The Strategic Oil Boomerang
President Clinton Released 30m Gallons Of Crude To Lower Prices
But As Little As One-Third Of The Oil May Actually Get To The U.S.
Big Oil Companies May Divert It To The European Market
NEW YORK, Oct. 7, 2000
CBS) President Bill Clinton said he released oil from the country's strategic reserve to help Americans get through the winter months, but most of the newly-released oil may never heat American homes, CBS News Correspondent Jacqueline Adams reports.
Crude oil prices did drop, two weeks ago, when President Clinton released 30 million barrels of crude from the Strategic Petroleum Reserve. Now, though, the Energy Department admits that only a third of the extra home heating oil refined from government crude may reach U.S. customers.
The lion's share could wind up in Europe, where oil fetches a higher price.
"If you think of the oil market as a global market, what you're seeing happen is 30 million extra being put on the global market. Some of it sticks in the United States. Some of it displaces oil to some other portion of the world," says Mark Mazur of the Energy Information Administration.
Critics are outraged — at the oil companies' greed and the Clinton Administration's failure to anticipate or stop it.
Because of a June fire at a critical export refinery in Kuwait, Europe's home heating oil supplies are even tighter than here. Still, inventories in New England are 65 percent below normal, and weather forecasters are predicting a far more severe winter than last year.
The translation: despite more crude in the pipeline, consumers will be paying 25 percent more than last winter for heating oil, and 44 percent more for natural gas.
By dipping into the Strategic Petroleum Reserve, President Clinton hoped to lower Americans' fuel bills and help Al Gore win the White House. If any of the oil winds up in Europe, though, the strategy may come back to haunt him.
©2000, CBS Worldwide Inc., All Rights Reserved.
cbsnews.cbs.com |
