southflorida.bizjournals.com 10:00 EST Monday  Robin Londner  

Officials of the Air Transport Association have asked the federal government for access to the nation's strategic fuel reserves to control rising jet fuel prices, according to media reports.

Fuel is the second-largest expense after labor for most airlines. The cost has risen nearly 30 percent, to almost 90 cents a gallon, in the last three months.

In a Friday Reuters report, officials from ATA, a lobbying group that represents most domestic airlines, said it is forming a plan to present to Congress and the Bush administration for easing cost pressures caused by taxes and rising fuel costs. While the airlines said they have yet to agree on what, specifically, to ask for, Reuters said carriers have already informally asked the government to give them access to the nation's strategic petroleum reserves. The newswire said the airlines made the request "to mitigate an expected spike in jet fuel prices in the event of an Iraqi conflict."

Among other options outlined by Reuters, the carriers could ask the government to lift aviation security taxes and fees imposed since Sept. 11, 2001, or to temporarily relax anti-trust laws.

A change in the way airlines receive fuel could impact Port Everglades. The Broward County port is the second-largest East Coast non-refinery center for petroleum products. As the primary port in southeast Florida handling petroleum, Port Everglades distributes products to 12 surrounding counties from as far north as Vero Beach, south to Key West, and across to Florida's west coast. Port Everglades also provides all the jet fuel requirements of Miami International, Palm Beach International and Fort Lauderdale-Hollywood International airports and Homestead Air Force Base.

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The majority of the port's petroleum arrives from refineries in the Gulf of Mexico along with Venezuela, Aruba, the Bahamas and Mexico. More than 1,000 petroleum tanker-trucks leave the port every day.

In fiscal year 2001, the port processed 117.9 million barrels of fuel, or 16.77 million tons.

A phone message left for a Port Everglades spokeswoman was not immediately returned.

American, United, Delta, Northwest and Continental airlines all cited jet fuel prices as a significant cost item in their fourth quarters earnings reports, with the total cost about 10 percent higher than the same quarter last year. If airlines can buy fuel from the country's strategic fuel reserve, the thinking is other suppliers would have to reconsider raising their prices.

Financial analysts have estimated the major U.S. carriers lost from $8 billion to $10 billion last year, the year both United Airlines and US Airways filed for Chapter 11 protection. The industry has warned a war with Iraq could push more airlines into bankruptcy.

So far, Congress has told the airlines to take more measures to help themselves before expecting the government to step in with significant aid.

www.thevistaonline.com

Editor's Note: These stories would not have been possible without the guidance and help of Lizette Galindez Silva.

Stories by Mark Schlachtenhaufen February 02, 2003

If the two-month-old general strike in Venezuela continues and U.S. troops invade Iraq, UCO commuters could soon be paying significantly higher prices at the pump. Resulting lingering uncertainties are pushing prices even higher.

"That's enough to make the market fairly jittery," said Chuck Mai, AAA Oklahoma public relations director.

Other factors influencing the oil market include OPEC's increase in production by 1.5 million barrels a day, winter weather, which is driving heating oil prices higher, and the low level of crude oil stocks, said Lowell Feld, Energy Information Administration (EIA) world oil market analyst.

An AAA Oklahoma survey of local regular self-serve prices shows metro prices are higher than they were one year ago, but lower than the record high of $1.73 per gallon of regular unleaded gasoline recorded on June 20, 2000.

The metro average price for a gallon of gas on Jan. 22 was $1.36 per gallon, compared to 99.9 cents per gallon one year ago, a difference of 36.9 cents. If there were no war with Iraq and the situation in Venezuela improved, prices over the coming months would remain comparable, Mai said.

If U.S. troops do invade Iraq and the situation in Venezuela worsens, prices could go as high as $1.55-$1.60 a gallon, Mai said. How long they would remain at that level, or just how high they could climb would depend on the duration and extent of the two crises.

"Anything is possible," Mai said.

The national average for a gallon of gasoline was $1.45, the highest amount since Sept. 24, 2001, said Doug MacIntyre, EIA senior oil analyst. Fears about Venezuela and Iraq briefly drove oil prices above $35 per barrel Jan. 21. They ended the day at $34.61 per barrel.

The higher the price per barrel, the higher the price of gas at the pump, MacIntyre said.

Before the national strike, Venezuela was exporting 1.5 million barrels of oil per day to the United States, Feld said. The current estimate ranges from 600,000 to 800,000, the lower figure being offered by strike leaders, the higher figure by the government.

The United States receives about one-fifth, or 20 percent, of its total oil imports from the Persian Gulf region, McIntyre said. A U.S.-led war against Iraq would have negative consequences throughout the oil-producing region.

Recently, President Bush has been pressing the case for taking action against Iraq sooner rather than later.

Numerous UCO students commute to school from various sections of Oklahoma City, already driving up their monthly gas bills. Some said they are very concerned about the prospects of paying increased prices at the pump.

Ayyappan R. Muthuvel lives in north Oklahoma City. He said he currently spends about $100 each month on gas. If prices increase too much, he will have to shuffle his budget and search for ways to come up with the extra money.

"Gas is one of the most important things. It is the driving force of the common man. It's going to affect everyday life in a very big way," Muthuvel said.

He said he hoped former President Jimmy Carter could resolve the Venezuelan crisis.

"It's better if things are solved diplomatically rather than militarily," Muthuvel said.

Shawn McCleary lives in Oklahoma City, near Millwood High School. He said he spends about $30 per week on gas and he would be happy if prices remained the same.

Instead of worrying about the world situation, he said he concentrates on school, sports and his one-year-old daughter.

Laura Oden spends a lot of her time on the road driving to UCO from northwest Oklahoma City. She said she probably doesn't follow current world events as closely she should. Her parents pay for her gas.

"I already think it's kind of high compared to what I remember a couple of years ago," Oden said.

Mai encouraged consumers to shop around for the best prices. He said Oklahoma, with its numerous retail outlets, has a competitive market compared to other areas.

www.news-miner.com72521153333,00.html Article Last Updated: Sunday, February 02, 2003 - 4:46:32 AM MST

We all know the deep, resonant clang that comes from beating an empty 55-gallon steel drum.

Unless Congress acts, it's a sound that could come from the trans-Alaska oil pipeline--even while there's North Slope oil still to be pumped.

To ensure we don't hear it, Sen. Lisa Murkowski last week proposed that Congress declare that the environmental documents supporting the recently signed 30-year federal pipeline right-of-way comply with federal environmental law. That simple act tells the courts that the documents cannot be challenged.

The measure, agreed to by the Senate and forwarded to a conference committee with the House as part of a national budget bill, removes the possibility that costly, protracted legal action over the documents could shut the pipeline when the current right of way, which is insulated in a similar manner, expires early next year.

With Alaska's treasury and the national and state economies so reliant on oil, a court-ordered pipeline shutdown is something we simply cannot risk, no matter how remote the possibility.

Sen. Murkowski's action, which drew immediate criticism from environmental groups, is nothing new. Rather, it is a wise reflection of what Congress allowed in 1973 when, at a time of the Arab oil embargo, it authorized the pipeline's construction and the awarding of the first 30-year right of way.

Two points made by Congress back then are relevant today.

First, Congress stated that the delivery of North Slope oil to domestic markets "is in the national interest because of growing domestic shortages and increasing dependence upon insecure foreign sources."

Today, the U.S. is still a major oil importer, and market insecurity again threatens those sources: A war with Iraq could destabilize that entire oil-producing region, and Venezuela, the world's fifth-largest oil exporter and a U.S. supplier, is suffering a lengthy strike that has cut its oil production in half. U.S. gasoline prices have risen for six weeks straight.

Second, Congress noted in 1973 that, "because of the extensive governmental studies already made of this project ... the trans-Alaska oil pipeline be constructed promptly without further administrative or judicial delay or impediment."

Today, the pipeline has again been the subject of extensive government study. The environmental document for the right-of-way renewal is more than 1,600 pages and was the subject of six public meetings around Alaska.

Now a third point exists in favor of legal protection for the pipeline.

Sen. Murkowski's proposal comes at a time when environmentalists are skillful fighters. Left without the congressional and White House support they enjoyed in the 1970s, they are turning more to the remaining branch of government, the judiciary, and are scoring major victories.

Since the arrival of the Bush administration, courts have upheld new clean air standards for vehicles and power plants, blocked oil and gas exploration in Utah and reinstated a Clinton-era rule to prevent logging and road construction in nearly 60 million acres of national forests, including areas of the Tongass National Forest in Southeast Alaska.

The successes haven't gone unnoticed at the Interior Department, where the undersecretary of natural resources and environment acknowledged recently that environmental groups have been highly effective in choosing their targets.

Pipeline critics say they were, until Sen. Murkowski's proposal, considering action against the current right-of-way renewal. It wouldn't have been the first time: In 1970 they used the courts to tie up the budding pipeline project for three years, ultimately leading Congress to overcome the challenge by bypassing environmental law.

Exempting a project from legal action, essentially denying a citizen the ability to sue, should be done sparingly. But in this case, and for the national interest and the well-being of Alaska, approval of Sen. Murkowski's proposal is the right decision for Congress to make and for the president to agree with.

We don't want to hear that hollow sound in the pipeline just yet.

www.nola.com Saturday February 01, 2003 By Karen Turni Bazile St. Bernard/Plaquemines bureau

St. Bernard Parish and its insurer will pay $1.15 million to settle a class action lawsuit stemming from a January 1998 refinery discharge that allegedly tainted the parish's drinking water, attorneys said Friday.

The settlement, which still must be approved by the Parish Council at Tuesday's meeting, will save the parish the legal expenses that were expected to mushroom had the parish continued fighting the lawsuit.

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The pending settlement leaves Chalmette Refining LLC as the only defendant in the suit, which is set for trial June 9.

The parish's share of the settlement will be $180,000, said J. Wayne Mumphrey, the attorney representing the parish in the matter. It already has paid about $200,000 in legal fees in the four years that Mumphrey and a team of up to five attorneys represented the parish in the matter, which included a three-week trial in 2000 over whether the case should be tried as a class action lawsuit.

The parish's insurer, Genesis Insurance Co., will cover the rest of the settlement, $970,000. The parish, as part of its insurance policy, must pay the first $250,000 of expenses with the insurance company covering the next $1 million. Anything over that amount would have had to come from the parish's general fund.

"I'm just pleased beyond belief to get us out of this mess," Mumphrey said. "The parish is not admitting any negligence or wrongdoing. It's just a compromise that is based on good business sense. Our legal fees and defense costs from now to this trial would have been more than $180,000."

Sidney Torres, one of the plaintiffs attorneys, called the settlement "fair and equitable" to both parties, adding that plaintiffs attorneys agreed to the settlement because the parish had limited liability and limited insurance coverage.

Plaintiffs attorneys have said the refinery should pay to move the parish's water intake pipe, which is just downriver from the refinery.

At this point, it's unclear how much money the plaintiffs' attorneys would receive from the settlement and how much their clients would receive. The money will be placed in an interest-bearing account until the trial with the refinery is complete.

There are 9,000 plaintiffs in the suit, a number that could still grow. Should the plaintiffs prevail, state District Judge Walter Kollin, who is hearing the case, will ultimately decide the rate attorneys receive.

Kollin made a ruling in April 2000 certifying the suit as class action. The plaintiffs claim they became ill after chemicals discharged by the refinery during a heavy rainstorm seeped into the parish water plant.

Kollin said the class action certification doesn't assign blame to the parish or the refinery, which is a joint venture co-owned by Exxon Mobil Corp. and Petroleos de Venezuela, the state-owned oil company of Venezuela; that will be decided at trial. . . . . . . . Karen Turni Bazile can be reached at kturni@timespicayune.com or (504) 826-3835.

www.bismarcktribune.com By MARK HANSON, Bismarck Tribune

Filling a 12-gallon tank with regular unleaded gasoline will cost you $1.20 more today than if you had refueled earlier this week. The price for a gallon of gas in Bismarck jumped from $1.49 to $1.54 during the middle of the week, and then to $1.59 by the end of the week.

And if certain world situations remain the status quo, that price may just climb even higher.

We're paying more at the pump mainly because today Venezuelan oil workers are entering their 62nd day of a strike. Another factor is the uncertainty of what the United States will do about Iraq.

Ron Ness, executive director of the North Dakota Petroleum Council, said the Iraqi situation is just a minor factor in crude oil prices, and subsequently gasoline prices, increasing.

"Venezuela is much more serious than Iraq," he said.

A lot of refined oil is piped up from the Gulf. Venezuelan crude oil makes its way to refineries in Mexico before coming into the United States as gasoline.

"Venezuela doesn't get as much media attention as it deserves," Ness said. "It's much more volatile."

It's such a big deal because Venezuela is the world's No. 5 oil exporter and key supplier to the United States. The country normally ships more than 3 million barrels a day, but was down to about 200,000 barrels a day in December. It was reported Friday that output stood at just a little more than 1 million barrels.

Russ Hanson, president of the North Dakota Petroleum Marketers Association, said the increase in crude oil prices has boosted wholesale gasoline prices. Hanson said he thought prices at the pump would have climbed sooner because of the wholesale price increase.

Arch Simonson, owner of Simonson's Station Stores across the state, including Bismarck, said prices are up at the pump simply because wholesale prices are up.

According to a Washington Post story, the rule of thumb among oil economists is that for every $4 increase in the price of a 42-gallon barrel of crude oil, the price at the pump jumps 10 cents a gallon. Crude oil prices Friday were about $33.50 a barrel. It was $28 a barrel in November.

So, if the situation in Venezuela doesn't improve, and the United States goes to war against Iraq, we could see crude oil prices continue to rise and the price at the pump go higher.

As Hanson said, if we have an extended war, and if Iraq president Saddam Hussein decides to harm the oil infrastructure in Iraq, much like he did when he set oil fields on fire in Kuwait at the end of the 1991 Persian Gulf War, "then it could be painful for a while." (Reach reporter Mark Hanson at 250-8264 or mark@ndonline.com.)