texas and Louisiana, intended for use in the event of war, embargo or threat
to national security, will come to the aid of the Vice-President's political
campaign as a tool for controlling prices.
There is strong whiff of hypocrisy here. Earlier this year Gore argued
against releasing the reserves because oil producing countries could respond
by cutting production. The same Gore who wrote that "the internal combustion
engine is the greatest threat to mankind" is now championing cheap petrol
for all, and attacking his rival's oily background when he himself owns a
substantial lump of Occidental Petroleum.
Within the Clinton Administration several senior voices have argued that
dipping into the reserves is neither appropriate nor effective policy.
Lawrence Summers, the Treasury Secretary, sharply observed that taking such
an action just prior to an election would "expose us to the valid charges of
naivete".
The move may have a temporary effect on prices, but releasing the
comparatively small amounts Gore advocates would not be enough to avert a
crisis if a cold winter arrives early this year. Therein lies a small beacon
of hope for Bush.
If prices continue to rise, threatening inflation and dampening the economy,
then the central plank of the Gore campaign - the claim to have engineered
America's boom - begins to look weaker. With some justification, Bush has
pointed out that the problem Gore now wants to address by using the nation's
emergency oil reserves - "for short-term political gain at the cost of
long-term national security" - is the result of political mismanagement. "We
haven't had an energy policy in this country for some time," he says.
The Bush campaign is praying for freezing weather over the next 46 days. If
releasing the reserves fails to bring down oil prices and a cold snap
provokes a run on expensive heating fuel, then resentment against the
Administration will snowball.
There is an oil patch on Gore's road to the White House. It is not, as yet,
a large one, but if it spreads then the Vice-President could still wind up
in a lethal skid.
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