Petroleum politics: After 20 years, oil is campaign issue

The Mobil gas station in lower Manhattan posted a wallet-emptying price of $1.56 for a gallon of unleaded gasoline. On Wednesday, Mayor Rudolph Giuliani used those prices as a backdrop to denounce President Clinton for "napping" while oil prices skyrocketed.

"The price of home heating and our gasoline is unfortunately going through the roof," said Mayor Giuliani, who, not coincidentally, is running for senator against the president's wife, Hillary Rodham Clinton.

As Giuliani's attack illustrates, for the first time in almost 20 years, the price of energy is becoming a political issue. Republicans are seizing on high petroleum prices and are trying to link them to Democrats.

The Republican National Committee is attacking the Kyoto Treaty on global climate change - backed by Vice President Al Gore - as yet another way energy prices might rise. The RNC - which says that to meet the treaty requirements, the US will have to raise energy taxes - plans to highlight the issue in every state.

"The high price of energy is one of the first real chinks in the economic armor Republicans can use against the Clinton-Gore administration," says Larry Sabato, a political analyst at the University of Virginia in Charlottesville. "Republicans have to use what little they have."

The political stakes do not appear to be lost on the White House. This week, Energy Secretary Bill Richardson is trying to persuade Middle East oil producers to step up output. Next week, the Organization of Petroleum Exporting Countries (OPEC) will meet to decide production quotas. Last year, OPEC cut production by 8 percent at a time when demand was starting to rise.

Now, energy experts believe worldwide demand is outstripping supply by about 4 million barrels of oil per day. According to early reports, the group is likely to increase output, but it's not clear when or by how much.

This week the White House got a taste of the political problems it might face if Mr. Richardson is not successful.

A long line of truck drivers rambled around the capital to protest high diesel prices. Northeast officials on both sides of the political fence are calling on Mr. Clinton to release oil from the Strategic Petroleum Reserve (SPR), a move he has rejected so far because he does not consider it a national emergency. Instead, he has released additional funds to help low-income people heat their homes.

In Washington, the Democratic National Committee says the Republicans have opposed efforts to make the high prices more bearable by providing heating assistance to the poor. "Given the choice of helping families in need through programs like the Low Income Home Energy Assistance Program, the Republicans choose the special interest every time," says Jenny Backus, a spokeswoman for the DNC.

The last time energy played a role in politics was in 1980, when President Jimmy Carter ran for his second term against Ronald Reagan. After the fall of the shah of Iran, energy prices rose and gas lines developed. At the same time, natural gas was in such short supply, Mr. Carter declared a national emergency.

Although the voters had more than oil on their mind when they voted in Mr. Reagan, the long gas lines played a part. "The gas line was the metaphor for inflation and the state of the economy," says John Zogby, a pollster in Utica, N.Y.

Today, the economy is humming, but Mr. Zogby thinks the energy issue may resonate with voters, especially in New York. Two years ago Zogby found that one of the top issues among upstate New Yorkers was their utility rates. "I had never seen that before but it gave me an indication of the potential for the energy issue," he says.

The potential is not lost on Giuliani in his high-stakes race against the first lady. Three weeks ago, he called for the release of oil from the SPR. On Wednesday, he called on Congress to hold hearings. "The Republicans should hold the president's feet to the fire," he said.

So far, congressional Republicans seem to feel that by blaming the president, they can tarnish the first lady as well. "Why doesn't the first lady walk across the hall and ask to release the petroleum reserves?" asks Joseph Mercurio, a Republican consultant.

Mrs. Clinton's campaign has taken a while to react to the energy problem.

Three weeks ago, when the price of home heating oil was soaring, Mrs. Clinton did not say anything. "The silence is deafening," said Kevin Rooney, executive vice president of the Oil Heat Institute in Hauppauge. On Tuesday, her campaign released a five-part plan that includes creating an oil reserve for the Northeast, requiring the industry to keep more oil in storage, and loaning out oil from the SPR to be replaced with a larger volume of oil at a later time.

On Wednesday, Giuliani, who is calling for the president to release oil from the SPR, criticized parts of the first lady's strategy, particularly the oil swaps. "The swap of oil would mean the oil companies would have to give back more oil later so you drive the price of oil up six months from now," said Giuliani.

Mrs. Clinton's campaign did not return repeated calls for comment.

(c) Copyright 2000. The Christian Science Publishing Society