sg.biz.yahoo.com By Campion Walsh Of DOW JONES NEWSWIRES

WASHINGTON -(Dow Jones)- Iraq is why President George W. Bush's administration took the unusual step this week of publicly asking the Organization of Petroleum Exporting Countries for more oil, industry analysts said.

ADVERTISEMENT While the Bush administration is worried by reduced oil supply due to strikes in Venezuela, it's the prospect of war with Iraq and a suspension of some of the Persian Gulf country's 2.4 million barrels a day of production that led the State Department to say publicly Wednesday it would be positive for OPEC to deliver more oil.

"It's all part of the psychological warfare, if you will," said Fadel Gheit, oil analyst for investment bank Fahnestock & Co. The Bush administration is effectively saying, "Saddam is not going to get away with anything ... and sending a message to the oil markets and the world not to panic," Gheit said.

Analysts say the U.S. strategy effectively divides responsibilities for the two international issues preoccupying oil traders.

Under this scenario OPEC will address the steep drop in Venezuelan oil production since early December from its previous rate of nearly 2.6 million barrels a day; while the U.S. government's strategic petroleum reserve and other emergency stockpiles will be used if war breaks out in Iraq.

"The last thing (Bush administration officials) want during a war with Iraq is for another significant OPEC exporter to be off-line the way Venezuela is now," said Aaron Brady, oil analyst at Wakefield, Mass.-based Energy Security Analysis Inc.

Releasing crude now from the 599-million-barrel SPR would bring crude oil prices down, but it could also cause alarm in light of the Bush administration's policy of only using SPR crude for international supply emergencies, analysts said. Bush and Vice President Dick Cheney pointedly criticized President Bill Clinton for tapping the reserve in non-emergency situations, and they're trying to set the bar high for situations that do warrant a release, analysts said.

OPEC Likely Wasn't Audience For State Department Remarks

While OPEC's emergency meeting Sunday in Vienna is expected to yield a significant production increase, the group's long-running production above quota has already helped to cushion some of the shortage from the Venezuela strikes, now in the fifth week.

Additional oil supply as a result of the meeting may serve as much to address market concerns about Iraq as it does the physical shortfall from Venezuela, said Vahan Zanoyan, president of the Washington-based consultancy Petroleum Finance Co.

"I would find it hard to believe that this is just about Venezuela," Zanoyan said. "By the time an OPEC increase arrives it will be mid- to late-February, and by then we're almost entering the routine maintenance period when refineries don't really need as much crude."

Many refineries shut down around March to conduct routine maintenance and to adjust operations to produce more gasoline for the summer driving season. The shutdowns, which can last several weeks, reduce crude demand.

Analysts said OPEC didn't need private or public prodding from the State Department this week to see it's in its own interest to boost production when crude oil prices rise above $30 a barrel for a sustained period, as the front-month New York Mercantile Exchange futures contract has since mid-December.

State Department spokesman Richard Boucher's comment that it would be "positive" for OPEC to raise supply was probably meant to calm markets and the general public, rather than to influence Saudi Arabia or any other members of the oil-exporters' group, they said.

"This could be in part in preparation for anticipated conflict in Iraq, either destruction from the war or its psychological effect," Zanoyan said.

Gheit of Fahnestock & Co. said the U.S. may be taking a third precaution for the oil-market impact of a potential war in Iraq, beyond releasing crude from the SPR or calling on OPEC for emergency supply. The U.S. military may be stockpiling oil beyond the scope of data-collection agencies and market reporters, he said.

"There has been hoarding by governments including ours off the books," Gheit said, suggesting various military facilities and vessels outside the scope of commercial analysis could be storing oil beyond what would be needed for a successful war against Iraq.

While Iraq is the main issue, Venezuela has been a contributing factor in the Bush administration's public expressions of concern about the market, analysts said. The strikes have reduced world supplies by more than 75 million barrels so far, and the U.S. Energy Department's Energy Information Administration said Wednesday it may take until June to get Venezuela's output back to normal even if the strikes are resolved in February.

The Energy Department has deferred winter delivery of nearly 11 million barrels of crude to the SPR, freeing the oil up for use by refiners. And Energy Secretary Spencer Abraham has said he's monitoring the situation in Venezuela closely.

-By Campion Walsh, Dow Jones Newswires; 1-202-862-9291; campion.walsh@dowjones.com

www.etaiwannews.com 2003-01-08 / New York Times /

A Venezuelan pushes his car in a line of cars waiting to fill up with gasolin in Caracas, Venezuela, Monday.(AP)

Energy Minister Rafael Ramirez said yesterday that the government planned to take the state-owned oil company, the world's fifth largest, and break it in two, hoping to snap the back of a devastating six-week strike aimed at driving President Hugo Chavez from power.

Ramirez, who offered preliminary details of the plan in an interview, said the government intended a sweeping restructuring of Petroleos de Venezuela.

The company, widely known by its Spanish acronym, PDVSA (pronounced peh-deh-VEH-sah), controls the largest oil fields outside the Middle East and is an important supplier to the United States.

He said the government would "decentralize" the company by dividing it into PDVSA East and PDVSA West and hollowing out the Caracas-based management.

Such a move would effectively gut the company of middle- and upper-level executives who have joined a coalition of business and labor leaders in opposing Chavez, whose left-leaning policies they say are destroying the country.

Opponents said floating such a plan amounted to government bluster aimed at breaking the morale of what they estimate are 30,000 oil workers who have joined the strike.

Ramirez said the goal was to restore the company's production capacity of some 3.1 million barrels of crude oil a day while reducing "exorbitant bureaucratic costs," which he estimated at US$1 billion. He said the company produced about 14 million barrels last month and was currently turning out 800,000 barrels a day, a quarter of what output was before the strike.

Outside experts expressed doubts that the company was producing even that much oil, and they were immediately skeptical that the plan could revive production to pre-strike levels.

Ramon Espinasa, a former PDVSA economist and now a consultant to the Inter-American Development Bank, said such a plan could have a devastating impact on what was once considered a model among state-run oil companies, and an equally devastating impact on Venezuela's oil-dependent economy. It could also reverberate through world markets and in the United States, which imports about 14 percent of its oil from Venezuela.

"We could talk about the need to diversify the economy, but those are long-term goals," Espinasa said. "But right now, Venezuela's economy needs oil. If not, the country could collapse."

The plan, experts said, appeared to be far less an economic strategy than a political one, aimed at purging the company of Chavez opponents once and for all and wresting more political control over the industry, even if it means enduring sharp declines in production.

Moises Naim, former minister of trade and industry and now editor of Foreign Policy, drew comparisons between what is happening in Venezuela today and what happened in Iran after the Islamic Revolution in 1979.

Iran's oil production, which rivaled Saudi Arabia's, plummeted from six million barrels a day to less than two million. In the decades since, Iran's oil output has been about half the pre-revolution levels. But, Naim said, the Iranian government has tighter political control of the industry.

"He may be willing to live with a smaller oil industry, and a less competitive oil industry, as long as he has more control over it," Naim said, referring to President Chavez. "What we know is that Chavez intends to stay in power at any cost."

In a televised address on Sunday night, Chavez said he had assumed the rank of "oil commander" and promised to rebuild the state company into "a new PDVSA, a patriotic PDVSA."

"PDVSA is being restructured for the benefit of all Venezuelans," he added. "In the near future we will see the fruits that we're sowing."

Ramirez rejected the view from critics, saying President Chavez remained committed to upholding the industry's strong performance. He acknowledged that getting the fallen industry up again was a Herculean task. The strike has virtually paralyzed PDVSA, shutting down refineries and strangling exports.

But, he said, the strike had shown the government that the industry could run with a significantly reduced labor force. Restoring oil operations had been delayed by sabotage at most installations, he said.

But, he added, signs of a slow but steady recovery were clear. He cited a number of tankers that have left Venezuelan ports and the restarting of two main oil refineries, at Puerto La Cruz and El Palito.

No one outside the national oil company is certain of the current state of Venezuela's oil fields. Opposition leaders, including Luis Pacheco, a former director of corporate planning at PDVSA, dismiss government industry reports as "pure fiction." He estimated that the government was producing about 200,000 barrels a day, enough to meet minimal domestic demands and fulfill some export commitments.

Government estimates seem to vary by the hour. On Sunday night President Chavez said the industry was exporting 1.5 million barrels a day. On Monday morning the PDVSA president, Ali Rodriguez, reported that the industry was producing 600,000 barrels a day. Ramirez put daily production at 800,000 barrels.

Outside experts estimate that the government is producing at most 400,000 barrels a day.

"Clearly, by inflating production figures, his game plan is to psychologically wear down the workers," said Michael Shifter at the Inter-American Dialogue, referring to President Chavez. "As time passes, he believes, the workers will get fatigued and come back to their jobs, before they lose them forever."

But, he said, exaggerated rhetoric runs both ways. Every day, the opposition issues oil industry reports promising that President Chavez is close to running out of gas -- literally and politically.

"They are desperate," Shifter said of the opposition. "They feel this is their last battle, and that if they lose, there will be no way to get Chavez out."

Industry experts concur that "the longer the strike goes on, the more problems Venezuela will have in reactivating their wells," said George Beranek, manager of market analysis at the Petroleum Finance Company, a Washington consulting group.

Much of the difficulty in restoring output arises from the unique properties of the country's crude oil. Of the three million or so barrels of oil a day that Venezuela once produced, about 75 percent was heavy oil, Beranek estimated.

Heavy crude is particularly viscous, and the petroleum from Venezuela's vast Orinoco belt is so thick that it is classified as bitumen and must be processed at specially outfitted domestic refineries before it can even be called oil and shipped to standard refineries overseas. Heavy oil has a tendency to gum up unless it is under the constant pressure and flow that is used to extract it.

So Venezuela risks permanently losing hundreds of thousands of barrels a day in production capacity from a protracted shutdown.

In 1998, for example, when very low oil prices led Venezuela to shut some wells, the country permanently lost 500,000 barrels a day in capacity, said Lawrence J. Goldstein, president of the Petroleum Industry Research Foundation.

He estimated that about one-third of Venezuelan fields could be restored quickly, in about two weeks, based on his discussions with experts from Petroleos de Venezuela. Most of the rest would take another four to six weeks, he said, with about 400,000 barrels a day of bitumen from Orinoco requiring even more time.

www.genomenewsnetwork.org By Ellen Ruppel Shell Reviewed by Teresa G. Gionis January 10, 2003 Book Review

Though they may be familiar, the statistics on obesity are nonetheless shocking. One in three Americans is obese and 60 percent are overweight. Despite some $33 billion spent on diets and exercise programs each year, Americans are fatter than ever and more at risk for heart disease, diabetes, cancer, and hypertension.

The health crisis, at epidemic proportions in the U.S., has spread around the globe. Obesity in China became six times more common during the nineties. Half the adults in Brazil, Chile, England, Finland, and Russia are overweight or obese, and children in many of these countries have weight problems of their own.

How did the world get fat, and what can we do about it? These questions are at the heart of The Hungry Gene, a fascinating and often disturbing new book by science journalist Ellen Ruppel Shell. She takes us into the cutthroat world of obesity research and exposes the machinations of the powerful diet and food industries. She explores the damaging influence of consumer culture on our philosophies about eating and exercise, and offers a glimpse of the tragic and isolated lives of the very obese.

Shell came upon her topic unexpectedly during an interview with a biotechnology executive a few years ago, on Christmas Eve. The topic was genomics, and as the executive rambled on about how genomics would transform biomedical research, she asked which disease he might hope to cure. His answer was not heart disease or cancer, as Shell had expected. It was obesity.

To illustrate just how desperate the health crisis has become, the author opens the book with a rather gruesome play-by-play account of gastric bypass surgery. In the procedure, a tiny part of the stomach is cordoned off, stapled and re-attached to the intestines. The procedure is performed only on the morbidly obese, and it has mixed long-term results. It is also in high-demand: medical centers have waiting lists of persons wanting the procedure.

The account of the surgery is illuminated by some of the author's irreverent yet effective metaphors, such as her description of a surgery patient's exposed flesh, "rippling thickly, like a crème brulee."

About half of the book tells the history of obesity research and the mad race to be the first to discover the elusive "fat gene," which drug companies had hoped would be the silver bullet solution to our weight problems—and their bottom line.

Shell begins the narrative thirty years ago, at a research institute called the Jackson Laboratory in Bar Harbor, Maine. There, scientists developed the first super-obese mice that would be used to discover genes involved in appetite and hunger.

In lively and understandable language, Shell reports on major advances in the highly competitive world of obesity research. She gives the reader a solid understanding of the physiology of fat, and the potential role of genetic science in contributing to solutions.

The story is driven by Shell's compelling profiles of pioneers in the field, including Douglas Coleman of the Jackson Laboratory, and Rudy Liebel and Jeffrey Friedman of Rockefeller University in New York. Like characters in a novel, the scientists appear on the pages as complicated and flawed human beings, who at times are greedy and willing to stab competitors in the back.

Shell nonetheless conveys a deep respect for the challenges they face in trying to discover obesity genes. She notes that locating a gene in mice without knowing which protein it produces is "like finding the home of a reclusive uncle who lists his address as 'Someplace, USA.'"

‘Every major drug company is heavily invested in obesity research.’

Ultimately, their research leads to the isolation of an obesity gene, which is christened "leptin." The gene in mice is critical in regulating appetite, and its discovery demonstrates that the drive to overeat does indeed have deep genetic roots. The role of leptin in humans is unclear, however, and its value in fighting obesity is unproven.

"Although leptin is not a cure for obesity, it is critically important," Shell writes. "It is so promising that every major drug company in the world is now heavily invested in obesity research."

The second half of the book includes a scathing portrait of the diet industry; an eye-opening examination of the social conditioning that has led to our current state; and steps we must take as a society to turn back the tide.

Shell's descriptions of the pharmaceutical and diet industries placing profit above safety concerns are vexing. But her argument begins to feel heavy-handed and muddled as she presents a few too many case studies suggesting how drug companies profiteer.

One example is the debacle of the fen-phen diet pill combination. The combination was wildly successful in 1996, when eighteen million prescriptions for the two drugs were filled. Within a year, however, studies proved that fen-phen was causing serious heart valve damage and other injuries. It was taken off the market. Evidence was presented that the manufacturer knew of these dangerous side effects long before the product was recalled.

The author's exploration of what has led us down this path to obesity takes her to Kosrae, Micronesia, and the story of that island's residents. Due to the recent mass importation of high-fat Western food, and subsequent rise in diabetes and heart disease, the life span in Kosrae has decreased dramatically. These and other telling examples offer evidence of the power of environmental forces in shaping our eating habits.

Toward the end of the book, the author includes an attack on the "unfettered consumerism that drives the obesity pandemic of the 21st century." She assails the American car culture, and TV culture, and the "obstacles to human exertion" that exist in most of our cities. She asserts that "free market capitalism is wonderful for some things, but public health is not among them," and supports the kind of public awareness campaigns and regulations that have been so effective against the tobacco industry.

In the end, the author's conclusions about the origins of the crisis are not exactly surprising. The real culprits in obesity are eating too much and exercising too little.

Teresa Gionis is a freelance writer who lives in Washington, D.C.

straitstimes.asia1.com.sg

The comment triggers alarm although the new left-wing government says he was not expressing official policy

RIO DE JANEIRO - A senior official in the left-wing government that took power last week triggered alarm by arguing that Brazil should acquire the capacity to produce a nuclear weapon.

'Brazil is a country at peace, that has always preserved peace and is a defender of peace, but we need to be prepared, including technologically,' said Mr Roberto Amaral, the newly appointed Minister of Science and Technology in an interview with the Brazilian service of the BBC that was broadcast on Sunday night. Advertisement

'We can't renounce any form of scientific knowledge, whether the genome, DNA or nuclear fission.'

His remarks, coming as the United States faces a nuclear crisis with North Korea and is preparing for war with Iraq over its weapons programmes, has reawakened debate over Brazil's own nuclear energy and research programme, the most advanced in Latin America.

On Tuesday, a spokesman for President Luiz Inacio Lula da Silva was quick to distance the new president from Mr Amaral's pronouncement that 'mastery of the atomic cycle is important' to Brazil, saying that his remarks were not an expression of official policy.

'The government favours research in this area, solely and exclusively for peaceful purposes,' Mr Andre Singer told reporters in Brasilia.

Mr Luiz Pinguelli Rosa, Brazil's most prominent nuclear physicist and the newly appointed head of the state electrical power utility Eletrobras, said on Wednesday: 'Brazil does not have, does not need and should not obtain the knowledge of this technology. The bomb is a plague of mankind.'

But Mr Amaral's declarations echoed a certain discontent expressed by Mr da Silva as a candidate last year.

In a speech here in September, he criticised the Nuclear Nonproliferation Treaty as unjustly favouring the United States and other nations that already had nuclear weapons, asking: 'If someone asks me to disarm and keep a slingshot while he comes at me with a cannon, what good does that do?'

Those remarks were made to a group of retired military officers, many of whom supported the ambitious nuclear programme undertaken by the military dictatorship that ruled Brazil from 1964 to 1985 and caused immediate alarm here.

The environmental organisation Greenpeace, for example, criticised Mr da Silva's position, as did groups of scientists here and abroad and even members of his own Workers' Party.

The Brazilian Constitution, promulgated in 1988, forbids the development of nuclear weapons and their presence here.--New York Times

www.riyadhdaily.com.sa

The European Union proposed Thursday calling in the World Health Organization to rescue a deal - blocked last month by the United States - on improving access to lifesaving drugs for poor countries. Blaming a ‘lack of trust’ between Washington and developing countries for the failure of talks last month at the World Trade Organization, EU Trade Commissioner Pascal Lamy said involving the WHO could restore good faith. ‘When there’s too much mistrust in the game then you have to call on a third party, and the WHO is a trusted party,’ he told reporters. The impasse over access to medicines _ which was supposed to be settled last year - could seriously jeopardize the new round of global trade liberalization talks launched in November 2001. Despite a series of tight deadlines early this year, developing countries are unlikely to agree on any other issues until the drug problem has been settled.

A draft agreement worked out last month at the WTO in Geneva would have allowed some developing countries to ignore patents and import cheap copies of drugs to treat diseases, including HIV/AIDS and malaria. But the United States wanted to limit its scope to epidemics of infectious diseases so that developing countries could not use it to gain cheap drugs for other conditions like asthma, diabetes or migraine headaches. Developing countries refused, arguing any list would be too restrictive and inflexible. The EU’s new proposal would start with a broad list of infectious diseases, but allow WTO members facing ‘any other public serious public health problems; to ask the WHO, a UN agency, for guidance on whether their situation was covered as well.

‘We are convinced that we will be able to break the deadlock and rapidly achieve a final agreement,’ Lamy said. Speaking to reporters in Washington, US Trade Representative Robert Zoellick praised Lamy for putting forward a new proposal to try to resolve the issue. But he said the administration wanted to gauge the reaction of other countries to the proposal before deciding whether to agree to expanding the list of diseases covered by the patent exemption. ‘Pascal (Lamy) has made a positive contribution. We will see whether it stirs any other countries to action,’ Zoellick said. Brazil and India, two developing countries that are also major exporter of generic drugs, and Kenya, which speaks for the African Group, had no immediate reaction.

After the talks broke down Dec. 20, Washington pledged to continue to work for a WTO solution while also announcing its own initiative: a pledge not to challenge any country that breaks WTO rules to export drugs to a country in need until a resolution is found. The interim US solution would cover infectious diseases including HIV/AIDS, malaria, tuberculosis, ebola, African trypanosomiasis, cholera, dengue, typhoid and typhus fevers. ‘We urge others to join us in this moratorium to help poor countries get access to emergency lifesaving drugs,’ US Trade Representative Robert Zoellick said last month.