Richardson warns of heating oil, natural gas shortages Energy chief urges new OPEC production boost

July 20, 2000 Web posted at: 1:50 p.m. EDT (1750 GMT)

WASHINGTON (CNN) -- Energy Secretary Bill Richardson warned a Senate committee Thursday of potential shortages of home heating oil and natural gas this winter, and again urged oil-exporting countries to boost production.

"We recognize that there are potential home heating oil shortages," Richardson told the Senate Agriculture, Nutrition and Forestry Committee. "We're concerned about natural gas too, both the prices and access and other issues."

Richardson warned Thursday that natural gas supplies are so low that a stretch of cold weather "could force prices up considerably."

The Clinton administration last month announced plans for a 2 million barrel home heating oil reserve for the Northeast -- the largest heating oil market in the world. Consumers in the region were squeezed financially by low supplies during last winter's severe cold, and President Clinton said the move was needed to head off a similar crunch this winter.

Richardson told the committee that the demand for fuel, particularly gasoline, is up over the past year, and he said the administration wants to encourage the development of alternative energy sources -- perhaps by using agricultural products such as ethanol.

Energy Secretary Richardson said demand for gasoline in particular has increased 4 percent over the past year, the largest increase ever. "The president is committed to such a vision, introducing proposals to boost domestic production, spur energy efficiency and increase the use of alternative energy resources. We have extensive opportunities in the field of bio-energy," Richardson said.

"If we are to see a meaningful decline in our future reliance on fossil fuels, if we are to lessen our vulnerability to interruptions in energy supply, if we are to kindle a whole new field of agricultural and forestry economics, then we need a cooperative national effort to develop a range of renewable energy sources, and bioenergy can be at the heart of such an effort," he added.

Richardson said demand for gasoline in particular has increased 4 percent over the past year, the largest increase ever. Saudi Arabia, the world's largest oil exporter, has begun boosting its output -- fulfilling a pledge it made in early July to add up to 500,000 barrels per day to global stocks.

Richardson praised Saudi Arabia's unilateral move, and repeated a call on the rest of the Organization of Petroleum Exporting Countries to follow the kingdom's lead.

"It is clear the world needs more oil," Richardson told reporters after his Senate appearance. "Saudi Arabia has shown a lot of leadership in the need for more production, and hopefully the rest of OPEC will follow suit."

OPEC countries agreed in March to crank up production by 1.7 million barrels per day. But Algeria last week shot down a Saudi call for an emergency OPEC meeting to consider another increase, saying there was no consensus on the need for such a gathering.

Richardson said recent statements by OPEC leaders on possible production increases "have been confusing."

http://www.cnn.com/2000/ALLPOLITICS/stories/07/20/richardson.energy/index.html

-- Martin Thompson (mthom1927@aol.com), July 20, 2000