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Should the Government Release Oil From the Strategic Petroleum Reserve?Aired September 21, 2000 - 7:30 p.m. ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
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AL GORE, VICE PRESIDENT OF THE UNITED STATES: I support oil releases from our national strategic petroleum reserve. We ought to start with several releases of 5 million barrels each.
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BILL PRESS, CO-HOST: tonight, campaign 2000 heats up with a gore proposal to cut the cost of gas and home heating oil. Is it good policy or just an election-year ploy?
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GOV. GEORGE W. BUSH (R-TX), PRESIDENTIAL CANDIDATE: Reserves should not be used as attempt to drive down oil prices right before an election.
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ANNOUNCER: Live from Washington, CROSSFIRE. On the left, Bill Press; on the right, Mary Matalin. In the crossfire, Republican Senator Frank Murkowski of Alaska, chairman of the Energy and Natural Resources Committee and a Bush supporter, and Democratic Congressman Marty Meehan from Massachusetts, a Gore supporter.
PRESS: Good evening. Welcome to CROSSFIRE. And how much did you pay for gas today? As fast as the prices of gas and heating oil were going up, Al Gore was trying to head off a potential political problem.
Speaking in nearby Maryland this morning, he called for bringing down prices by releasing some of the nation's 570 million barrel strategic oil reserve.
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GORE: I'm not satisfied when the oil to heat your home becomes more a luxury and not a simple, affordable necessity. I'm not satisfied when filling up your gas tank feels like a major purchase.
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PRESS: Gore's proposal was quickly slammed by George W. Bush, who said he favors putting more pressure on OPEC countries to produce.
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BUSH: ... need to do. We need to use our strong hand in the diplomatic circles to make it clear to our friends overseas that we don't want them holding our nation and our consumers hostage.
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PRESS: But opening up the reserve flies in the face of Fed chief Alan Greenspan and Treasury Secretary Larry Summers. Today, on Capitol Hill, Energy Secretary Bill Richardson said that a decision from President Clinton on whether or not to release oil from the nation's stockpile is imminent.
So tonight, while the president is making up his mind, oil prices as a political weapon. What's the best way to protect consumers from higher prices at the pump and at the home heater? Is Al Gore doing the right thing or just the political thing? -- Mary.
MARY MATALIN, CO-HOST: Well, congressman, that's where I'm going to start. Is there any other thing with Al Gore? The laws governing the strategic reserves that he wants to tap into are very clear and Governor Bush spoke to those governing laws today. Take a listen.
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BUSH: The strategic reserve is an insurance policy meant for a sudden disruption of our energy supply or for war. Strategic reserves should not be used as an attempt to drive down oil prices right before an election. It should not be used for short-term political gain at the cost of long-term national security.
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MATALIN: Last year, congressman, Vice President Gore agreed that the reserves should not be tapped. He said the release would be so little it would be ineffective. He also said it would provoke retaliatory response from oil-producing countries.
What has happened between last year and this year, beside it being seven weeks until the election?
REP. MARTY MEEHAN (D), MASSACHUSETTS: Projections are, Mary, that in the northeastern part of the country people could actually have to pay three times the price for home heating oil. People are going to have to make decisions about whether to eat or whether they can heat their homes.
We have a crisis in the northern part of the country, and frankly, we need to have relief. And the fact is that the law says that if the shift in supplies or shift in price is so great that it has a negative impact on the economy that it is an appropriate use of that statute. And to let more oil into the system makes a lot of sense, certainly if you heat your home by oil anywhere in the northeastern part of the country. MATALIN: Five million gallons...
MEEHAN: Five million gallons initially, and then they'll monitor the situation if it needs an additional 5 million. There are 570 million that are in that reserve, and if we can't use it for a crisis like what we -- what we have now, when can we use it?
MATALIN: So are you suggesting that Lawrence Summers, who would be the treasury secretary in a Gore administration, god help us, or Alan Greenspan, whom we all agree is, you know, the word on high -- this is what they said to the vice president or to the president, who's thinking about the release.
Quote: "Chairman Greenspan and I believe that using the strategic petroleum reserve at this time, as proposed by the Department of Energy, would be a major and substantial policy mistake." Larry Summers also says it would set very bad precedent.
MEEHAN: Mary, that was an internal memo months ago. The fact is today...
MATALIN: This is last week, congressman.
MEEHAN: Through a spokesperson -- through a spokesperson today, he said 5 million gallons, something that's being proposed by the vice president, could be something that would be acceptable.
This is a situation where the administration is looking to deal with a crisis. One of the things we have to do is increase LIHEAP funding. We need to look at all of the possible solutions, including continuing to deal with OPEC.
But if we don't act now, we're going to have a crisis in this country this winter, and it's something that I think people are crying out for action.
MATALIN: A quick follow-up there, and I misspoke. It's not gallons. Of course, it's barrels.
The vice president and this administration could not have anticipated this crisis before seven weeks before election day?
MEEHAN: That's one of the reasons why negotiating, getting OPEC to increase 800,000 barrels of oil additionally, that's why we're looking -- the president took immediate action to establish a northeast reserve for home heating oil in our part of the country. But this is a crisis, make no mistake about it, and this notion that we should sit back and do nothing is absurd.
PRESS: Of course, Marty, I just want to point, when Alan Greenspan said he was opposed to an across-the-board tax cut, Republicans and George Bush went ahead with it.
Anyway, senator, welcome to CROSSFIRE.
There's the politics and the policy. I'd like to start talking about the policy, if we can, and pick up on Congressman Meehan's point.
National emergency: If millions of seniors on low incomes or fixed incomes in the northeastern United States face a severe winter and the possibility of either going without heat or great discomfort or even death because they can't afford their heating oil, if that's not a national emergency that cries for action, what is?
SEN. FRANK MURKOWSKI (R), ALASKA: It is an emergency. It's a train wreck and it's going to come. There's absolutely no question about it. But by selling out of our strategic petroleum reserve, we're not selling refined product. We're selling crude. We have to take that to our refineries. You don't do that overnight.
For all practical purposes, our refineries are almost running at 100 percent now.
So the reality is you take this oil out of SPRO and you run it through the refinery, and then you have to distribute it out in heating oil and so forth. Instead of making heating oil in this country right now, we're still making gasoline.
You know what's happened under this administration in the last decade, we've lost 37 refineries in this country. We haven't built a new refinery in 25 years.
Now, we want to help the Northeast Corridor. There's no question about it. But we've had some problems, as the congressman will admit, (UNINTELLIGIBLE) didn't approve the gas line coming in. No excuse for that.
And now, as we look at the merits of taking -- what? -- 5 million barrels and transferring it, by the time you get relief it's questionable if you're going to have the winter already set in.
And what has it done to the national security of this nation? It's told OPEC that they're in the driver's see. We're 58 percent dependent on OPEC and imported oil, and that's the problem with this country. We've become addicted to foreign oil.
PRESS: Of course, we have. Of course, we have. But the answer is not more fossil fuels. That's why I think both Gore and Bush are wrong on this issue.
The immediate answer, however, is getting some help to Marty's territory...
MURKOWSKI: And he needs -- he needs fuel oil. You're not going to do it on hot air from Washington, D.C. And that's what you're talking about...
PRESS: No, we're not talking about -- we're talking about doing it on oil from the strategic oil reserve.
Let me just say the Federal Energy Commission says that in 15 days this oil will be out of there, in the pipelines, in the refineries, on its way to help.
MURKOWSKI: Bill, let's go back...
MURKOWSKI: You're failing to recognize one point.
PRESS: Let me just add, if I can, please.
MURKOWSKI: No. One point is the refiners are at maximum capacity now. So you're doing a displacement. You're putting this thing off until after the election and hoping it will go away. You're not going to get any additional...
MEEHAN: No, the Department of Energy has said that we could increase in the next two months, we could double our output from 12 billion...
MURKOWSKI: How are you going do it if you're refinery capacity...
MEEHAN: We're at 95 percent...
MURKOWSKI: That's right.
MEEHAN: We could go to 105 percent and get it done.
MEEHAN: If they want to get it done, they can get it done. Projections in the Department of Energy said we could double the amount.
MURKOWSKI: Refineries cannot operate at 100 percent.
We've never been able to. You've got refineries that are interchanging, going on -- they're going onto heating oil now from gasoline. They have maintenance problems.
You can only put so much in the funnel. That's a fact.
PRESS: All right. Let me ask my follow-up. Of course, Gore says let's do something about the strategic oil reserves, even though you don't agree with it, whereas George Bush says let's do nothing about the strategic oil reserves, no immediate relief. And I wondered today why, and I think one of your colleagues today, senator, put his finger right on the reason why George Bush is for doing nothing immediately. Please listen up.
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SEN. CHARLES SCHUMER (D), NEW YORK: Why doesn't George Bush call for release of the SPRO? Because big oil doesn't want it. The oil companies are doing very, very well with these high prices, and they don't want to see the government bring the prices down.
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PRESS: Isn't that it? Two big oil guys are doing just what the big oil companies want.
MURKOWSKI: No, I think the American public is a little smarter than that. They understand who's buying the oil and who's setting the price.
OPEC sets the price. You either take it or leave it. Mexico sets the price. Venezuela sets the price. And we pay it.
MEEHAN: And profits for oil companies were up 200 to 300 percent for refining.
MURKOWSKI: And we pay it. And we pay it. We pay the price.
MEEHAN: 200, 300 percent.
MURKOWSKI: We pay the price. Nobody's building a refinery in this country. Why not?
MEEHAN: Their refinery profits are up 200 to 300 percent. That's just in refining.
MURKOWSKI: Nobody's built a refinery.
MEEHAN: That's not even getting into the drilling and everything else. The oil companies are doing great.
MURKOWSKI: Come on...
MATALIN: Congressman -- congressman, you know this: For decades, the last investment anybody would make was in oil reserves. There wasn't -- or oil production...
MATALIN: ... until -- it wasn't until the second quarter of this year that these windfall profits that Gore keeps bashing came to be. And they make -- they're not even begin to have made up for the years and years and years of $10-a-barrel oil. Even the "Washington Post"
MATALIN: Please. Even the "Washington Post," who is going to endorse Gore, says that demonizing Big Oil is demagoguery. Al Gore is playing demagoguery.
MEEHAN: Somebody has to step forward. When you have 200-300 percent increases, who is going to take on the oil companies? MATALIN: For one quarter.
MEEHAN: Somebody who owned three oil companies or a vice president
MURKOWSKI: It's supply and demand. It's supply and demand.
MEEHAN: ... the oil industry? Who is going to take on the oil company? Somebody has to speak up for the seniors in Massachusetts, for the seniors in New Hampshire, who right now face an impending crisis.
MURKOWSKI: You bet they do. And we want to help them. But we've got to have more oil produced. And you're either going to import that oil -- OK? -- or you're going to put more oil out as a consequence of the domestic reserve capability we have. Let's open up the overthrust belt. This administration has cut off 64 percent.
Let's open up Alaska. You know, don't forget, Al Gore is
MATALIN: We will come back to Alaska. I have one follow-up for you.
MATALIN: If the American domestic producers have such control over prices, why did they let their prices fall to $10 a barrel for the many decades that it did? They don't have control.
MEEHAN: Obviously, that was a factor in terms of the glut in oil that was available. But the bottom here is, it's good for Big Oil right now what's happening. You have seen record profits. And, frankly, somebody has to come forward. I'm glad the vice president has.
MURKOWSKI: Who is buying the oil and who is selling it? OPEC sets the price.
MURKOWSKI: They control the volume.
PRESS: They sell it to the oil companies. The oil companies gouge the consumers, Senator. That's what happens.
MATALIN: And it goes to the bottom line. But, of course, Democrats have never worked in business, let alone the oil business.
(CROSSTALK) MATALIN: All right, who is responsible for high oil prices? Cast your vote online at cnn.com/crossfire. We will show you the results at the end of the show.
Stay tuned for more CROSSFIRE.
MATALIN: Welcome back to CROSSFIRE.
After a summer of gas price spikes, Al Gore doesn't want a fall of home heating cost hikes. With energy cost escalating, Gore blames Big Oil profiteers, and Bush blames big government incompetence. Our debate tonight: the politics of energy policy with two energy experts: Democratic Congressman, from Massachusetts, Marty Meehan, and Republican Senator, from Alaska, chairman of the Senate Energy and National Resources Committee, Frank Murkowski -- Bill.
PRESS: Senator, as you pointed out during the break, we're -- it's not just heating oil. It's the price of gasoline at the pumps. But sticking to heating oil for just a second, the Department of Energy today -- I saw figures -- I think they're recent figures -- that the home heating oil bill that last year was -- averaged $765 in the Northeast, this year could be up -- averaged $901.
So, I mean, this does -- this is going to hit people's pocketbooks.
MURKOWSKI: We don't know how cold the winter is going to be.
PRESS: So now I want to ask you about the politics. If it's true, as George Bush is saying, that Al Gore is just doing this for politics -- but I'm a senior on a fixed income in Marty's state of Massachusetts, and I get $135 or $200 relief this winter, do you think I care whether Al Gore did it for political reasons or not?
MURKOWSKI: No, that's not the point here. The point is...
PRESS: Bush's point.
MURKOWSKI: You know, the point is, we don't have an energy policy in this country. You know, we haven't talked about what's going to happen to the American taxpayer when he gets his electric bill and the generation comes from natural gas - or he heats his home from natural gas. We are just talking about oil now, where we've seen the price of natural gas doubled in the last 10 months. That's a fact.
It's gone from $2.16 to $5.40 for deliveries next month. Now, that's reality. Now, we don't -- we generate 20 percent of our power by nuclear energy. We don't have a policy -- an energy policy for the nuclear industry. It's choking on its own waste. We can't build any new hydroelectric plants. There hadn't been a new coal-fired plant built in the last couple of years. You can't get permits.
The problem with this administration is there's no energy policy. We've been knowing for seven years that this was coming. It's like a cancer. And suddenly, we are about to die. And we say: Well, why -- how can this happen?
MURKOWSKI: It's been happening all the time.
PRESS: Senator, I'll take your point. I'll match you one. I don't think this country has had an energy policy since Jimmy Carter, under any president. You may disagree with that. But I saw -- today, I went to George Bush's Web site -- or asked our research department to -- to see what his energy policy was.
I'm not going to bore you with this. But these are four pages from his Web site, his issues. Energy is nowhere to be found in these four pages, not one word on energy. Then I remembered the first debate, a CNN debate, last December, up in the primaries, where Steve Forbes asked -- the last time we talked about heating oil prices -- remember -- Steve Forbes asked George Bush what his plan was.
And here's what George Bush had to say at the time.
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STEVE FORBES, PRESIDENTIAL CANDIDATE: New England is going to have a very expensive winter with heating oil. What would you do to get the price down again?
BUSH: I would encourage exploration. I mean, it's a matter of supply and demand. I would put -- I would keep plans in place that say -- to say to our drillers: We want you to continue exploring.
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PRESS: Senator, you of all people know, exploration takes years and years. That's no answer for Marty Meehan's constituents.
MURKOWSKI: Sure it is. Where do you start? We had
MURKOWSKI: ... Congress passed had opening up ANWAR. The president vetoed it.
PRESS: He should have.
MURKOWSKI: We would have that online today. We would have not only exploration. We would have production. If you don't start now, you're going to be more dependent on OPEC. You know what Saddam Hussein did the other day? He simply told the U.N. that he wasn't going to start his repatriation for Kuwait.
And if they force him to, you know what he was going to do? He was going to produce production of oil. You know what the U.N. said? We will put it off for another quarter. Now, OPEC is driving this whole thing, because we don't have an energy policy. And we're -- we're not developing domestic energy resources in this country adequately...
PRESS: And we're not going to do it by this winter...
MATALIN: Congressman, let me pick up on that. And as we all know sitting at this table, just as -- like the farmers, just like any kind of crisis, no American is going to freeze this winter, That doesn't happen in this country. But Al Gore is playing it short term...
MEEHAN: Well, I -- I don't know about that. If you look at LIHEAP...
MATALIN: Let me go to his...
MEEHAN: If you look at the way prices have gone 40 percent, we would have to increase LIHEAP, for example, by 40 percent.
MATALIN: We need a long-term energy policy; we don't need a short-term emotional fix...
MEEHAN: I think we can --- we can all agree on that...
MATALIN: Can I speak to the senator's point about our national security, because Karen Hughes did today. Take a listen on this.
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KAREN HUGHES, BUSH COMMUNICATIONS DIRECTOR: If we dip into our reserve now, Saddam Hussein may well drop production. Once our reserves are depleted, this would allow Saddam Hussein to literally put America over a barrel. We would not have our reserves to fall back on. He could cut production and create a crisis, which would drive gasoline prices even higher than they are today.
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MATALIN: Congressman, there is no more than a 60-day supply in SPRO. You are -- your candidate is suggesting a national security -- putting this country at a national security risk for a short-term political gain.
MEEHAN: That is absolutely ridiculous. What we are looking to do -- it's September 21st. Winter is approaching, and we have no real plan to deal with this impending crisis. And the fact is OPEC -- they're not going to stop their production. They're getting $38 to $39 per barrel now. If it goes to 30 or 28 or 25, they're still going to produce.
What we simply need to have is some kind of a safety valve whereby people within the northeastern part of the country are able to get some relief, and we can provide 22 million additional barrels of refined...
MATALIN: But we can't do that without putting our national security at risk.
MEEHAN: We're not putting our security at risk. Absolutely -- that is a ridiculous. So what do we do? Do nothing?
MEEHAN: Do we sit back and say, "Look, there's nothing we can do," and talk about drilling that will take decades?
And another point I would make relative to Alaska drilling -- you know, former senator from Massachusetts Paul Tsongas gave blood, sweat and tears to preserve that refuge up in Alaska, and the last thing we need to do as a country is destroy it because...
MURKOWSKI: Have you ever been up there? Have you ever been up there? You should come up there. It's 19 million acres.
MURKOWSKI: We sat aside 8 1/2 in a wilderness, nine in a refuge...
MEEHAN: It's Paul Tsongas' legacy, and we shouldn't destroy it by drilling.
PRESS: I'll tell you what...
MURKOWSKI: ... and we left -- we are not. It's a wilderness and a refuge. We left a million and a half acres for Congress to decide...
PRESS: Gentlemen? Gentlemen...
MURKOWSKI: That's where...
PRESS: Senator, we have to go. We have to go. I'd love to debate ANWR...
MURKOWSKI: I'd love to, too.
PRESS: ... with both of you. I invite you both back to do it. It's another topic, another day.
We're done for today except for closing comments. You can't miss that, coming up.
MATALIN: Now, the results of our online vote. We asked you who's is responsible for high oil prices. Fifty-six percent of you said the Clinton-Gore administration, 25 percent blamed consumers, 16 percent said OPEC, and 3 percent said the same thing, so consumers.
Tomorrow night on "CROSSFIRE," get ready to rumble. Our guest, the one and only Jesse Ventura. That's tomorrow at 7:30 p.m.
Actually, those guys were -- almost had it right. There's three reasons for high oil prices -- and your administration doesn't understand this, no energy policy for seven years -- OPEC, which you've done nothing about, have no diplomatic relations with; taxes, which you've raised, and regulations -- environmental regulations. That's what drives the cost of natural gas, home heating oil, gas for your car...
MATALIN: I don't know what your president is so shocked about.
PRESS: Give me five seconds, will you please? You have it wrong, our viewers have it wrong. We are responsible for the higher oil prices because we drive these gas-guzzling cars. Until we change our habits, nothing is going to change.
But let me tell you something: Al Gore's solution may be a political solution, but a political solution is better than no solution put forward by two big oil guys.
From the left, I'm Bill Press. Good night for "CROSSFIRE."
MATALIN: Who actually have some experience in this critical sector of our economy...
PRESS: Yes, big oil. Big oil ticket...
MATALIN: From the right, I am Mary Matalin. Join us again tomorrow night for more "CROSSFIRE" with Jesse Ventura.
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