USA Today-Fear of oil, gas & energy shortages

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-- Cave Man (caves@are.us), December 27, 2000

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(12/27/00 8:00:27 AM PT) WASHINGTON -- More than 100 members of Congress, mostly Democrats, urged President Clinton to release the Energy Department's new two million-barrel reserve of home-heating oil to ease high energy prices in the Northeast, Friday's Wall Street Journal reported.

There doesn't appear to be any supply disruption in the region and the price of heating oil has dropped slightly in recent days. But the group's leader, Rep. Bernard Sanders, a Vermont Independent, said, "we think you do have a crisis right now."

One of the technical criteria for releasing the reserve has been met: A large gap, greater than 70%, exists between the price of heating oil and the price of crude oil. But a senior Energy Department official said the difference exists because crude prices have begun to fall, and that the matter remains discretionary for President Clinton.

Rep. Sanders's vigorous lobbying efforts in Congress helped establish the reserve in the fall, which is stored in private tanks in New York and in New Haven, Conn.

The legislators' letter to Mr. Clinton also carried a slight partisan twist, urging that any release should be done before his administration ends Jan. 20.

The group also asked the president to release $300 million from the Low Income Home Energy Assistance Program to help poor families pay their fuel bills.

An earlier release of funds from the program distributed the money using a formula that provided fuel assistance to all 50 states. In their letter, the legislators asked that any new allocation be "targeted to the cold weather states who are, in fact, currently experiencing an emergency."

New England has been particularly hard hit by the heating-oil price spike. Because much of the region isn't connected to gas pipelines, it has been heavily dependent on heating oil since the 1950s, when many homeowners switched from burning coal to oil. Private inventories of heating oil in New England have plunged to 4.5 million barrels from 10.2 million barrels last year, according to the Energy Department. And during a cold spell in January, inventories dropped to 2.9 million barrels.

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-- Cave Man (caves@are.us), December 27, 2000.