Domestic Producers Seek Oil Import Curbs
A group representing domestic oil producers said Monday that it will file a petition pressing President Clinton to take emergency action to curb oil imports and shore up prices that are at five-year lows.
The Independent Petroleum Assn. of America said it will seek “an immediate adjustment of imports of crude oil and refined petroleum products” under a trade law that allows import curbs to protect national security.
Light crude oil futures traded in New York have plunged from about $19 a barrel to below $15, a boon to drivers but a potential disaster for smaller domestic producers.
“Over 20% of our production in the United States, about 1.3 million barrels per day, is marginally economic- and labor-intensive, and current prices are well below the cost of producing this oil,” IPAA Chairman George Alcorn said in a letter to Clinton.
“If this situation persists, the U.S. could easily lose an additional 100,000 oil industry jobs on top of the 450,000 jobs we have lost in the last decade,” the letter says.
The Energy Department is to release Thursday its initiative to spur the domestic natural gas and oil industries and reduce the U.S. reliance on oil imports. A department official said no changes are anticipated in light of the price fall.
“I think what this does is highlight the importance of what we’re trying to do with this initiative,” Deputy Energy Secretary Bill White said of the falling prices.
The IPAA letter does not say what action the group seeks, but Alcorn said said relief could come through import taxes or other measures.
The United States imports about half the oil it uses.
Senate Energy Committee Chairman Bennett Johnston, a Louisiana Democrat, released a letter to Clinton saying he supports the IPAA petition.
Johnston pushed unsuccessfully for an import curb three years ago, after U.S. forces were sent to the Persian Gulf. “Since that time, our reliance on foreign sources of oil has grown even more critical,” his letter says. “I believe the case for administrative intervention to limit oil imports is more compelling than ever before.”
The IPAA said the nation remains vulnerable to the whims of Middle Eastern oil giants and the Organization of Petroleum Exporting Countries. Oil prices have plunged since OPEC decided last month not to cut production.
Energy Secretary Hazel O’Leary said Friday that the Administration was worried about the adverse effects of cheap oil, including increased reliance on imports, damage to the domestic industry and disincentives for energy efficiency and conservation.
But she also said the Administration had no immediate plans to intervene in the marketplace.
