Web posted Saturday, September 23, 2000 6:54 a.m. CT

Stockpile release insignificant, oilmen, politicians say

By GREG ROHLOFF Globe-News Business Editor

The release of 30 million barrels of the government's emergency stockpile will have little effect on the supply of refined products, petroleum industry members said Friday.

Refineries are operating at 98 percent of production capacity, said Wayne Hughes, executive vice president of the Panhandle Producers and Royalty Owners Association.

"It's a mystery to me how they are going to refine this million barrels a day, especially since they have standing contracts to refine oil already," Hughes said.

Brent Allen of Alpar Resources of Perryton sees a political motivation behind President Clinton's announcement that, starting Monday, the government will accept bids for oil in the Strategic Petroleum Reserve in a swap arrangement that would replace oil later when prices are lower.

"He's going to do what he can to get his vice president elected," Allen said.

Allen cited a possible backlash from OPEC producers. Iraqi leader Saddam Hussein could decide to pull Iraq's oil production from the world market to counter any release of the emergency stockpiles, he said, which would negate any downward pressure on oil prices or allow for a buildup of inventories.

Tom Cambridge of Cambridge Production Inc. in Amarillo said announcements by Saudi Arabia of oil production increases had little effect on prices and supplies, although the Saudis may not have fully increased their production.

Cambridge said he objected to the release because the reserve was set up for security purposes, not for controlling prices.

Members of the Amarillo-area congressional delegation had little regard for the announcement.

U.S. Rep. Mac Thornberry, R-Clarendon, called the move election-related.

"This is a short-term effort when the administration has done nothing for eight years to develop a national energy policy," Thornberry said.

He said the reserve should be saved for extreme emergencies such as war.

U.S. Rep. Larry Combest, R-Lubbock, also called the move an election ploy.

"Tapping the SPR to improve the costs of home heating oil does nothing to help Americans and is merely election-year lip service given by the vice president," Combest said.

"This administration has taken a back seat to supporting a comprehensive energy policy, and when the problems they have created catch up with them, they merely try to divert the attention from their own failures."

Texas Sen. Kay Bailey Hutchison called Clinton's actions irresponsible.

"We need to be encouraging our domestic oil and natural gas production so that we can break the incredible price fluctuations we have seen in recent years," she said.

Thornberry said a reappraisal of restrictions to drilling on federal lands and regulations of the drilling industry are needed to increase domestic oil production.

The restrictions were placed to protect sensitive environments in parts of Alaska and offshore on the Atlantic and Pacific coasts. Thornberry agreed that some regulations were placed as environmental protection or safety measures.

But in opening remote parts of Alaska, new technology should be considered, he said.

"I've been told you can have a very small footprint on the ground and get an enormous amount of oil out of the ground," Thornberry said.

http://www.amarillonet.com/stories/092300/new_stockpile.shtml

-- Martin Thompson (mthom1927@aol.com), September 23, 2000