www.chronwatch.com Posted by Kevin Willmann Tuesday, February 25, 2003

     Venezuela has been a volatile powder keg for the last couple of months. There has been loud dissatisfaction with the presidency of Hugo Chavez, and some have paid the price for their dissent against Chavez.

     Thor Halvorssen wrote the following for The Weekly Standard about one dissenter in that South American nation.

     VENEZUELA IS NOW an abyss where there is no rule of law. A rogue government tortures innocent civilians with impunity while paying lip service to democracy and buying time at the ''negotiation'' table set up by the Organization of American States. Venezuela's foreign minister, Roy Chaderton, has funded an effective multi-million dollar public relations campaign to smear the opposition as coup-plotters and fascists intent on bringing about violence.

     Jesus Soriano has never met Roy Chaderton or Hugo Chavez. Soriano supported President Hugo Chavez's meteoric rise, volunteered during the election campaign, and is now a second-year law student in Caracas.  His law-school peers describe the 24-year-old as a cheerful and happy young man.

     Soriano, a member of the Chavez party, is part of a national student group called ''Ousia,'' a group that brings together moderates who support the government and opposition members seeking a peaceful resolution to the current crisis.

     On December 6, Soriano witnessed the massacre that occurred during a peaceful protest in Altamira, a neighborhood in Caracas where the opposition has a strong presence.  The killer was Joao De Gouveia, an outspoken supporter of Chavez who has an unusually close relationship with mayor Freddy Bernal, a Chavez crony.  Gouveia randomly began shooting at the crowd.  He killed three--including a teenage girl he shot in the head--and injured 28 people.  As Gouveia kept shooting, several men raced toward him to stop the killing. Soriano was one of the men who wrestled Gouveia to the ground and prevented further killing. Soriano also protected Gouveia from a potential lynch mob that swarmed around the killer.

     Soriano's heroic accomplishments did not cease that day. He became a national figure in Venezuela when he brought a small soccer ball (known in Venezuela as a ''futbolito'') to a sizable protest march organized against the rule of Lt. Col. Chavez. Soriano and other pro-Chavez partisans made their way towards the march intending to engage the opposition members in dialogue.

     That hot afternoon, Soriano kicked the futbolito across the divide at the members of the opposition.  They kicked it back.  The magical realism of the event is evident in the extraordinary television footage of what occurred next.  By the end of the match the anti-Chavez protestors and pro-Chavez partisans were hugging and chanting ''Peace!  Unity! We are Venezuela! Politicians go away!  We are the real Venezuela!'' In one particularly moving part of the footage, Soriano and a member of the opposing team trade a baseball hat for a Chavez-party red beret.

     In one hour this sharply divided group of strangers accomplished more than the high-level negotiation team that seeks to defuse a potential civil war.  Chavez was reportedly furious with the televised soccer match and even angrier that the reconciliation was a product of the efforts of one of his supporters.  Soriano was declared an enemy of the revolution.

To read the entire article, go to: www.weeklystandard.com

www.sun-sentinel.com By Juan C. Rodriguez Staff Writer Posted February 25 2003

JUPITER -- The food was getting old. Holed up for eight days in a Valencia, Venezuela, hotel, Doug Bochtler heard about a nearby delicatessen that was open.

Bochtler, his wife, Darcy, and their two sons had just begun eating when the din of protesters banging pots and pans reached a crescendo outside the front door. With Venezuela in the midst of a nationwide labor strike, the group was upset the deli hadn't shut down. "We backed into a corner where no one could see us," said Bochtler, a Marlins minor league free-agent pitcher. "The owner went out and told the people he was going to close. We just finished eating and he let us out a little side door so no one would interfere with us. When that happened I told my wife and family they were going home."

Bochtler and other Americans playing Venezuelan winter ball left once games were suspended in early December. Despite its popularity, the game was not immune from the protests against President Hugo Chavez. A month later, what remained of the season was canceled.

Native Venezuelans like shortstop Alex Gonzalez and third base prospect Miguel Cabrera ultimately left as well to join the Marlins' spring training. Only they can't completely distance themselves from the situation.

The focus is on baseball now, but they still receive almost daily updates about the country's deteriorating political and social climates. Gonzalez and Johanna Josely, the mother of his 3-year-old son, Alexander, won't join him until the season starts.

Having recovered from a shoulder injury, Gonzalez was ready to start playing winter ball when the games were suspended. Cabrera was having a standout season with Aragua, batting .329 with four home runs and 24 RBI in 38 games.

Residents of Turmero and Maracay, respectively, Gonzalez and Cabrera weren't exposed to the same degree of unrest as those in the capital city of Caracas.

Minor league free-agent outfielder Robert Stratton played for La Guaira, a Caracas-based team. He went home less than a week before the season was suspended to be with his father, who underwent hip replacement surgery.

Though Stratton hoped to return, he did venture out in Venezuela. He took his meals in the food court of a mall attached to the team hotel.

"I didn't go and see what people had to offer just because of safety reasons," he said. "It's not like we went out to try and find a good steakhouse. ... I saw a lot of things on TV, shooting the gas at [protesters]. It's a crazy thing to see it on TV and knowing it's going on right outside."

Such natives as Philadelphia's Bob Abreu and the Angels' Francisco Rodriguez didn't get much closer. They said they feared leaving their homes during the offseason.

"They live in Caracas, where the biggest problems were happening," Gonzalez said. "I would go out, but I would be very careful. If I was in Caracas like them, I would have been worried. ... There were a lot of crazy people in the streets."

Cabrera also found himself altering his lifestyle. Driving anywhere was problematic. Fuel shortages made filling up a chore. Cabrera said he had to wait in line at the pumps like everyone else.

"Normally you get accustomed to going out a lot," he said. "You didn't have anywhere to go, plus with the instability, you didn't know what could happen if you were out. You preferred to stay at home, do things in the morning and return home."

Marlins third base coach Ozzie Guillen, who maintains a home in Caracas, didn't return as much as he usually does. He spent more time this offseason in the United States due in part to the unrest.

"I didn't see it the same," Guillen said of the past two trips to the homeland. "People don't know what's going to happen. Everybody suffered. The professional league was canceled and now many players don't have jobs because there weren't enough scouts in Venezuela to bring them back.

Friday Guillen will take a one-day trip to Venezuela to attend to a prior engagement. He'll do so with the utmost caution.

Astros outfielder Richard Hidalgo was shot in the left arm during an attempted carjacking last November. In a similar incident a month later, former major-leaguer Chico Carrasquel was beaten.

"As far as danger, obviously when there isn't work or money, you're going to feel less secure," Guillen said. "The people without work have to find a way to survive. ... I read the newspapers and see the news every day. Sometimes you get sad because you hear the same things. We can't make any progress."

Juan C. Rodriguez can be reached at jcrodriguez@sun-sentinel.com.

www.washingtonpost.com Tuesday, February 25, 2003; Page A04

The threat of a terrorist attack against the United States remains high, and there are no plans to downgrade the nation's terror alert, Attorney General John D. Ashcroft said yesterday.

U.S. intelligence gathering continues to show enough of a threat to warrant keeping the alert level at "high risk," the second-highest level on a five-color scale, Ashcroft said.

The level was raised to orange Feb. 7, prompting the government to impose extra security measures and causing jitters throughout the country.

"The constant and continuous evaluation of the factors that go into the development of threat level have not changed in a way significant enough for the threat level to be changed," Ashcroft said.

Other Bush administration officials, notably Homeland Security Secretary Tom Ridge, have indicated the level could soon be reduced to "elevated," the middle of the color scale.

The attorney general said the possibility of a U.S.-led war with Iraq was a less important factor in assessing the risk of terrorism against the United States. He pointed out that the attacks on Sept. 11, 2001, were not provoked by any international crisis. Senate Aims to Curtail Child Pornography

The Senate moved to crack down on child pornography with a bill drawn to strengthen bans on using minors in obscene material while dealing with the Supreme Court's constitutional problems with an earlier version.

The bill, passed without dissent, was in response to a court ruling last April that struck down a 1996 law that specifically prohibited virtual child pornography. The court said banning images that only appear to depict real children engaged in sex was unconstitutionally vague and far-reaching.

The Senate bill prohibits the pandering or solicitation of anything represented to be obscene child pornography. Responding to the court ruling, it requires the government to prove beyond a reasonable doubt that a person intended others to believe the material was obscene child pornography.

The bill, which still requires House action, also plugs a loophole in which pornographers could avoid prosecution by saying that their sexually explicit material was computer-generated and involved no real children. Under an affirmative defense provision, the defendant would be required to prove that real children were not a part of the production.

The United States accused Venezuelan President Hugo Chavez and his government of using inflammatory rhetoric, possibly contributing to violence between opponents and supporters of the populist leader.

"Inflammatory statements such as those attributed to President Chavez are not helpful in advancing the dialogue between the government of Venezuela and the opposition," State Department spokesman Philip Reeker said.

On Sunday, Chavez warned the world to stop meddling in the affairs of his troubled South American nation, and Venezuelan police locked up a strike leader on "civil rebellion" charges. He accused the United States and Spain of siding with his enemies, warned Colombia he might break off diplomatic relations and reprimanded the chief mediator in peace talks for stepping "out of line."

Last week he said he was going on the offensive against the "terrorists" and "fascists" who have defied him. For the Record

• The State Department warned Americans not to go to Colombia, where guerrillas abducted three Defense Department contractors last week. State said U.S. citizens were in danger of kidnapping, plane hijackings and murder. The threat to Americans could increase in response to U.S. support for the Colombian government's drug eradication programs, it added.

• Sen. Joseph I. Lieberman (D-Conn.) urged the Bush administration to investigate whether consumers are being gouged at the gasoline pump and also to be ready to counter a disruption in crude oil supplies if war breaks out in Iraq. Oil prices have topped $36 a barrel on market fears of a U.S.-led attack on Iraq, which in turn have helped propel retail gasoline prices to more than $2 a gallon in some cities. Oil companies have denied wrongdoing and said gasoline prices reflect market conditions, including fears of war in Iraq, low oil inventories and strong consumer demand for petroleum products.

www.usatoday.com Posted 2/24/2003 11:28 PM By Barbara Hagenbaugh, USA TODAY

WASHINGTON — Natural gas prices jumped nearly 40% and heating oil costs hit their highest level on record Monday, developments that point to increases in already bloated home-heating bills.

Residential heating oil prices are up 50% from a year ago, when the average winter heating oil bill was $642, the Energy Department says. Bills might approach $1,000 this winter.

While natural gas prices are not as easy to track, consumers were reporting similar jumps before Monday's rise. The average household heating bill for natural gas users was $596 last winter.

"Higher natural gas and heating oil prices will cut more into consumer budgets," says Jim Williams of WTRG Economics, an energy consultant. "If you are old enough to remember, it is time to bring out that sweater that President Carter used to wear while encouraging us to turn our thermostats down."

In futures trading in New York, natural gas prices rose from $6.61 per million BTU to $9.14, the highest in more than two years. Heating oil hit $1.15 a gallon, surpassing the previous record high set in December 1979, before ending the day slightly lower.

Futures prices usually have an impact on retail prices later, and not necessarily by the same magnitude, but point to the direction of prices.

More than half of U.S. homes are heated with natural gas, while 8% are warmed with heating oil. Prices for electricity, which heats 30% of U.S. homes, also might rise, because natural gas and oil are among fuels used to produce it.

The increased heating costs, which in part reflect higher demand during an especially cold winter in many parts of the USA, act as a drag on the economy.

"We're in a weak recovery as it is, and this is just one more headwind in an economy that is facing many headwinds," says Stephen Brown, director of energy economics at the Federal Reserve Bank of Dallas.

Forecasts for another mass of cold air to sweep through parts of the East Coast and the Midwest later this week led traders Monday to bid up prices. Energy prices were already on the rise because of a strike in Venezuela that has drained oil off the international market and concerns that a war with Iraq would choke off oil supplies. In other news:

• Crude oil prices rose to $36.48 a barrel Monday, up 90 cents from Friday's close.
• After rising for 10 weeks, the average price of a gallon of gasoline in the USA last week was flat at $1.66, the highest price since June 2001. Some congressmen are calling for government investigations into possible gasoline price gouging, which station owners deny.

www.usatoday.com Posted 2/25/2003 1:50 AM     Updated 2/25/2003 9:09 AM
By James Cox, USA TODAY

Blood for oil, say the doves. No, blood for "vital U.S. interests" — with oil far down the list — says the Bush administration. Whether or not the looming war with Iraq is about oil, much of the peace surely would be.

If the United States pushes Saddam Hussein from power, that would set off a struggle for control of Iraq's vast oil riches. The result, ultimately, could be a world awash in cheap petroleum and less dependent on the one player determining global prices, Saudi Arabia.

Iraq's proven oil reserves are estimated at 112 billion barrels, enough to meet current U.S. import needs for a century. But much of Iraq is barely explored, and probable reserves there are thought to be as great as 310 billion barrels. The Saudis, by contrast, have known reserves of 262 billion.

"Iraq is the only source that could displace Saudi Arabia," says Fadhil Chalabi, a former top official in the Iraqi oil ministry, now at the Centre for Global Energy Studies, a London consulting firm.

A swift, decisive victory over Saddam might be tonic for the ailing U.S. economy. It would vaporize the current $5-a-barrel "war premium" on oil and end the uncertainty economists blame for stalling a long-awaited recovery in financial markets and the broader economy.

Long term, the implications are huge. The U.S. — first by installing a military governor in Baghdad, then through a friendly Iraqi regime — could gain enormous influence over world supplies and prices for crude. It could create a second "swing producer" to rival Saudi Arabia and act as a counterweight to the Saudis' sway over OPEC.

But before any of that happens, a lot of things have to go right, cautions Toby Dodge, an Iraq expert at the University of Warwick in Britain. "Short term, a liberated Iraq isn't going to affect (global) output. The Iraqi oil industry is in an absolutely dreadful state. Medium and long-term, as Iraq develops its resources, there's clearly going to be a lot more oil about."

What's got to happen:

In the short term

U.S. Special Operations troops would have to race to secure oilfields in the north and south before Saddam's army can torch the wells there. Reports indicate he has moved ammunition and explosives to Iraq's fields.

Retreating from Kuwait in 1991, Iraqi troops blew up nearly 700 wells, causing an environmental disaster and more than $20 billion in damage. By choosing what military observers call the "Nero option," Saddam could trigger an even bigger catastrophe this time. That's because Iraq's fields cover a much greater expanse than Kuwait's, and sabotaged terminals and loading facilities could send millions of barrels spewing into the Persian Gulf.

The fighting would need to end quickly — within days, not weeks — so Iraqi oil could begin to flow back to a starved market. And there can be no damage to fields and facilities in neighboring Kuwait or Saudi Arabia. The world already is struggling to replace crude lost as a result of recent strikes in Venezuela and Nigeria. A war would suck 2 million barrels of Iraqi oil off the market each day — 4.5% of global exports — until the taps could be turned on again.

OPEC has hinted it might suspend production quotas temporarily so cartel members can pump at will to make up for lost Iraqi supplies. But Saudi Arabia and, possibly, the United Arab Emirates, are the only OPEC countries with spare capacity to tap.

Midterm

The Bush administration is desperate to avoid giving ammunition to anti-war protesters who argue that a U.S.-led war against Iraq amounts to blood for oil. To mute those charges, Secretary of State Colin Powell vowed that Iraq's future oil revenue would be put into a trust to pay for Iraq's reconstruction and meet humanitarian needs.   WHO PUMPS THE MOST OIL? (Millions of barrels a day, 2002 estimates) Non-OPEC countries USA 8.17 Russia 7.50 Mexico 3.60 China 3.36 Norway 3.35

Organization of Petroleum Exporting Countries Saudi Arabia 8.51 Iran 3.53 Venezuela 3.09 Iraq 2.93 United Arab Emirates 2.42 Nigeria 2.10 Kuwait 2.04 Algeria 1.53 Libya 1.37 Indonesia 1.36 Qatar 0.79

Sources: AP, International Energy Agency, USA TODAY research, Deutsche Bank estimates

But the administration hasn't spelled out how the trust would work and who would run it. Middle East experts caution that the U.S. would enrage Arab skeptics if it used any Iraqi oil proceeds to pay the war tab.

Putting oil revenue into a trust fund would mean eliminating the United Nations oil-for-food program, which has collected and dispersed money from Iraqi sales since 1996. Iraq's neighbors and creditors are likely to resist that idea until they know what would happen to their various claims.

Kuwait wants Iraq to pay billions in reparations from the Gulf War. Iran has demanded the same for the 1981-89 Iran-Iraq war. Turkey says it might assert a historic claim to part of the oil from Iraq's northern fields. Creditors such as Russia say Iraq owes more than $100 billion in foreign debt.

With Saddam gone, it wouldn't be long before oil company executives would be prowling hotel lobbies in Baghdad. U.S. oil majors ExxonMobil and ChevronTexaco are "natural candidates" for contracts in Iraq, says a recent report by Deutsche Bank. Bechtel, the San Francisco-based engineering giant, and oilfield services companies Halliburton, Schlumberger and Baker Hughes also could expect to get lucrative deals there, Deutsche Bank says.

Initially, President Bush plans to place a military governor, probably Army Gen. Tommy Franks, in charge of administering Iraq after Saddam is gone. Within months, Franks would be replaced by an American civilian governor, who could be in the awkward position of having to decide what to do with billions in development contracts the Iraqi dictator has signed with oil companies from France, Russia, China and 20 other countries.

Any American authority might be smart to leave control in the hands of Iraq's many respected technocrats and engineers. Iraqis of all stripes are fiercely nationalistic and determined to guard their oil resources from foreign domination, experts warn.

"No quasi-imperial governor would have the ability to award long-term oil contracts in Iraq," Dodge says. "It would be politically unacceptable, domestically and internationally, not to mention a nightmare for the governor."

Long term

After two decades of war and a decade of sanctions, Iraq's oil industry is crumbling. Only 24 of 73 fields were producing last year, according to Alexander's Gas & Oil Connections, an industry authority.

The U.S. and Britain have repeatedly gone to the U.N. to block Iraq's purchase of spare parts and technology, arguing that the gear has potential "dual use" for military purposes. As a result, Iraq can't make vital repairs and do maintenance on its aging wellheads, pipelines, pumping stations, refineries, storage facilities and shipping terminals. In addition, Iraqi engineers have done permanent damage to underground reservoirs by injecting them with water and other liquids to keep short-term production levels from falling.

Iraqi oil production peaked at 3.5 million barrels a day in 1979. Now, Iraq risks a 5% to 15% annual decline in capacity because of shoestring management and a lack of equipment and investment, says Saybolt International, a Dutch firm hired by the U.N. to assess the Iraqi oil industry.

Deutsche Bank and others say Iraq needs to spend $5 billion right away just to keep production from collapsing. If it can restore old wells, install turbines in pumping stations to restart pipelines, and rebuild loading terminals on the Gulf, it can boost its production capacity to 4 million barrels a day in two years vs. 3 million today.

Down the road, Iraq needs $38 billion of fresh investment to develop fields that are discovered but untapped and to thoroughly explore its western desert, thought to be rich in oil and gas. That investment most likely would be spread over 20 years or more. It could ultimately give Iraq the ability to pump 8 million barrels a day, about equal to what Saudi Arabia produces.

The Saudis aren't defenseless against the rise of an Iraqi rival: They could effectively choke off international investment to Baghdad by flooding world markets with cheap oil to make new development uneconomical.

One unknown is Iraq's standing in OPEC, where it is a founding member. Iraq effectively lost its voice in OPEC with the Gulf War and its production quota with the imposition of U.N. economic sanctions.

Few believe Iraq would bolt OPEC in a post-Saddam era. But Baghdad probably wouldn't agree to limit itself to the cartel's production quotas for years to come, arguing that it must pump and sell all it can to meet its massive reconstruction needs.

Even before the world discovered uses for it, oil coursed through Iraqi history. The people of ancient Iraq used to tell of flames that shot from holes in the earth near the northern city of Kirkuk. Beneath them, they thought, was the fiery furnace described in the Old Testament, a burning hell into which the king of Babylon was said to have cast Jews who refused to worship his golden image.

Western geologists saw the fires in 1927 and recognized them for what they were: gas flares rising from giant lakes of oil below the surface. Two decades later, an American scientist — name unknown — returning from Iraq felt compelled to tell the State Department what he found.

"The oil in this region," he said, "is the greatest single prize in all history."