Clinton Seeks Heating Oil Reserve for Northeast

President Clinton moved Saturday to create an emergency heating oil reserve for hard-hit Northeast states, but he warned that there is “no overnight solution” to the fast-rising gasoline and oil prices that have sticker-shocked the nation.

Clinton proposed several steps he said would help insulate Americans from future vagaries in the price of imported oil. He urged Congress to pass tax credits to promote fuel-saving cars, to encourage use of alternative fuels, and to increase domestic oil production.

But administration aides and independent experts cautioned that none of the new measures will have an immediate effect on oil prices that have tripled in the past year--and may go higher still as the summer approaches.

Clinton did not say if he is considering releasing oil from the emergency Strategic Petroleum Reserve, as some critics have demanded, to replenish domestic supplies. Nor did he address proposals by some lawmakers to halt the export of about 60,000 barrels a day of Alaskan crude oil to Asia, and to divert it instead to West Coast markets.

“We have to be clear there is no overnight solution to this problem,” Clinton said as he announced the moves in his weekly Saturday radio address. “Instead of taking shortsighted and risky steps now we might regret later, we should use this opportunity to start down the right path toward real long-term energy security.”

Clinton called on Congress to immediately reauthorize the 569-million barrel Strategic Petroleum Reserve before the current authorization expires at the end of March “to ensure that we have all available tools” in event of a national crisis.

Clinton left later Saturday on a weeklong trip to India, Bangladesh and Pakistan.

On Friday, the White House said Clinton would only decide whether to tap the emergency oil stockpile after oil ministers from the Organization of Petroleum Exporting Countries meet on March 27 in Vienna. Clinton said Friday he had spoken with Saudi Arabia’s King Fahd about the need to stabilize oil prices at levels that satisfy both producing and consuming nations.

An administration official said Saturday that OPEC leaders have assured U.S. officials they will increase production. “It’s no longer a question of if and when,” the official said. “It’s now how much.”

But even if OPEC nations sharply increase output next month, it would take four to six weeks for extra supplies to reach American consumers.

Hoping to shore up support for as much of an increase as possible, Energy Secretary Bill Richardson will leave today for a weeklong round of energy diplomacy.

Aides said Richardson would meet with officials from OPEC member nations, including Algeria, Indonesia, Nigeria and the United Arab Emirates. He met Saturday at an undisclosed location in California with Saudi Arabia’s oil minister.

Overall, U.S. oil output fell last year to the lowest level in decades since foreign oil was cheaper to buy. But crude oil has jumped from $10 a barrel in 1998 to more than $30 a barrel today.

In his radio address, Clinton said he would ask Congress to create a regional home heating oil reserve for the Northeast and New England. Aides said that heating oil could be sold from the reserve to increase local supplies in event of future shortages. The size and cost of the proposed reserve was not disclosed.

Clinton also proposed a 10-year tax incentive program, costing about $1 billion, to support new domestic oil exploration and production. He also proposed tax credits for a broad array of alternative fuel sources, including solar energy systems, wind power, biomass, and more fuel-efficient cars and homes.

Republican National Committee Chairman Jim Nicholson said in response that Clinton’s foreign policy toward OPEC countries “has crashed and burned and the American people are suffering for it today.”