June 17, 2003 By <a href=www.busrep.co.za>Reuters Doha - Opec could be forgiven for feeling a touch of paranoia.

Iraq, where it was born in 1960, has been invaded and occupied by the US, and Washington hawks are now calling for "regime change" in Iran, another founder member.

Venezuela blames America for backing a failed coup last year, and some in the Pentagon question the US alliance with Saudi Arabia, the linchpin of the oil cartel.

Opec has remained silent in the face of the growing threat to its members, confining debate to the price of its oil.

Until now, that is.

Venezuela, under the leadership of President Hugo Chavez, has put sovereignty back on the agenda at a recently revived, long-term strategy meeting.

"We need to emphasise that the world has left behind the colonial era, when one power could take by force another country's resources," Venezuelan energy minister Rafael Ramirez told reporters after last week's ministerial meeting in Doha, Qatar.

"There are several countries which could feel threatened."

The proposal is some way from becoming policy of the group that supplies half of world oil exports, and is unlikely to lead to any immediate threat to supplies. But the idea of tightening Opec's grip over two-thirds of the world's oil reserves, and seeking to avoid military attack, has awakened interest from members.

"It is a serious concern that Opec members will become occupied by foreign powers," said a delegate from another member of the 11-country group.

Opec made its name in the 1970s by nationalising Western-controlled oil firms in their countries and forcing the industrialised world to pay more for oil.

But Western capital has been creeping back into Opec since the 1980s, while the US, anxious to secure cheap supply, has increased its military and political influence in key members Saudi Arabia, Kuwait and recently Iraq .

Under Saudi leadership Opec has traded revolutionary rhetoric for talk of partnership with the West, but some in the cartel think the scale has tipped too far in favour of Washington and see the war on Iraq as a bad omen.

"The US can't continue to invent wars. We want a deal with the world powers - we will supply oil and gas, but you can't invade my country. After Iraq, who is next?" said an Opec delegate, asking not to be named.

Venezuela's proposal is to link the Opec principle of security of oil supply to the national security of Opec nations.

If approved by Opec ministers, it would be tabled at a heads of state summit in 2005.

Some delegates believe that unless Opec reasserts sovereignty over its natural resources, it could be destroyed by a resurgent US foreign agenda, combined with the financial power of four "supermajor" oil firms.

The discussion could be welcomed by Iran and Libya, which are under US sanctions, but Saudi Arabia excludes politics from Opec debates.

Given the Washington climate, a more political Opec agenda could fuel critics who see the cartel as an instrument of economic warfare against the only superpower.

"We are trying not to let this get too political," said a delegate from a pro-US member.

Venezuelan Opec officials believe that country's foreign investment experience in the 1990s, and what it sees as a US hand behind last year's coup attempt, could be repeated all over Opec.

South America's leading oil producer, which has hiked its royalty rate to 30 percent, has proposed that Opec establish a minimum royalty rate across the group, but many Opec states have agreed to discounts to attract Western capital. - Reuters

MSNBC, By Pauline Frommer ARTHUR FROMMER'S BUDGET TRAVEL     June 17 —  The cruise discounts are coming in waves nowadays as the sluggish economy and lingering fears over international travel continue to torpedo travel pricing. Thanks to the downturn, all types of vessels are being discounted from the standard, large ships of the major cruise lines; to the river barges and coastal ferries of Europe; to old fashioned sailing ships. We’ve rounded up a few of the best bargains below.   Top travel deals        We like to call Windjammer the “anti-cruise”. Instead of being crowded onto a large and impersonal “city at sea”, passengers get a taste of what sailing was like at the turn of the century (and before). All of Windjammer’s vessels are actual tall ships, of human scale, with billowing rectangular sails. The relatively small size of the ships allow them to “dock” in isolated coves and small fishing villages, far from the bustling and overcrowded ports that blight much of the Caribbean. The ships vary slightly in size, but none carry more than 130 passengers each.        Windjammer has two sail sales going on right now. For fall travel, the SV Legacy is launching six day itineraries for just $999/person—no great shakes for a normal Carib cruise, but an exceptional deal for one that includes airfare (from Miami, Boston, Baltimore, New York and Philadelphia). The cruise-only rate is a still-good $675. This offer runs from Sept. 1 through Nov. 30, the height of the Caribbean’s hurricane season. Not to worry though, as the Legacy sails outside the hurricane belt, plying the waters between the (usually) storm-free ABC islands—Aruba, Curacao, Kline Curacao and Bonaire.        Windjammer has also extended a friendly hand to families, allowing one child to sail free when accompanied by two adults this summer. This works for both the S/V Legacy and the S/V Polynesia, both of which have extensive programs for kids (aged six and up only). What happens to families of four? Each child under twelve pays half price. Single parents, as well, pay half price for their children (up to two).         Eugene Buchanan answered your questions on the rafting, canoeing and kayaking vacations. Read the transcript.        To learn more call 800/327-2601. Windjammer’s website is www.windjammer.com, but it’s almost useless, not having been updated apparently in the last six months or so. You’ll do better to call.         SCANDINAVIA BY SHIP        There are few more dramatic floats in Europe. Just above the Arctic Circle, the ships of Norwegian Coastal Voyage make daily runs up down the coast, through towering fjords and past historic fishing villages, hillsides ablaze with wild flowers and numerous untamed little islands. Though the ships cater mostly to locals, who use them as we use ferries in the US, there are also a few hundred tourists aboard each voyage, drawn by the spectacular scenery, the nice onboard amenities (swimming pools, panoramic lounges, modern private staterooms) and of course, the low, low prices.

	       Those rates are going to dip even lower this year, thanks to a 10 percent off sale currently being offered by NCV, with a corollary 25 percent off sale on certain sailings. Prices normally start at $885/person, per six night cruise, so with the discounts these sailings are rock bottom. (Prices vary by date, ship and cabin class.)

        Seniors have it even better: AARP members will receive an additional $70 to $100 off per cabin in the summer, between $95 and $170 off after Aug. 16. After Sept. 17, the pesky singles supplement is waived as well. To top it all off, senior discounts ARE combinable with the regular 10 and 25 percent off sales. For more information and some very pretty pictures, go to www.coastalvoyage.com. One quick suggestion: don’t buy a shore excursion package in advance. You’ll pay less if you purchase excursions on an ad hoc basis onboard.         ONE MORE CHANCE TO BARGE IN FRANCE

       We told you about two weeks ago about the steep discounting that was going on for French barge cruises this summer. The original marked-down July sailings have sold out, but the folks at Viking Cruises have put their “French Vineyards and Vistas” Aug. 2 itinerary on sale for a piddling $599 (a savings of 65 percent off the brochure rate). That tremendously low price includes a portholed cabin, all meals, folkloric entertainment onboard, even shore excursions (all of them—now, that’s an unusual perk for a cruise). This is quite a cushy ship, by the way, making this sale even more remarkable. Go to www.vikingrivercruises.com to learn more about the itinerary (from Avignon to Chalon); please note that there is no info about this sale on the site. For that you’ll have to call 877/66-VIKING and mention code 006-38.         CARIBBEAN CHRISTMAS CRUISE        It’s not often that we see savings on X-mas sailings, and even rarer to find a discount this far in advance, but that’s what’s happening of the Dec. 18 voyage of Celebrity Cruise’s Galaxy. The price is currently at a low $549 for this eight-night holiday at sea, with a round-trip itinerary (calls in St. Thomas, St. Kitts, Barbados, Venezuela, Aruba) out of San Juan. Christmas Day itself is spent at sea, but onboard this mid-90’s cruiser (she was launched in 1996) the holiday should be a festive one, spent either in one of the ship’s toney martini or cigar bars, or around one of the ship’s three pools. The Galaxy is known for the quality of her cuisine, so we have no doubt that all the stops will be pulled out both for Christmas Eve and Christmas Day.        We found this special price at the site of Cruise Club of America (www.cruiseclubofamerica.com or 800/982-2276), but it’s possible that other cruise discounters have it as well. Be sure to shop around.                {Editor’s Note: Cruised recently recently? Do you have an instructive anecdote, tip or horror story to share? We’d love to hear it and possibly reprint it in our letters to the editor column. Simply click here to send a letter to our editors.}

John Sullivan June 17, 2003   Vehicles travel Monday along Interstate 49. As the vacation season begins, gas prices are climbing. LAFAYETTE The Advertiser—Gasoline prices have started a slow, but steady climb upwards again after falling for almost 11 straight weeks. And, this upswing is coming at the start of the summer vacation driving season, a time when demand is the heaviest on U.S. inventories. A spot check of five stations in Lafayette on Monday showed that the average price was $1.35 per gallon for regular unleaded; $1.43 for medium grade unleaded; and $1.49 for premium unleaded. “I haven’t changed my plans yet, but it could definitely affect them,” said Vicki Morgan of Broussard. “I think we will have to wait and see.” Morgan said her family usually takes a driving vacation during the summer. The rise comes on a forecast made by analysts with the federal Energy Information Agency on April 8 that motorists could expect little relief from high prices at the pumps this summer. In its report, the EIA, which is an agency of the U.S. Department of Energy, predicted that by mid-summer, the average price across the United States will be $1.56 per gallon for regular unleaded. According to its report, “The project price is 17 cents per gallon above last summer’s average, but close to average summer prices in 2000 and 2001.” The report said the high gasoline prices are being caused by high crude oil costs, low motor gasoline inventories and a growing domestic demand.” According to the agency and the American Petroleum Institute, gasoline inventories totaled 200 million barrels at the end of March, about 13 million barrels below last year’s total at the same time and 6 million barrels above the record low seen in 2001. EIA officials also cautioned that the supply and demand situation may not get better by the fall. According to its records, average domestic crude production in 2003 is expected to decrease by 66,000 barrels per day, or 1.1 percent, to a level of 5.75 million barrels of oil per day. For 2004, a 2.4 percent decrease is expected, resulting in an average yearly production rate of 5.61 million barrels of oil per day. Patrick Burke, an investment representative with the New Iberia office of Edward Jones, said the long-range forecast for oil calls for a price in the low- to mid-$20s per barrel. “Increased production from Russia and other non-OPEC areas may lead to lower oil prices, particularly if OPEC becomes unable to continue the production cuts that have been successful in supporting higher oil prices over the past three years,” Burke said. OPEC, the Organization of Petroleum Exporting Countries, has scheduled a meeting in September to discuss worldwide oil output. The 11-nation organization is made up of Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates and Venezuela. Burke said crude oil prices averaged $25.96 in 2001, $26.12 in 2002 and, so far, $31.74 for 2003. “While we expect oil prices to stay below $30, supply concerns in Iraq, Nigeria and the lingering effects of the Venezuelan strike are keeping prices higher than expected,” Burke said. “The slowdown in world economic growth is lowering demand, and the combination of supply disruptions and uncertain growth are expected to keep prices volatile.” OPEC and demand-and-supply questions were the last thing that Gwen Sam said she was thinking about after hearing of gasoline prices beginning a slow climb upwards. “I guess I will do less traveling,” said Sam, a Lafayette resident. “It will affect me and my family. We may not travel much this year.” On the road The weekly U.S. retail gasoline prices for regular grade according to the Energy Information Agency: 5/26/03 6/2/03 6/9/03 East Coast: 1.442 1.437 1.442 West Coast: 1.699 1.677 1.657 Midwest: 1.471 1.449 1.506 Gulf Coast: 1.369 1.364 1.378 SOURCE: Energy Information Agency

By SIMON ROMERO

HOUSTON, June 16 <a href=www.nytimes.com>NYT— The economy has been cool, and so has the spring in much of the country. Nonetheless, the United States is facing its most severe shortage of natural gas in a quarter-century.

Industries like fertilizer and ammonia makers, which use gas to produce their goods, are already laying off workers. And experts warn that a warming trend, in the economy or the weather, could send prices spiking for the electricity that cools homes and runs every sort of business. Advertisement

"You would have thought that the last big upsurge in prices a couple of years ago was a tremendous wake-up call," said Gwyn Morgan, chief executive of EnCana, a Canadian company that is the largest independent natural gas producer and storage operator in North America. "But for most people it was not."

The market manipulation by companies like Enron has been blamed for much of the price surge of 2000 and 2001, which led to brownouts in parts of California and price spikes for electricity in much of the West and some of the Northeast. But now, like then, most analysts agree, the basic law of supply and demand is at work.

With natural gas promoted as a cleaner-burning fuel than oil or coal, nearly all the electric plants built since 1998 are designed to be fired mainly by gas. So demand is up. And while drilling has increased about 25 percent in the last year, much of it has been confined to old, overworked basins that are not as productive as they once were. Supplies, therefore, have not kept up.

In addition, analysts say that a failure to gauge supply needs and weather patterns accurately in an up-and-down economy has added to the squeeze on supplies.

Prices for natural gas have risen sharply in the last year, reaching a peak at more than $6 per million British thermal units, compared with about $3.65 a year earlier. Stored supplies of natural gas have fallen to the lowest level since the federal government began keeping records in 1976, with levels about 30 percent below the average for the last five years.

The effects of this latest surge in prices have led to renewed calls from the gas industry for the loosening of environmental restrictions on drilling and pipeline construction in the United States. Energy Secretary Spencer Abraham and the National Petroleum Council are convening a top-level meeting later this month to discuss the shortage and propose solutions.

Last week, the Federal Reserve chairman, Alan Greenspan, warned the House Energy and Commerce Committee that short supplies of natural gas could contribute to erosion in the economy. Mr. Greenspan emphasized the potentially important role that liquefied natural gas, in particular, could play in American energy imports.

Yet with the richest overseas stores of gas in distant regions like West Africa and Southeast Asia and the energy industry under technical and financial constraints, the difficulty of increasing imports remains considerable.

With few immediate answers at hand, industry executives and analysts talk of elevated natural gas prices for years to come.

"We're already facing the prospect of higher utility bills for consumers and higher energy costs for many businesses," Robert Allison, chief executive of Anadarko Petroleum, said in an interview. "The shortage is going to become a matter of exporting jobs to countries with cheaper natural gas."

The fertilizer industry has been particularly hard hit, since natural gas accounts for 90 percent of the cost of ammonia, the building block for nitrogen fertilizers. Robert C. Liuzzi, chief executive of CF Industries, a farm-supply cooperative based in Long Grove, Ill., said high natural gas prices were the most serious threat to the industry since the energy shocks of the 1970's.

Ammonia manufacturers are not faring any better, with factory closings becoming common. Mississippi Chemical, an ammonia company based in Yazoo City, Miss., filed for bankruptcy protection last month. The company idled a plant in Ohio, cut production at another in Tennessee and shut down a factory in Donaldsville, La., resulting in the loss of 24 jobs.

Charles O. Dunn, the chief executive, cited the "extreme increase and volatility in the price of domestic natural gas" as contributing to Mississippi Chemical's mounting financial losses.

Power generators that are capable of switching their plants to fuels like oil or coal are doing so to mitigate their dependence on gas. But analysts say that this, in turn, is contributing to higher prices for those fuels.

Short Supply of Natural Gas Raises Economic Worries

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Over all, about 23 percent of the nation's energy needs are met by natural gas. The United States is a large producer of natural gas, second to Russia, and 85 percent of the gas used here comes from domestic wells. But many parts of the country remain off-limits for drilling for environmental reasons.

Gaining access to these areas is a top priority of the energy industry, foreshadowing a more intense struggle between conservationists and natural gas companies. "The sorry thing is that there is gas to be found in this country but we can't get to it," said Mr. Allison of Anadarko, the nation's most active natural gas driller. Advertisement

Canada, with large reserves and geographic proximity, provides more than 90 percent of the natural gas exported to the United States. But Canadian imports are slowing, too, with some analysts expecting them to decline steadily in the next decade as demand grows at home.

That leaves the United States with the alternative of importing liquefied natural gas from other countries. Such gas, condensed into a liquid by chilling it, is transported by ship, and currently accounts for only 1 percent of the nation's gas imports.

Yet even raising today's imports to 3 percent of the total is not expected to happen anytime soon, because only a handful of terminals in the United States are capable of processing liquefied natural gas. The largest are in Everett, Mass., near Boston, and Lake Charles, La.

The costs involved in building the terminals, and the reluctance in many coastal areas to have large gasification installations in their vicinity, have kept many such projects from getting off the ground. So have fears that terminals could become targets of terrorism and financial concerns about the health and transparency of energy companies in the business world after Enron's collapse.

For instance, the El Paso Corporation, an energy trader based here, has had to abandon an ambitious project to use buoys and shipboard gasification technology to receive liquefied natural gas at offshore locations.

Yet numerous projects for liquefied natural gas terminals are under consideration, ranging from plans to reopen mothballed terminals built in response to the energy crises of the 1970's to more fanciful ideas. One Houston company, Crystal Energy, wants to use existing offshore facilities to build a receiving installation on the Southern California coast.

Several other terminals could be built and functioning within the next three to five years. Then, the United States may face the prospect of increased dependence on large, but sometimes politically problematic exporters like Nigeria, Algeria, Angola, Qatar, Venezuela and Indonesia.

"We're on the verge of discovering that natural gas is almost as important as oil for our energy supplies," said Amy M. Jaffe, associate director of Rice University's energy program. "Once we wake up to this, we'll have to deal with the geopolitical implications of importing natural gas from some of the more unsavory parts of the world."

In the meantime, about the only beneficiaries of the natural gas shortage are companies that can profit from the high prices for the fuel by producing or transporting it in North America. These include huge energy companies like BP, which are considerable gas producers, and a coterie of smaller companies that made a prescient bet on strong demand for natural gas.

Every 10-cent shift upward in gas prices, for instance, translates into a 4 percent gain in cash flow next year for Burlington Resources, which is based here. For EnCana, based in Calgary, Alberta, the same increase results in a 2.5 percent rise in cash flow, according to a study by Deutsche Bank.

"This is the strategy payoff we have been anticipating for many years," Mr. Morgan, EnCana's chief executive, said.

The Mercury New-Knight Ridder Newspaperss Posted on Mon, Jun. 16, 2003 By KEVIN G. HALL and DUNE LAWRENCE

BRASILIA, Brazil - Brazilian President Luiz Inacio Lula da Silva will visit the White House on Friday for the second time in seven months, a sign of the growing importance of South America's largest economy and the growing international stature of its leftist leader.

Da Silva, a former machinist, labor leader and union organizer, initially frightened Wall Street and the White House with fiery populist campaign rhetoric. But since taking office Jan. 1, da Silva - known affectionately to Brazilians as Lula - has pursued his social agenda without challenging the free-market policies that brought Brazil billions in foreign investment in the 1990s.

By holding the line, Brazil has remained one of the most attractive markets for international investors, and da Silva arrives in Washington with a strong hand, even as much of Latin America is in an economic crisis. He also has a reputation for charm.

"Lula has a record of being quite effective in these personal appearances, and he still has an aura about him," said Thomas Skidmore, a longtime Brazil expert at Brown University's Watson Institute of International Affairs in Providence, R.I.

"It's pretty sensational that a former metal worker is flying around the world to negotiate with the strongest country in the universe."

U.S. and Brazilian diplomats expect the two leaders to disagree sharply on some issues but seek to highlight areas of agreement. As Celso Amorim, Brazil's foreign minister, said in Washington last Friday, "A mature relation means that you explore to the maximum the points of convergence, you try to limit the points of difference and you respect the diversity."

Bush and da Silva differ on Cuba and on U.S. military involvement in fighting drug-funded Marxist guerrillas in neighboring Colombia. They also differ on the U.S.-led invasion of Iraq, which Brazil opposed.

More important, da Silva wants Bush to drop tariffs on Brazilian steel, citrus and other agricultural exports as a condition for Brazil's assent to a hemispheric free trade zone by 2005. Brazil has been reluctant to endorse the so-called Free Trade Area of the Americas, which would reduce tariffs and barriers to trade, but Brazil and the United States are co-chairs of a final round of talks aimed at sealing the deal by 2005.

"Brazil and the U.S. are jointly assuming responsibility for leading the hemisphere toward free trade and integration," said Donna Hrinak, the U.S. ambassador to Brazil. "We're essential partners in the hemisphere."

Brazil insisted on several modifications to the official agenda for the Washington visit, a top Brazilian diplomat in Brasilia, the capital, told Knight Ridder on the condition of anonymity. One stipulation was adding an item called "fighting protectionism" to protest what Brazil complains is a U.S. trade policy that unfairly keeps out its exports.

The United States maintains that's not so, citing two-way trade that's grown from $15.6 billion in 1994 to almost $26 billion last year.

Brazil also insisted that a session on the "war on terror" be changed to "combating terror," and that the sessions include a discussion of the United Nations in resolving future conflicts. The changes were intended to voice da Silva's displeasure that the war in Iraq went ahead without a second U.N. resolution authorizing force.

Brazil also contends that it, or possibly India, should get a seat on the U.N. Security Council to represent large, important and democratic developing nations.

In a sign of Brazil's growing importance, not only are the presidents talking but top Cabinet officials also are set to meet.

"From what I understand, the United States has this kind of meeting with a very reduced number of countries. So we are interested. We think it's a very good opportunity," Amorim said. "It's also a very good opportunity for the two heads of government to speak freely and frankly and to increase their personal relationship."

The Brazilian official said the two countries' representatives expect to address

"hot spots," including ways to resolve Venezuela's political crisis, how to best promote democracy in Cuba and how to help Argentina out of its deep economic crisis.

The bulk of the meeting is likely to be devoted to free trade. All countries in the hemisphere except Cuba have been negotiating such an agreement since 1994, but Brazil lately has suggested that free trade with its closest neighbors might take priority.

Brazil may be disappointed again on efforts to remove U.S. trade barriers that keep out its farm exports and key commodities.

"The big question for the Brazilians is how can they make any progress on these urgent items like orange juice and steel," Skidmore said.

Brazil also is weighing a trade deal with the European Union, where it faces barriers similar to those in the United States. Global negotiations by the World Trade Organization seek to reduce trade barriers to farm products but appear stalled. Brazil is using the hemispheric trade pact as leverage in the global talks, and playing the United States and European Union off each other.

Trying to match Washington tit-for-tat, Brazil and its neighbors in the Southern Cone Common Market, or Mercosur, expect to sign a free-trade deal with Peru in August. The United States signed a free-trade deal with Chile on June 6 in Miami.

U.S. lawmakers from South Florida are pushing for the hemisphere-wide trade deal in hopes of capturing for Miami the secretariat that would administer any regional agreement.