September 24, 2000

Gasoline, Fuel Oil Prices Suddenly Become a Big Issue

There he goes again – Al Gore inventing cock-and-bull issues.

This time it’s about George Bush’s and Dick Cheney’s totally proper, former connections to the oil industry.

Strangely, none of the Beltway media seems to know about Gore’s suspicious on-going connection to the Occidental Petroleum Corporation.

Oil company relationships became crucial last week when the Organization of Petroleum Exporting Countries (OPEC) reneged on its promise to increase production and bring down gasoline and fuel oil prices.

Instead, the oil cartel dominated by Saudi Arabia continued its slowdown. At midweek, a barrel of the precious stuff climbed to $37.80. Just eighteen months ago the price was $10.

Gasoline prices some places in the United States climbed above $2 a gallon. This compares to $5.50 a gallon in France and Great Britain. European countries run their governments mostly on gasoline taxes of  $3.50 a gallon.

When the shortage of oil hit the headlines, the Dow Jones stock index dived 600 points in three weeks.  Suddenly the unexpected X-factor event sent candidates scurrying to cope with the new issue.

Gore urged President Clinton to open the spigots on the government’s Strategic Petroleum Reserves (SPR) of 600 million barrels "to stabilize prices." Clinton obliged, but has not yet decided on the amount – several increments of five million barrels each has been suggested by Secretary of Energy  Bill Richardson.

In the meantime, Gore accuses the oil industry of "profiteering." He promises "to stand up to the big oil interests and fight for our families."  

Gore links Bush to the bad guys on the basis of Bush’s early investment and labor in a Texas oil well. Cheney is castigated for having been the well-paid chief executive officer of Halliburton Company, an engineering services firm for the oil industry trying to find more black gold.

The old admonition to people living in glass houses should be carefully pondered by Gore. As vice-president "re-inventing government," he persuaded Clinton to sell the government’s interest in the Navy’s Elk Hill (California) oil reserve held intact since it was established in 1912. The winning bidder was Occidental Petroleum for $3.5 billion, according to the Center for Public Integrity.

Consider a bit of history.  

In 1922, Interior Secretary Albert Fall accepted a bribe to let an oil company drill secretly in the Elk Hill and Teapot Dome (Wyoming) Naval oil reserves. For this, Fall and Navy Secretary Edward Denby were dismissed, and Fall was imprisoned.

President Richard Nixon tried to lease Elk Hills to boost oil production during the 1973 Arab oil embargo. President Reagan proposed selling Elk Hills for $1.5 billion that would go toward reducing the federal budget deficit being kicked skyward by a Democrat Congress.

How did Gore and Occidental Oil succeed when others failed? One wonders if the long-time financial relationship between the Gore family and Armand Hammer, founder of Occidental, greased the skids. For shocking details see Edward Jay Epstein’s book "Secret History of Armand Hammer."

Albert Gore, Jr., bought from his father some land originally owned by Occidental in the 1960s and said to have a zinc deposit. No zinc has ever been mined, but Occidental Petroleum pays Al Gore, Jr., $20,000 a year for" mineral rights."

Occidental still today, under the chairmanship of Ray Irani, is a generous contributor to the Gore campaign. Irani was a recipient of one of Gore’s "no controlling legal authority" telephone solicitations and paid $100,000 to sleep in Lincoln’s bed.

It would seem that Bush’s and Cheney’s experience in the oil business would be valuable in dealing with any energy crisis. Cheney was Secretary of Defense during the Gulf War and responsible for oil production agreements with Saudi Arabia and Kuwait.  

 Bush says the present run-up in oil price results from lack of an energy policy by the Clinton-Gore administration. The Republican candidate declares the strategic oil reserve – tapped just once, for the Gulf War -- should be saved exclusively for war.

He said Wednesday he would "use our diplomatic leverage with Saudi Arabia, increase domestic exploration and drill in the Alaska Anwar oil field now off-limits because of opposition by wildlife advocates. He points to the existing Alaska wells and pipeline  -- once stoutly opposed  -- which now operate harmoniously with the environment.

Treasury Secretary Lawrence Summers and Federal Reserve Chairman Alan Greenspan dashed off a stiff memorandum to President Clinton declaring that tapping the strategic reserve "would be a substantial policy mistake."

Summers wrote that he and Greenspan doubt that releasing 60 million barrels of oil from the reserve would have even "a modest impact" on prices. OPEC could compensate by reducing production still more.

Trying to control world oil prices with a squirt can is an invitation to economic disaster. No thanks. We’ve been there and done that.

By Lindsey Williams, columnist for Sun Coast Media Group newspapers