www.mirror.co.uk Feb 28 2003 By Gary Jones

A TERRIFYING security loophole was exposed by a Daily Mirror sight-seeing flight over London yesterday.

We hired a helicopter without identity or luggage checks and flew over many of the capital's landmarks - including the Houses of Parliament, Canary Wharf and the City of London.

TARGET: Parliament

Had we been terrorists, it would have been easy to overpower the pilot and send the helicopter crashing onto the House of Commons or Big Ben.

We could have hurled a bomb or unleashed a deadly poison cloud.

Buckingham Palace was within close range. And at one point, the helicopter hovered over Parliament at 1,500ft.

We passed the Commons three times, causing so much noise that guests at a special lunch attended by Lord Tebbit could hardly hear themselves speak.

Intelligence sources have warned that al-Qaeda terrorists might attempt a propaganda suicide bombing of Westminster.

Helicopter sight-seeing tours were banned briefly after the September 11 attacks in America.

In the US, tough security measures were introduced following the air hijackings - including stringent identity and bag checks for helicopter flights.

But there were no questions asked when photographer Emma Cattell and myself arrived at Biggin Hill in Kent for yesterday's trip. We didn't even give our full names.

I had phoned Biggin Hill Helicopters at about 10.30am saying I wanted to hire a helicopter for a sight-seeing tour as a birthday present for my girlfriend.

At first I was told one wasn't available because of a training lesson but I was called back shortly afterwards on a mobile phone to be told: "If you can get here by 1.15pm you'll be OK."

After parking directly outside BHH's prefabricated building, I was met by a man called Will, who said: "You must be Gary."

After a short briefing about the flight, involving how to wear seatbelts correctly and avoid the rotor blades, the four-seater helicopter landed to pick us up.

I had a black bag with strap slung over my shoulder and my colleague a large handbag containing a digital camera. At no stage were the bags checked for their contents. They were not even given a cursory glance.

The only mention made of my bag - which could easily have concealed a gun or a gas canister - was when I laid it at my feet.

I was asked by the pilot called Simon, in his late 20s, what it contained. I replied: "A camera." I was told to put the bag in the back because it could become entangled in the pedals.

No check had been made on either of our identities before we boarded the flight. Apart from the credit card details which I had given over the phone earlier, BHH had no information about us.

It was only after we had landed and were driving back to London that an address was asked for so a receipt could be given for the cost of the flight.

The helicopter emblazoned with the sign LBC - the capital's independent radio station which hires the chopper for its travel reports - flew directly towards Canary Wharf before following the path of the River Thames.

The spectacular journey passed the City of London and was supposed to end at Battersea power station.

But our trip was interrupted by a Ministry of Defence Chinook helicopter taking special services personnel to the Duke of York's barracks at Chelsea.

The distinctive dark green MoD chopper was given priority and flew beneath us a couple of kilometres away as we hovered above the Commons.

Helicopter sight-seeing trips follow a pre-determined path into the capital, twisting and turning along the Thames.

But with the Houses of Parliament directly on the river, a terrorist would not need to manoeuvre the helicopter any great distance to hit the target. Security services and anti- terrorist police have warned of the threat of attack.

Metropolitan Police Commissioner Sir John Stevens says: "It is not a question of if, but when."

Earlier this month troops and tanks guarded Heathrow Airport after warnings of a possible surface-to-air missile attack on aircraft. A grenade was found in the possession of a passenger who flew into Gatwick from Venezuela.

Home Secretary David Blunkett said at the time: "First this reinforces that we really do have a problem.

"People have been saying that it doesn't exist. Second, it means that our security services are on the ball. Third, it has given us leads and over the next few days we need to follow them through."

Anti-terror police have a massive ongoing offensive against alleged British supporters of Osama bin Laden.

A joint investigation between police, MI5 and MI6 continues to target bin Laden loyalists in Britain and around the world.

UK security forces are hunting scores of British Muslims trained by bin Laden and suspected of plotting attacks here. It has emerged that the names of almost 1,200 suspects are known to the intelligence services.

Some who survived the collapse of the Taliban in Afghanistan are thought to have sneaked into Britain where they have gone to ground but remain sympathetic to al-Qaeda which has made Britain its number one target in Europe.

Within weeks of the attacks in New York and Washington, three Algerians were arrested in Leicester, suspected of being involved in a plot to crash a helicopter into the US embassy building in Paris.

They were all members of an Algerian Islamic terror group, Tafkir-Wal-Hijra, and were captured after the arrest of the group's leader Djamel Begal in Dubai.

Begal, 35, had confessed to police that he ran three groups in Europe, including one in Leicester where he had lived for a short time in the 1990s.

Detectives in the Midlands have investigated the backgrounds of hundreds of Algerian asylum-seekers who have entered Britain from the strife-torn country.

Some are believed to be belong to the fanatical Armed Islamic Group (GIA) which aims to overthrow the Algerian regime and replace it with a strict Islamic state.

A source in the Birmingham Algerian community said: "Mostly they help to raise funds through credit card and passport frauds but there are others who are more actively involved in organising terrorist activities."

www.phillyburbs.com By H. JOSEF HEBERT The Associated Press

Venezuela's oil production has been rebounding, but it's still too early to tell when American refineries will once again be able to rely on the South American country as they have in the past.

Venezuela's energy minister, Rafael Ramirez, gave an optimistic forecast during a visit Thursday, predicting that his country would be producing 2.4 million barrels of crude a day by the end of the month, about what the country's production quota is under guidelines laid down by the Organization of the Petroleum Exporting Countries.

But Bush administration officials did not eagerly embrace the upbeat assessment.

On Wednesday, Energy Secretary Spencer Abraham told a Senate hearing it might be two to three months before Venezuelan imports get back to normal.

"We appreciated their sharing the information with us," Energy Department spokeswoman Jeanne Lopatto said Thursday when asked for comment on Ramirez' forecast.

The loss of Venezuelan oil in December because of the country's political strife has been especially worrisome within a Bush administration preparing for possible war with Iraq.

Energy analysts have questioned whether other producing countries with spare production capacity, mainly Saudi Arabia, could replace both lost Venezuelan and Iraqi oil should war erupt in Iraq and Venezuela's problems not be resolved.

The world's fifth largest oil producer, Venezuela is a major source of oil for the United States, accounting for about 14 percent of U.S. oil imports last year, or about 1.4 million barrels of crude and refined gasoline per day.

In recent months U.S. refiners, purchasing through intermediaries, reportedly have been relying more heavily on Iraqi oil to replace the lost supplies from Venezuela. The two countries produce similar types of oil.

U.S. imports of Iraqi oil doubled to more than 1 million barrels a day in mid-February, The Washington Post reported recently, citing unpublished figures from the United Nations. Working through intermediaries, U.S. companies long have bought Iraqi oil under a U.N. food-for-oil program, but those imports dropped to almost nothing last summer when Iraq for a time tacked on an expensive surcharge.

The political turmoil in Venezuela caught U.S. officials by surprise. Energy analysts have blamed the recent jump in the price of crude, as well as heating oil and gasoline, to the loss of Venezuela's oil and jitters over possible war in Iraq.

Crude prices retreated somewhat Thursday after soaring to the highest level since the Gulf War 12 years ago, closing at $36.35 on the New York Mercantile Exchange spot market.

Analysts speculated that the decline- nearly $1 from Wednesday's close - was more the result of profit taking than a signal of a downward trend. The price for crude to be delivered in April increased to just under $40, the highest since October 1990, shortly before the Gulf War.

The attempt by Ramirez, Venezuela's minister in charge of energy and mines, to reassure U.S. officials of his industry's recovery seemed to have little impact on traders, who have been worried more about Middle East supplies if war erupts in Iraq.

Ramirez said Venezuelan oil production, at a standstill in December and January, recovered significantly in February.

He said production rose from 150,000 barrels a day in early January to just over 2 million barrels a day, with 1.5 million barrels a day being exported. He said production is expected to reach 2.9 million barrels a day by the end of March.

He spoke at the Inter-American Dialogue, a Washington group specializing in Western Hemisphere affairs, and later to reporters.

www.heraldnet.com Published: Friday, February 28, 2003 By Kirby Arnold Herald Writer

PEORIA, Ariz. - Gil Meche isn't trying to come back any more. The way he sees it, he already is back.

It has been almost three years since Meche threw a meaningful pitch for the Seattle Mariners. He suffered through a period of shoulder pain and two surgeries that tested his confidence and threatened to peel away the label that said he was a can't-miss prospect.

Now, the 24-year-old right-hander is ready to resume the portion of his career that everyone expected from the beginning.

A winter retreat to Venezuela, where he played for Lara in the Venezuelan Winter League, brought back the zip on his fastball, the sharp break on his curveball and the biggest element of all: his confidence.

"My last two starts in Venezuela were probably just as good as anything I've done," Meche said. "My curveball was back, which I haven't had in a couple of years. Velocity-wise, I was pretty much the same as I was when I was called up."

Thursday brought another step in the process: Meche's first start of spring training in the Mariners' 6-5 victory over the San Diego Padres in their exhibition opener.

Meche's numbers were nothing to brag about - six hits and three runs in two innings - but truth in spring training performances lies underneath statistics.

"I thought he was great," pitching coach Bryan Price said. "He had a live fastball and I was extremely pleased with his changeup. He's showing the shape of four quality pitches and I couldn't care less about the numbers."

It's been a while since Meche came to spring training with this much to gain and feeling this good about his chances.

"There's nothing I'm worried about in camp," said Meche, who is competing for the one opening in the starting rotation with Jamey Wright, Ken Cloude and Rafael Soriano. "I feel strong. It's totally opposite of how I was at the beginning of last year. I feel like I could throw all day."

Price has noticed the difference and attributes it to one important element.

"It's because he's healthy," Price said.

Finally.

Meche progressed steadily through the Mariners' system - including a summer with the Everett AquaSox in 1997 - after they drafted him in the first round in 1996.

He made it to the majors in 1999, when the Mariners called him up in July and he went 8-4 in 15 starts. Meche started the 2000 season in the rotation and made another 15 starts, although they became more painful as time went on.

He went on the disabled list with a strained shoulder, but came back from that and pitched well. The pain returned, however, and he nursed himself back onto the mound for a late-August rehab appearance in Everett that sealed his fate.

He struggled to get through one inning, was shut down for the year and, after pain persisted during the winter, had surgery the following February to repair a partially frayed rotator cuff. Nine months later, amid continuing pain, he underwent exploratory surgery.

After another year of rehab, Meche pitched again last season at Class AA San Antonio and finally made progress. He finished just 4-6 with a 6.51 ERA, but steadily improved.

The Mariners sent him to winter ball in Venezuela late last year, and it all came together.

"The second start he made was the telltale point for me," said Dan Rohn, manager of the Class AAA Tacoma Rainiers who managed the Lara team. "When I saw his velocity come back and the sharpness on his breaking ball come back, I knew he was locked in."

The difference?

"He didn't hurt anymore," Rohn said.

Meche made five starts in Venezuela and went 2-1 with a 3.54 earned run average before he pulled a muscle while lifting weights. In that time, Meche realized he could pitch again without pain, something he battled through much of his rehab.

"Always before, he wasn't feeling that his injury was going away," Price said. "That's part of the rehabilitation process, but you have to have the confidence in the back of your mind that it is going to get better. My point to him was that it's going to get better or it's going to get worse, but it won't stay the same."

It has gotten better, and Meche is pitching now like the Mariners always believed he could.

He was knocked around a little Thursday, although two of the Padres' hits were swinging-bunt dribblers and one was a seeing-eye grounder that barely eluded shortstop Mark McLemore's glove.

"At this point in camp, I feel really good," Meche said. "I know my arm's only going to get stronger as we go on. I feel real good right now."

It has been almost three years since he's been able to say that.

www.globeandmail.com By DEBORAH YEDLIN Friday, February 28, 2003 - Page B2

Closing Markets - Thursday, Feb. 27 S&P/TSX 73.86 6582.19 DJIA 78.01 7884.99 S&P500 9.73 837.28 Nasdaq 20.26 1323.94 Venture -2.23 1102.34 DJUK -.87 145.22 Nikkei 2.57 8359.38 HSeng 17.96 9134.24 DJ Net .37 38.85 Gold (NY) -7.90 346.20 Oil (NY) -0.50 37.20 CRB Index -4.09 246.09 30 yr Can. +0.00 5.46 30 yr U.S. -0.01 4.73 CDN$ buys US$ -0.0008 0.6688 Yen +0.1800 78.6400 Euro +0.0011 0.6213 US$ buys CDN$ +0.0017 1.4952 Yen +0.4000 117.5800 Euro +0.0027 0.9290

It's tough to imagine a better scenario in the oil patch: Natural gas prices flirting with $10 (U.S.) per thousand cubic feet (mcf), crude prices stuck well north of $35 a barrel and energy companies posting record numbers for earnings and cash flow.

On a year-over-year basis, oil prices are ahead 50 per cent this year while natural gas is trading at 1.5 times what it was a year ago.

Last week EnCana Corp. announced earnings of $1.25-billion (Canadian) and cash flow of $4.2-billion for 2002, and on Wednesday fourth-quarter results posted by Canadian Natural Resources Ltd. exceeded the consensus estimates for both cash flow and and boosted its annual dividend by 20 per cent to 60 cents.

In the old world of investing parameters, all the fundamentals are pointing in the right direction for energy stocks -- high commodity prices, low debt levels and tight supply.

And all that should translate into lofty stock prices for the sector.

After all, investors paid up for tech stocks that offered but a promise of earnings and cash flow at some time down the road while the oil and gas companies are delivering both in spades today.

Instead, the big-cap companies are looking at stocks that reflect commodity prices of about $23 (U.S.) for oil and $3.75 per mcf for natural gas and stingy trading multiples of about 3.5 to 4 times cash flow when they should be higher by two points or more.

So what is it?

Part of what is going on simply has to do with the fact that stocks are mired in a major bear market and equities simply don't respond the way they used to -- even if the fundamentals are good.

The situation is exacerbated by the overriding uncertainty of the current geopolitical environment.

The other part of the equation relates to the market's psyche and its lack of faith regarding the sustainability of high commodity prices.

That might be true for crude prices, because a war premium is helping to push prices skyward, but as soon as the situation in the Middle East is resolved, expectations are that prices will settle back down below $30 a barrel because that is what happened during the last go-round in the Persian Gulf.

Then again, the situation today, from a supply and production capacity standpoint, is different than it was in 1991.

Back then, excess OPEC production capacity was in the order of six million barrels a day; today that number is closer to 2.8 million barrels. Add to that the continued disruption in Venezuela and the expectation that only two-thirds of its production will come on stream by year-end, and the possibility of a scorched-earth policy pursued by Iraq with regard to its oil fields, and the result is an oil price that is likely to average $26 or $27 this year.

The market might think it is clever by looking through the existing noise, but the reality is that crude oil supplies remain tight, the industry is plagued by a lack of growth and there is limited excess capacity.

What makes the current situation with energy stocks even more confusing is that natural gas prices are at levels only dreamers expected.

While oil is a global commodity and subject to the health of the global economy, natural gas remains a North American commodity and to see prices of almost $10 per mcf in the absence of a roaring economy serves as a clear indication that growth in demand is clearly outstripping growth in supply.

That means -- to the delight of the Alberta government, but not its citizens -- the high prices are likely to stick around for a while.

What's an energy company to do if the market doesn't want to pay up for its shares?

Well, if big earnings, cash flow, boosting dividends and paying down debt doesn't work, they can always turn to buying back their shares.

On the one hand, proponents of this strategy argue that buying back shares constitutes a vote of confidence in the company's prospects and is a more effective use of cash than paying ridiculous prices for assets -- which is what happens when commodity prices are high.

Moreover, share buybacks, because they lower the number of shares outstanding, boost the latest industry yardstick -- production per share. This new measure is almost a reaction to the previous philosophy that advocated production growth at any cost; now the focus is on value -- through adding production per share and showing investors a return on capital.

Still, it's doubtful share buybacks will be enough to inspire institutional investors to make the necessary leap of faith and pay up for energy stocks.

Bitten by the tech wreck, the pendulum has swung too far back in the opposite direction and investors are scared to buy in at what they perceive to be the top of the cycle for commodity prices.

But that presupposes the market can be timed.

Better to buy the long-term fundamentals and have a little patience, and in that case, the energy sector remains a good bet -- even at these levels.

www.heraldnet.com Published: Friday, February 28, 2003 By Eric Fetters Herald Writer

The region's average price for gasoline rose to nearly $1.81 a gallon on Thursday, the highest recorded by AAA since the organization began tracking local prices in the late 1970s.

That Seattle-Bellevue-Everett average for regular unleaded fuel is 37 cents higher than just a month ago, and nearly 3 cents higher than Wednesday's average.

The statewide average for regular unleaded hit a record high of $1.76 on Thursday, according to AAA.

Chuck Lacy of Marysville said he is amazed at how fast the prices have risen since he last bought gas for his pickup several weeks ago.

"I think it was around the $1.40s-per-gallon the last time I filled up," he said.

In Everett, nearly all service stations were charging more than $1.70 for a gallon of regular unleaded gasoline on Thursday, with many prices creeping closer to $1.80. In Marysville, the Arco station on Fourth Street at I-5 looked like a relative bargain at $1.68 a gallon.

Find cheaper gas

Help us keep track of the area's lowest gas prices with this new HeraldNet feature: www.heraldnet.com/gasprices/ The price for premium unleaded is crossing the $2-a-gallon mark at more Snohomish and Island county stations as well.

Mark Nelson of Everett's Nelson Petroleum said he's not always able to quote a price for customers of his independent distributing business. That's because it's changing so fast.

"Our wholesale prices are going up much like what you see on the street," Nelson said. "We're not only seeing price changes daily, but sometimes also twice a day."

At this point, however, volume at his business hasn't been affected much.

"In a sense, it's a product everybody has to have," he said. "We have a lot of commercial customers, and they need to keep their fleets rolling."

But it's only a matter of time before the rapid rise in prices begins to ripple across the local economy. For example, some trucking companies are adding fuel surcharges to deliveries to cover their higher costs. Many airlines already have added a similar charge to their tickets.

Like many consumers, Lacy said he's suspicious of the reasons behind the higher prices at the pump.

"I think someone's making a killing off the prices," he said.

There's reason to be suspicious, many analysts agree. Pure speculation on the oil commodity market seems to be the biggest reason for a surge in crude oil prices, which in turn affects the retail price.

Uncertainty about what will happen in Iraq has caused much of the volatility in trading. That continued Thursday, as early panic buying sent oil futures soaring to a 12-year high of $39.99 a barrel, only to be replaced by panic selling. Crude oil ended the day at $37.20, down 50 cents.

The U.S. supply of oil is now at its lowest level since 1975, another reason for worry among commodity traders. The government and oil companies have blamed a strike in Venezuela and recent cold weather on the East Coast that has increased demand for heating oil.

But Tim Hamilton, executive director of the Automotive United Trades Organization, said the nation's supply could improve almost immediately if the federal government agreed to dip into emergency reserves or OPEC agreed to ratchet up production.

"We do have less oil, but it's a conscious decision on the part of the oil companies and oil-producing countries not to increase production," said Hamilton, whose Olympia-based group represents independent gas retailers.

How long will the prices keep going up?

"At some point in time, it will reach a peak," Nelson said. "Whether we're there yet, I don't know."

Hamilton said he would like to see prices go back down before they add any more to the economy's problems.

"The dealer's getting beat up, and the consumer's getting hammered," he said, "and our biggest fear is it could get much, much worse."

The Associated Press contributed to this story. Reporter Eric Fetters: 425-339-3453 or fetters@heraldnet.com.