www.news-journal.com By GLENN EVANS

AUSTIN — Two of four Northeast Texas lawmakers got the committee assignments they asked House Speaker Tom Craddick for last week.

Longview Republican Tommy Merritt wasn't one of them.

Merritt, who was allied with Democratic former speaker Pete Laney during the 2001 legislative session, was not granted his wish by the new speaker, a Midland Republican. Merrit, an oil field service businessman, fell off the Energy Resource Committee, where he had served since his first term in 1997 and which he led for a few months after being named chairman by Laney last fall.

Merritt declined to speculate whether he was bumped from the energy committee by Craddick as payback for his loyalty to Laney.

"I can't answer that," he said. "I don't speak for Speaker Craddick. I just know that some speakers like to move their people around. I would like to believe it's because of my relationships in international and border affairs, and my relationships in state and military affairs."

Merritt was optimistic about his new assignments on the Border and International Affairs Committee and the Defense and State-Federal Relations Committee. Those panels will tackle issues from business relationships with Mexico, including traffic from the North American Free Trade Agreement, to coordination with the new federal Homeland Security Agency.

"Now our committee will pick up that important issue," Merritt said, referring to terrorism. "This had enough priority that the governor did establish a home security committee. And I know my qualifications are well-suited for that."

Merritt said his relationship with Tony Garza, a former Texas railroad commissioner who is the new U.S. Ambassador to Mexico, will help the legislature work with that country and all Latin nations.

"My good friend Tony Garza being in Mexico will be not only an asset to the United States, but help us working with the ambassador of Venezuela in establishing a better working relationship with Texas," he said of the major oil producing nation that has been all but paralyzed by strikes.

And Merritt held out hope for his oil field study bill, which is designed to show drillers the best way to recover the last drop of oil from below East Texas.

Gov. Rick Perry said the bill cost too much when he vetoed it after the 77th Legislative Session in 2001 but Merritt said his membership on the state-federal committee will help him secure federal Department of Energy money for the bill.

"It just opens another door," Merritt said. "I think there's a chance for the oil field study."

Mineola Republican Bryan Hughes — who represents Harrison, Marion, Upshur and Wood counties — could be the poster child for Craddick's pledge to give the 36 freshmen a voice in the Texas House.

"He promised to be inclusive, and he's following through," Hughes said of the new speaker. "As the majority, we're basically saying that we're sharing our power (with Democrats)."

Hughes asked to be placed on the Committee on Judicial Affairs, a request that Craddick obliged for the attorney.

That committee will deal first with any bills affecting how judges are seated, whether by partisan or nonpartisan election, appointment or some other method.

Hughes also was placed on the Committee on Rules and Resolutions, which he described as a housekeeping committee.

Paris Democrat Mark Homer did not get appointed to the transportation or natural resources committees as he'd hoped. But he did get a promotion from member to vice chairman of the Committee on Economic Development.

That appointment should help his bill to stop the use of local half-cent sales taxes to help bring retail establishments that will compete with existing businesses. Hughes also joins Homer on the economic development committee.

"Economic development is something I ran on," Hughes said.

Homer was a little more more candid about Craddick's appointments than Merritt was.

"He obviously punished some of those," Homer said. "Any who were longtime loyalists of the former speaker, the (new) speaker didn't do them any favors. ... I thought he was very kind to me."

Homer, who also was appointed to the Licensing and Administrative Services Committee, had wanted to be on natural resources so he could keep an eye on the proposed Marvin Nichols Reservoir in Red River County. Local timber interests, landowners and others oppose the lake, which water planners in the Metroplex say they will build with or without local support.

Homer does not oppose the lake outright, but he has insisted it be put on hold until its economic and environmental impacts are known. Homer's District 3 includes Titus and Franklin counties.

Chuck Hopson, who represents Rusk and Panola counties in District 11, was reappointed to the Committee on Corrections that oversees prisons, this time as vice chairman.

There are five prison units in Hopson's district, including the Bradshaw State Jail near Henderson and the Skyview psychiatric unit outside Lufkin.

He also was reappointed to the Committee on Financial Institutions. Chief of Staff Dennis Speight said Hopson, D-Jacksonville, serves on a bank board and wanted on the financial institutions committee.

"The home equity issue will be important in this session," Speight said.

Glenn Evans can be contacted at gevans@coxnews.com.

www.sabcnews.com February 04, 2003, 07:45

Venezuela's government yesterday rejected a proposal to cut short the rule of President Hugo Chavez and delivered a fresh blow to the opposition campaign for early elections in the world's fifth biggest oil exporter.

Opposition leaders, who said they collected about four million signatures petitioning for a constitutional amendment to shorten Chavez's term, accused the government of stalling talks to end the bitter dispute over his rule.

Jose Vicente Rangel, the Vice President, said the government dismissed the opposition initiative and proposed instead a binding referendum after August on the president's rule. The amendment campaign marked a shift in strategy for opponents of Chavez after they scaled back a two-month strike that battered Venezuela's economy, but failed to unseat him. State oil workers at the heart of the strike have vowed to keep up their stoppage to press for a vote.

The fresh row signalled more political wrangling between the government and opposition, who have been locked in a stand-off since April when Chavez survived a short-lived military coup. Both the constitutional amendment and a binding referendum were put forward as options by Jimmy Carter, former US president and Nobel Peace prize winner, who is part of international efforts to broker an electoral deal.

In a statement Rangel said the government could not set a date for a referendum and also rejected Carter's proposal urging no reprisals for striking oil workers. Chavez has fired more than 5000 oil employees, accusing them of sabotage, and refused an amnesty.

A six-nation initiative led by the US and Brazil has also lent its weight to the talks led by the Organization of American States to hammer out an agreement on elections. - Reuters

www.miami.com Posted on Mon, Feb. 03, 2003 Associated Press

NEW YORK - Crude oil futures finished sharply lower Monday as Venezuelan production continued to climb and officials of the Organization of Petroleum Exporting Countries warned of a possible supply glut.

On the New York Mercantile Exchange, nearby March crude fell 75 cents to close at $32.76 a barrel.

March heating oil fell 1.45 cents to close at 91.81 cents a gallon; March gasoline dropped 0.92 cent to close at 95.68 cents a gallon.

On London's International Petroleum Exchange, nearby March crude fell 85 cents to close at $30.25 a barrel.

February natural gas gained 16.1 cents to settle at $5.766 per 1,000 cubic feet.

"There are signs that Venezuela is returning to more normal and OPEC is showing some concern that the market could be oversupplied in the second quarter," said Tom Bentz, an analyst at BNP Paribas in New York.

Venezuela's President Hugo Chavez said over the weekend that Venezuelan crude oil output has climbed to 1.78 million barrels a day, or more than half the level Venezuela produced before the start of a strike in early December. Dissident workers at state-owned monopoly Petroleos de Venezuela estimated output at 1.22 million barrels a day.

Before the strike, Venezuela produced nearly 3 million barrels a day of crude oil.

The Venezuelan strike helped cut into U.S. crude inventories, putting upward pressure on oil prices.

But with the strike breaking down, analysts expect American inventories to rebound from a recent slump.

"We see Venezuela as less and less of a supportive factor, as output there has rebounded to about the halfway mark and refiners have had ample time now to make further adjustments to their mix of feeds," said Tim Evans, an analyst at IFR Pegasus in New York.

Evans and most other analysts surveyed by Dow Jones Newswires expect U.S. crude stocks to decline by an average of 2 million barrels in the weekly government and industry data to be released Wednesday.

The increase in Venezuelan production, and potentially, exports, comes just as OPEC's latest production hike of 1.5 million barrels a day takes effect.

OPEC members agreed to the production hike last month in response to the Venezuelan strike. Now, officials are concerned that prices could collapse if Venezuelan production returns to pre-strike levels at a time of year when demand tends to slacken.

"They're becoming a little alarmed by the possibility of a price collapse," Bentz said of OPEC officials.

OPEC President Abdulah bin Hamed Al-Attiyah said that the market could be flooded with as much as 4 million barrels a day of extra oil during the second quarter when demand tends to drop by 2 million to 3 million barrels a day. This could trigger a price collapse, he said.

Libyan Oil Minister Abdul Hafez Zlitni said OPEC will cut production at its March meeting if prices fall and supply and demand are in equilibrium.

He said current oil demand was "exaggerated," with refiners building up stocks rather than using them.

However, with the threat of a U.S. attack on Iraq looming over the market, few analysts expect oil prices to retreat dramatically in the near term. Traders worry that an attack on Iraq could lead to a large-scale oil supply disruption in the Persian Gulf.

For now, though, traders are awaiting a presentation on Iraq by Secretary of State Colin Powell to the U.N. Security Council on Wednesday.

www.dailytelegraph.co.uk

Venezuela's opposition yesterday formally conceded defeat in its attempt to oust President Hugo Chavez through a general strike.

In a last symbolic action, hundreds of thousands of signatures were collected for a petition against the government, but a jubilant Mr Chavez said: "They have the 'F' of failure on their foreheads."

The opposition insisted that the struggle was not over. Businesses were forced to re-open their doors or go bankrupt. Mr Chavez has agreed to hold a referendum on his continued presidency in August, but it is not yet clear whether the poll will actually take place.

The Left-wing president has vowed to accelerate his "peaceful revolution", designed to redistribute the country's wealth in favour of the 70 per cent of the population that live in poverty.

www.upi.com By Bradley Brooks UPI Business Correspondent From the Business & Economics Desk Published 2/3/2003 6:54 PM

RIO DE JANEIRO, Brazil, Feb. 3 (UPI) -- Grace Souza Calvocante considers herself collateral damage of a war that hasn't yet come in Iraq.

"The first thing they raise the price of is gas," said Calvocante, a mother of three in her late 40s who makes her living cleaning apartments inhabited by tourists.

"Then they raise the price of food, then clothing, then the costs of transportation -- which also makes all the other products more expensive," she said as she perused the aisles of a grocery store on Monday.

"And if there is a war, the tourists will stay home in front of their TVs, they won't come here, and I won't have work."

So it goes for the inhabitants of a region with some of the most turbulent economies in the world.

While the countries of Latin America might not send a single soldier to the Middle East, the fighting that goes on there will nonetheless bring pain -- of the economic sort.

"What the war implies for Latin America is more or less what it implies for the United States and other industrial countries," said William Cline, a senior fellow at the Center for Global Development and the Institute for International Economics in Washington.

But for the already anemic economies of the region, that could bring a fatal blow, as opposed to the increase in economic discomfort the First World would register.

"You have investor caution during the course of a war, and that has a particularly painful effect for Latin America," Cline said. "The investment flows in bonds and bank lending to Latin America tends to dry up when there is a period of high risk aversion."

That's a scary thought for Latin American businessmen, considering that the well of foreign credit and investment in the region is already bone dry.

Investor appetite for pushing into Latin America severely diminished in a disastrous 2002 that saw Argentina founder, Brazil stumble and Venezuela threaten to fall flat.

Even Chile -- the beacon of stability and progress, with its free trade pacts with both the European Union and the United States -- would feel great pressure if war comes to Iraq: the country imports 80 percent of its oil.

Local analysts forecast that the turbulent ride for Latin America -- just beginning to ease -- will be ready to begin anew should the bombs start falling on Baghdad.

"A war would affect Brazil by preventing recovery in the flow of foreign direct investments and credit lines that we were starting to see recover after the political crisis we lived through," said Carlos Firetti, director of BBV Corretora de Valores in Sao Paulo, Brazil.

"As a consequence, this would keep the foreign exchange under pressure. In the case of Brazil, this would mean that inflation would not reduce as quickly and interest rates would be kept at a high level," he said.

Brazil -- Latin America's largest economy -- is burdened by its massive $240 billion debt, much of which is linked to the dollar or floating interest rates. This makes the debt highly susceptible to fluctuations in the exchange rate for the local currency -- the real.

That would also place the spotlight even more on new President Luiz Inacio Lula da Silva -- a leftist whose election spooked investors.

During his campaign, Lula promised voters the moon when it came to improving the horrific social situation in Brazil, where some 40 million people live below the poverty line.

Analysts question how the government will pay for its social programs should war severely crimp Brazil's economic situation.

This has grown as a concern for analysts after a top adviser to Lula said Monday that no cuts would be made in social spending, whether war breaks out or not.

While Lula's moves during his first month in office have eased investors' anxieties, the economic shocks that would come with a war in Iraq could trip him up, analysts say.

For instance, the domestic pricing policies of state-run oil giant Petrobras might be used by Lula to artificially improve Brazil's economic situation in a time of war.

"The main concern is that the government could hold oil prices down in order to keep inflation under control, or so they're not affected by public opinion that is clearly against increases in oil prices," Firetti noted.

What can the leaders in Latin America do to lessen the pain of external shocks that a war in Iraq will bring?

"I think there isn't much to do," Firetti said, specifically in regard to Brazil.

"In fact, the only thing they can do is follow through with a credible economic policy and give signs to the market that they will go through with reforms."

Cline agreed, saying: "The main thing they can do is to continue to show international investors a firm resolve to keep basic policies on a healthy trend," he said. "That means making sure fiscal accounts are in order and making sure the exchange rate isn't out of line."

For Calvocante -- already struggling to make ends meet in a year that saw Brazil's currency lose about 35 percent of its value against the dollar -- weathering the affects of a war has little to do with complicated economic policies.

For her, it is math of a simpler sort.

"I might pay 60 cents for a kilo of rice now. But if there is a war, the price could go up to $1.20," she said. "That is a big problem for me."