heraldnet.com By Eric Fetters Herald Writer

Gas prices are shooting up in Lake Stevens as fast as they are in the rest of the country. A gallon of premium costs $1.99 9/10 at this Texaco station.

Brian Elliot was blunt about rising fuel prices after filling up his pickup Friday at a Monroe gas station.

"I think it's out-and-out gouging," he said after paying $1.70 a gallon for diesel fuel.

Marysville resident Colleen Weston said she's also had enough. On Thursday morning, she bypassed her local station, thinking she'd fill up on the way home from work.

When she stopped by that evening nine hours later, the price had jumped 5 cents a gallon.

The latest prices

HeraldNet.com is cooperating with gasbuddy.com on a new site that tracks gas prices in Snohomish County. Check it out at www.heraldnet.com/gasprices.

"It's pretty incredible," Weston said.

To limit the bite of higher gas prices on their household budget, she and her husband have adjusted their shifts in order to carpool to their jobs in south Everett.

Snohomish and Island counties have joined the growing list of places across the nation where paying $2 or more for a gallon of gasoline is no longer just a bad dream. On Friday, a Texaco station near Lake Stevens and a Chevron station near Maltby were among those charging $2-- more precisely, $1.99 9/10 -- for a gallon of premium unleaded.

The average price per gallon for regular unleaded reached $1.73 in the Seattle-Bellevue-Everett market Friday morning, according to an AAA survey. That was 7 cents above the national average.

More shocking is how fast prices rose to that level. Just a month ago, the local average was $1.41 a gallon. In early January, many stations around Everett were selling fuel for $1.30 a gallon or less.

Compare that to prices Friday, when finding any local station charging below $1.60 for a gallon of regular unleaded was difficult. An Arco station on Evergreen Way at Pecks Drive in Everett was charging just below $1.62 for a gallon, but most stations were at $1.66 to $1.70 a gallon.

Outside Everett and Lynnwood, many stations posted prices above that range, with a growing number charging $1.80 or more for regular unleaded.

All this is happening at a time of year when fuel prices usually bottom out before rising as summer, the year's busiest driving season, approaches.

Randy Schatz, owner of Randy's Better 76 in Mill Creek, said his regular customers are grumbling but still buying.

"They don't like it, but they understand," he said.

Prices at his station rose 3 cents a gallon Friday to $1.78. But as an independent owner competing against corporate-owned stations, Schatz said that he's not getting rich off the increases.

"In just the past week, it's been a dime increase per gallon in the wholesale price I pay," he said.

The higher retail prices also have increased the transaction surcharges Schatz pays whenever a customer buys gas with a credit card.

At corporate-owned service stations, which are now the majority in most urban areas, local managers usually have little control over prices. They normally charge what their owners, the big oil companies, tell them to charge.

The oil companies deny price-gouging accusations leveled this week by AAA and some members of Congress, saying market factors are to blame. Those include Venezuela's reduced oil production in the wake of nationwide strikes there, worry about the impact of a possible war with Iraq and relatively low reserve supplies held by the United States.

Just as crude oil prices showed signs of easing after reaching a two-year high on Thursday, an accident caused an explosion and fire at an oil terminal in New York. That sent crude oil up again, ending the day at more than $35 a barrel.

Schatz said those conditions explain why prices are rising in general, but he agrees with many of his customers that there's no good reason the prices are going up so high. Meanwhile, he joked that he is ordering more numeral 2s for the sign outside his station in preparation for prices of $2 and up.

Back at the 76 station in Monroe, Elliot, who is self-employed, said there's not much he can do about the rising prices or how much he drives.

"I still have to go to work," he said with a shrug.

Reporter Eric Fetters: 425-339-3453 or fetters@heraldnet.com.

www.sltrib.com BY REBECCA GOMEZ THE ASSOCIATED PRESS

    NEW YORK -- A powerful explosion at an ExxonMobil Corp. oil storage facility sent shock waves through an energy market already roiled by fears of war, pushing crude oil prices up more than a dollar in trading Friday. Heating oil and gasoline futures also surged.     The explosion occurred midmorning when a barge stocked with 100,000 barrels of unleaded gasoline was being unloaded at the Port Mobil terminal, a storage facility that holds 2 million barrels of oil products, on the tip of Staten Island. The cause was under investigation.     Prices eased somewhat after analysts and traders realized the loss of gas supplies on the barge and thousands of barrels of heating oil at the terminal in Staten Island would pose only a short-term problem for the Northeast.     "This is two million barrels and that's an important size for Staten Island and the region," said Ed Silliere, vice president of risk management at Energy Merchant LLC in New York. "Heating oil is extremely tight right now in the East. We can't be losing this quantity at this time."     Even though the barge was carrying gas only, the fire damage makes it nearly impossible to retrieve the heating oil from the facility, hurting regional supplies.     "It could have an effect for a couple of weeks, a little more tightness in heating oil," said Tom Kloza, chief oil analyst with the oil price information service. "Much more significant is whether it's cold in the Northeast in the next few weeks."     The national oil market is not likely to suffer as a result of the fire, analysts said.     Still, crude oil for April delivery rose $1.15 to $35.95 a barrel on the New York Mercantile Exchange, after news reports of the fire. It finished the day at $35.58 a barrel, up 84 cents for the day. Earlier, in London trading, Brent crude from the North Sea finished at $32.27, up 71 cents.     The fire broke out as U.S. crude supplies are already at their lowest level since 1975 and crude, gasoline and heating oil inventories are all below what the industry considers essential for smooth operation, the government reported last week.     The United States has not been getting the enormous supplies of imported crude oil from Venezuela because of political turmoil and a nationwide strike there that began in December.     Prices also have been sensitive to worries about a war with Iraq and Mideast oil supplies.     As a result, analysts said, any news about the oil markets will cause rumbles, regardless of the long-term impact.     "There's this heightened effect on the market," Silliere said. "Everybody is ready to jump on the latest news.     Elsewhere on the Nymex, the March heating oil contract rose 4.98 cents, or 5 percent, to $1.10 a gallon, while the March unleaded gasoline gained 4.7 cents, or about 5 percent, to trade at $1.01 a gallon. Natural gas for March delivery surged nearly 7 percent, or 44.4 cents, to $6.606 per 1,000 cubic feet.     "The market shot up when they thought it was a refinery fire and perhaps there was some other concerns that it could have been terrorist related," said Kloza.     A fire at an oil refinery, rather than a storage facility, would have had a far greater impact, analysts said. Refineries contain much more oil than terminal facilities, such as the Port Mobil, and they house expensive manufacturing equipment.     One person was killed in the explosion, another was critically injured and a third was missing, officials said.     The destruction of the facility quickly affected wholesale oil prices in local New York markets. In Albany, independent heating oil distributors increased their prices by 7 cents to $1.20 a gallon, said Silliere, who tracks the spot market. Small businesses getting supplies of heating oil Friday morning would have seen a quick pop in prices.     The Port Mobil facility is a vital link to oil supplies for the Northeast. It stores oil products taken off the Colonial pipeline, which brings supplies to the region from refinery centers in Louisiana and Texas.     The Port Mobil stores the oil product in tanks, then it is loaded into barges that ferry the gas and heating oil to regional distributors.     The fire knocked the Port Mobil out of commission. "Oil products are trapped there for some time because the only way out is barge and barging capabilities are destroyed," Silliere said.

www.dailypress.com Published February 22 2003 Pernell Watson Feb 18, 2003   Q: Where does the crude oil imported to the United States come from? - D.G., Newport News A: According to the Energy Information Administration, these were the chief sources of crude oil imported to the United States in barrels per day in 2001: (1) Saudi Arabia, 1.611 million; (2) Mexico, 1.394 million; (3) Canada, 1.335 million; (4) Venezuela, 1.291 million; and (5) Iraq, 795,000. The United States imports nearly 53 percent of its crude oil from abroad. Of the crude oil the United States imports, an estimated 21 percent comes from the Middle East. To avoid putting the United States at the mercy of the Middle East, the government has begun negotiating with African countries in an attempt to increase oil production on the continent. Canada is the top petroleum supplier to the United States and has been the top supplier to the U.S. of refined petroleum products which includes gasoline and jet fuel.

www.nationalpost.com Paul Vieira Financial Post Saturday, February 22, 2003

A number of major U.S. airlines and courier services announced yesterday they are being forced to slap on extra charges for their services to offset the rising cost of oil.

American Airlines, a unit of AMR Corp., announced it would add a US$20 charge on round-trip domestic tickets to cover the rising cost of fuel. The move matches an across-the-board surcharge levied by Northwest Airlines Corp. Other airlines have, or are expected to, follow suit.

Air Canada spokeswoman Laura Cooke said her airline moved Thursday to impose a fuel surcharge on trans-border, or U.S.-bound, flights of $14.30 one-way or $28.60 on a round trip. The Montreal-based airline already has a $15 fuel charge on domestic flights and it is set to impose a similar levy on international flights. Air Canada has said in the past that a US$1 increase in a barrel of oil adds $40-million to its costs.

WestJet Airlines Ltd., which tries to keep air fares as low as possible to attract demand, was compelled earlier this year to add its first-ever fuel surcharge.

Airlines are not the only ones feeling the pinch of high fuel costs.

Airborne Inc., the No. 3 express shipper in the United States, said it will raise its fuel surcharges for plane and truck customers.

A barrel of West Texas intermediate, the standard benchmark for oil, closed yesterday at US$3x.xx, inching closer to highs not seen for 13 years. Besides fears of war in Iraq, the other two big factors driving up the price of oil are the slow export recovery in Venezuela and a tight supply-demand balance.

Seattle-based Airborne said the levy for U.S., Canadian and international air express shipments will rise on March 3 to 5.1% from 4.3%. Also on that date, it said, it will raise its fuel surcharge for ground shipments to 1.8% from 1.3%.

Airborne rivals FedEx Corp. and United Parcel Service Inc. have also announced higher fuel surcharges effective March 3.

"Volatility in the Middle East and the threat of war has caused a sharp rise in fuel prices, one that is not expected to be short-lived," said Carl Donaway, Airborne's chief executive. "As fuel prices rise in the marketplace, it causes a considerable increase in our operating expenses."

Patricia Mohr, vice-president of economics for Bank of Nova Scotia, said added fuel charges are the norm when oil prices climb. "[Oil] has really gone up past $30 since last year," she said. "It's quite high ... And the airlines are quite sensitive to fuel prices."

Ms. Mohr said railways and truckers, who engage in export trade, may have to increase rates charged to recover added fuel costs. Of course, consumers are seeing the effect of surging oil prices at the gas pumps, where gas prices in the mid-80¢ range for a litre is the norm across the country.

However, she added the fuel surcharges are likely a temporary measure, and will be removed once the price of oil drops.

But how soon that will be is in question. UBS Warburg issued a report yesterday saying it was increasing its oil price forecast for 2003, to US$28 a barrel from US$25, and 2004, to US$22.50 from US$21.50. It cited as its main reason for the upward revision the "crawling pace" of recovery in Venezuelan oil production and exports.

Exports are at barely half the pre-strike levels of three million barrels of oil a day. And the continuing refusal of Hugo Chavez, Venezuela's president, to reinstate workers of the state-owned oil company "means the industry lacks the technical expertise and the funds to restore operations quickly," UBS said.

For the airline industry in particular, the high oil prices could not have come at a worse time. Airfares in Canada and the United States are hitting lows not seen in more than a decade, due to increased competition from no-frills players and an effort to spark demand.

Major airlines continue to lose money, and some executives have said that a war with Iraq would cause such a falloff in already-weak air traffic that they would be forced to ask for government aid to stay in business.

pvieira@nationalpost.com

www.nationalpost.com Peter Morton Financial Post Saturday, February 22, 2003

WASHINGTON - Americans have only a vague idea that their largest trading partner is Canada, according to a new poll done for a Canadian softwood lumber lobby group.

Only 12% knew Canada was the largest buyer of American goods and services but others believed the Japanese, China, Britain and Mexico were further ahead, the poll done by Taylor Helsom Sofres Intersearch found.

In addition, only 1% of Americans were aware Canada is the leading source of oil and natural gas to the United States, with most pointing to Saudi Arabia, Iraq, Venezuela, Kuwait, Mexico and Iran as bigger suppliers of energy.

The poll was conducted between Feb. 14 and 16 for the U.S.-Canada Partnership for Growth, a Washington-based group partially funded by the Canadian Forest Products Association and Ottawa.

"The citizens of the United States remain unaware of the enormous interdependence of the U.S. and Canadian relationship," said William Brock, a former U.S. senator who, with James Blanchard, the former U.S. ambassador to Canada, co-chair the group founded last fall.

"These survey results show just how far we need to go to inform Americans on their neighbours to the north," he said yesterday.

Canada and the U.S. are world's largest trading partners with two-way trade hovering around US$1.3-billion a day, much of that in automobiles and parts as well as exports from Western Canada of oil and natural gas.

"Americans are stunned every time they learn that Canada -- and not a country in the Middle East -- is the largest provider of oil and natural gas to the U.S.," said Mr. Blanchard, a former governor of Michigan.

Canada supplies more than 15% of natural gas consumed in the United States but shares top spot as oil exporter with Saudi Arabia and Mexico, depending on market and seasons. Generally, The United States imports heavy oil from Canada but usually imports lighter grade oil, used for gasoline and heating oil, from Saudia Arabia and Venezuela.

Chris Sands, a Canada expert at the Center for International and Strategic Studies in Washington, said he was not surprised the poll found that few Americans were aware of the trading relationship with Canada.

"The economies are so similar that it is hard to think of things that are Canadian-made," he said. "Some countries have signature products like Japan. Perhaps Americans would think of Canada when they bought hockey sticks."

The partnership has been trying to raise the profile of Canada both in Washington and elsewhere by running television commercials on CNN and advertisements in The New York Times and USA Today to put pressure on Congress to end the long-running softwood lumber dispute.

Canadian and U.S. negotiators are meeting in Washington this weekend in a bid to close the remaining gaps that would see an end to a 27% import duty imposed last March on Canadian lumber shipped into the U.S. market. So far, the U.S. administration has collected about US$1-billion in duties from Canadian exporters.

Although the two sides are much closer to a deal, they are far apart on an interim agreement that would see Ottawa impose a temporary export tax while the four major timber producing provinces -- British Columbia, Quebec, Ontario and Alberta -- reform their management practices to bring them closer in line to a U.S.-styled market system.

Sources close to the talks said yesterday the U.S. lumber industry is still demanding an export tax as high as 25%, depending on lumber prices, while the Canadian side is not willing to go higher than 18%.

pmorton@nationalpost.com