<a href=www.journalpioneer.com>Journal PioneerMar. 26, 2003 by STAFF, Journal Pioneer

Although it came as no surprise that electricity rates were going up, the shock and awe that followed the amount by which it would actually increase has most people picking their jaws up off the floor.

Maritime Electric has been given the go-ahead to increase its rate by 13.34 per cent after a Halifax-based consultant hired by the Island Regulatory and Appeals Commission concluded that the rate hike is justified. Reasons for the increase were blamed on global uncertainty, a shortage of electric power and high oil prices.

So let’s regroup.

According to Development Minister Mike Currie, he too a power consumer, agreed that while no one likes to see the rates increase there is nothing that can be done. He also said that for most households, the rate increase will only amount to about $10 more a month.

Anna Duffy, president of the P.E.I. Seniors federation has tremendous concerns.

She said for those seniors on a fixed income, it may mean the choice between paying the electric bill or paying for medication or groceries. Not much of a choice.

Add that rate increase to the high cost of oil and that is a serious financial situation.

Since the uncertainty in Venezuela, Iraq and now Nigeria, the oil prices have skyrocketed, and many people claim their oil bills are higher than their mortgage payments.

Cutting back in the dead of winter, with -40 degree nights is not an option.

Oil, electricity and heat are vital to life here in the Maritimes, and increased prices are going to hurt.

Small businesses, restaurant owners, farmers, fishers and other self-employed entrepreneurs will certainly be feeling the pinch as prices increase. And there is really no recourse. Or is there?

Will Islanders blame the provincial government for its high oil and electrical rates?

Will Pat Binns and his members feel the brunt of Islanders wrath when they call an election this year?

Will Islanders remember that the provincial government allowed Fortis Inc., the parent company of Maritime Electric, to hook its prices to those in New Brunswick?

There is no doubt that the world is in crisis.

The war for oil in Iraq is just one example of how vital resources are, and how hungry we as consumers are for the fuel to heat our homes, drive our cars and run our lives.

For years, alternative methods have been sought to move away from our reliance on fossil fuels, but the convenience and tradition of oil and electric power have made us suspicious of other methods.

Maybe now, the price may force us to look at other means of conserving energy.

Keeping the thermostat low, turning off the lights, going to bed early may all be the way many of us deal with cold winter nights.

It won’t make the rates go down, but it might keep us from freezing to death in the dark.

War Reports By Michael Lelyveld

Oil prices are swinging wildly on reports about the war in Iraq, but analysts say that world-market fundamentals remain unchanged. As the United States emerges from the winter heating season, producing countries like Iran remain wary of pumping too much, while the U.S. Department of Energy sees no cause to tap the Strategic Petroleum Reserve.

Boston, 26 March 2003 (RFE/RL) -- Experts say big swings in oil prices may mean little from one day to the next during the Iraq war. Last week, prices plunged on the expectations of a short war, only to rebound this week as perceptions grew more wary. But analysts are dismissing both moves as trading turbulence that will have little effect on the world economy over time.

Ira Joseph, director of the international energy group at PIRA Energy in New York, told RFE/RL, "Anything that happens inside of a week isn't going to affect the fundamentals."

Much like the stock market, oil trading is driven by daily news that may be quickly overtaken by events. But economic expectations in both oil-producing and -consuming countries are often swept up in conclusions that soon prove to be wrong.

While consumers fear a wartime price spike, producers like Russia and Iran are worried that high oil output could devastate prices as soon as the war ends, leaving their economies with no means of support. Between the extremes, daily trading is driving the cost up and down on assumptions that may have little grounding in fact but still cause concerns.

In the first days of the conflict last week, world oil prices dropped suddenly by more than 25 percent to well below $30 per barrel for the first time since January as the market welcomed the end of the long wait for war.

Early this week, prices rebounded by more than $2 per barrel on speculation that the war could drag on. Ethnic clashes in Nigeria, leading to the loss of some 40 percent of the country's production, added to the higher price push. But yesterday, prices stalled again following British television reports of an uprising in Basra against Iraqi President Saddam Hussein, the Reuters news agency said.

Joseph said the fundamental forces behind oil prices remain the same as they did before any of the price swings. "People are just playing around with the bubble -- the war premium," Joseph said.

Joseph said the market has added a premium of about $5 per barrel to oil prices because of the war-related risks. That factor is now serving as an open field for price jumps that may be driven by daily news, rumors, or speculation, temporarily masking the fundamentals of supply and demand.

Joseph sees very low U.S. oil inventories at the end of a cold winter providing basic support for higher prices. At the same time, the second quarter is usually a time of weaker demand because the heating season is ending and warm-weather travel has yet to begin, said Robert Ebel, director of the energy and national-security program at the Center for Strategic and International Studies in Washington.

Ebel was asked whether anything has really changed in the oil market since the war started. He said, "Probably not, when you're just talking about the fundamentals."

While the trouble in Nigeria is causing traders to worry, the loss to the world market has been offset by the partial return of Venezuela's production from its civil unrest. The disappearance of Iraqi oil from the market due to the war and the end of the United Nations oil-for-food program was anticipated. Higher output from Saudi Arabia has made up the difference.

The biggest moderating factors on oil prices in the midst of the war are still Saudi Arabia's pledge to pump more as needed and the ultimate backstop of the U.S. Strategic Petroleum Reserve, which could release nearly 600 million barrels of oil. This week, the U.S. Energy Department repeated that it sees no need for such a move at this time.

Ebel said, "I think that we have an understanding with Saudi Arabia that we won't tap into the Strategic Petroleum Reserve as long as they keep expanding production." So far, the balance seems to be keeping the volatile markets within bounds, despite the war risks.

The wartime speculation has still made the oil market treacherous. Ebel said, "Forecasts are usually tenuous at best, and now, you know you're going to be wrong."

Read article By PATRICK BRETHOUR Wednesday, March 26, 2003 - Page B1

Closing Markets Wednesday, Mar. 26

S&P/TSX -27.96 6357 DJIA -50.35 8229.88 S&P500 -4.79 869.95 Nasdaq -3.56 1387.45 Venture -1.52 1040.68 DJUK 1.19 153.54 Nikkei 113.16 8351.92 HSeng -15.06 9047.09 DJ Net .89 44.39 Gold (NY) +1.80 330.10 Oil (NY) +0.66 28.63 CRB Index -0.49 228.42 30 yr Can. -0.01 5.59 30 yr U.S. -0.01 4.93 CDN$ buys US$ +0.0030 0.6798 Yen +0.4360 81.6660 Euro +0.0025 0.6366 US$ buys CDN$ -0.0065 1.4710 Yen +0.1107 120.1307 Euro -0.0004 0.9365

CALGARY -- Alberta plans to go solo on the stage of world oil politics, bypassing Ottawa to limit the fallout from what it says is the federal government's anti-American rhetoric and "punitive" energy policies.

The province is speaking with members of the Organization of Petroleum Exporting Countries about obtaining observer status within the cartel, Alberta Energy Minister Murray Smith said.

That would be a first for OPEC, where observer status has been extended only to national governments, such as Russia.

Alberta also plans to meet formally with the International Energy Agency, which advises Canada and 25 other industrialized countries on energy policy.

In both cases, Alberta will be acting alone, Mr. Smith said, adding that he has no intention of checking in with the federal government.

Some provinces attend international forums in concert with the federal government, but the Department of Foreign Affairs and International Trade said it is not aware of any instance in which a province has participated in such bodies by itself.

However, Alberta is looking to dissociate itself from Ottawa's stance on the war in Iraq, particularly comments last week by Natural Resources Minister Herb Dhaliwal that U.S. President George W. Bush is a failed statesman.

"We're working hard to repair the damage that Mr. Dhaliwal has done in our trade relationship with the United States," Mr. Smith said.

Mr. Dhaliwal heads the federal ministry chiefly responsible for energy policy.

The Prime Minister's Office said the federal government is responsible for international relations, echoing its rebuff last week of Alberta Premier Ralph Klein's public support for the U.S. war effort.

"In terms of foreign policy, the Prime Minister and the Foreign Minister speak for Canada," said PMO spokesman Jim Munson.

Alberta has often clashed with Ottawa over the oil patch, the most recent battle being the debate over ratification of the Kyoto Protocol, aimed at reducing greenhouse gas emissions.

Yesterday, Mr. Smith said Kyoto was one of the main motivations for the province in contemplating a seat at OPEC meetings.

"We're always concerned about the notoriously inept energy policy that comes from Ottawa, so we look for ways to build bridges, to build dialogue," he said.

The subject first arose in December, when an influential energy industry journal published estimates of national oil reserves that included Alberta's oil sands for the first time -- giving Canada the world's second-largest reserves, after Saudi Arabia.

OPEC's entire purpose is to manage world oil supplies in order to maximize its members' revenues, but Mr. Smith said he did not see Alberta joining in the cartel's efforts to control production.

Right now, Alberta regulates the oil sector, but does not dictate output levels.

The Canadian Association of Petroleum Producers said it could be helpful for Alberta to have first-hand information on OPEC deliberations, but vice-president Greg Stringham said he did not foresee the province attempting to micromanage crude production.

As for meetings with the IEA, Mr. Smith said Alberta is looking to gain a better understanding of how energy demand will change after the war in Iraq ends.

OPEC is largely made up of producers from the Middle East and North Africa, but it also counts Nigeria, Indonesia and Venezuela among its member nations.

Source By T. Christian Miller, Los Angeles Times, 3/26/2003

CARACAS -- Henrique Salas says he is just trying to inject hope into a shattered economy and a divided society.

The second-place finisher in Venezuela's presidential election five years ago, Salas has saturated the television airwaves in recent days with a reminder that he predicted trouble ahead with the victory of President Hugo Chavez.

''Now it's time to look ahead. Lift your eye up to the skies,'' Salas says in a 30-second spot, staring into the camera and flashing a toothy grin.

The advertisement, which Salas insists is not a political ad, is the latest sign that Venezuela's opposition is crumbling in the wake of a failed two-month national strike to oust Chavez.

Salas has become the first major politician to openly distance himself from the Democratic Coordinating Committee, the uneasy coalition that has led the protests against Chavez for the last year.

The possibility of a recall vote and a new presidential election this year has divided the committee. Labor and business, new and traditional parties, and the leftists and conservatives who made up the opposition's once-united front are fighting for power.

The fracture has left the opposition with no clear strategy to confront Chavez, who seems politically stronger than ever after having survived a brief coup last April and then the strike, which cost the country $6 billion.

Street demonstrations have declined both in size and frequency. A petition drive to force out Chavez has gone nowhere. Strike leaders are on the run, seeking political asylum or facing trial on treason charges.

''The opposition is going through a difficult time,'' said a source close to talks. ''They are not going to exercise significant pressure on the government in the next few weeks.''

The failure of the strike and the coalition's problems have stalemated the peace talks. Meetings between the two sides, once held daily, are now taking place only occasionally.

The government has little reason to negotiate, now that the strike has failed, say those participating in the talks. Cesar Gaviria, the president of the Organization of American States and the talks' mediator, has privately told some diplomats that he thinks there will be no negotiated settlement.

''At the table, nothing is happening,'' the source said. ''The government has decided to do nothing. The most probable thing is there will be no accord but a recall vote by the end of the year.''

Even the news media, once Chavez's fiercest opponents, have toned down their rhetoric in the face of an aggressive counterattack by Chavez.

The president recently implemented currency controls that permit bolivars, the national currency, to be exchanged for dollars only for certain government-approved imports.

Chavez announced that he would not allow ''coup-plotters'' to have access to dollars, which led media owners to fear the measure would be used against them. In its first list, released earlier this month, the government did not allow currency exchanges for the purchase of newsprint. Already, one newspaper has warned that it will run out of newsprint by April.

Marcel Granier -- director of RCTV, one of the nation's most-watched television networks -- said he has been unable to pay foreign suppliers for new programming or videotape since the government put the currency exchange controls in place last month.

''In a fascist government, the media are targeted from day one,'' Granier said. ''He is the one who has mounted a media war.''

Members of the opposition accuse Chavez of attempting a social revolution that has driven the country further into poverty and political ruin. The president has refused to make any concessions, insisting that the only legal means to force him from power would be a midterm recall election that could take place as early as August.

Instead, he recently announced that this year will be ''the year of the offensive'' of his Bolivarian revolution, which seeks to improve the lives of the 80 percent of the population that lives in poverty.

He has promised to implement long-delayed plans for a redistribution of land to the poor. And he has begun a program in which the government uses air force planes and navy ships to import food at reduced costs to sell at ''popular markets'' for the poor.

In a speech to university students last week, Chavez claimed victory over ''the conspirators, terrorists, and fascists'' who tried to stop his reform plans.

''We are defeating them, and we will always defeat them,'' he said. ''On our side is morality, reason, and victory.''

In several interviews, opposition leaders downplayed the the fissures in their ranks, which they said were to be expected after the strike's failure and the prospect of an election.

Instead, they outlined a new strategy: The opposition will take a low profile over the coming months as the economy slowly collapses, reaching a nadir of high inflation and unemployment in August, the same month as the possible election.

This story ran on page A10 of the Boston Globe on 3/26/2003. © Copyright 2003 Globe Newspaper Company.

Arguments Aid the Cause OPINION | MAR 26 Guest Column The Shorthorn: David DeGrand

While our best men and women in uniform are fighting the evils of man, a minority still protests. These protesters and supporters of stopping the war fuel the logical need and reasoning for the current action in Iraq. The following are the top 10 points used by the “stop the war” movement and how they can be used to justify the war as well.

Point 1: War will mean thousands of civilian casualties.

Saddam has produced 20-plus years of civilian casualties. Over those years, he has gassed thousands of innocent Kurds; he had thousands of Shiites murdered; he caused tens of thousands of civilian casualties in his war with Iran, ordered the killing of thousands of Kuwaiti civilians in his invasion, ordered the execution of thousands of Iraqis and caused thousands of Iraqi children to die from starvation or lack of medicine. 

Contrast that with the few hundred civilians killed in Afghanistan by the U.S. military; American-lead intervention saved hundreds of thousands who would have starved to death, and the Gulf Conflict killed few Iraqi civilians.

A conflict and course of action that deposes Saddam and the leadership in Iraq will save thousands of lives with the possibility for a republic government founded upon democratic institutions and principles.

Point 2: It’s a war for Iraqi oil.

An easy solution for oil would be to lift the sanctions and make a deal with Saddam. Saddam has indicated an eagerness to sell his oil and make money. The United States, however, doesn’t need Iraqi oil since the Russians will be bringing on line new pipelines and oil wells.

Even so, given the problems in Venezuela, which was a major factor in the increase of oil prices, a war for oil would oust President Hugo Chavez of Venezuela. There is no such plan, and there is no plan to cut the price of oil.

Point 3: War in Iraq will stir a new wave of terrorism.

This has been said for several decades. For example, during the Gulf Conflict a small number of people warned Arab streets would be in flames and Americans would be subject to many waves of attacks. Nothing of the sort has happened.

A more recent example is the conflict in Afghanistan, worse yet, bombed during Ramadan, it was supposed to prompt a worldwide uprising and terrorists in particular, against America. Again, that never happened.

Point 4: The Arab streets will erupt.

As in Point 3, this has been said for several decades. A swift and decisive victory as defined in just war, combat and strategy over Saddam will bring an increased peace and stability to the Middle East.

Even so, sad to say, the only streets erupting are American streets against the French and Germans.

Point 5: Attacking Iraq would be unprovoked aggression.

This is false in the understandings of just war, combat and strategy. No peace treaty was signed. Rather, a truce was signed and instituted. Thus the state of war resumes when the conditions are violated.

By attacking now, the United States would be ending the war, not starting it.

Point 6: America doesn’t have enough allies.

Forty plus isn’t enough? Is the case for war weakened in the slightest by the absence of the French or the Germans? No. Despite what a minority of people say, a war with Iraq would not be “unilateral,” which would mean the United States would be acting alone directly and indirectly.

Point 7: Give the inspectors more time and do not rush to war.

This is a common theme with many demonstrations against actions in Iraq. However, such a theme is deceitful.

The “stop the war” theme and supporters by definition do not want war, even with the United Nations inspectors finding weapons of mass destruction. The supporters of stopping the war seem to enjoy Saddam’s delaying game: Let the inspections continue until support in the United States for military action in Iraq dissolves and war is averted.

Then Saddam survives. Weapons of mass destruction should be destroyed.

Iraq has been in material breach of United Nations resolutions since a few weeks after the Gulf Conflict in 1991. New resolutions have been approved, inspectors were ousted on several occasions, the United Nations was made to look impotent and President Bush has taken all the steps asked of him before going to war.

Point 8: Containment is working.

With the presence of force, Saddam won’t attack Jordan or Syria or other neighbors. However, the more serious concern is the possibility of chemical or biological weapons being given to terrorists without anyone knowing.

Point 9: Win without war.

What a wonderful, drugged hippie perspective and flower-power idea. Sadly, however, we do not live in a utopian world, and human beings are fallible. This is what Saddam would want: With no war or course of action, he wins and emerges with the power to dictate the Middle East and a majority of Europe.

Point 10: Bush is seeking a new American empire.

I must let the Honorable Secretary of State Colin Powell answer this one. When heckled by a former archbishop of Canterbury on this subject recently, he said: “We have gone forth from our shores repeatedly over the last 100 years ... and put wonderful young men and women at risk, many of whom have lost their lives, and we have asked for nothing except enough ground to bury them in.” Well said.

God Bless America.

— Roy Mitsuoka, an interdisciplinary studies sophomore focusing on United States national security studies.