CLEVELAND - The presidential rivals split yesterday over the wisdom of tapping the Strategic Petroleum Reserve, with Al Gore proposing a modest withdrawal aimed at reducing oil prices and George W. Bush casting the move as `` bad public policy '' and ``a risk to national security.''
Standing at an oil distributorship in St. Mary's County, Md., where most people heat their homes with oil, Gore urged the president to make the reserve's supplies available to the market.
Until now, Clinton administration officials have expressed reluctance to release oil from the 571 million barrel reserve, citing concerns that the move would distort the oil markets and that oil-producing nations could compensate by cutting production.
But public pressure has increased along with the price of crude and the prospect of soaring heating bills this winter, and several officials on Capitol Hill said Gore's statements are a signal that President Clinton is preparing to tap the reserve, perhaps as early as today.
If the releases lower prices and ease tight supplies, the Energy Department should make additional releases ``to further stabilize prices,'' Gore said. ``We need aggressive action right now.''
Under Gore's so-called ``swap'' proposal, the reserve's oil, initially 5 million barrels at a time, would be loaned to energy companies, which would restock the reserve when prices are cheaper.
The vice president also urged Congress to provide $400 million in additional energy assistance to low-income families and tax credits to oil distributors to help build up dwindling heating-oil stocks. And he said foreign producers must live up to their promises to increase supplies.
``It's time for OPEC to get serious about the supply and price of oil,'' the vice president declared.
The price of crude for October delivery is close to $38 a barrel, the highest in a decade.
That has pushed gasoline and home heating oil prices past what they were during the Persian Gulf War.
Although 5 million barrels represents just one-quarter of one day's US oil consumption, a release would be expected to ease the pressure on prices by signaling to oil traders that the government is prepared to step into the market.
After Gore's remarks yesterday, crude oil for November delivery fell $1.24, or 3.5 percent, to $34 a barrel on the New York Mercantile Exchange. Nauman Barakat, vice president of global energy trading at ABN Amro Inc. in New York, estimated that a 5 million barrel release would reduce prices $1 or $2 a barrel, Bloomberg News Service reported.
Still, the wisdom of dipping into the Strategic Petroleum Reserve has been controversial, even within the administration.
Appearing yesterday at an Ohio computer equipment manufacturer, Bush cited a Sept. 13 warning from the administration's Treasury Department secretary, Lawrence Summers, who said he and Federal Reserve chairman Alan Greenspan believed depleting the reserve ``would be a major and substantial policy mistake.''
In a memo to Clinton, reported yesterday by the Wall Street Journal, Summers said tapping the reserve would ``set a dangerous precedent'' by using it to ``manipulate prices'' rather than achieve its stated purpose of preventing supply disruptions.
Bush also castigated Gore for making the suggestion after being quoted last winter as saying the Organization of Petroleum Exporting Countries could easily undercut a reserve withdrawal by reducing crude oil production.
``Now that we're 47 days away from the election, he's changed his mind and is ignoring his own advice,'' Bush said. ``That's bad public policy. The Strategic Petroleum Reserve was an insurance policy meant for a sudden disruption of our energy supply or for war. The Strategic Petroleum Reserve should not be used as an attempt to drive down oil prices in an election.''
Instead, the Texas governor favors aggressive exploration for domestic oil. He also wants to expand the country's gasoline-refining capacity, making better use of hydroelectric power and natural gas, and pressuring OPEC to boost production quotas.
Earlier in New York, Bush said on the CBS talk show ``Live with Regis,'' ``We need to use our strong hand in the diplomatic circles to make it clear to our friends overseas that we don't want them holding our nation and our consumers hostage. We expect them to increase the supply of crude oil, so that the price of crude oil drops.''
The Strategic Petroleum Reserve was created after the 1973 Arab oil embargo to prevent an energy shortage during a war or global economic crisis.
Located mostly in Louisiana and Texas, it has been tapped only twice, for a test and during the Gulf War.
A bipartisan coalition of lawmakers on Capitol Hill, led by Senators Susan Collins, a Maine Republican, and Charles Schumer, a New York Democrat, has been urging the administration to tap the reserve since last winter. Energy Secretary Bill Richardson met with officials from the Northeast on Wednesday to discuss oil prices, and ``hinted strongly'' that Clinton would soon approve a crude oil release, one Republican aide said. Gore's statements yesterday further confirmed suspicions that the administration has shifted course, said the aides, who requested anonymity.
A spokeswoman for Summers played down the Sept. 13 memo. There are several options for using the reserve, including Gore's proposal, ``which could be appropriate in current circumstances,'' Michelle Smith said.
Democrats say the new eagerness to tap the reserve is motivated partly by foreign policy concerns, intended to prevent the United States from being entirely dependent on foreign crude oil.
``Al Gore doesn't want the United States to be held hostage by Saddam Hussein and other governments in the world,'' said US Representative Edward J. Markey, a Malden Democrat. ``Saddam boasted two days ago that he would use his oil supply to force the United States to lift sanctions on Iraq. The Strategic Petroleum Reserve is our weapon against Saddam and other oil despots.''
Some market analysts also argue that it is false to consider the oil market a true capitalist model, given the price-setting practices of OPEC.
``Some people are opposed to touching the reserve because they view it as intervention in a free market. I don't see it that way, because the markets are not free,'' said Lincoln F. Anderson, chief investment officer of LPL Financial Services in Boston. ``It's obviously not free trade when you have prices being controlled by an international cartel not operating in our best interests.''
While in Ohio, Bush visited Thermagon, a 100-person Cleveland manufacturer of computer cooling devices. The governor spoke about his plan to modernize the Social Security system by allowing younger workers to voluntarily invest a portion of their payroll taxes in the stock market.
The proposal was endorsed by Tony Roosevelt, grandson of President Franklin Delano Roosevelt. President Roosevelt is considered the driving force behind establishing the Social Security system.
