- The Washington Times - Thursday, October 5, 2000

Energy Secretary Bill Richardson took issue yesterday with Vice President Al Gore's characterization that the country is in an "energy crisis" and that "big oil" is to blame.

In remarks before the National Press Club, Mr. Richardson said the "political campaign" was behind Mr. Gore's accusations against oil companies and that a surge in demand for oil in the United States and abroad is the real reason gasoline, heating-oil and natural-gas prices have soared this year.

"We are not in an energy crisis," Mr. Richardson said, adding that the problems driving up prices are "short-term" and will be worked out in time.

Mr. Gore, in his efforts to shift blame away from administration policies onto oil producers for this year's energy problems, in June called on the Federal Trade Commission to investigate whether collusion by the oil companies caused gasoline prices to skyrocket to more than $2 a gallon in the Midwest.

But Mr. Richardson said yesterday that the FTC reached the same conclusion as the Energy Department and industry analysts: that the price spike was caused by "a multiplicity of factors," including a pipeline breakdown, other transportation difficulties and clean-fuel regulations issued by the Environmental Protection Agency.

Mr. Gore has maintained that the EPA regulations did not cause high gasoline prices.

Mr. Richardson said recent mergers, like those of Exxon Mobil and BP Amoco, that have increased the power of oil conglomerates do not worry him and are "inevitable" as companies strive to cut costs.

"I don't fear them," he said. "We have good investigatory tools to make sure that those mergers and acquisitions are honest."

Shortly after the speech, Mr. Richardson awarded contracts for 30 million barrels of crude oil the administration is releasing from the Strategic Petroleum Reserve to 11 major oil companies, including BP Oil Supply of Illinois and Marthon Ashland of Houston.

In his speech, Mr. Richardson described the petroleum release which has been criticized by Republican presidential candidate Texas Gov. George W. Bush and other Republican leaders as "government policy at its best" because it will "avert a supply emergency" of home-heating oil this winter and eventually will result in more oil in the reserves.

The release was prompted by a "highly unusual market reaction" to OPEC's announced increase in oil production last month, he said. Instead of lowering prices, the announcement sent crude-oil prices soaring to nearly $37 a barrel and "set off alarm bells within the administration," he said.

The release, which requires companies to return the oil plus a premium amount within a year, succeeded at first in reducing crude prices by about $7 to a little above $30, he said, though he contended that price is still too high. The administration wants crude prices to fall to about $25 a barrel.

The price of crude rose this week and yesterday was hovering around $32 a barrel.

The administration has few tools available to relieve natural-gas prices that are near record highs and have sharply raised heating and electricity costs around the country, he said. But it hopes the oil release will take pressure off energy supplies in general and bring down gas prices.

Mr. Richardson defended the Clinton administration against repeated charges by Republicans that it "has no energy policy." He asserted that its policies of modest supply increases, conservation, and "quiet diplomacy" to coax more oil out of the Organization of the Petroleum Exporting Countries are working.

Unlike Republicans, he said, the administration's energy policy aims to both increase production of oil and gas, and decrease consumption through energy-saving technologies and alternatives like solar and wind power.

"You know we are in the political silly season when you hear charges that the Clinton administration has done little to promote domestic oil and gas production," he said, maintaining that through incentives it has cut in half the decline in production that started during the administration of President George Bush, father of the current Republican presidential nominee.

Despite all the rhetoric, the administration's energy-development policies are almost identical to those announced by Mr. Bush, he said, except the administration is opposed to opening the Alaska National Wildlife Refuge to oil and gas drilling.

Much of the United States' untapped reserves of oil and gas lie offshore, off the coasts of California and Florida, but Congress has imposed a moratorium on drilling in those areas, he said.

To try to reduce dependence on imported oil, the administration has pushed energy-conservation measures that have been largely rejected by the Congress, he said, including increased research on alternative fuels and technologies and an increase in fuel-efficiency standards for cars and trucks.

An increase of three miles per gallon in the average efficiency of American vehicles would cut oil imports by 1 million barrels a day, he said, adding that such conservation strategies "must be included in any comprehensive and responsible energy policy."

The administration has integrated its energy policies with its environmental and technology policies and is optimistic that, despite resistance from Congress, breakthroughs in technology will vastly increase energy conservation in coming years.

President Clinton and Mr. Richardson often express their belief that researchers are on the verge of a big breakthrough that will enable cars to run on hydrogen-powered fuel cells instead of the internal-combustion engine a development Mr. Gore called for in his 1992 book "Earth in the Balance."

This optimism is one reason the administration maintains that complying with the still-unratified global-warming treaty would be relatively painless for Americans, even though it would require the United States to cut energy use by one-third by 2010.

"We have the technology" to produce even sport utility vehicles that get 40 to 80 miles to the gallon, instead of the less-than-20 they get today, Mr. Richardson said. "The American people can have their SUVs and be fuel-efficient, too."

Industry analysts point out, however, that while the technology exists to power cars with fuel cells, it is in its infancy and is too expensive currently to be affordable to average consumers.

Mr. Richardson acknowledged that the administration's efforts to coax more oil out of OPEC this year have had limited success.

The surge in demand for electricity caused by the booming economy and the advent of the Internet has "really strained our electricity grid," while the nation's pipelines for transporting natural gas need expansion and improvement, he said.

One solution for the electricity shortage, he said, would be to pass national electricity-deregulation legislation now stalled in Congress.

Mr. Richardson also acknowledged that more refineries need to be built to handle the huge volumes of gasoline and other products demanded by Americans. No new refineries have been built in a quarter-century, largely because of restrictive environmental regulations, analysts say.

On another matter, Mr. Richardson denied accusations by a former Energy Department intelligence official who said he told the New York Times that Los Alamos scientist Wen Ho Lee was a key spy suspect.

"I categorically deny this," Mr. Richardson said. "This is an individual who two days ago sued me; one day ago, he says I leaked the report; today, he's probably said that I stole the nuclear secrets myself. So I don't take this very seriously."

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