Lawmakers look for ways to pressure oil prices down

WASHINGTON -- If it's any consolation, Congress is trying to do something about those eye-popping prices you are paying for gasoline and home heating fuel.

Trouble is, the fix probably won't be quick, and there appears to be little consensus on how to get the United States off the oil- price roller coaster of recent decades.

Strapped by low production and high prices from OPEC countries, lawmakers from northeastern states lobbied President Clinton last week to tap the country's 565 million barrels of emergency oil reserves in Texas and Louisiana.

"We need immediate action," said Sen. Charles Schumer, a New York Democrat. "None of the long-term solutions are going to look like much when May 31 rolls around and gas is $2 a gallon."

Clinton said he has not ruled out turning to the oil reserves. But critics said that wouldn't necessarily ease demand enough to reduce prices and could put the country at risk if some catastrophe depleted other oil production. The reserves alone would keep the country running for about three months.

Some senators from oil producing states such as Oklahoma are among those leading a call for increased production of domestic oil while telling the Organization of the Petroleum Exporting Countries in the strongest terms that its oil quotas could damage dealings with the United States on other fronts.

"The world is a very unpredictable place, and we need a better energy policy for domestic production," said Sen. Pat Roberts, a Kansas Republican. "We need to become less reliant on OPEC."

Roberts and Sen. Sam Brownback, also a Kansas Republican, have endorsed legislation that would try to increase the production of oil from Kansas and other states. Currently, the United States produces about 44 percent of its own oil.

"We're beating on the administration to say, `We better start addressing this,' or we could see prices go up further," Brownback said.

The bill would give tax credits to marginal oil and gas producers and provide further tax relief when prices dip to certain levels. For oil, tax relief would kick in at $15 a barrel. Nationally, oil was almost $32 a barrel as of Wednesday, up from $10.72 on Dec. 10, 1998.

Tax relief would help producers stay in business when prices fall, said Bob Krehbiel, executive vice president of the Kansas Independent Oil and Gas Association. As it is now, many producers can't survive price dips, he said.

"Rigs get stacked, people leave the industry and file for bankruptcy, and we lose production," Krehbiel said. "A year later we're supposed to come back? Those dips are designed to drive people out of business."

But tax relief for domestic producers failed to gain much headway in Congress last year and has some opposition again, despite the sharp rise in fuel prices.

"I'd hate to see us knuckling under to blackmail, which is what this does," said Sen. Frank Lautenberg, a New Jersey Democrat. "It says, `OK, keep the prices high on domestic as well as foreign oil.'"

More domestic oil production also is called for in a resolution Sen. John Ashcroft, a Missouri Republican, is circulating for Senate support.

The thrust of the resolution, however, is to ask that Clinton demand OPEC increase oil exports when the 11-country group meets March 27. OPEC should realize that failure to cooperate could have trade and foreign-relations consequences, Ashcroft said.

"If they want us to be a consistent customer, they should be a consistent supplier," Ashcroft said. "The United States also is a valuable ally, but we should be an ally only to our allies."

Some Democrats said they are not sure the resolution would have much impact. But they agree that OPEC countries need to hear the message.

"When they dial 911 for America, we send thousands of our young people to the area to defend those countries," Lautenberg said. "It's quite unrealistic to suppose that that enthusiasm can be developed again if they take advantage of this situation."

Three major petroleum-exporting countries, including Saudi Arabia, have recommended raising oil production. But the lack of details and the timing made it likely that prices will remain high for some time, analysts said.

Brownback, Roberts and Ashcroft all propose that the United States consider easing regulations that have protected some regions from oil exploration, particularly in the Alaska National Wildlife Refuge in the arctic.

Rep. Don Young, a Republican who is Alaska's only House member, told colleagues in a letter Wednesday that if they supported a bill to permanently keep the refuge from being tapped for oil, then they also support $2 per gallon gasoline.

"The world's greatest superpower has no significant plan to develop new U.S. oil," Young wrote. "Instead, (Energy) Secretary Bill Richardson is instructed to `beg' other countries for oil."

Young said enough oil is under the refuge to match Saudi Arabian oil for 30 years, an estimate called highly inflated by environmental groups. The average estimate is a 57-day U.S. supply, according to the Sierra Club.

"There's a lot more oil in Detroit," said David Nemtzow, president of the Alliance to Save Energy in Washington, referring to untapped ways to improve fuel efficiency.

"Consumption is back out of control," said Nemtzow, who believes America is paying the price for indulging in luxuries like sport- utility and other gas-gobbling vehicles.

Some lawmakers agree that cutting consumption is at least as important as increasing production of fuel.

"We've got to improve our efficiency, we've got to depend more on natural gas that we have here in abundant supply, and we have to develop alternative energy sources," said Sen. Joe Lieberman, a Connecticut Democrat.

Another need is renewed public awareness that fuel supplies can shrink and prices can rise, just as they did so dramatically two decades ago.

"One in three people was born after the energy crisis," Nemtzow said. "They don't remember how vulnerable we are."

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