A Vague Beast Called Big Oil - 29 September 2000

I suppose if you were to stop people in the street in Britain, France, Belgium, Germany, and then do the same all over the United States - that would be some galloping poll, wouldn't it? - if you asked people to say, honestly, what two things were most on their minds, one that affected their own interests and the other more of a national concern, I guess anyway that in Europe the honest answer would be petrol and the fate of the euro. In this country, gasoline - meaning petrol - and the presidential election.

The petrol problem, the lurching of the price at the pump in various parts of this continental country, has been a chronic popular grumble since the spring though it never erupted anywhere into the recent general sit-down strike of the truckers and the farmers.

The phrase to notice in that last sentence of mine is "in various parts of this continental country" because the availability of petrol for any American depends largely on the climate, on how far away you are from a port, from a refinery, from any other source of supply.

Some very different anxieties spring from these differences of place. We've heard no complaints for the people in, say, Arizona - that desert state is close enough to the ports of the West coast, its population is comparatively small and it has mild, by our lights hot, winters and probably never gives a thought to heating oil.

The steadiest concern here in the North East is about the price of oil in the barrel and the total control of it by the Opec nations.

This concern is felt by, I should say about half the population - say 130-odd millions - who suffer from Arctic winters. This takes in the whole Midwest and the prairie all the way through to the Rockies.

And here, from where I sit, by the great population that reaches from Washington DC, up through New Jersey, New York State - which is the size, exactly, of England - and the six New England states.

At the moment they're the last people to start a general complaint about the price of petrol. But they're the first to ask all their candidates for public office, from town councillors, to congressmen, to hopeful senators: What are you going to do about next winter's heating oil?

The six New England states have discovered that they have only 10 days heating oil reserve instead of the normal six weeks.

The other question, often asked in the same breath, is why is this fuel oil inventory, the reserve kept back for heating oil, lower than it has ever been?

First I should say that, of course, automobile - motorcar - drivers and homeowners don't use crude oil, which is what we're talking about when we name the price of oil in a barrel. They burn a product refined from crude.

The crude costs about half of what Americans pay at the pump. The other half takes into account city taxes plus state taxes plus the federal tax. The city and state, of course, vary greatly from place to place.

In the regions where, this summer, the cost of a gallon of petrol went over two dollars people began to yelp but, as I say, they soon learned that the reserve fuel for next winter's heating oil was at an all-time low.

The Democrats and some Republicans blamed the Arabs. Many Republicans, especially ones running for election next month, found it more convenient to blame President Clinton and the Democrats.

Some people who are not noticeably partisan blame the refiners for responding too greedily to the car owners' huge demand in this blazing Clinton prosperity.

The oil industry - in which, by the way, both Governor Bush and his running mate, Mr Dick Cheney, made their fortunes - the oil industry blames the administration and the Environmental Protection Agency in particular for the strangling restrictions it has put on building new refineries. A big point they make is that there is no major refinery operating today that is under 25-years-old.

Vice-President Gore, running full speed just now as the Democrats' presidential opponent to Governor Bush, is a very inviting target here.

For the past eight years, throughout Mr Clinton's two terms, the vice-president, more than any other American except the environmentalists' guru Mr Ralph Nader, has gone relentlessly after industrialists who befoul the rivers, the lakes, who fuel smoking chimneys with gases rushing up into the atmosphere, to create global warming and bore holes into the ozone layer so that very soon we shall all fall down in the streets from a melanoma plague.

This, of course, is not literally what Mr Gore has ever said but his long campaign to clean up our world and punish the besmirchers has been conducted with such evangelical fury and without a smidgen of humour that he does present an inviting target.

On oil his main alleged crime is that he's the one most responsible for closing to oil drilling the vast spaces of Alaska - area 600,000 square miles, population 600,000, hence population density one human per square mile. Ah, but there are living creatures other than human, including rare wildlife.

There is an ocean of oil swilling along deep under this vast lonely land but Mr Gore has been against further oil drilling.

I won't say that Mr Gore has ever said that in an agony of choice he would rather save the spotted owl than the automobile but he does sometimes take off on utopian flights and he has said - and don't think Republican candidates won't quote him - that he hopes to see the end of the internal combustion engine.

It is on the oil problem then that Mr Gore is most vulnerable and in return he is saying that the villain is "Big Oil" - not defined except to set up in an audiences' mind a nasty connection with the two oil millionaires from Texas - the Messrs Bush and Cheney.

But so far, anyway, in blaming some vague beast called Big Oil you'd have to say the refiners should have thought about the coming winter and held back a bigger reserve of fuel oil and that would, of course, have sent up the car drivers' petrol everywhere in a surge.

As it is the refineries are going all out to meet the enormous demand in this high riding, high energy, Clinton prosperity.

Does this fact - of refineries at full blast - does it not point to the true culprit: the American people themselves, who for the past giddy nine years have assumed a right to drive their cars - big cars, sports utility vehicles, the great gas guzzlers - anywhere at any time as often as they choose.

Most of the many millions of commuters, by the way, drive to the city and back all alone. And Ralph Nader has sensibly proposed that the coming crisis of supply be met now by instituting - which in this freewheeling democracy would have to mean a congressional bill or an executive dictate from President Clinton - by instituting a car pooling system such as we had during the Second World War, at least two people to every car.

Can you imagine with the election a month away or realistically at any time other than a war or an Arab oil embargo which provoked the Strategic Petroleum Reserve Bill in the first place.

So what to do, especially if you're President Clinton hoping to get Vice-President Gore elected, and you've reflected that any increase in oil availability takes about five weeks to affect and please the consumer? And last week, oh dear, it was just five weeks away from 7 November.

Mr Clinton had facing him also a more exquisite problem intact. It concerns his ever-loving wife, who, as you must know, has been running - forever it seems - to represent her new found home state, New York, in the United States Senate.

This date has been as vocal as any in expressing anxiety about the coming winter and the grim prospect of insufficient heating oil for their homes.

Mr Clinton's problem is how incidentally to help his wife by appearing to help the nation?

Last week a proposal came up to have the president do something he'd never done and which has been done only once before which was during the Gulf War and which most informed politicians and oil men and the military deplore - namely to release oil from the nation's strategic petroleum reserve, which is there to be called on in a war or other national emergency not necessarily when your wife is running for the Senate in a state that fears a hard, cold winter.

Promptly the secretary of the treasury despatched a memorandum to the president saying that to tap the strategic oil reserve would be "a major substantial policy mistake." He added that Mr Alan Greenspan - the chairman of the Federal Reserve who's become an oracle on all matters affecting the economy - Mr Greenspan thinks also it would be a grave error.

So a week goes by, a week longer for any new infusion of oil to help the Democrats by election weekend.

So this week President Clinton ignored these warnings and did what he thought was best for the nation. He released from the strategic reserve 30 million barrels.

Experts whose political bias they don't care to disclose say this would relieve the shortage for about one weekend. President Clinton hopes and prays it may be well over the first weekend in November.

In saying a little earlier that the American people are as much to blame as anybody I meant, I now realise, I'm blaming prosperity itself.

A transport survey finds that traffic in the big cities is heavier, more gridlocked than ever in history - more trucks carrying more goods, more things being needed or wanted by more people. That's the very definition of prosperity isn't it?

In the happy process we forgot that, as the poet nearly said: "Getting and spending, we lay waste our oil reserve."

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