Thousands in Massachusetts to Get Cheaper Oil

By Michael Levenson and Susan Milligan
The Boston Globe

Sunday 20 November 2005

Delahunt, Chávez help broker deal.

A subsidiary of the Venezuelan national oil company will ship 12 million gallons of discounted home-heating oil to local charities and 45,000 low-income families in Massachusetts next month under a deal arranged by US Representative William D. Delahunt, a local nonprofit energy corporation, and Venezuela's president, White House critic Hugo Chávez.

The approximately $9 million deal will bring nine million gallons of oil to families and three million gallons to institutions that serve the poor, such as homeless shelters, said officials from Citizens Energy Corp., which is signing the contract. Families would pay about $276 for a 200-gallon shipment, a savings of about $184 and enough to last about three weeks.

The contract is to be signed Tuesday by officials from Citizens Energy, based in Boston, and CITGO, a Houston-based subsidiary of Petróleos de Venezuela SA. The contract was arranged after months of talks between Delahunt, a Quincy Democrat active in Latin American affairs, and Chávez, a leftist former paratrooper and fierce critic of the Bush administration.

"We recognized that we had an opportunity," Delahunt's spokesman, Steve Schwadron, said yesterday.

Chávez showed "an inclination to do a humanitarian distribution" of oil, and poor families in Massachusetts had a "desperate need" for relief from high home-heating prices, Schwadron said. He characterized the deal as one between "a US company and two nonprofits to help them do more of what they already do, with terms that mean the price is good."

Delahunt was not available for comment yesterday.

Schwadron said the congressman did not get involved in the details of the contract, but had raised the issue with Chávez and helped connect the nonprofits with CITGO, which is owned by PDV America Inc., an indirect, wholly owned subsidiary of Petróleos de Venezuela SA, the national oil company of Venezuela.

When the discounted oil arrives early next month, Citizens Energy - whose chairman and president, former US representative Joseph P. Kennedy II, also helped arrange the contract - will screen recipients with the help of local organizations that serve the poor. Some 350 local dealers will then distribute three-fourths of the oil to local families.

MassEnergyConsumer Alliance, a nonprofit group that also offers discounted oil, will distribute or sell the remaining quarter to homeless shelters, food banks, and low-income housing groups, said Larry Chretien, the group's executive director. Recipients must apply for the help, he said.

Home heating oil prices are expected to increase by 30 percent to 50 percent this winter because of rising oil prices, Chretien said. Because funding for the federal Low Income Heating Assistance Program is expected to pay for only one delivery of heating oil to eligible households, the CITGO agreement could help ease the crunch on some families, he said.

"Fuel assistance is woefully underfunded, so this is a major shot in the arm for people who otherwise wouldn't get through the winter," Chretien said. He said he hoped the deal would present "a friendly challenge" to US oil companies - which recently reported record quarterly profits - to use their windfall to help poor families survive the winter.

Some foreign-policy analysts said Chávez helped broker the deal in part as a jab at President Bush. Chávez has frequently belittled the White House, saying it is not doing enough to help the poor, and he has called Bush an "assassin" and a "crazy man." Now, he has helped arranged for 285,000 barrels of oil to arrive in Massachusetts at a 40 percent discount over the next four months. Each barrel contains 42 gallons.

"It is a slap in the face" to the Bush administration, said Larry Birns, executive director of the Council on Hemispheric Affairs, a group that tracks Latin American politics and government. "Chávez is involved in petro-diplomacy."

Chávez has drawn criticism from human rights groups for his treatment of political foes and curbs on media freedoms. But he has also become a hero to some on the left who say he has helped improve conditions for the poor in his country and drawn attention to US foreign policy in Iraq and Latin America.

On Friday, a US State Department spokesman declined to comment on the oil deal with Chávez.

Schwadron said Delahunt's involvement had nothing to do with Venezuela's strained relationship with the Bush administration and was meant as a specific effort to ease high heating costs for Bay State residents.

Massachusetts already gets a great deal of oil from Venezuela, Chretien said, and the deal with CITGO means only that the oil will be less expensive. He added that he has never been approached with such an offer from a US oil company.

"We did not negotiate foreign policy here," Schwadron said. "We steered clear of that."

Kennedy said he was not concerned about Chávez's politics.

"You start parsing which countries' politics we're going to feel comfortable with, and only buying oil from them, then there are going to be a lot of people not driving their cars and not staying warm this winter," Kennedy said. "There are a lot of countries that have much worse records than Venezuela. At the end of the day it's not our business to go choosing other peoples' leaders, particularly when they are duly-elected democratic leaders."

Kennedy said Delahunt has been working with Chávez "for years now and has gone down there many times and developed a personal relationship with him."

Chávez has used his influence in the global market before.

In August, he offered discounted home-heating oil to poor communities in the United States after meeting in Caracas with the Rev. Jesse Jackson.