www.washingtonpost.com By Michael Dobbs Washington Post Staff Writer Tuesday, February 18, 2003; Page A03

Enough oil is stored in the deep, cone-shaped salt caverns along the Gulf of Mexico -- most of them large enough to accommodate the towers of the World Trade Center -- to replace a year's worth of imports from Saudi Arabia.

Originally conceived as a response to the oil crises of the 1970s, the Strategic Petroleum Reserve has become as much a part of the United States' strategic arsenal as the aircraft carriers, airborne divisions and spy planes converging on the Persian Gulf region. According to the Department of Energy, the 599-million barrel reserve constitutes the nation's "first line of defense" against disruptions in energy supplies.

As President Bush prepares for war with Iraq, he has come under pressure to use the reserve to calm an increasingly jittery market. In addition to the uncertainty caused by the Iraqi crisis, a general strike in Venezuela has helped push oil prices to new highs, and slashed inventories in many parts of the world to critically low levels.

If the past is a guide, and Bush follows the precedent set by his father in the Persian Gulf War in 1991, he probably will resist the temptation to tap into the underground storage sites in Texas and Louisiana until the onset of any hostilities. If the attack on Iraq begins, he will order the release of some of the oil in the reserve, a move designed to signal the United States' ability to ride out any temporary panic over the oil market.

If the war went badly, and Iraqi President Saddam Hussein succeeded in torching Iraqi oil fields or hitting oil facilities in neighboring Kuwait or Saudi Arabia, the reserves would assume huge strategic importance. The 50 or so caverns in Louisiana and Texas contain enough oil to replace 53 days of lost imports. In practice, officials say, supplies should last considerably longer, as the United States buys much of its oil from such countries as Canada and Mexico, which would unlikely be interrupted by a crisis in the Middle East.

The Strategic Petroleum Reserve is "a powerful instrument," said John Shages, one of the Energy Department officials responsible for managing the network of storage sites, pipelines and loading facilities strung out along the Gulf of Mexico. "It gives the president a tremendous tool to use in the event of a severe disruption to the market, from an act of God to a political-military event."

Because of the tightness of the international oil market, said Edward Porter, an economist at the American Petroleum Institute, the Strategic Petroleum Reserve might end up playing "a much more central role" in a new Gulf war than it did in 1991. A decade ago, there was plenty of excess capacity in the oil market. After the war broke out in January 1991, prices quickly tumbled from more than $30 a barrel to about $20.

Today, by contrast, it is much more difficult to offset a likely loss of Middle Eastern oil, if the region became embroiled in war. Iraq alone sells 2 1/2 million barrels a day to foreign countries, including the United States, through "oil for food" arrangements approved by the United Nations and through illegal smuggling. Although Venezuelan oil is slowly coming back on stream, as a general strike against populist left-wing President Hugo Chavez winds down, exports are no more than half of prestrike levels.

According to oil analysts, the only country in the world that can significantly increase production levels practically overnight is Saudi Arabia, which has about 1 million barrels a day of excess capacity. In recent weeks, the Saudi government has boosted production to offset losses from Venezuela. But the Bush administration does not want to be held hostage to a potentially unstable Arab country rife with anti-Americanism that has previously used the oil weapon against the United States.

"We shouldn't allow U.S. national security to be dependent on decisions in Riyadh, when the president has the ability to take those decisions," said Edward L. Morse, who was responsible for international energy policy at the State Department during the Reagan administration. "The Strategic Petroleum Reserve allows the U.S. government to put much more oil onto the market [in the short term] than we can get from the Saudis."

How much oil should be released from the reserve, and under what circumstances, is the subject of great debate among energy specialists. President George H.W. Bush was criticized for not acting after the Iraqi invasion of Kuwait in August 1990, as a result of which oil prices rose as high as $40 a barrel. He finally ordered a limited drawdown of 33.75 million barrels on Jan.16, 1991, the same day he announced that U.S. warplanes had begun attacking Baghdad. By the time the oil reached the market, prices had fallen sharply, and the crisis was largely over.

Last week, as the price of light sweet crude rose to more than $36 on the New York Mercantile Exchange -- a 26-month high -- calls for the release of oil from the reserves came from airlines hit by soaring fuel costs, refineries suffering from a lack of Venezuelan oil and senators worried about the rising price of gasoline for their constituents. Oil industry executives oppose the release of oil from the reserve, except in a national emergency.

The Bush administration is keeping its options open. Energy Secretary Spencer Abraham said last week that the reserve should be used only in the event of severe supply disruptions, and not to bring down prices.

The Strategic Petroleum Reserve dates to 1975, in the aftermath of the Arab oil embargoes against the United States and other Western countries that followed the 1973 Yom Kippur war. Traumatized by spiraling oil prices and long lines for gasoline, Congress passed the Energy Policy and Conservation Act to protect the country from sudden interruptions in supply.

During its early years, the reserve was plagued by technical problems and cost overruns, as the Energy Department struggled to adapt the salt caverns along the Gulf of Mexico to the long-term storage of oil. The goal President Jimmy Carter established in 1977, of filling the reserve with 1 billion barrels of oil by 1985, remained a mirage. Through a perverse bureaucratic logic, the government tended to purchase oil when it was scarce and expensive, because that was when political pressure was greatest to fill the reserve.

Apart from the Desert Storm drawdown, the reserve has rarely been touched. In 1996 and 1997, President Bill Clinton authorized nonemergency sales of 28 million barrels to raise revenue. In September 2000, he ordered an exchange of 30 million barrels of oil to bring down heating oil prices in the Northeast, a move that Republicans criticized as an election-year ploy. By the time Clinton left office, the oil stockpile had dwindled to 540 million barrels.

After the Sept. 11, 2001, terrorist attacks on New York and Washington, the reserve assumed much greater strategic importance. The Bush administration is now committed to filling the reserve to its 700 million barrel capacity. It is also considering ways to reach the original target of 1 billion barrels, which would require $3 billion to $6 billion of new investment in infrastructure and oil purchases.

While the salt caverns along the Gulf of Mexico are fuller than ever, the United States' ever-rising consumption of petroleum means the reserve actually offers less protection against market disruptions than it did a decade or two ago. In 1985, according to Energy Department figures, there was enough oil in the reserve to replace 115 days of lost petroleum imports, more than double the present figure.

"In order to continue to have as much protection as we had 10 years ago, the reserve needs to be substantially increased," said James A. Placke, a senior associate with Cambridge Energy Research Associates. "As we become more and more dependent on foreign sources of supply, you need a cushion to fall back on. Otherwise, the world's sole remaining superpower will be quite vulnerable to events over which we have little control."

Others argue that the road to energy independence lies through drastic conservation measures and investment in new sources of energy, such as ethanol and biofuels, to reduce the United States' dependence on Middle Eastern oil. They say the United States now imports nearly 60 percent of its energy from abroad -- mostly from authoritarian countries, such as Saudi Arabia, Iraq, Nigeria and Venezuela -- and that figure could rise to 70 percent by the end of the decade.

"Continuing to fill the reserve is taking us backwards, not forwards," said Rep. Marcy Kaptur (D-Ohio), one of three members of Congress to vote against an increase in the size of the Strategic Petroleum Reserve. "We need a strategic energy policy, not a strategic energy reserve."

© 2003 The Washington Post Company

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Live OnlineYoussef M. Ibrahim, a senior fellow at the Council on Foreign Relations, discussed the Saudi peace proposal for the Middle East. Marriage of ConvenienceIn the first of a three-part series on U.S.-Saudi relations, Post reporters David Ottaway and Robert Kaiser report that, after Sept. 11, the Saudi Leader's Anger Revealed Shaky Ties Part 2: Oil for Security Fueled Close Ties Sidebar: Enormous Wealth Spilled Into American Coffers Part 3: After Sept. 11, Severe Tests Loom for Relationship Sidebar: Viewing Oil as a Bonding Agent Live Online discussion with Post reporters, Robert G. Kaiser and David Ottaway Full Mideast Coverage

news.ft.com By Grant Nulle Published: February 18 2003 4:00 | Last Updated: February 18 2003 4:00

Sir, Moisés Naím, editor of Foreign Policy magazine, ridiculed the Bush administration's sluggish response to recent explosive events in Venezuela ("Venezuela gets a nimble hand from Castro", January 21); but is it really alarming that Washington for once decided not to intervene unilaterally in a hemispheric nation?

Mr Naím's single-factor analysis of the Venezuelan crisis and Cuba's alleged pivotal role in it smacked of an obsolete cold war mentality. He did not introduce a single piece of serious and non-anecdotal evidence to support his charge.

Sadly, his thesis brought nothing to the debate that differs from the simple-minded, anti-Castro paranoia fostered by many fellow members of Venezuela's middle-class opposition, who see President Hugo Chávez as Havana's puppet.

This is not analysis so much as banality.

Doubtless, subsidised Venezuelan oil is helping the Cuban economy; but both Venezuela and Mexico have done this episodically for years, supplying discounted petroleum to other Caribbean basin countries.

Fidel Castro, Cuban president, would only lose financially and geopolitically by encouraging Mr Chávez to quicken the pace of his "Bolivarian revolution". Nor does a shred of evidence exist indicating that Mr Castro has directed Mr Chávez to radicalise his relations with the US through his intransigence, which unfortunately appears to be an intrinsic feature of the Venezuelan's prickly personality. In fact, the opposite is more likely, given the Cuban leader's counsel to President Salvador Allende to engage constructively the US during his 1971 visit to Chile, which he repeated to Grenada's Maurice Bishop in the early 1980s and Panama's Manuel Noriega in the late 1980s.

As for the influx of several thousand Cuban civil personnel into Venezuela, is Mr Naím telling us that only the US can have its Peace Corps? Exporting specialists to foreign states - doctors, teachers and sports coaches - irrespective of the host nation's political orientation has long been a mainstay of Cuban diplomacy, with few ascertainable intelligence pay-offs.

Instead of ominously pointing to Mr Castro's inroads in the Caribbean, the author should recall that relations between states are conducted for mutual benefit. If the English-speaking islands decide to enlarge the Caribbean Community to include Francophonic Haiti, why shouldn't it accord limited status to Havana, the Caribbean's largest island?

Mr Naím repeatedly employed a Castro allusion in a failed effort to clarify further the current Venezuelan tragedy. But in spite of his best efforts, neither Mr Chávez's intemperate personality nor Venezuela's disloyal and coup-prone opposition were authored by Havana.

Evoking a Cuban bogey and a sinister leftist spear-thrower in Mr Chávez is at the least simplistic, since Cuba's weakened economy stands to be one of the main losers if Mr Chávez's consensual survival is not achieved.

Grant M. Nulle, Research Associate, Council on Hemispheric Affairs, Washington, DC 20036, US

story.news.yahoo.com 2 hours, 14 minutes ago Add Op/Ed - Ted Rall to My Yahoo! By Ted Rall

TAIPEI--One of the most striking aspects of life in Third World countries is information starvation. Because they've learned not to trust their state-controlled media, people in authoritarian backwaters carefully debrief newcomers. What's going on abroad? What's going on here? Did you get any foreign newspapers or magazines through customs?

News is a component of infrastructure every bit as important as roads and telephones. Businesspeople need to know if a border with a neighboring country is open so they can decide whether or not to send out a truck. Citizens need to know their government's international standing--are those falling bombs their leader's fault? Hunger for news hurts a country almost as much as hunger for food.

The First Amendment enshrines freedom of the press in the U.S. Constitution, but a variety of forces conspire to prevent totally free access to information. Residents of most cities rely on one large daily newspaper, usually part of a media conglomerate that itself owns the biggest local radio and television stations. Directors of that corporation and the editors who work for them are frequently loathe to offend influential government officials and business tycoons, for if they get cut off--excluded from access to press releases, interviews, leaks, etc.--their ability to collect news is impeded. One might argue that such "news" is little more than worthless propaganda, but fear of causing offense often inhibits the media's natural role as a watchdog of democracy.

Our government very rarely censors the media. It doesn't have to.

A new, subtle form of self-censorship has recently become commonplace. A news story is covered in full, minus a crucial fact that changes the entire tenor of the piece. That missing bit of information is invariably something that would make someone important look bad.

The American media has, for example, devoted extensive coverage to political unrest in Venezuela, where mobs loyal to President Hugo Chávez have clashed with striking employees of the state oil company. The crisis sparked an attempted coup d'état in April 2002. To busy Americans, this looks like a simple story of a right-wing Latin American dictator crushing poor workers. That's because three key facts are regularly omitted from the story. First, the oil company strike was called by its wealthy managers, not its workers. Second, Chávez was democratically-elected. Third, the coup plotters were backed by the Bush Administration. "We were sending informal, subtle signals that we don't like this guy," said a U.S. Defense Department official quoted in The Guardian, an English paper that has become an important post-9/11 resource for Americans in search of objective reporting. The bully, it turns out, is us--not Chávez, who is standing up for his nation's poor.

Similarly, the North Korean crisis looks like a simple case of crafty commies welching on their agreement not to develop nukes in exchange for economic aid. Repeatedly left out of the thousands of words spilled daily on this topic are the contents of the 1994 North Korea (news - web sites)-U.S. Agreed Framework, in which President Clinton (news - web sites) promised to develop full diplomatic relations with Kim Jung Il's regime, and North Korean warnings dating to 1999 that they would resume nuclear research unless the U.S. kept up its end of the bargain.

North Korea is violating the agreement. But the U.S. broke it years earlier.

The closest thing to a "smoking gun" found by U.N. arms inspectors in Iraq is 12 warheads found at an ammo dump south of Baghdad. Americans know that the White House considers this discovery a "material breach" that justifies war. Few are aware that, as reported Jan. 17 in the U.K. Telegraph, the canisters were empty, and are probably American-made shells sold to Iraq by the Reagan administration. Not much of a "smoking gun."

Scratch the surface and you find this sort of thing all over the "news." Democratic complaints that the Bush tax cuts only benefit the "richest one percent" of Americans are duly reported, but leave out a definition of the term. Did you know that you have to earn more than $330,000 a year to be in the top one percent? Nineteen percent of Americans don't. They told Time that they think they're in that top one percent.

Perhaps you've read that American soldiers are fighting off guerrillas loyal to warlord Gulbuddin Hekmatyar in eastern Afghanistan (news - web sites). Hekmatyar, the Associated Press says, is "believed by Afghan and U.S. authorities to be allied with Taliban and Al Qaeda remnants." That may be true. But Hekmatyar was always a sworn enemy of the Taliban--until the CIA (news - web sites) tried to kill him last May, with a Hellfire missile fired by a Predator drone plane.

One missing detail. Changes the story a little, doesn't it?

(Ted Rall is the author of "Gas War: The Truth Behind the American Occupation of Afghanistan," an analysis of the Trans-Afghanistan Pipeline and the motivations behind the war on terrorism. Ordering information is available at amazon.com and barnesandnoble.com.)

news.bbc.co.uk

Tuesday, 18 February, 2003, 02:55 GMT

The opposition is calling on Chavez to stand down

Venezuela's government and opposition have agreed to condemn violence and defuse tensions between them, the Organisation of American States (OAS) says.

OAS Secretary General Cesar Gaviria said the two sides would sign a common statement in favour of peace and democracy on Tuesday.

Chavez describes his opponents as 'terrorists'

It is the first firm development in three months of talks mediated by Mr Gaviria, and backed more by a six-nation group led by the United States.

But a source close to the talks said the document carried no sanctions, and the two sides were no closer to a deal ending their conflict.

The opposition wants Mr Chavez to stand down and call a fresh referendum immediately.

The president, who was re-elected in 2000, has refused to consider a vote on his rule before August.

Paralysis

"We have finished the round of negotiation and dialogue to complete a declaration against violence," Mr Gaviria said on Monday.

Opposition marches are a regular feature in Caracas

The document is also believed to include references to freedom of expression, the media's role in promoting peace, and calls to tone down aggressive language.

Opposition leader Timoteo Zambrana told the BBC he hoped the statement would help reduce tensions in Venezuela.

An ongoing national strike and a wave of demonstrations by both government and opposition supporters have paralysed much of the country and led to the deaths of at least six people this year.

Mr Chavez has used troops and replacement crews to restart the vital oil sector - although many sacked oil workers have vowed to keep their protest.

The opposition accuses the president of being too authoritarian and blames him for the country's economic woes.

story.news.yahoo.com Mon Feb 17, 9:42 AM ET Add Top Stories - USA TODAY to My Yahoo! Kathy Kiely and Traci Watson USA TODAY

WASHINGTON -- President Bush (news - web sites) and his Republican allies in Congress have an opportunity to give the nation's energy and environmental policies a more pro-business tilt, and they're moving quickly to take advantage of it.

The pending war with Iraq and disruptions of oil supplies from Venezuela highlight the need for greater energy independence, a goal Bush listed as one of his top priorities in his State of the Union address last month. Republican leaders in Congress are moving quickly to revive an energy bill that died last year in the Senate, which was controlled by Democrats.

This year, Republicans control both the Senate and the House of Representatives, and a number of key committee chairmanships and leadership posts are held by staunch conservatives. Several were small-business owners who had run-ins with environmental agencies before coming to Washington. They view the Environmental Protection Agency (news - web sites) as a bureaucracy run amok.

Last week, the conservatives demonstrated their new clout. They expanded a program that allows for more logging on federal land. They lifted a ban on preliminary oil and gas exploration in Alaska's Arctic National Wildlife Refuge (news - web sites). They barred environmental lawsuits over reissuing permits for the trans-Alaska oil pipeline. And they cut $140 million from Bush's requests for national parks and wildlife refuges.

The measures, all controversial, were part of a massive spending bill that had to be approved for the federal government to continue operating.

In the coming months, the president and his allies are hoping for more energy exploration on federally owned lands; more freedom to thin national forests; and environmental regulations that would give businesses, power plants and property owners more flexibility in meeting federal standards on clean air, clean water and the preservation of endangered species.

The stage is set for a showdown that could move environmental issues to the top of the political agenda.

Conservative Republicans think voters will agree that it's time to update environmental policies that they say have put the interests of obscure bugs and plants over Americans who need jobs.

Democrats are trying to make an issue of the administration's plans for energy and the environment. ''They're set on rolling back 30 years of environmental progress,'' House Minority Leader Nancy Pelosi, D-Calif., said last week.

New power brokers

When Republican congressional leaders made appointments to key committees last month, moderates with close ties to the environmental movement were shunted aside in favor of Westerners with a history of tangling with the EPA. Among the new chairmen:

• Sen. James Inhofe of Oklahoma. At a recent appearance before the U.S. Chamber of Commerce (news - web sites), Inhofe recited a list of epithets environmentalists have hurled at him since he took over the Senate Environment and Public Works Committee: '' 'An extremist, a dangerous idiot, Mr. Pollution, Gunga Din, Attila the Hun and Villain of the Year,' '' he said with a laugh.

The combative businessman-turned-lawmaker has said he intends to change the EPA, which he sees as too closely tied to ''environmental extremists.'' He called it an agency of ''bureaucrats inflicting terror'' on small-business owners. He said the costs of environmental regulations need to be weighed against their benefits. He wants more oil and gas drilling in areas that are now off-limits. ''You can't run the most heavily industrialized nation in the world on windmills,'' Inhofe said.

• Rep. Richard Pombo of California. In a rare decision to circumvent the congressional seniority system, House Republican leaders passed over nine more-senior members to make Pombo chairman of the House Resources Committee. The recipient of a ''zero'' rating from the League of Conservation Voters, Pombo is an outspoken fourth-generation rancher who favors cowboy boots and an equally flamboyant rhetorical style. ''I'm anything but politically correct,'' he once said.

A 1996 book that Pombo co-wrote, This Land Is Our Land, inveighed against ''an eco-federal coalition that owes more to communism than any other philosophy.'' But as chairman, Pombo is sounding more conciliatory. He said he's seeking a ''broad consensus'' on ways to ''do a better job of protecting our environment and have less conflict with people.''

• Sen. Don Nickles of Oklahoma. The 22-year Senate veteran and ace parliamentary strategist took over the Senate Budget Committee this year. Each year, the committee writes one of the few bills that is not subject to a Senate filibuster. That could lead Republicans to include controversial issues in it, such as a measure to permit drilling in the Arctic National Wildlife Refuge.

• Sen. Pete Domenici of New Mexico. The new chairman of the Senate Energy and Natural Resources Committee also favors opening the Arctic refuge for drilling. And he wants any new national energy policy to include additional nuclear power. No new nuclear power plants have been built since the 1979 accident at the Three Mile Island plant in Pennsylvania.

   

The committee chairmen help set the legislative agenda. They can showcase an issue by holding a hearing on it. They can bury a bill by never scheduling it for consideration. They can make policy behind closed doors.

A pro-business agenda

The conservatives are assuming leading roles on the environmental and energy committees at a key time. The administration is trying to revive several bills that never made it out of Congress last year, largely because of opposition in the Democratic-led Senate:

• The ''Clear Skies'' bill, a sweeping proposal that the administration says would reduce airborne sulfur dioxide, nitrogen oxide and mercury by about 70% over the next 16 years. Environmentalists argue that the bill does not address pollution from carbon dioxide, which some scientists believe causes global warming (news - web sites). The environmentalists also say the president's measure is too lenient on coal-fired power plants that cause some of the worst pollution problems. The bill would allow plants the option of installing new pollution-control equipment or buying clean-air ''credits'' from other, less dirty facilities.

• A comprehensive national energy strategy. It would open up new opportunities for oil and gas drilling in regions where it is currently prohibited, including the Arctic refuge. Environmentalists say the White House isn't putting enough emphasis on cleaner, alternative energy sources. Supporters of the Bush approach say it is ''balanced.'' Any long-term energy strategy ''has to involve alternative energy and where we're going to be in 30 years,'' Pombo said, ''but it also has to take care of our needs right now.''

• Speeding up timber cuts in Western forests. Advocates say doing so would prevent wildfires in a region where they have recently caused devastation. Environmentalists counter that it would be used as an excuse to expand commercial logging.

Also on the agenda for conservative Republicans such as Inhofe and Pombo: a rewrite of the endangered species act. Advocates of the law say it protects important plants and animals from extinction. Opponents argue that it deprives property owners of the right to use their land.

But there are signs of a schism in Republicans' narrow congressional majority. Influential centrist Republicans have delivered a vote of no-confidence in Bush's ''Clear Skies'' plan. Sens. Susan Collins and Olympia Snowe, both Maine Republicans, are supporting an alternative by Vermont independent Sen. Jim Jeffords and backed by a number of leading Democrats.

Centrists also have objected to Bush's plans for energy exploration in the Arctic refuge. Rep. Nancy Johnson, R-Conn., is co-sponsoring a bill to ban oil and gas drilling permanently in the refuge.

Sen. John McCain, R-Ariz., plans to use his post as chairman of the Senate Commerce, Science and Transportation Committee to crusade against global warming. And Sen. Lincoln Chafee, R-R.I., who often holds the deciding vote on the Environment and Public Works Committee, is prepared to break ranks with the Bush administration on environmental issues.

Nonetheless, business leaders and property owners think they have their best chance in years to rein in government regulators. ''It does look as if the stars are lined up,'' says Nancie Marzulla of the Defenders of Property Rights.

Environmentalists agree. They say they're facing the most hostile Congress in at least a generation. John Echeverria, director of the Georgetown Environmental Law and Policy Institute, said, ''You can be confident nothing good will happen for the next two years from an environmental standpoint.''