Oil crisis might be averted, energy chief says

By Alex Canizares States News Service, 10/3/2000

ASHINGTON - Department of Energy Secretary Bill Richardson yesterday said the oil industry was making progress against threats of a home heating oil supply crisis, as the Senate prepared for a vote today on a Northeast heating oil reserve.

''I'm confident that we're making progress to avert a home heating oil disruption,'' Richardson said after meeting with about 40 East Coast oil industry officials to discuss recent actions to curb high energy prices. He announced a working group made up of government and industry officials to focus on the impending crunch.

Richardson said progress was seen in refining, maintaining, and distributing home heating oil before cold weather sets in. The administration has announced a 30-million-barrel swap of crude oil from the Strategic Petroleum Reserve to help lower prices and has offered $400 million in oil assistance to low-income households.

Stocks in the Northeast, where the majority of heating oil is used, are about 60 percent lower than one year ago. But ''it appears that they are rapidly moving, stocking up on inventory,'' Richardson said. ''We're not out of the woods yet but we're making progress.''

High prices in Europe are still a concern, Richardson said, adding that the United States was urging European countries to build domestic stockpiles.

The decision to tap the Strategic Petroleum Reserve, crude oil held for national emergencies, has been portrayed as a ploy to help Democratic presidential candidate Al Gore. Industry officials have also opposed tapping the reserve but Richardson said that among the officials he met ''the general consensus on the swap was more positive than negative.''

The Senate is expected to vote on a bill to establish a ''trigger'' for releasing oil from a 2-million-barrel heating oil reserve for the Northeast. The Energy Policy and Conservation Act also authorizes the president to tap the Strategic Petroleum Reserve, although he has already taken that action.

The bill is expected to pass in a fast-track procedure that would prevent any amendments or further debate, according to a congressional aide.

''Energy markets will remain volatile, but this legislation should help assure an afforable and reliable supply of energy,'' said Senator John Kerry, Democrat of Massachusetts.

The bill would release oil from stockpiles held in New Haven and New York harbor in a ''regional supply shortage.'' Senators decided against flexible language to trigger the release of oil to prevent the reserve from succumbing to political whims.

The legislation authorizes the president to release oil when the price differential of crude oil and heating oil increases by more than 60 percent. Under such language, the reserve would have been tapped during severe price spikes last year but would otherwise be seldom used.

http://www.boston.com/dailyglobe2/277/nation/Oil_crisis_might_be_averted_energy_chief_says+.shtml

-- Martin Thompson (mthom1927@aol.com), October 03, 2000