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Congressman Brings Home The Fuel
From An Unorthodox Supplier

Venezuela's Chávez Sends Heating Oil to Massachusetts' Poor

MARK CLAYTON / Christian Science Monitor 25nov2005

[Mindfully.org note: Articles about NY and RI below]


Congressman Brings Home The Fuel From An Unorthodox Supplier: Venezuela's Chávez Sends Heating Oil to Massachusetts' Poor. MARK CLAYTON / Christian Science Monitor 25nov2005

BOSTON — Linda Kelly of Quincy, Mass., and her family will get some help with their heating bills this winter, courtesy of Venezuela's President Hugo Chávez, who evidently can feel a US chill way down in Caracas.

This week's announcement that Venezuela will sell 12 million gallons of heating oil — at a discount — to help Massachusetts' neediest citizens is part political theater to tweak the Bush administration, part PR campaign for Mr. Chávez, and, some allow, part gesture of help.

"Our objective is simple: to help people of limited means through the winter," said Felix Rodriguez, chief executive officer of Citgo, the US-based refining subsidiary of Venezuela's state-owned oil company.

A deal to supply oil to New York — and possibly other US cities — is in the works.

Behind these pacts are influential Americans with close ties to Chávez — in Massachusetts' case, a US congressman who worked behind the scenes for some time to secure the oil. It's an indication that Chávez, who was castigated in Congress just last week for aligning himself with the likes of Fidel Castro and the late communist revolutionary Che Guevara, is not without friends in America.

But some analysts see such oil deals as carrying a hidden price tag in the long term: bolstering Chávez's government.

"It's a populist move by Chávez and his government," says Gal Luft of the Institute for the Analysis of Global Security in Washington, an energy security think tank. "They're trying to offer cheap oil to curry favor with the American people to provide some political relief at time when relations between the two countries are not good."

In some ways, the oil pact should not be a surprise, fitting Chávez's pattern of diplomacy.

"He's been going around the continent giving money away, subsidizing every country in the region, and this move is part of that," says Ricardo Hausmann, an economist at Harvard's Kennedy School of Government and a former Venezuelan planning minister. "Such things are meant to make it harder for a political coalition to limit his actions."

Like 45,000 needy Massachusetts families, Mrs. Kelly's will get an extra load of fuel oil delivered to her home if she needs it — at a 40 percent discount, a savings of about $184.

In total, those savings for Americans will cost Venezuelans, who on average are much poorer, about $8 million. But it's worth every penny to Chávez, whose current global charm campaign involves using petro-dollars to quiet critics and win goodwill, several experts say.

Chávez has been in tit-for-tat mode with the Bush administration for several years. But anxiety has been building in Congress, too, as Chávez stokes his brand of "21st-century socialism" across Latin America.

"We want to help the poorest communities in the US," Chávez said in August. "There are people who die from the cold in winter in the US."

Besides needling the White House, Chávez's show of generosity may be aimed at casting his policies in a positive light for Venezuelans, who vote in December in a legislative election. Earlier this month at a summit in Argentina, Chávez led opposition to a Bush-backed free-trade agreement among countries in the hemisphere.

"This is precisely what he loves to do — embarrass the White House, show that the US doesn't take care of its own, and that the approach he's devised in Venezuela is superior," says Michael Shifter of the Inter-American Dialogue, a Washington think tank on Latin America.

A big reason Chávez is so attuned to the problem of $1.77-a-gallon heating oil in New England is US Rep. William Delahunt (D), who has been cultivating his contacts with Venezuela's president since 1999. In a private conversation with Chávez a few weeks ago in Caracas, Mr. Delahunt reminded him that there are many poor in the US who need help, says Larry Chretien, director of Massachusetts Energy Consumers Alliance, which is helping to distribute the oil.

On top of that, US oil companies told Congress in recent hearings they couldn't do much to relieve the burden of high heating-fuel prices on the poor this winter.

"It is gratifying that at least one major oil company is willing to step up to help — and voluntarily and at its own expense," Mr. Delahunt said in a statement Tuesday. At a press conference in Quincy the same day, he defended the deal with Chávez. "This today is about people, it's not about politics," he said.

The Bush administration has generally supported Delahunt's efforts to reach out to Chávez, whose country sends 60 percent of its oil to the US. But others say the Massachusetts deal is all about Chávez's aim to inherit Mr. Castro's mantle, win reelection next year, and remain a thorn in the side of US policymakers in Latin America.

"The point he's trying to make is that not only can he take care of the poor in Venezuela, but he can do it in the world's richest country, too," says Mr. Shifter. "It's shrewd political theater."

source: http://www.csmonitor.com/2005/1125/p03s03-usec.html 27nov2005


Citgo May Bring Discounted
Heating Oil to Rhode Island

TIMOTHY C BARMANN / Providence Journal 23nov2005

Nov. 23—Low-income households in Rhode Island may receive discounted home heating oil provided by Citgo Petroleum Corp. this winter.

The Houston-based company said it wants to provide help to low-income families in U.S. cities where the company has a presence.

Yesterday, Citgo launched the first such initiative in Massachusetts, where the oil giant agreed to deliver 12 million gallons of heating oil to be distributed to low-income communities across that state.

The oil will sell for 60 cents to 80 cents below the regular price, saving customers $10 million to $14 million this winter, Citgo said yesterday.

The company said it plans to offer similar heating assistance programs in New York and in other states, although it has not offered any other details.

A letter sent by a Citgo executive last week to Sen. Jack Reed said the company is interested in providing assistance to the Ocean State.

"Based on our data analysis of home heating oil usage and Citgo's presence as both a marketer and employer in Rhode Island, your state is one that Citgo would like to further explore implementation of a potential energy assistance program," the letter said, signed by Rafael Gomez Abreu, vice president of strategic relations for Citgo.

About 42 percent of Rhode Island households, or 172,000, heat with oil, according to the 2000 U.S. Census. About 46 percent use natural gas.

Citgo employs about 460 people in the state, according to the letter, and the company has 36 branded gasoline stations statewide.

"Citgo believes that it is crucial to act as good corporate citizens and help those in need as circumstances allow in our states and regions of operations," Gomez Abreu wrote.

The letter was sent as a response to a letter Reed wrote to Citgo, and to several other major oil companies, last month. In light of the industry's record profits in the third quarter, Reed asked the energy companies to donate 10 percent of their profits to heating assistance programs.

(Reed has also introduced legislation that would establish a windfall profit tax on excess oil profits. Those efforts have failed in the Senate.)

Citgo was the only company to respond to his letter, Reed said in an interview yesterday.

"They are following through," Reed said. "I think they have to be given credit for that."

Asked why he thought the oil company was offering help, Reed said: ". . . I think they see an opportunity to get some very positive attention with respect to heating assistance in New England and other parts of the country. It gives them a way to differentiate themselves from other big oil companies that seem to be oblivious to the issue and are not trying to be helpful."

Citgo is a subsidiary of Venezuela's state oil company, Petroleos de Venezuela (PDVSA), and some foreign-policy analysts have suggested that Citgo's actions could be viewed as a jab at President Bush. Venezuelan President Hugo Chavez has been a critic of Mr. Bush, saying that he has not done enough to help the poor.

Reed said he doesn't see it that way.

"I don't think this is any great political public relations coup," he said. "Historically, people see Citgo as a local company." The first thing that comes to most people's mind is the large sign at Fenway Park, not international politics, he said.

The assistance comes at a time when financing for federal Low Income Home Energy Assistance Program grants has not been completed by Congress. Right now, it stands below last year's amount and what money is available won't go as far, since energy prices are higher this year. Households that heat mainly with oil can expect to pay, on average, $325, or 27 percent more this winter than last, according to the U.S. Energy Information Administration's forecast issued Nov. 8.

In Rhode Island, 21,250 people have applied for LIHEAP grants so far this year, up 7.3 percent from this time last year, said Matteo P. Guglielmetti, who coordinates the energy assistance program for the state Energy Office.

source: http://www.redorbit.com/news/science/312917/citgo_may_bring_discounted_heating_oil_to_rhode_island/index.html?source=r_science 27nov2005

Venezuela's Leader to Send
Heating Oil to South Bronx

JONATHAN P. HICKS / New York Times 26nov2005


A group of South Bronx residents will soon receive a large - and inexpensive - shipment of heating oil, courtesy of President Hugo Chávez of Venezuela, a frequent thorn in the side of the Bush administration.

Under an agreement between President Chávez and United States Representative José E. Serrano, Citgo, the Houston-based American subsidiary of Venezuela's state-owned oil company, will provide eight million gallons of discounted heating oil this winter to thousands of low-income residents of the South Bronx.

The populist government of the Venezuelan president is one of Latin America's most vocal critics of American-style capitalism. Mr. Chávez has led anti-Bush rallies in his country and has accused the United States of trying to kill him and invade his country.

The oil should start arriving late next week or early in the week of Dec. 5, Mr. Serrano, a Bronx Democrat, said in an interview yesterday. He said that the oil would be provided at 40 percent below the market rate.

"This is something that came as a result of conversations between me and President Chávez," Mr. Serrano said. "As part of our talk, he suggested that he wanted to ask Citgo to make home heating oil available to the poor of the South Bronx at a lower rate."

Mr. Serrano said that the agreement provided "an incredible message to other oil companies."

"It tells them," he said, "that that if these people in Venezuela can share their profits with poorer communities, then they should, too."

Earlier this year, two nonprofit Massachusetts groups signed an agreement with Citgo to provide discounted heating oil this winter to thousands of low-income residents.

Mr. Serrano said that there were some challenges in fine-tuning the program in the Bronx that were not encountered in Massachusetts.

In New York, he said, most of the low-income residents rent their apartments as opposed to being homeowners, as in Massachusetts.

The congressman added that the priority was to administer the program in such a way that the savings were passed to residents.

"In New York, most of the landlords are private landlords, and we don't really know how to get them to pass along those savings to the renters," Mr. Serrano said. "We suggested to the president that we start off with three nonprofit affordable housing community corporations in the South Bronx."

Initially, Mr. Serrano said, the program will involve residents in about 200 apartments. He added that the agreements with the nonprofit groups call for residents to receive vouchers for rent reductions and for "infrastructure and quality-of-life improvements" in the buildings.

source: http://www.nytimes.com/2005/11/26/nyregion/26oil.html?pagewanted=print 27nov2005


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