Release U.S. Oil Reserves Now
At first glance, Mayor Rudolph Giuliani and state Senator George Onorato might not appear to have much in common, aside from their chosen vocation as public servants. However, the two are united in a deep and abiding concern for the people of this city who are their constituents. To this end, both have called on President Bill Clinton to address the current crisis in fuel oil and gasoline prices by releasing this nation's strategic petroleum reserves. We join with them in this request.
The bitterly cold weather across wide stretches of the United States during the past two months has, naturally, escalated the demand for heating oil in homes, schools, businesses, and thousands of other public or private facilities. However, the cold weather is not the only villain of the piece. The Organization of Petroleum Exporting Countries (OPEC) had decided, even before the cold spell set in, to restrict production. The amount of oil released for sale on the world market by OPEC dropped and the price of crude oil soared to $30 a barrel—an astronomical amount, compared to the $10 a barrel charged in late 1998. The hike in prices for fuel oil and other petroleum-based products spread like an oil slick from a leaky tanker.
Recently gasoline prices have begun to escalate as well, and those prices do not appear to be contingent upon weather conditions. Some economists predict that gasoline may cost $2 a gallon by summer. Gas prices at $2 or more a gallon will have a deleterious impact on a number of quality of life issues. The many volunteer ambulance services that come to the aid of residents in a number of Queens neighborhoods may find themselves cutting back on their hours of operation because they cannot afford to buy fuel for their vehicles. Services such as Access-A-Ride for disabled persons may be cut back or restricted. The parents of children who travel to school on private buses will find themselves paying more for the privilege, either out of their own pockets or by having their subsidies for such transportation cut.
It should be noted that owing to a number of circumstances, crude oil at $30 a barrel does not threaten the American economy in the same way and to the same extent that the Arab oil embargo of the early 1970s did. The United States now imports three times as much oil as it did during the early '70s, when the oil embargo put the American economy into a recession and an inflationary spiral that lasted for years. Because of much improved energy efficiency and an expanded economy, oil amounts to only three percent of the Gross Domestic Product. OPEC now includes Norway and Mexico among its members, one a NATO ally and the other a neighbor. Both have limits to their willingness to wreak petroleum-based havoc on the American economy.
We note, too, that it was America which came to the aid of Saudi Arabia and Kuwait in their hour of need—aid which involved putting American lives in harm's way. We ask only that in return they make an extremely small financial sacrifice, one which will result in more sales volume and ultimately a larger bottom line. Where are our whilom allies now?
Oil and gas cost less in the United States because they are taxed less heavily than in almost any other country on earth. Adjusted for inflation, prices for these commodities are historically low. Oil prices, despite the short-term runup, are now seven percent higher than in 1982, according to the American Petroleum Institute. During the past 18 years, in contrast, coffee prices rose 55 percent and bread prices 91 percent.
This picture is not as rosy as it seems, however. Even though many senior citizens take advantage of the Home Energy Assistance Program (HEAP), funds for such assistance are limited. Queens numbers more senior citizens among its population than any other borough in New York City. With home oil prices escalating, both seniors on fixed incomes and struggling young parents may find themselves having difficulties trying to pay heating bills and feed and clothe their families and themselves. Landlords may find themselves unable to pay oil bills and mortgages. Small businesses—and even some larger ones—may find themselves laying off workers because they cannot afford to keep their buildings heated for a full work day or during several shifts.
Giuliani has pointed out that it was his criticisms of Clinton's policies that prompted the president to announce an allocation of $125 million in emergency cash subsidies to aid poor people in paying for heating oil. Clinton's willingness to turn loose of some federal money to help people living at or below the poverty level to pay their heating bills does not begin to go far enough to alleviate the situation, however.
The strategic petroleum reserve is intended to be used in times of genuine threats to the national security. That the nation's elderly and poor—and to a great extent the middle class, the nation's economic backbone—are faced with difficulties in paying both their heating and food bills seems to us a threat to the national security as great as any military or terrorist action abroad or on our shores. Unless there exists an immediate need to use the reserves in some national defense action known only to him, Clinton should allow the nation's oil suppliers to draw upon the strategic petroleum reserve immediately. To pay either a heating or a grocery bill, rather than both, is a choice no American should have to make.