In his brief stop in Bangor Wednesday to get an earful from shivering Mainers, Energy Secretary Bill Richardson admitted his agency was partially to blame for not anticipating soaring prices and depleted supply. “Caught napping” was the expression he used.
While such candor is refreshing, Secretary Richardson’s description of the situation — “the price of oil was $10 a barrel and all of a sudden you have this fluctuation” — is hardly accurate. The price passed that level a year ago and signs that both crude and refined products would be in short supply this winter were evident nearly as long.
OPEC announced the third in a series of production cuts last April, at a time when the barrel price already had risen from below $10 the previous December to $14.50. At an international oil conference a month later, Dr. Rilwanu Lukman, secretary general of OPEC, noted that the recession in Southeast Asia, what he called the “prime culprit” in the collapse of prices, already was abating. Dr. Lukman also noted that another contributing factor, a warmer than usual 1998-’99 winter in the Northern Hemisphere, was a condition too mercurial to be a factor in long-range policy, and that the petroleum industry in the United States has contributed significantly to the looming shortage by capping wells and laying off refinery workers.
Members of Congress from the Northeast, including Maine Sens. Olympia Snowe and Susan Collins, have been urging the Department of Energy to address the clearly impending shortage since last summer. Their current call to tap into the Strategic Petroleum Reserves is not the market-skewing Band-Aid Secretary Richardson says it is. It is the kind of last-ditch action that inevitably results from failing to take timely and rational action.
And if the Energy Department can’t wake up long enough to listen to OPEC officials and members of Congress, it could at least pay attention to its own statements. In a briefing paper published last April, the department observed that worldwide demand for oil had been rising since the beginning of 1999, driven primarily by the economic rebound in Southeast Asia.
Coincidentally, on the very day Secretary Richardson was telling New Englanders to bundle up and tough it out, the House Intelligence Committee recieved an update from Paul Redmond, the former head of counterintelligence at the CIA who was been conducting an in-depth review of actions taken by the Energy Department since it got caught sleeping on its job of safeguarding research at the nation’s nuclear weapons laboratories. Mr. Redmond acknowledged that efforts to combat espionage have improved somewhat, but said progress on this vital matter has been slow and inconsistent. As for the department’s glowing self-assessment, including Secretary Richardson’s assertion that improvements have been “dramatic,” Mr. Redmond observed that “some of the hyperbole was nonsense.”
Still, it’s good to know that Secretary Richardson is not interested in “blaming anybody” for the oil crunch. What’s important, he says, is finding solutions, such as developing a national home heating oil plan, developing alternatives to heating oil and diplomacy with OPEC. It’s a big job. Good thing the Department of Energy is so well-rested.
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