Normal oil shipments '2-3 months away'
www.southbendtribune.com By H. JOSEF HEBERT Associated Press Writer
Area energy costs: It could be worse Michiana motorists and homeowners might be more fortunate than their counterparts in some other parts of the country when it comes to energy costs. Though the commodity price for natural gas has nearly doubled, the leap doesn’t necessarily translate into higher heating costs for NIPSCO customers, said Larry Graham, spokesman for Northern Indiana Public Service Co. According to Graham, NIPSCO adjusts its prices on a monthly basis, so daily market volatility is not the key factor in the cost of natural gas. Weather remains the driving force in determining the per-therm price of natural gas. In the meantime, local gasoline prices slipped a few cents per gallon Tuesday to $1.63 in the South Bend area and $1.70 in Michigan. According to AAA, the national average is about $1.66 for regular gas, though some locations on the West Coast are charging nearly $2 per gallon. — Carol Elliott
WASHINGTON -- Energy Secretary Spencer Abraham said Tuesday it may be two to three months before Venezuelan oil shipments to the United States return to normal levels, now that the crisis that shut down production in the South American country has passed.
Abraham, appearing before a Senate committee, also said the Bush administration was ready to tap its emergency reserves, but would do so only if there are "severe disruptions" of supplies and only after consultation with other major energy-consuming nations.
While promising to consult with other International Energy Agency member countries on use of emergency reserves, Abraham later told reporters that the administration, nevertheless, is prepared to take action on its own. "We would consult with the IEA members before we would make a decision. It's a matter of process," he said.
"It's my understanding that the crisis that has essentially shut down production (in Venezuela) has passed," Abraham said when asked about Venezuelan supplies resuming.
Pressed on the matter, Abraham said he couldn't be specific on the level of Venezuelan imports. But he said a delay of 60 to 90 days could be expected between an increase in production in Venezuela and barrels of that country's oil arriving in the United States.
Asked about using the government's Strategic Petroleum Reserve to dampen prices, Abraham reiterated the administration's conviction that the emergency supplies of oil should be used only to counter severe shortages and not to influence prices.
"We will and we can act quickly to use the Strategic Petroleum Reserve ... to offset any severe disruptions if it's needed," he said under questioning by Sen. Jeff Bingaman, D-N.M.
But Abraham also said the United States only would act "in consultation" with other oil-consuming countries that have stocked emergency oil to counter supply disruptions.
"People are being pinched like never before" by soaring gasoline and other energy prices," Sen. Ron Wyden, D-Ore., told Abraham, adding that consumers "are getting hosed because they're not getting any protection."
But Abraham said the government oil stocks were established "to provide energy security ... We do not believe it should be used to address price fluctuations."
Likewise, Abraham dismissed suggestions -- as requested by a group of New England heating oil companies -- that the government should make available some of the 2 million barrels of heating oil kept in a Northeast reserve. "Two million barrels is not a lot" and it should be kept in place "unless there's an emergency situation in terms of supply," he said.
Sen. Pete Domenici, R-N.M., chairman of the Energy and Natural Resources Committee, questioned the continued purchase of oil for the Strategic Petroleum Reserve at a time of high oil prices and inventory shortages.
Abraham said the Energy Department has suspended deliveries to the reserve for the first three months of the year and was reviewing whether oil would be accepted after March.
The strategic reserve, located in salt caverns along the Texas-Louisiana Gulf coast, has just over 600 million barrels. Congress last year directed that the stocks be increased to 700 million barrels, but some lawmakers have questioned doing so when supplies are low and crude is expensive.