www.miami.com Posted on Tue, Feb. 25, 2003 BY PATRICK DANNER pdanner@herald.com

As oil prices go, so goes the oil industry. And with oil prices surging to their highest levels in at least two years, oil companies are poised to reap rich profits.

''When prices rise, it looks like they're coining money,'' says Craig Pirrong, director of energy markets for the University of Houston's Global Energy Management Institute.

A comparison of oil prices and the bottom line of some major oil companies shows that the industry generally racks up greater profits when prices are at or near their peak. Earnings tend to tumble when oil prices bottom out.

The oil and gasoline industry is sensitive to the topic, particularly now. Tempers have been rising right along with prices at the pump.

The automotive club AAA, raising the possibility of gouging, has called current gas prices unjustified.

Florida Attorney General Charlie Crist has called for federal authorities to investigate and is scheduled to meet today with the representatives of six oil companies.

Connecticut Sen. Joseph Lieberman, a Democratic presidential candidate, asked the energy secretary on Monday to look into the recent rise in gas prices.

Within the last week, according to AAA, drivers in South Florida and throughout the state have paid historically high prices -- $1.729 in Miami, $1.723 in Fort Lauderdale, $1.696 statewide -- for regular gasoline.

But while the oil industry acknowledges the connection between prices and profits, it insists the link does not tell the whole story.

''Industry critics chastise oil companies for gaining what they claim are unconscionable profits,'' the American Petroleum Institute, which represents the industry, says. ``The truth is, however, that industry profits have been very much in line with those of other industries. And often they are lower.''

Last week, oil prices topped $37 a barrel, their highest level since the last half of 2000, when a barrel of light sweet crude cost as much as $37.20. Before that, oil prices had not reached such levels since late 1990 -- when the United States was last on the verge of war with Iraq.

During these periods, oil companies registered some of their biggest earnings.

''The price of oil and other energy commodities are inherently volatile,'' Pirrong says. 'There's a direct linkage between [companies'] financial performance and the price of oil and energy commodities, [and it] inherently generates volatility in their financial performance and earnings.''

The price of a barrel of oil is trading high for a variety of reasons, says Rayola Dougher, a senior policy analyst with the American Petroleum Institute.

Among them, she says, are the following:

• Venezuela, a significant source of oil, has been coping with a strike that has reduced exports to the United States.

• Oil inventories are at their lowest levels since 1975.

• The cold winter through much of the United States has increased the demand for heating oil.

• Jitters about possible war with Iraq have traders bidding up prices to secure supplies.

DOUBTS REMAIN

AAA is unconvinced.

''It's difficult to understand . . . why the price has gone up so steeply,'' says Geoff Sundstrom, a spokesman for the Orlando-based auto club. ``No oil tankers have been sunk; refineries are operating; oil is flowing.

''We are not trying to be harsh on the industry,'' he says, ``but we did feel the big increase after the State of the Union address seemed to be based on fear and speculation.''

Sundstrom says there is an almost instantaneous increase in gasoline's wholesale price when the price of crude rises. The oil companies attribute that to their need to anticipate inventory-replacement costs, but, Sundstrom says, ``the problem with that is we don't see an immediate drop in gas prices when the price of crude oil goes down.''

Dougher counters that current gas prices are nowhere near historical highs. Adjusted for inflation, she notes, a gallon of gas in 1981 would cost $2.71 in today's dollars.

''I don't know why AAA does this,'' she adds. ``Every time the price goes up, they do this. Maybe they think it keeps their constituents happy. They're just not dealing with the facts.''

According to Dougher, a close look at oil companies' profit margins (net income divided by sales) shows the fuel industry's profits lagging behind those of U.S. industry as a whole over the last five years. Citing data from BusinessWeek, she says the fuel industry's profit margin has been 4.7 percent, compared with 5.2 percent for all U.S. industry.

PROBE DEMANDED

Nonetheless, the price jump has fueled calls for investigations into why gas prices are rising and possible manipulation or gouging.

Last week, Crist sent the Federal Trade Commission a letter, requesting that it look into the increase.

On Monday, Lieberman urged U.S. Energy Secretary Spencer Abraham to investigate.

When gas prices skyrocketed in the West in 2000 and in the Midwest a year later, the FTC investigated and reached the same conclusion.

''In both cases,'' FTC spokesman Mitch Katz says, ``the commission did not find that illegal anticompetitive behavior or collusion had led to the price increases.''

Adds Dougher: ``The FTC . . . [has] done numerous investigations over the years and . . . never found any anticompetitive behaviors. What [it has found is that] market forces are determining the price of gasoline.''

HUMAN NATURE

When oil prices are high, oil companies typically see profit gains in exploration and production (referred to as ''upstream'' operations). The reason is simple: The crude taken out of the ground is more valuable.

But profits from the downstream operations of refining and marketing -- from the making of products from crude, that is, and from those products' sale to consumers -- typically tumble. That's because the price of a barrel of oil will have climbed.

'When oil prices rise, more often than not but not always, refiners' margins tend to be squeezed,'' says Jon Rasmussen, a financial economist with the Energy Information Administration, the statistical arm of the Department of Energy.

Take ChevronTexaco. In the fourth quarter last year, when the price of a barrel of light sweet crude averaged $28.23, the San Ramon, Calif.-based company's exploration and production operations generated more than $1.2 billion in operating earnings, up from $544 million in the same period in 2001, when the price of oil averaged $20.53 a barrel.

But ChevronTexaco's refining, marketing and transportation operations lost $151 million in the most recent quarter, compared with a $215 million profit over the same period a year earlier.

On the other hand, downstream operations generally do well and upstream operations falter when oil prices tumble. When prices fell to $12 a barrel in late 1998, some of the major oil companies' profits declined.

Low oil prices, however, rarely spark debate.

''These things,'' Pirrong says, ``get the most attention when prices are high.''

athena.tbwt.com By Sonja  Ebron TBWT Guest Contributor Article Dated 2/24/2003

"... the greatest purveyor of violence in the world today - my own government." - Dr. Martin Luther King, "Beyond Vietnam: A Time to Break Silence," April 4, 1967 at New York City's Riverside Church

"If we don't have boots in the Iraqi desert by spring, we have to wait till winter because of the heat," says conventional wisdom. Don't believe the hype: our soldiers can handle the heat, but gas and oil prices can't stand the cold. Heavy demand makes winter fuel prices the highest of the year, and prices spike when an oil producer like Iraq is attacked. Best to fight in the spring and summer when prices are low. That's just the first lesson in the nexus between oil, money, time and the taking of other people's property by force. As the U.S. government rushes to invade and occupy Iraq, people around the globe ask Why, Why now, and Why so alone?

Look all around you. Plastics, carpets, asphalt, paint, fertilized soil. Look how electrified our lifestyles. All of it based in oil and gas. Transportation systems, the glue of our economy, needed for centralized workplaces and the economic cohesion of our nation, dependent on oil. Agriculture, pharmaceuticals, a host of other industries all critically dependent on oil. Globally, one's personal income is more closely related to the amount of energy one consumes than to any other factor. Oil is the most liquid energy, the form most easily transformed to others. The more oil you use, directly or indirectly, the richer you are. As the richest country on the planet, U.S. oil consumption is more than 20 million barrels a day and rising. We produce less than half those barrels, importing the rest largely from Saudi Arabia, Mexico, Canada, Venezuela, Nigeria, and Iraq. Within 20 years, we will import 6.5 barrels out of every 10 we consume.

U.S. oil production peaked in 1971, enabling OPEC's 1973 oil embargo and the deep economic recession that resulted. Jimmy Carter changed our country's policy toward Arab nations in 1980 by designating the supply of cheap oil from southwest Asia (the "Middle East") vital to national security. Our policy in the region quickly evolved to prevent the rise of a hegemonic power, like Iraq was becoming in 1990, able to influence use of the region's oil. The world's oil production will peak this decade, bringing with it a permanent change in oil market control from those who consume to those who produce. This change will occur at a time when our economy is far more dependent on imported oil than it was in the 1970s. With deep roots in the oil industry, the Bush administration rightly seeks to diversify our sources of imported oil. Large oil and gas deposits in the Caspian Sea (circumscribed by Iran, Russia, and the -stans in central Asia), South America (including Mexico, Venezuela and Brazil), the South China Sea (circumscribed by Korea, the Philippines, and Indonesia), and West Africa (primarily Nigeria, Angola and Gabon) are consequently drawing sober U.S. interest.

Black Americans have historic and cultural ties to Africa, as illustrated by our concern with the continent's poverty and HIV/AIDS rates, its terms of international trade, and its continuing struggles against colonialism. Many of us cheered last year when all 53 African states vowed to increase trade and to cross national boundaries as necessary to implement the mandates of a new African Union. Few of us know that Africa produces one-seventh of the oil consumed in the U.S., a figure that will rise to one-quarter over the next decade. Even fewer know that oil discoveries in Africa have outpaced those of every other region for several years. "West Africa's oil has become of national strategic interest to us," Assistant Secretary of State for African Affairs Walter Kansteiner declared early last year. "African oil should be treated as a priority for U.S. post-September 11th security," added Congressman Edward Royce, chair of the Africa subcommittee in the House of Representatives. Discussions are ongoing at the highest levels of our government to formally designate west Africa a region vital to national security. Those of us with interests in Africa - African Americans, in particular - must understand the implications of this. With the size of Africa's oil exports growing to rival Saudi Arabia's, we must assess our government's war plans against the U.S. need for oil.

Our country is the largest consumer of the world's oil, but our economy is tied to oil in more ways than one. Since the 1940s, oil has been denominated in U.S. dollars only, making our dollar the world's preeminent reserve currency. Nations buy and hold dollars like they buy and hold gold because they can't purchase oil without dollars. With this support for our currency, U.S. foreign debt has grown to $2.8 trillion, or $10,000 owed to foreigners by every man, woman and child in our country. Last year's trade deficit alone was more than $500 billion and shows no sign of slowing. Any other country with our lack of fiscal discipline would see its currency and stock market crash hard. But the dollar's value is essentially backed by oil, which allows our Treasury to simply print money as needed to finance our debt. Since accounting makes no allowance for fiat money, the General Accounting Office has been unwilling to certify our nation's financial statements for several years. We can operate this way only while our dollar is the world's preeminent reserve currency; without dollar preeminence, there is hell to pay.

Enter the real "weapon of mass destruction," the euro. Eleven European countries formed a monetary union around this currency on January 1, 1999; Britain and Norway, the major European oil producers, were conspicuously absent. Due to the strength of European economies, the euro now presents a serious challenge to the dollar in its role as key reserve currency. The rise of the euro also threatens to hobble the British pound's eventual entry into Europe's monetary union. Britain and the U.S. have mutual interests in oil to match their interests in the euro. Of the five largest oil companies in the world, two (ExxonMobil and ChevronTexaco) are U.S.-based, two (Royal Dutch/Shell and BP) are based in Britain, and one (TotalFinaElf) is French. U.S. and British oil companies are all but banned from exploration in Iraq, while French, Russian and Chinese companies have contracts waiting for the lifting of sanctions. France and Germany, the largest economies in the Euro-zone, can diminish U.S. credibility and keep the euro on track to become the key reserve currency by preventing war with Iraq.

Under U.S. and British military attack for the last decade, Iraq has had its exports restricted to oil through a United Nations oil-for-food program that deducts war reparations from the receipts. Iraq has used smugglers to trade its oil for goods and services, minimizing official oil sales as a way to influence prices and punish its attackers. Labeling the dollar "the currency of an enemy state," Iraq switched its oil denomination to the euro in late 2000, risking the loss of $270 million to the dollar's strength at that time vis-à-vis the euro. But the dollar lost 15% of its value against the euro last year. Iraq's move to the euro - and Iran's expected move - are placing tremendous pressure on OPEC countries and other oil producers to drop our dollar as the main transaction currency for oil. With a looming global peak in production, consuming nations must switch currencies when oil-producing states do so. For instance, Jordan began using euros to buy oil as soon as its major supplier, Iraq, began using them to sell, and North Korea switched to the euro late last year to protest the U.S.' halt in fuel aid. Given the highly leveraged and fragile state of our economy, an OPEC switch from the dollar to the euro would bring a quick and devastating dollar and Wall Street crash that would make 1929 look like a $50 casino bet. Iraq's currency action adds urgency to the coming oil price and supply crisis, so our leaders have moved to control both the flow and the currency denomination of oil.

The U.S. strategy to destroy OPEC is twofold: pressure non-OPEC producers to flood the oil market and retain denomination in dollars in an effort to weaken OPEC's market control, and change the leadership of any country switching oil denomination from the dollar to the euro (hence, the "axis of evil"). The strategy requires that the U.S. military assert our interests in oil and gas deposits worldwide. U.S. interests in the Caspian Sea have been secured through regime change in Afghanistan and a deal for a new pipeline through that country. U.S. interests in South America, despite the failure of the coup in Venezuela (an OPEC member), are being secured via military aid to neighboring Columbia. U.S. interests in southwest Asia are being secured through the planned invasion of Iraq, then Iran (both OPEC members) if it switches oil denomination. U.S. interests in the South China Sea are being secured through military deployments in the Philippines and off the Korean coast (near OPEC member Indonesia). But what of West Africa?

While most African countries import oil from outside the continent, Africa is a net oil exporter. That's because nearly all African oil is produced for export to Europe and North America. The vast majority of foreign direct investment in Africa is in the energy sector. In the largest project to date, ExxonMobil and ChevronTexaco have invested $3 billion in a pipeline project to bring Chad's oil through Cameroon to the west African coast for export; the oil could flow by the end of this year. Yet the primary goal of the African Union is economic, political and military integration. In a nod to the continent's internal needs, ChevronTexaco is building a gas pipeline from Nigeria to ports in Ghana, Benin and Togo. Until OPEC lowered production quotas last year, Nigeria was selling large blocks of oil to South Africa and Kenya. As the African Union succeeds in integrating the continent's economies, Africa's oil exports will be turned increasingly to internal use. Does U.S. policy in Africa mirror our policy in the Persian Gulf, a policy designed to prevent the rise of a hegemonic power with influence on the use and denomination of the region's oil?

Sao Tome and Principe, an island nation 150 miles off the West African coast (triangulating Nigeria and Angola), agreed last year to host a U.S. naval base in exchange for protection of oil in its territorial waters. Nigeria has claimed exclusive licensing rights to an oil block in these waters for many years. The U.S. base could also be used to protect Cameroon's claims to Bakassi, the oil-rich island off its coast long claimed by Nigeria. A new deployment of U.S. Special Forces to Djibouti, a tiny country bordering Ethiopia, Eritrea and Somalia, could likewise check national autonomy in the Horn of Africa. This troop deployment, designed to catch terrorists in east Africa, adds to the 3,000 French and German troops already present in the area. Our State Department has openly threatened Zimbabwe as that country puts its land back into Black hands. Like accusations levied against Somali "warlords" a decade ago, President Mugabe is charged with exacerbating Zimbabwe's famine by distributing food aid only to government supporters. Our country has numerous opportunities - and perhaps an incentive - to violate African sovereignty. The upshot is that African Americans could soon experience repression of the sort felt lately by our Arab and Muslim brothers and sisters.

What are we to do? Recognize that Black well being in the U.S. and around the world will be adversely impacted by our government's war for oil. Recognize that an oil war, by increasing the costs of energy, threatens oil-importing developing economies everywhere, especially those in Africa and South America, as well as Black America's. Recognize that the war to control the world's oil is in the late planning stages but is early in its implementation and can be stopped. Recognize that Martin was killed because of the moral authority he brought to the Vietnam anti-war movement, drawn from his use of the "race card," and that the African American community retains that authority. Recognize that our ability to drive domestic response to an immoral foreign policy is what keeps the warmongers up at night. Recognize that thoughtful Black people, from Nelson Mandela to your next-door neighbor, are against this war for two reasons: because it is against Black interests - in the U.S., in central and South America, in Africa - and because it is so very terribly wrong. Talk to your friends and family about your opposition to the war. Stick an anti-war poster in your yard and a bumper sticker on your car. Join or help organize a local or national protest. Call, write, email and visit your congressional representatives. Take a few "sick days" from work, and don't buy anything you don't absolutely need. Get behind the anti-war movement now, before it's too late.

We must also work on root causes with those in other communities. It may already be too late for a smooth transition from oil dependence to sustainable energy use, but we must begin now. If we are sensible, we'll invest in solar and wind technologies, human-powered and public transportation (bikes and buses), public agriculture, and other requirements of sustainable communities. We must get our economic house in order and rebuild our manufacturing base. "Made in the USA" means we'll have more jobs, even though they may be difficult and may not pay very well. Our lifestyles will change dramatically. Our standards of living will decrease, but the quality of our lives will improve. We'll be forced to depend more on each other, to communicate more with each other, to build stronger families and communities. And just maybe we won't have to kill people to maintain our economy. We can only suspect that, had the people's will prevailed in 2000, our president-in-exile would have begun this transition.

On September 20, 2001, President Bush declared, "The war will be fought not just by soldiers, but by police and intelligence forces, as well as in financial institutions." Hmmm. War is not the answer. It's a shortsighted desperation play that is doomed to failure. Our military forces may take but cannot hold Iraq's oil, as they have failed to tame Afghanistan's land. Far from staving off disaster, our arrogance may instead compel OPEC to "go euro" en masse, taking many oil-consuming nations with them by force of economics. And a trade war with Europe will lend the coup de grace to our economy. In the meantime, many people will be hurt and killed, research and development on fuel efficiency and renewable energy will be slowed, the necessary policy and tax initiatives on energy consumption will be delayed, and our country will be far worse off when intelligent leadership finally prevails.

Sonja Ebron is the chief executive of blackEnergy, the place to practice Black cooperative economics. blackEnergy brings the benefits of deregulated energy to Black communities everywhere. For more discussion on this article and to see what others have to say click on the link below to go to discussion forums.

washingtontimes.com By Joseph B. Frazier ASSOCIATED PRESS

     MARACAIBO, Venezuela — Under the scorching sun on Lake Maracaibo, oil wells by the thousands suck up natural gas and crude oil, the wealth of Venezuela, for home use and export.      But much more crude than usual has been ending up in the water since oil workers joined a national strike against President Hugo Chavez in December, environmentalists and government critics say.      Though the walkout against Mr. Chavez has fizzled, many oil workers remain off the job, and critics say the shortage of employees and lack of know-how among those who are working is causing severe environmental damage.      The state-owned oil monopoly, Petroleos de Venezuela SA, insists spills are small, rare and quickly controlled. It also blames many of the spills on striker sabotage.      The situation is difficult to check independently. The oil fields have been sealed off by army and national guard troops who enforce a no-fly zone over the lake and turn back boats carrying journalists trying to get a firsthand look.      "They won't let us overfly the lake to look for oil slicks anymore," said Eddie Ramirez, a former executive for the oil monopoly. "It's all militarized now. We still have people working in the oil fields who give us information. But it is getting harder to get."      Norberto Robodello, who directs the environmental-quality program of the Ministry of the Environment and Natural Resources, complains that there are areas even his ministry isn't allowed to see.      Crude oil is critical in Venezuela, the world's No. 5 exporter and a major supplier to the United States. Lake Maracaibo, 325 miles west of Caracas, is a major producer.      Since World War I, about 14,000 wells have been drilled in the lake. About 8,000 are active. Estimates vary, but 15,000 to 28,000 miles of pipes and tubes snake along the bottom.      "There is no operation in the world like this," said Felix Rodriguez, recently named by Mr. Chavez's government to lead oil operations in western Venezuela.      Oil operations are spread over 60 percent of the lake's 5,200 square miles. Latticed derricks poke skyward from platforms. Black pumping units bob up and down relentlessly. More modern wells extend a few feet above the water and are driven by electric pumps.      During a boat trip supervised by oil-monopoly officials, a reporter was shown what was described as sabotage at an electrical platform that powered 24 wells. Heavy cables appeared to have been cut in several places.      "Someone knew how to do it," said Luis Graterol, one of the officials. "You don't just do that with a pair of pliers. It takes a skilled electrician."      About 35,000 of the monopoly's 40,000 employees went on strike Dec. 2, joining the opposition general strike aimed at forcing out President Chavez, whom they blame for the country's political and economic strife.      The general strike failed, but the oil walkout continues. Mr. Chavez has fired more than 11,000 oil strikers and split the oil monopoly into eastern and western divisions to tighten government control over operations.      Production is creeping back to pre-strike levels. But the government says it is hampered by sabotage.      The private Venezuelan Environmental Foundation said it flew over the lake Dec. 11, before the flight ban, and spotted 17 spills. The foundation said one well was spewing oil and water more than 30 feet in the air, and experts estimated it was spilling 1,100 barrels a day.      Mr. Rodriguez, who blamed that spill on saboteurs, acknowledged there is government pressure to increase production.      "We need the money," he said. "But we do it with safety. We are working to diminish the risk. If we aren't sure, we won't open a well."      Lenin Herrera, a chemical engineer and former head of the Institute for the Conservation and Control of Lake Maracaibo, said spills of petroleum and production chemicals are a major source of contamination.      "There have been unjustifiable spills since the strike. There was a spill in January that went three or four days without being fixed. Later, a well spilled for two or three days," he said.      Mr. Herrera said the oil work force is 10 percent to 15 percent of normal levels and that many of those workers are not trained. "Yet they contend the petroleum operation is safe," he said.      Figures compiled by Zulia state's Maracaibo Lake Commission show that before the strike, there was a steady drop in spills in recent years to a rate of about four barrels for every million pumped from under the lake. Now the rate is equal to 40 barrels per million, the commission said.      "We didn't worry before. The government used international norms and standards," said Gonzalo Godoy, who leads the commission. "Now, with [the strike] a series of spills has begun."      His agency counted 67 spills in the first seven weeks of the strike, 15 of them in the lake, even though production was down substantially.      "The packing on those wells has to be checked and adjusted every day," Mr. Godoy said. "With so few people working, they just can't do it."      Industry specialists say that if the packings are not kept in order, they can begin to leak and that leaks can grow into full-blown spills.      People are also worried about chemical contamination.      "We suspect they are using dispersants to break up the slicks," Mr. Godoy said, noting that Venezuela and many other countries forbid their use.      Dispersants don't clean up oil but cause it to sink to the bottom, where both crude oil and dispersant can enter the food chain.      "The government says they aren't using them, that they use special boats to pick up the oil, but fishermen say they have seen it," Mr. Godoy went on.      Zulia state Gov. Manuel Rosales, one of Mr. Chavez's most resolute foes, declared a state of emergency in January because of reports of oil spills. He contended that there have been 79 spills, about 40 percent of them in the lake and the rest on platforms or surrounding fields.      "The spills have affected the flora and fauna of the lake," he said. "After days of this, they had not implemented a contingency plan."      The Ministry of Environment and Natural Resources said it had reports of 96 spills from Dec. 6 to Jan. 28. Of the 84 it investigated, four were in the lake, the ministry said.      Critics also warn of natural-gas leaks.      Mr. Ramirez, the former oil executive, said the accepted standard for the escape of natural gas from wells into the atmosphere is 2 percent. Some of the rest is fed back into wells to keep pressure up while the remainder goes to domestic and industrial use.      "But now we hear that 30 percent is escaping," he said. "Most of that gas is high-sulfur, and it comes back as acid rain."      Oil-monopoly officials insist that gas leakage is nearly zero.      Mr. Herrera, the chemical engineer, is urging the strikers and oil monopoly to accept a truce and work together to fix the spills. "The political crisis will end. The economic crisis will end. But what is contaminating the lake will stay there," he said.      And the lake has problems beyond oil spills, others warn.      Raw sewage flows into it. There is significant runoff of pesticides, herbicides, fertilizers, organic materials and other matter from the farms of Zulia state, the country's major agricultural producer.      "The lake is aging prematurely," Mr. Herrera said.

www.nytimes.com By ROBIN FINN

MUCH as the good husband is not supposed to covet his neighbor's wife, the good curator is not encouraged to covet a museum's art. But, hurrah, the Museum of Modern Art's terribly British curator at large, John Elderfield, briefly drops his second-skin decorum and diplomacy — cribbed from C. P. Snow novels — and makes a tiny confession inside this blah conference room at the museum's office near Rockefeller Center.

Nothing larcenous, mind you. Merely a flight of fancy that causes Mr. Elderfield, 59, to work up a blush beneath his silver hair and scholarly specs, and to lower his voice as if the texts, some written by him, in this book-lined room have ears. Matisse, it seems, has exerted a giddy influence on him for 35 years and shows no sign of letting up. Factor in some Picasso and before you can say, "Blue Nude"-"Two Nudes," Mr. Elderfield, whose cubist-patterned socks and polka-dot Miyake tie hint at a whimsical soul behind the gray business suit, undergoes a kid-in-a-candy-store transformation.

His harmless excursion into covetousness occurred last month as he and his co-curator, Kirk Varnedoe, installed the blockbuster "Matisse Picasso" exhibition commandeering the museum's temporary headquarters in Queens. Sixty-seven works by Matisse (Mr. Elderfield's hero) are displayed in an intricate dialog with 68 works from Picasso (Mr. Varnedoe's hero). It was installation as intoxication.

"When you're hanging the pictures," says Mr. Elderfield, "you can maintain the fiction that these are all yours. But then you're finished, and people come, and there's a slight postpartum feeling, you know, that you've lost them. During the installation, Kirk and I started making a list of the works whose actual owners we felt don't deserve to have them, but it got too big." Naughty boys.

Mr. Elderfield is a Courtauld Institute of Art-trained dabbler whose Upper West Side apartment, shared with his companion of 20 years, Jeanne Collins, is dotted with landscapes, some on wood, some on canvas, painted by him, not Matisse or Picasso. If he could take one painting home, it would be "Bathers With a Turtle." But wait. It might be politically correct — Mr. Elderfield, slyly paraphrasing Nelson Rockefeller, says he learned his politics at the Modern — to select a painting by each artist.

Now he's getting greedy. Which two paintings?

"I've gotten quite attached to those final two surrogate self-portraits that end the show," he says, referring to "Violinist at the Window" by Matisse and "The Shadow" by Picasso. "To my delight, I've been told people have been found crying in front of them."

Not to digress, but what was his and Mr. Varnedoe's rationalization for exiling a zillion dollars' worth of masterpieces to a concrete-floored facility that more resembles a warehouse than a museum? Not counting the practical reason, the $80 million renovation of the Modern.

"Queens has its good and its bad points, but we sort of concluded the big raw space reminds us of an artist's studio and lends the works a different kind of resonance," he says. "Or maybe this is just our justification."

He paired Matisse and Picasso once before, linked by Cubism, at the close of the Modern's 1992 Matisse retrospective; it was a snap success, but why reprise it? Even Mr. Elderfield needed convincing after his mentor, John Golding, proposed a show for the Tate that morphed into a collaboration of museums in London, Paris and New York.

"It isn't King Kong versus Godzilla," he says of "Matisse Picasso." "It's about what it means to make works of art in a context where there's somebody else of your stature. I never understood, before working on this show, how Matisse wouldn't have been as great without Picasso pushing him, or how Picasso wouldn't have been as great without Matisse."   MR. ELDERFIELD comes from Lazenby, a village in Yorkshire. His father, in the British Air Force, died two weeks before he was born. He and a twin brother were raised by another war widow, his maternal grandmother, until his mother remarried. His stepfather, an amateur artist, taught him to paint, and he studied painting at the University of Leeds under Quentin Bell, Virginia Woolf's nephew; after a foray into architecture, he immersed himself in art history.

He saw his first Matisse in London in 1968, and was floored. "I'd had tremors before the earthquake," he says, "but nothing like that."

While on a fellowship at Yale, he began writing for ArtForum, and his work was noticed by the Modern's Bill Rubin; they chatted, but Mr. Elderfield went back to a teaching job in Leeds and forgot about the Modern until he received a phone call in 1975. The Modern needed a curator. First assignment: assemble an exhibit of Matisse and the Fauves, and fast. Go to Paris and confer with Matisse's daughter: "Terrifying!" Write the catalog in three months; open the show in six.

Mr. Elderfield's next project involves a virtual unknown, the Venezuelan painter Armando Reverón, but there's been a snag — the domestic unrest in Venezuela. "As much as I believe in the power of art to work wonders in the world, Caracas has more important things to think about at the moment than someone from MOMA knocking at their door and asking to borrow their paintings," he says. "I can wait."

www.thedailyjournal.com Tuesday, February 25, 2003

Ten dollars of gas doesn't go as far as it once did.

That isn't the longing of a veteran driver for the good old days. Anyone who has been driving since last year would have noticed the slow uptick of prices since the start of 2003. The increase, about 22 cents per gallon for unleaded gas nationwide, has been occurring slowly but steadily.

Until now, drivers have had the threat of war, terrorist attacks and blizzards to worry about, and they haven't been complaining too much. But the price increases are discouraging and worrisome. Higher gas and heating oil prices fuel inflation, which won't help an already weak economy get back on track. And with gas prices rising as fast as they are now -- the price is hovering around $1.50 per gallon locally -- drivers are starting to wonder how high they will go if, or when, we attack Iraq.

The main reasons for the increase -- a protracted refinery strike in Venezuela, a major U.S. supplier of petroleum, and tensions about the looming war -- have been cited many times in recent weeks.

But some observers are suggesting that refiners and retailers are once again using these reasons to justify overly large price increases. We hope not. To do so when America is preparing for war would be opportunistic at best and unpatriotic at worst. If some of them are, government officials and consumer groups should crack down on the gougers.

Meanwhile, consumers should find ways to trim their gas expenses. One less ride to Wawa during the day; one less weekly trip to the mall; and how about driving a little slower? All will help reduce your gas bill.

For example, every increment of 5 miles per hour above 60 mph adds 10 cents to your per-gallon cost of gasoline. So keep the pedal off the metal, and you'll see a savings that's worth slowing down for.