- The Washington Times - Wednesday, March 8, 2000

The Clinton administration is coming under increasing pressure to ease rising oil prices as mounting fears yesterday shoved the Dow Jones Industrial Average down 374 points.

The stock market dive fed off major concerns that corporate profits will take a hit from the rising fuel costs as well as from interest rates that are climbing.

Procter & Gamble, one of the Dow's 30 components, saw its share plunge 30 percent after the Cincinnati-based maker of household goods said third-quarter profit would fall because of the rising costs of oil and wood pulp.

Thirty senators today will introduce legislation that would open part of Alaska's northern wilderness to oil drilling and reduce the nation's dependence on foreign oil.

And hundreds of independent truck drivers who staged a rally two weeks ago in Washington said they will return March 16 to urge Congress and President Clinton to give them relief from soaring diesel-fuel costs, which they say are driving them out of business.

The United States and other oil-dependent nations have been prodding the Organization of Petroleum Exporting Countries (OPEC) to release more oil into the world market as soon as possible to help ease fuel costs.

While oil ministers of major oil producers Saudi Arabia, Venezuela and Mexico have said they support boosting supply, government officials said production increases under consideration by OPEC will not be enough to keep prices for gasoline and other oil-based products from rising further.

"There is no mistaking the message. There is no uncertainty. The world needs more OPEC oil, and it needs it now," Robert Priddle, executive director of the International Energy Agency, said yesterday at an oil and gas conference in the United Arab Emirates.

The agency, a group created by developed nations to deal with energy disruptions, is calling on OPEC to boost production by as much as 3 million barrels a day from the current 26 million-barrel limit.

OPEC reportedly is considering boosting oil production by about 1 million barrels a day. But some OPEC members Iran, Libya and Algeria oppose any increase.

Ministers from OPEC, which produces about 40 percent of the world's oil supply, in February 1999 agreed to cut output of its member nations by 4.3 million barrels daily. The move was intended to recoup profits lost from sagging oil prices in the past two years. Now some oil ministers fear that higher fuel prices might prompt their customers consumers and businesses to use less fuel.

Saudi Arabian oil ministers, who spearheaded last year's cuts, are expected to meet today with their Iranian counterparts in an effort to iron out differences in advance of the March 27 OPEC meeting in Vienna, Austria.

President Clinton yesterday called on oil-producing countries to boost production, saying it was in their best interest to keep prices stable.

The president has said he would consider tapping the Strategic Petroleum Reserve, a 90-day oil supply set aside for national emergencies, if crude-oil prices continue rising.

While Mr. Clinton and industry watchers expect OPEC to boost supply, many argue that those nations will not release enough oil to keep fuel prices from rising further this summer.

Rising oil prices have sent gas prices at U.S. pumps to new highs. And this winter, residents in the Northeast were burdened with high home heating oil bills.

The Energy Information Administration warned Monday that gas prices are likely to jump another 20 cents by the end of May.

Crude oil trading on the New York Mercantile Exchange rose $1.95 to $34.13 a barrel yesterday, the highest level since November 1990.

U.S. businesses also have been hurt with higher fuel prices, dampening profit and forcing some companies like airlines and delivery companies to pass extra costs onto consumers.

Hundreds of independent truckers are expected to drive into Washington March 16 for the second time in a month to urge lawmakers to provide help for drivers who say they cannot afford soaring diesel-fuel costs.

Many businesses, as well as their allies in Congress, think the United States has become too dependent on foreign oil and that steps should be taken to revive the domestic oil industry.

A coalition of 30 senators is expected today to introduce a bill to open up portions of Alaska's protected northern wilderness to petroleum exploration.

The 19 million-acre Arctic National Wildlife Refuge in northernmost Alaska is believed to contain up to 16 billion barrels of oil, potentially the biggest reservoir of petroleum on U.S. soil.

The government has placed the land, about the size of South Carolina, off limits to oil producers because of environmental concerns.

Supporters of the bill, sponsored by Sen. Frank H. Murkowski, Alaska Republican, said the Clinton administration has set aside far too much U.S. land for preservation and should begin thinking about economics.

"The problem is not just current rising gas prices; we are dependent on other countries for 55 percent of the oil we use," said Tina Kreisher, spokeswoman for Mr. Murkowski.

"While our supply of oil is being disrupted, [the administration] has sent our energy secretary around the world with a tin cup in hand asking for help," she said, referring to Energy Secretary Bill Richardson's recent 10-day trip to meet with OPEC leaders.

Ellen Sorokin contributed to this article.

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