www.wilmingtonstar.com Last changed: March 12. 2003 5:43PM By KATY DAIGLE Associated Press Writer Curacao's refinery is to resume full production in the next several days, after weeks of sitting idle as a strike stemming from political strife in Venezuela blocked crude oil supplies for two months. But it's going to take time for profits to return to Refineria Isla, which was forced to give up most exports and restrict shipments to a small domestic market and Venezuela. "When the strike started we lost all of our international clients," said Norbert Chaclin, the refinery's managing director. As a result, it is suffering monthly losses of about $9 million, he said. The refinery, owned by the local government of this Dutch Caribbean island and leased by Venezuela's state-run Petroleos de Venezuela S.A., is processing 150,000 barrels of crude a day. By next week, it should have its main catalytic cracker back online after routine maintenance and expects to turn out its full capacity of 210,000 barrels a day, Chaclin said. The ramped up production could provide some relief to energy markets. Gasoline prices have soared in recent months as crude oil costs have climbed to levels not seen since just before the Gulf War amid heavy demand and tight inventories. Oil production dropped drastically in Venezuela during the strike, called Dec. 2 by opponents of President Hugo Chavez to press demands for early elections. Shipments stopped arriving in Curacao for several weeks in December and January but resumed before the strike petered out last month. The refinery currently is sending regular shipments of gasoline and jet fuel to Venezuela, located just 37 miles away. Traditionally, it sends 43 percent of production to the Caribbean and Central America, 20 percent to the United States and Canada, 22 percent to South America, and sells the rest in Curacao and neighboring Bonaire. A sprawling expanse of metal pipes, chemical converters and concrete by Willemstad's bay, the refinery is Curacao's largest business and employer, with 1,030 workers and about 350 contract workers. When running normally, it contributes an estimated $120 million a year to the economy through contractor fees, salary taxes and duties, said Chaclin. The slowdown has hit the federation of the Netherlands Antilles, including four islands and St. Maarten. Its revenues from taxes and shipping fees have dropped about 15 percent each month since December, Economy Minister Errol Cova said. The refinery produces gasoline, lubricants, jet fuel, propane and other products. It also is one of the largest oil transshipment terminals in the Caribbean, with storage capacity of 17 million barrels. Before the strike, Venezuela was the world's fifth largest oil exporter and a major source for the United States, accounting for about 14 percent of U.S. oil imports last year or 1.3 million barrels of crude and refined gasoline.

www.csmonitor.com By Leila Wombacher Knox | Special to The Christian Science Monitor

After paying $2.20 for gas in the San Francisco Bay area, student Chelsea Tamulevich has decided not to visit her parents as much. It isn't that she doesn't like her mother's cooking or the opportunity for a free laundry service. It's that Tamulevich's car, even though a fuel-stingy Honda Civic, costs twice as much to fill up now as it did a year ago, and she doesn't have the money to make the 500-mile round trip commute from San Luis Obispo, where she goes to college. "Judging by this last trip, I think I'm going to have to not go as often," she says.

Tamulevich's decision to forgo some of her trips home symbolizes how many Californians are changing their lifestyles, in ways both subtle and significant, in the face of the highest gasoline prices in US history.

While energy prices have jumped nationwide in the run-up to war, nowhere are they more expensive than in the Golden State, the unofficial car capital of the world. If you were to suddenly plunk down in Los Angeles, you might think it was Amsterdam or Paris, except for all the spandex and mini-malls: Prices are now high enough - $2.10 a gallon on average - that they are approaching European levels. Nationally on Tuesday, the average gas price was $1.70.

For Homa Atash, a retiree living on fixed income, the price hike hasn't stopped her from filling her spotless Mercedes with premium gasoline, which was running $2.25 a gallon at a busy Chevron station in San Luis Obispo on Monday.

"In order to keep my car maintained, I have to buy expensive gas," she says, polishing her car windows with a rag.

Ms. Atash says she typically comes into San Luis Obispo from Los Osos, 10 miles away, three times a week to run errands and visit her daughter. But now that gas is so expensive, she is reconsidering how often she will drive into town.

Lifestyle changes

Indeed, small adjustments to driving routines are typical when gas prices reach new highs. But wholesale changes, such as taking public transportation or carpooling, are rare here.

"Some people will start consolidating their trips, for example doing several errands at once rather than making random trips," says Ron Cogan, editor of the Green Car Journal, an industry publication based in San Luis Obispo. "Others will cut out nonessential local trips."

In California that might mean forgoing a drive to pick up an afternoon coffee at Starbucks but not weekly trips to the nail salon.

Janet Hiller has certainly noticed how the price boards outside gas stations seem to change their numbers faster than a scoreboard at a Lakers game with Kobe off the bench.

The correctional officer at the county jail in San Luis Obispo raised her teenage son's allowance from $30 to $40 a week so he could afford to drive to school in his minivan. "His costs have gone up considerably," she says.

Isolated state

California has always had its own rules when it comes to the economics of gasoline.

For starters, consumers have always had to pay higher state and local taxes on gas. Mainly though, production costs are higher here. Most of the state's supplies come from refineries in the West because of California's strict environmental rules on gasoline inputs.

Analysts say that it's a new state requirement, coinciding with supply shocks in the petroleum market, that has caused the sudden spike in prices at the pump in California. Refineries in the state are in the process of switching from fuel that is oxygenated by Methyl Tertiary-Butyl Ether (MTBE) to fuel oxygenated by ethanol.

"The whole process of changing over for a different formulation is extremely expensive for the industry, and it takes time to pull it off," says Mr. Cogan.

The result will be a cleaner-burning gasoline that won't find it's way into groundwater. But the regulations do mean that the state is unable to tap into gas supplies elsewhere in the nation because of different refining standards.

Other factors are at work too.

The impending war with Iraq is certainly contributing to high gas prices nationwide. Additionally, the petroleum workers' strike in Venezuela - one of the top ten crude oil producers in the world - and the cold winter on the East Coast have had a significant impact on gas prices.

"Refineries are either making home-heating oil or gasoline, but they're not making both," says Jerry Taylor, director of natural resource studies for the Cato Institute in Washington, D.C. "Typically they are making home-heating oil in the winter, and the harsh winter we've had has forced refineries to make home-heating oil for longer than they have in the past, and that has hurt the gasoline supply."

But drivers in the Golden state may have to wait a while yet for relief when they fill up.

"Regardless of strikes, war, or the cold, gas goes up in the summer," says AAA spokeswoman Cynthia Harris. "Summer gas is more expensive than winter gas because it has more additives."

Businesses feel the pinch

That's not good news for Dan Routt, moving-department head at Meathead Movers in San Luis Obispo (the company name is a tad misleading, it employs students as movers and packers).

Mr. Routt is counting on gas prices eventually returning to normal since his company, which has nine diesel-powered trucks, must accept what the prices are at the pump without passing them on to clients. "We know that ... our great economy will come back to where it should be and gas prices will be affordable," he says. "We've got to keep plugging ahead regardless."

But other companies are already charging their customers more - especially small businesses with smaller profit margins. Steve Sheetz, a window cleaner from San Luis Obispo whose Nissan Rodeo is loaded with ladders and cleaning supplies, certainly jokes that he'll raise his rates to compensate for the higher gas prices.

"This is tax time, so I'm trying to cut back," he says as he buys $21 worth of gas at $2.06 a gallon. "Right now I just don't have the money to fill all the way up."

usinfo.state.gov 12 March 2003

(James Hill says narco-terrorism fuels radical Islamic groups in region) (2040)

Narco-terrorism is a "pervasive force of destruction" that is affecting every country in the Americas, says James Hill, commander of the U.S. Southern Command (Southcom).

In a recent speech in Miami, Hill said that narco-terrorism -- that is, terrorist activity funded by the illicit drug trade and other organized crime -- is fueling radical Islamic groups associated with Hamas, Hizballah, and Al Gamatt that are operating in such places as the tri-border area of Brazil, Argentina, and Paraguay, and on Venezuela's Margarita Island. Such groups, he said, generate hundreds of millions of dollars through drug and arms trafficking to finance terrorist groups around the world.

"Simply put, direct drug sales and money laundering fund worldwide terrorist operations," Hill said. "That is fact, not speculation."

The Southcom commander said the threat to countries in the region does not come from the military force of an adjacent neighbor or from a foreign invading power. Rather, "today's foe is the terrorist, the narco-trafficker, the arms trafficker, the document forger, the international crime boss, and the money launderer," Hill said. The new threat, he added, "respects neither geographical nor moral boundaries."

The hemispheric community must act in concert to prevent the "continuing and increasingly corrosive spread of narco-terrorism and its connections to international and transnational terrorists, arms, drugs, and other insidious threats" throughout the region, Hill said March 3 at the North-South Center.

The goal for regional leaders, he said, is a hemisphere where children do not have to live in fear of being orphaned by terrorists, kidnapped, or pressed into service by gangs, drug traffickers and narco-terrorists.

"Our children deserve to be safe -- and if we act together, we can give them safety and security," said Hill.

Following is the text of Hill's prepared remarks:

(begin text)

Remarks by James Hill, Commander of the U.S. Southern Command North-South Center March 3, 2003

"Building Regional Security Cooperation in the Western Hemisphere"

Today's Western Hemisphere strategic environment is unique. In stark contrast to many other parts of the world, countries in the Western Hemisphere are not threatened militarily by their neighbors. Twenty-five years ago, the vast majority of the governments in Latin America and the Caribbean were under either communist or autocratic rule. Today, every country in the hemisphere except one is a democracy.

Democracy is the goal and the accepted model for government in the Western Hemisphere. This is significant because democracies tend to look out for the welfare of their people, seek positive relations with their neighbors, and most importantly, don't make war against each other.

When flare-ups have occurred in the Americas in the past decade, they've been resolved by diplomacy and regional cooperation, rather than by force of arms. Contrary to popular myth, Latin America is the least militarized region of the world, accounting for only 4 percent of the world's defense spending.

The peace between our nations should have translated into greater prosperity and more security for the people of the Americas, but for some it has not. We know that our hemisphere, like the entire world, has become a more volatile and unpredictable place, and we've got a long way to go to make it safe.

Today, the threat to the countries of the region is not the military force of the adjacent neighbor or some invading foreign power. Today's foe is the terrorist, the narco-trafficker, the arms trafficker, the document forger, the international crime boss, and the money launderer.

This threat is a weed that is planted, grown and nurtured in the fertile ground of ungoverned spaces such as coastlines, rivers and unpopulated border areas. This threat is watered and fertilized with money from drugs, illegal arms sales, and human trafficking. This threat respects neither geographical nor moral boundaries.

Nowhere is the threat more graphically and brutally active than Colombia. Last month in Bogotá, a 200-kilogram car bomb planted by the FARC exploded in a parking garage under the 11-story El Nogal social club, killing 35 people, including six children at a piñata party, and injuring 173 more. I never refer to these terrorists as guerillas, insurgents, or rebels. Neither does the secretary of state - because, in his words, those labels romanticize them. There is nothing romantic about these narco-terrorists who wreak havoc on Colombia and its people.

These are the same narco-terrorists who employ home-made propane tank mortars -- with a range of 400 yards and notorious inaccuracy. They do what they are meant to do -- kill indiscriminately. These narco-terrorists conduct violent, incessant attacks to undermine the security and stability of Colombia. They are incredibly well-financed by their involvement in every aspect of drug cultivation and production, kidnapping and extortion. They have long since lost any ideological motivation they once may have had. Today, they are motivated by money and power, protecting and sustaining themselves through drug trafficking and terror. They offer nothing of value to the state or people, no better form of government, no liberation from an oppressive dictatorship. They offer death and lawlessness.

Last year, over 28,000 Colombians were murdered -- 13 times the rate of the U.S. More than 2,900 were kidnapped -- including many children. More than 450 Colombians lost their lives last year to landmines -- the very vast majority due to the narco-terrorists, not the military. One and a half million Colombians have been driven from their homes, displaced by the war. There were more terrorist attacks in Colombia alone last year than in all other nations of the world combined.

Colombia's narco-terrorists supply almost all of the cocaine and heroin consumed in the United States. Drugs killed more than 19,000 Americans in 2001 and were indirectly responsible for another 55,000 deaths, according to the Office of National Drug Control Policy. By statistical definition, this makes these drugs weapons of mass destruction.

The facts: narco-terrorists and other armed illicit groups operate in and out of southern Panama, northern Ecuador, northern Peru, Bolivia, portions of Venezuela and the tri-border area; they are involved in kidnappings in Venezuela, Ecuador, and Paraguay; they smuggle weapons and drugs in Brazil, Suriname, Guyana, Mexico, and Peru. They use the same routes and infrastructure for drugs, arms, illegal aliens, and other illicit activities. There is a huge and growing market for forged and illegal immigration documents; narco-terrorists and radical Islamic groups are feeding this market.

As traffickers exchange drugs for arms and services in the transit countries, transit nations become drug consumers as well. Narco-terrorism fuels radical Islamic groups associated with Hamas, Hizballah, al Gamaat, and others. These groups, operating out of the tri-border area, and other locales, like Margarita Island off Venezuela, generate hundreds of millions of dollars through drug and arms trafficking with narco-terrorists. Simply put, direct drug sales and money laundering fund worldwide terrorist operations. That is fact, not speculation.

I say this not to point fingers at any one country; I don't have enough fingers. The reality is that narco-terrorism is a pervasive force of destruction that not only affects our region, but each and every one of our countries -- big and small, rich or poor, weak or powerful. This is a battle that must be fought together. If we don't, I fear we risk winning the battle in Colombia, but losing the war in the rest of the region.

Narco-terrorists and drug trafficking organizations have shown considerable flexibility in adjusting their operations, tactics, and locations in reaction to our combined efforts.

If we are not as flexible, if we are not as agile, or as quick to anticipate and counter these adjustments, we'll find ourselves always one step behind, with old or inaccurate intelligence, lunging at shadows, and we'll come away with incomplete results. That's why I believe we need to re-evaluate our armed forces and security forces and collective agreements in order to bring about increased coordination and cooperation.

I would never say that the day of traditional military capability has passed, but it surely must evolve to remain relevant and defeat the threats of the 21st century. We must have the courage and confidence to honestly evaluate how our armed forces are configured, trained, and equipped, and more importantly, how well they communicate with and mutually support their sister services, other security forces, and neighboring countries.

Working together in multilateral exercises and forming trust through transparency are just some of the confidence- and security-building measures that have formed a structure for multilateral security cooperation in the Americas. We must continue to build upon this edifice with even more synchronization of effort.

The U.S. government and U.S. Southern Command are currently working on initiatives to do just that -- not only to exercise together, but also to operate together in order to shut down transnational threats.

The 5th Defense Ministerial Conference of the Americas held in Santiago in November emphasized the "desire to strengthen the inter-institutional and inter-governmental coordination ... which permits the ... preservation and stability of peace." Cooperation and coordination are much more complex than just communicating with each other. They must be built on a foundation of mutual respect and trust, and they must be mutually beneficial. Without these precepts, there is no cooperation. The most basic level of cooperation and coordination must be between the branches of the armed services themselves. This entails information-sharing, planning, and training. When we train, plan and operate together, we learn each other's terminology, doctrine, limitations and capabilities, and we forge a strong, seamless, combined arms force. I believe we're slowly getting better in this area.

The next level must be between the military and the other security forces such as the police and customs, and in this area we've got a long way to go.

Armed forces must -- operating within their constitutional and legal constraints -- support and cooperate with law enforcement agencies in combating drugs and other transnational threats. And where the legal boundaries don't make sense anymore given the current threat, they should engage in an honest dialogue with their democratically elected leaders to determine if laws and restrictions need revision. That is an essential discussion that takes place in a democracy, a proper role for a military in support of a democracy.

I routinely visit military and civilian leaders throughout Latin America and the Caribbean. I talk with them about re-addressing the roles and missions of their armed forces to ensure they focus on relevant 21st-century threats, not those of the past. Our ideas must look ahead in anticipation of what can be -- and [we must] transform ourselves to meet these new threats -- new ideas that will ensure multi-national cooperation and coordination to fight common enemies.

We must act together to prevent the continuing and increasingly corrosive spread of narco-terrorism and its connections to international and transnational terrorists, arms, drugs, and other insidious threats throughout the hemisphere. It is no mean or simple task.

But let me tell you what is at stake if we do not succeed -- our children and their children. Our goal needs to be an Americas where children do not have to live in fear of being orphaned by terrorists. Children should not live in fear of being kidnapped. Children should not live in fear of being pressed into service by gangs, drug traffickers and narco-terrorists, and they should not have their lives cut short being forced to work in a coca lab, breathing and ingesting poisons.

A child, whether he or she is growing up in Bogota, Rio, Pucallpa, Guatemala City, Port-au-Prince, Paramaraibo or New York, deserves to grow up, be loved, cared for, and have at least basic needs like nutrition, education and the one thing that many of today's children are missing -- the feeling that they are safe. Our children deserve to be safe. And if we act together, we can give them safety and security.

Thank you for the opportunity to be with you tonight, God bless you and God bless each of your countries.

(end text)

(Distributed by the Office of International Information Programs, U.S.Department of State. Web site: usinfo.state.gov)

This site is produced and maintained by the U.S. Department of State's Office of International Information Programs (usinfo.state.gov). Links to other Internet sites should not be construed as an endorsement of the views contained therein.

www.forbes.com Reuters, 03.12.03, 4:27 PM ET BOGOTA, Colombia, March 12 (Reuters) - Colombia said on Wednesday it would call a tender in 15 to 20 days to construct a $450 million electricity transmission line to boost energy links between the country's north and center, which are threatened by rebel bombings. "In a matter of 15 to 20 days the tender will be open, honest," the director of the government's Mining and Energy Planning Unit, Julian Villarroel, told Reuters. The project will seek to both cut transmission costs and reduce the risk of blackouts in the capital Bogota, which has been affected by rebel attacks on energy infrastructure. "The project will provide more protection to the transmission system," Villarroel said. The 500,000-volt line will be 600 miles (1,000 km) long. The government hopes work should start by the end of the year and it should begin to operate by 2006. While the risks of Colombia's four-decade-long guerrilla war might cause some investors to pause, the project offers good returns and the possibility of an energy link-up with Venezuela and Brazil, Villarroel said. Government officials have mentioned possible investors including Colombia's state-controlled ISA <ISA.CN>, Canada's Hydroquebec, Britain's National Grid <NGT.L> and Red Electrica <REE.MC> from Spain. Colombia currently has two major transmission lines linking the hydroelectric generators of the country's center with thermal plants on the Atlantic coast.

www.msnbc.com By Melissa Francis CNBC According to the National Roofing Contractors Association, 80 percent of the products used for residential and commercial roofing are derived from oil.     March 12 —  The price of crude oil has risen to a high of over $38 a barrel in recent days, putting pressure on prices at the pump and for home heating. But there’s another industry that you might not immediately think of that’s caught between the dueling forces of a slower economy and the higher cost of materials.   YOU KNOW THAT tar paper on the roof that keeps the rain out, and the shingles and tar paste? Well, the vast majority of those products used in the roofing industry are petroleum based. And the interruption in supply from Venezuela along with the spike in oil prices is creating havoc in an industry already beaten down by a sluggish economy.        With a harsh winter, Jerry Cawley of Homestead Roofing has seen the volume of his business decline — this as the price of crude oil has spiked, significantly narrowing his margin.        “With the economy it’s been a little slow, so I don’t think the cost of the increase [in oil prices] will be passed on right away to the homeowners,” Cawley says. “I think that the small business, the roofing contractor, will have to absorb some of that cost.”        According to the National Roofing Contractors Association, 80 percent of the products used for residential and commercial roofing are derived from oil.        Climbing prices for crude, brought on by the specter of war with Iraq, have created tremendous uncertainty in an industry so dependent on the black gold, according to Bill Good of the NRCA.        “We just don’t know what the prices are going to do other than that they are just going to go up. But even more important than that, we’ve had a lot of issues of availability,” says Good. “We’ve had some spot shortages and it makes it very difficult for roofing contractors in particular to plan their work for the year.”        The uncertainty was aggravated by the strikes in Venezuela, a country where a quarter of the industry’s crude originates.        “The roofing industry relies to an unusual degree on Venezuelan crude,” says Good. “It turns out to be just a better crude oil to produce asphalt from, so the effect of the strike was really pretty devastating to our industry.”        The best substitute for Venezuelan crude is, ironically, the oil found in Iraq. An interruption in the flow from that country, or a further rise in prices, could seal the fate of many contractors.        “It has the potential to really be devastating,” says Good. “It will depend of the amount and the nature of the price increase and the availability. We’re seeing contractors getting very insecure about bidding work that is anything other than short term because they don’t want to lock into prices that may not be realistic 60-90 days from now,” he adds.