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Archive for Thursday, September 28, 2000

Oil from reserves will buy time

September 28, 2000

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— To those who see politics behind President Clinton's decision to overrule his Treasury secretary and tap into the nation's emergency oil reserves, I say: Next you will claim that the sun rises in the east and sets in the west.

Clinton is all politics all the time, a state of consciousness Al Gore finally seems to be achieving with his impressive faux populist campaign this year. But politics can be a useful rather than a destructive catalyst in presidential decision-making. Clinton's release of oil from the Strategic Petroleum Reserve (SPR) demonstrates just this.

The absence of politics in national security or economic decisions is difficult to achieve and often becomes a problem if achieved. Without political urgency, leaders do not take disputed or painful steps very often.

Clinton acted to help Gore's campaign by ordering the phased release of 30 million barrels of oil into a painfully tight market. The political motivation is so undeniably clear that the White House and Gore are compelled to deny it at the top of their lungs.

Two words should have dominated Clinton's thinking as he weighed the pros and cons of oil shortages and politics: Tony Blair. Clinton cannot want his friend the vice president to suffer as much as has his friend the British prime minister.

To find another presidential act that mixes politics and national security so blatantly in a presidential campaign year, you have to go all the way back to, umm ... well ... September 1992. Way back then, George (H. W.) Bush abruptly went on a selling spree that sent F-15 fighter aircraft to Saudi Arabia, F-16s to Taiwan and communications satellites to China.

Decisions that had been bottled up for years were taken and trumpeted in a 10-day span. The sales, Bush bragged, would save tens of thousands of jobs in Electoral College battleground states. The foreign policy consequences were not highlighted or analyzed then.

But Bush's sale of 150 F-16s to Taiwan is still cited by Beijing officials as the most destabilizing act in U.S.-Chinese relations in the past decade.

The rest of the 1990s demonstrated that Taiwan needed all the help it could get against Beijing's bellicose threats. Politics helped determine the timing of Bush's decision but did not undermine its ultimate validity.

I think something similar will happen with Clinton's oil reserves decision, which is in part also about deterrence. His decision puts OPEC on notice that it will not control prices in the United States. He improves U.S. ability to counter any oil cutoff by Iraq's Saddam Hussein. And the modest intervention interjects some rationality in a market now dominated by greed and fear.

That is why OPEC was compelled to welcome the SPR release as a stabilizing move, rather than retaliate against it by cutting production as many had predicted.

The consequences of Clinton's petroleum release lie more in the realm of market psychology than in global strategy. It will buy time, not solve the nation's long-term energy problems. Bush's F-16 decision did not solve the China-Taiwan problem, either. But it probably did help prevent a worse disaster occurring. Clinton's oil move should be looked at in the same light.

Even so, it is doubtful that absent Gore's urgent political needs Clinton would have overridden the strong objections voiced by Treasury Secretary Larry Summers to releasing the oil reserves now. But consumers are more likely to be impressed by fuel prices dropping, at least temporarily.

Gore pursues his attacks on Bush and Cheney as agents of Big Oil an assault that helps obscure the Gore family's own longstanding ties to Occidental Petroleum while carefully staying away from substantive discussions on a long-term energy policy. He also eschews truly populist measures, like new taxes on the windfall profits oil companies have been spinning out of the current shortages.

This skillful use of rhetoric without great substance is somewhat surprising: Gore comes to oil problems and energy policy in general through concern about the environment. Ecology is as elitist as St. Alban's and Harvard, Gore's other formative schools. Green politics demand painful transitions to new motoring and energy-use habits.

But his nearly eight years at Clinton University have taught Gore much, including it seems the value of a narrow, quick fix aimed at maintaining political viability. If the nation benefits, too, that's gravy.




Jim Hoagland is a columnsit for Washington Post Writers Group.

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