Congress has a slippery grip on oil prices

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Mon 20-March-2000

Congress has a slippery grip on oil prices Last spring, legislators were worried gasoline prices were too low By Bob Vitale Post-Crescent Washington bureau

WASHINGTON -- Just a year ago, House and Senate committees that oversee the nation's energy policies were fretting about low gasoline prices.

Oil was selling for $10 per barrel, and gas was selling for less than a dollar per gallon. There were proposals to direct the federal government to purchase oil on its own as a way of boosting prices for struggling U.S. producers.

This spring, lawmakers have the opposite problem on their hands. Oil prices are about three times as high as in 1999 and gas prices almost double. The number of remedies they'll consider this spring has expanded similarly.

Concern about the effects rising gas prices have on Americans' wallets as consumers and their attitude as voters this election year has produced a dozen or more proposals in Congress.

There are plans to scale back the federal gas tax, sell off some of the nation's oil reserves, step up domestic production by opening new areas to drilling, and apply some old-fashioned political pressure to oil-producing allies.

The first -- urging President Clinton to reduce foreign aid to nations taking part in an OPEC production slowdown -- will go before the House this week.

Mexico, Saudi Arabia and Kuwait are three of the members of the oil cartel that have received substantial U.S. aid over the last decade. Nations in OPEC, the Organization of Petroleum Exporting Countries, have uncharacteristically adhered to supply-pinching production quotas designed to raise prices from last year's lows.

"We need to take a serious look at our foreign policy," said Rep. Mark Green, R-Green Bay, who supports the measure that has been introduced by House International Relations Committee chairman Benjamin Gilman, R-N.Y.

"We need to make sure the very countries that every so often we're asked to help with foreign aid aren't able to turn around and inflate the price of oil as it reaches our shores."

Sen. Russ Feingold, D-Wis., signed on to a less-threatening Senate measure last week that simply directs Clinton to tell OPEC nations that their production limits should be lifted immediately.

Some in Congress are pointing the finger at each other as well as OPEC, though, for rising gas prices. Republicans are blaming Clinton for a 17 percent drop in domestic oil production during his presidency, a result, some say, of overzealous environmental rules that have hurt domestic production.

Senate Energy and Natural Resources Committee chairman Frank Murkowski, R-Alaska, has proposed letting oil companies drill on a portion of the Arctic National Wildlife Refuge in his home state. Clinton vetoed the idea in 1995.

Rep. Tom Petri, R-Fond du Lac, said the drop in U.S. production has been accompanied by a similar increase in oil consumption, making the nation more dependent on foreign oil.

"There are very good reasons to keep oil exploration out of environmentally sensitive areas, but we should be aware that when we choose not to produce oil we've made a choice," he wrote recently. "We aren't simply victims of foreign producers, we've made a choice to put a little more power in the hands of the foreign oil cartel by restricting our own domestic production."

Democrats blame Republicans on the consumption side. Since they took control of Congress in 1995, majority lawmakers have repeatedly blocked any attempts to even consider increasing fuel-efficiency standards for automobiles.

"We should let OPEC hear our outrage loud and clear," Feingold said. "But we'll never drive prices down in a significant, lasting way if the Congress doesn't get serious about reducing consumption and developing a coherent national energy policy."

Lawmakers have been skeptical of other proposals floating around Congress.

Republicans have proposed cutting federal gas taxes, and they're delighted to remind voters that Vice President Al Gore cast a tie-breaking vote to raise them 4.3 cents per gallon as part of a 1993 deficit-reduction package.

Sen. Herb Kohl, one of the Democrats' last holdouts on that increase, said eliminating it now would be a bad trade-off, especially for Wisconsinites. The state would lose $218 million a year in federal highway money, he said, but motorists in the state would save an average of $26 per year if the tax is repealed.

"It would be a tremendous blow to lose these funds just as Wisconsin is poised to start a number of road improvement and expansion projects," Kohl said.

Green was skeptical as well.

"I'm in favor of anything that will lower the price of gas at the pump for consumers, but not on the back of states and local units of government as they try to improve their transportation infrastructure," he said.

Others have proposed tapping into the Strategic Petroleum Reserve, a national stockpile created after the 1970s oil embargo by OPEC. Lawmakers from the Northeast are particularly supportive of that idea, because the region was hit especially hard this winter by a spike in home heating oil prices.

Rep. Dave Obey, D-Wausau, has been one of the strategy's critics, saying the reserve was created to be used during national security crises

http://www.wisinfo.com/postcrescent/news/032000-3.html

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


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