www.naplesnews.com Business front | Business archive | help Tuesday, February 25, 2003 By DAVID ROYSE, Associated Press

Charlie Crist, the state's top lawyer, has invited representatives of major oil companies to explain why prices are at an all-time high in Florida

TALLAHASSEE — Attorney General Charlie Crist wants to know why gas prices have spiked to an all-time high in Florida, so he will meet today with representatives of six major oil companies.

Officials from ExxonMobil, BP, ConocoPhillips, Amerada Hess, Marathon Ashland Petroleum, and Chevron Texaco Corp. are expected to meet with Crist individually to discuss the oil industry's role in prices at the pumps.

Crist spokesman Bob Sparks said the companies were voluntarily sending representatives and haven't been subpoenaed.

"We're at record high prices," Sparks said Monday. "General Crist has just invited the representatives of these companies to share their perspective on why this is so."

Crist has also asked the Federal Trade Commission to look into whether Florida gas stations are artificially increasing prices to take advantage of possible war with Iraq. Several gas retailers suggested he should look at the whole industry, not just the stations.

According to the American Automobile Association, Florida's average cost per gallon for regular gasoline on Monday was $1.69, up 19 cents from a month earlier and 56 cents higher than the same time last year. It is the highest average price for gasoline ever in the state.

None of the six companies would comment Monday on what their representatives would tell Crist, although BP spokesman Scott Dean said: "We always cooperate with these requests for information and we're happy to do so."

But a petroleum industry economist said basic economics are at work and that a "perfect storm" of international factors were driving up the price of gasoline, not any kind of gouging or conspiracy by producers.

A two-month national strike in leading oil producer Venezuela, the potential for a strike in Nigeria, a particularly cold winter, a growing economy, and the prospect of war in Iraq all combined to push crude prices up, said John Felmy, chief economist at the American Petroleum Institute.

"This is simply fundamental supply and demand," Felmy said. He said crude oil prices have gone up 29 cents a gallon since November and that gas prices have followed suit, going up about 29 cents a gallon since December. He pointed out that in Florida, the price has actually gone up a little less in that period, about 28 cents a gallon.

"We don't set prices on world markets, the market does," Felmy said. "The cost of producing gasoline has gone up 29 cents a gallon."

www.globeandmail.com Associated Press

Caracas — Every night for two months, Venezuelans knew where to find Carlos Ortega. The labour leader was sure be standing before cameras in Caracas, predicting the imminent downfall of President Hugo Chavez.

"The dictator's days are numbered," Mr. Ortega would thunder at his news conferences, flanked by business leader Carlos Fernandez.

Now Mr. Ortega, the leader of the strike that failed to oust Mr. Chavez, is in hiding, charged with treason and rebellion. Mr. Fernandez, accused of similar crimes, was seized by federal agents last week and is under house arrest.

Mr. Chavez wants both men sentenced to at least 20 years in prison for inflicting pain and suffering on Venezuelans with a strike that crushed the economy.

"See how the others are running to hide," he mocked in a speech after Mr. Fernandez's arrest.

Hiding is uncharacteristic of Mr. Ortega, the most visible and pugnacious of Mr. Chavez's opponents. He is the only government opponent to claim a measure of victory against Chavez since the leftist president was elected in 1998 and re-elected in 2000.

As president of Venezuela's biggest oil workers union, Fedepetrol, Mr. Ortega led a four-day strike in 2000 for back pay and a collective contract for 20,000 workers. Mr. Chavez ceded on both counts.

Mr. Ortega subsequently rose to the top of the Venezuelan Workers Confederation, or CTV, which boasts one million members. In a bid to grasp control of the labour movement, Mr. Chavez called a nationwide election for CTV leaders over the protests of the International labour Organization, which argued union elections were a private matter.

Since then, though, Mr. Ortega hasn't been so successful against Mr. Chavez.

Last year, he joined his labour forces with Fedecamaras, the leading business chamber, and convoked a general strike in April of 2002 to support striking oil workers. Workers were upset with Mr. Chavez's intervention in Venezuela's semiautonomous state oil monopoly.

Mr. Ortega urged thousands to march on Miraflores, the presidential palace. Nineteen people died during the march, which prompted a two-day coup.

Mr. Chavez returned to power when an interim government composed mostly of business executives abolished Venezuela's constitution. Mr. Ortega seethed on the sidelines.

Mr. Ortega was last seen in public Wednesday, a day after a warrant for his arrest was issued. Alfredo Ramos, executive secretary of the CTV, said Mr. Ortega is moving from safehouse to safehouse.

"He will stay underground because there is no guarantee for his physical safety. He's received numerous death threats," Ramos said.

Mr. Ortega's whereabouts have become a national obsession. Rumors have put him in Aruba, Colombia or in remote ranches on Venezuela's vast central plains.

"He probably left the country already, but that bandit could be anywhere," said Ramon Ramirez, a construction worker who supports Mr. Chavez.

The latest strike, which ended Feb. 4 in all but the oil industry, cost Venezuela more than $4-billion (U.S.), created shortages of food and medicines, and forced the world's fifth-largest oil exporter to import gasoline.

The strike focused attention on Venezuela's simmering political crisis but failed to bring about either early elections or Mr. Chavez's ouster.

The future of talks mediated by Cesar Gaviria, secretary-general of the Organization of American States, is in doubt.

Mr. Chavez responded angrily Sunday to foreign critics of the charges against the two strike leaders. He directed warnings at some members of a "Group of Friends" initiative created to bolster the negotiating process.

"Don't mess with our affairs!" Mr. Chavez said, singling out Mr. Gaviria, the United States, Spain and Colombia.

Opposition representatives on Monday sent a letter to Brazilian Foreign Minister Celso Amorim, co-ordinator of the "Friends" group, calling for an urgent meeting to discuss "the worsening of the Venezuelan situation."

www.wreg.com February 24, 2003 By Omari Fleming

Memphis, TN - Prices appear to have hit a plateau, down one cent from Sunday, but still hovering at all time highs. At 1.58 a gallon for regular, the price of petrol in Memphis is near record highs.

"Unfortunately we're seeing some of the highest prices recorded. We're within a half cent of the highs in Memphis," says Jim Lott of AAA.

Some drivers crying highway robbery even gouging. But the experts say the showdown with Saddam, supply disruptions from Venezuela, and brutal winter weather has whipped together what energy traders are calling "The Perfect Storm."

"All of those things coming together this month is what has resulted in the huge price increase in the last six to eight weeks," says Lott.

Memphis' average gas price this time last year 1.07...now it's up to 1.58. The lofty prices injecting pain in the pockets of real estate agent Audrey Wood. "It hurts. I ride round town all time and it hurts to pay high prices," says Wood.

"The war is the 'X' factor so we're just toughening it out right now, " says driver Quincy Turner In addition to the threat of war, energy experts say its simple economics. Oil demand is as high as ever...with supplies at 1975 lows. Demand for membership at wholesalers like Costco also on the rise. Only members can fill-up on Costco gas now about 8-cents below the Memphis average. "The prices are lower and I came from Germantown just to get gas. So you made the crosstown trip? Yeah!," says Wood.

www.stltoday.com By Patrick L. Thimangu Of the Post-Dispatch 02/24/2003 10:45 PM (P-D)

Natural-gas spot prices and futures rose sharply Monday amid fears that bitterly cold weather will raise demand for energy and bite into low gas inventories nationwide.

In the Midwest, average natural-gas spot prices nearly doubled at 16 delivery points surveyed by Bloomberg News, jumping from about $7.92 per million British thermal units to about $15.06. Gas for March delivery closed at $9.14 per million Btu on the New York Mercantile Exchange, the highest price in two years. In St. Louis, Laclede Gas Co. spokesman Rick Hargraves said the futures prices wouldn't affect immediately the utility's 630,000 customers in eastern Missouri. But Laclede likely will raise rates in March - when it's scheduled to make a purchase gas adjustment - if wholesale prices rise, he said.

The purchase gas adjustment reflects the wholesale price of natural gas and is applied to about 70 percent of a customer's bill. Last month, Laclede increased purchase gas adjustment rates from about 44 cents a therm - 100 cubic feet of gas - to 52 cents.

Scott Glaeser, manager of natural-gas supplies and transport at Ameren Energy Fuels &Services, a unit of Ameren Corp., said home-heating rates won't rise immediately. But he, too, warned that prolonged increases in futures eventually would trickle down to the wholesale and retail prices.

Ameren Energy buys natural gas for Ameren Corp.'s subsidiaries: AmerenUE, AmerenCIPS and newly acquired Central Illinois Light Co. The subsidiaries serve about 102,000 natural-gas customers in Missouri and about 408,000 in Illinois.

Glaeser and Hargraves said Laclede and Ameren customers won't be affected immediately by rising futures prices because both utilities have ample supplies in storage, bought during the summer months. Also, the companies have hedged gas purchases against higher wholesale prices.

But even without any rate increases, natural-gas customers at Laclede, Ameren and most of the Midwest likely will see high heating bills. The winter so far has been about 32 percent colder than last year, which was the third warmest winter in Missouri history. The National Weather Service forecast that temperatures in St. Louis would fall to 2 degrees Monday. Normally, average temperatures this time of year are a high of 48 degrees and a low of 30 degrees.

The cold weather along with fears of war with Iraq and the political and labor problems in Venezuela, a major oil producer, are pressuring energy prices in general, Glaeser said.

Propane from the terminal at Mont Belvieu, Texas, rose 5.5 cents, or 7.5 percent, to 78.75 cents a gallon Monday, the highest price since 2001, according to Bloomberg News. Heating oil for March rose 3.82 cents, or 3.5 percent, to $1.1467 a gallon in New York, the highest price since December 1979.

The energy increases came as the latest data from the Energy Information Administration showed the nation's natural-gas inventories were about 27 percent below the five-year average and 42 percent below last year.

Kate Warne, senior energy analyst at Edward Jones in Des Peres, said the combination of very cold weather and low inventories triggered high prices Monday.

"Normally, by the end of February the weather is not expected to go into the single digits in St. Louis," Warne said. "What's surprising is that it's this cold at this time of the season."

Another cause of higher prices: Natural gas production in the United States has been falling in recent years, Warne said. Old natural-gas wells are running low, and few new ones are being drilled, she said.

"Longer term, we will see higher prices. I think the era of very low gas prices is probably behind us, because the industry hasn't found a lot of new sources, they have not done a lot of drilling," Warne said.

Besides driving up demand, the colder weather also is hurting gas-drilling operations in some states, such as Oklahoma and Kansas. Ice and snow on the ground are making extraction of gas difficult, Glaeser said.

Bloomberg News contributed to this report.

Reporter Patrick L. Thimangu: E-mail: pthimangu@post-dispatch.com Phone: 314-340-8320

www.washingtonpost.com By Marcela Sanchez Special to washingtonpost.com Friday, February 14, 2003; 11:27 AM

At a time when Washington's relations with other nations are fraught with tension, there is something endearing in hearing a foreign leader effusively proclaiming that he wants to become the best U.S. ally around.

Lucio Gutiérrez, the new Ecuadoran president, did just that during his trip to Washington this week. And, genuine or not, his gesture appeared to defuse any suspicions about his intentions.

This was no small feat, especially considering that Gutiérrez is the same former coup-plotting colonel who two years ago helped topple an elected president. Elected president himself in November in a tough campaign in which he ran as the populist candidate of the left, he has been described by some as part of a leftist force of ``evil'' taking over Latin America and is often likened to Venezuela's polarizing president, Hugo Chávez.

How can such a leader suddenly become Washington's best ally? Or more importantly for Gutiérrez, what future would such a president have when it is distrust and even hatred of Washington's dominance that propels outsiders like him into office?

In his defense, Gutiérrez says he is a victim of a ``satanized'' image. He argues rather that he is the embodiment of changing times in the region--not the radical changes and revolutions that years ago transplanted the Cold War to Latin American soil, or that have left modern-day Venezuela a broken nation.

Gutiérrez says there are ``fresh, gentle and positive'' winds of change pushing leaders to restore faith in the democratic system. It is not a matter of whether they come from the left or the right, but whether they will be able to address the growing needs of their people. Washington can choose to help, or turn its back. Right now it seems to be giving Gutiérrez the benefit of the doubt.

Washington generously opened its doors--and its wallet--to Gutiérrez, who has been in office barely a month. He is the first Ecuadoran head of state to pay an official visit to the White House in more than a decade. The International Monetary Fund formalized a $200 million loan agreement that his predecessor had been unable to obtain despite nearly a year of trying. And in the U.S. budget plan unveiled last week, President Bush requested $15 million in military assistance for Ecuador--15 times more than sought the year before.

Why such generosity? Possibly because in such a short period of time, Gutiérrez has said and done all the right things in the eyes of official Washington. He has sought and apparently taken to heart the recommendations of various officials here regarding the reforms necessary to maintain economic stability. He also has demonstrated a willingness to leave behind the tactic of kicking and screaming for more attention that created mutual frustration.

Instead, he has offered his full cooperation in the wars against terrorism, drugs and corruption. He has expressed interest in making his country an attractive place for foreign investment and trade with a proposal to make Ecuador, among other things, a reliable regional source of oil.

This is definitely the kind of ally Washington is looking for and should be interested in maintaining. Yet supporting Gutiérrez will not be easy. After all, he heads a country that has had five presidents in the last six years and forcibly removed the last two it democratically elected.

Gutiérrez came to power with the help of Ecuador's politically potent Indian voters. Yet numerous analysts contend that his first month in office has exposed the weakness of that coalition. The Pachakutik indigenous movement has had an especially tough time accepting the economic reforms required to obtain IMF support, but Gutiérrez asserted that his political marriage with the movement would continue ``until death do us part.''

That, obviously, remains to be seen. Just as it remains to be seen whether Gutiérrez's gambit to ally himself so closely with Washington is worth the doubts and suspicions he has already raised in his country.

The Bush administration can help demonstrate to Ecuadorans that its interests go beyond a security alliance. By backing Gutiérrez's social agenda, including his fight against corruption and his crusade against poverty, Washington could prove itself to be a true ally.

In play, after all, is not only the future of Ecuador but also the need to ensure that the winds of change sweeping across the region will remain gentle and positive.