Venezuela’s state-owned oil company wants to offer deeply discounted home heating oil to American Indian tribes throughout the Pacific Northwest.
Representatives of oil-giant Citgo Petroleum Corp. have contacted the Tulalip Tribes, the Yakama Nation in central Washington, the Nez Perce and Coeur D’Alene tribes in Idaho and many others with information about a possible 40 percent discount on home heating oil.
Citgo is a Houston-based subsidiary of an oil corporation controlled by Venezuela and Hugo Chavez, its controversial elected president who has been called a dictator by U.S. leaders.
The idea of bringing discounted heating oil to West Coast American Indian tribes is still in the exploratory stage, Citgo spokesman Jorge Toledo said.
“We’re going to meet with some tribes in the West Coast within the next few weeks to consider the feasibility of a program there,” he said. There’s a local meeting scheduled for Wednesday at a hotel in SeaTac.
Heating oil is widely used on the East Coast, but has largely, though not entirely, been replaced by natural gas in the West. Heating oil is essentially the same product as diesel fuel.
Savings for tribes
Citgo first delivered discounted heating oil to low-income communities last year in Massachusetts, New York and other Northeast states.
With the motto “From the Venezuelan heart to the U.S. hearths,” Citgo sold fuel to eligible homes and nonprofit organizations.
By spring, Citgo delivered nearly 40 million gallons of heating oil to 181,000 households in the Northeast, Citgo President Felix Rodriguez said.
Citgo’s offer comes amid a war of words between Chavez and President Bush.
Chavez is arming his country against what he contends is an impending American invasion, and opposes capitalism. The Bush administration is warning that Chavez is a “negative force” in South America, which is still recovering from decades of dictatorships.
The city of Chicago declined a deal with Citgo for fueling public buses, which could have saved the city $15 million. City leaders said they were reluctant to deal with Chavez.
Chavez has signed energy deals with France, India and China, and is looking for other allies against “the imperialist power,” according to the Washington Post.
Even so, the Citgo heating oil program is winning fans.
When members of the Penobscot Nation in Maine heard about the program in October, they contacted the Venezuelan embassy and asked if they were eligible.
“Within 24 hours, the embassy’s response was, ‘Yes, they are,’ and it stunned us,” tribal chief James Sappier said.
Within weeks, Sappier and leaders of three other tribes met with Citgo. In February, they bought nearly 1 million gallons of heating oil, enough to heat 912 family homes and several tribal complexes through the winter.
Tribal members paid $1.47 per gallon for heating oil that would have cost them $2.52 per gallon, Sappier said. They saved more than $1 million.
“This has been one of the best things we’ve ever done for Indians and our tribe,” he said.
So far East Coast tribes haven’t resold the heating oil, though some tribal leaders are discussing selling other types of fuel from Citgo to raise revenue.
Going nationwide
Citgo sent representatives to a national tribal conference in May to spread the word about the fuel discount.
“It’s exploratory at this stage,” said David Conrad, director of the National Tribal Environmental Conference. “They want to see if there’s enough people on home heating oil to make enough economic sense to expand it to those states.”
Citgo also has contacted tribes in the Southwest, where discussions have just started.
In the Pacific Northwest, many tribal leaders know little more than what was said in an e-mail brochure from Citgo that began circulating this week.
Steve Gobin, deputy general manager of the Tulalip Tribes’ Quil Ceda Village, said he plans to attend the meeting.
There are only four or five families on the Tulalip Reservation that currently receive assistance from the tribe with their home heating oil, but Gobin suspects there may be other families who could qualify for a discount.
About 6,000 homes in Snohomish County heated their homes with oil in 2000, according to U.S. census data.
Citgo isn’t saying how it would deliver fuel locally. On the East Coast it used local distributors.
Most heating oil burned in the Pacific Northwest is refined at four refineries in the Anacortes and Ferndale areas, said Lea Wilson, executive director Washington Oil Marketers Association. The refineries convert crude oil into heating oil, diesel, gasoline and aviation fuel.
About half the region receives fuel transported by Olympic Pipe Line Co., which starts in Blaine, stretches south through Snohomish County, and ends in Vancouver, Wash.
Wilson said Citgo could buy heating oil from one of the refineries and ship it through the pipeline. A tanker also could deliver it directly. She said she’s not familiar with Citgo’s plan.
Corporate generosity
Citgo spokesmen describe the program as an indicator of corporate responsibility.
The discounted oil is a donation and tax write-off for Citgo, Sappier said.
Citgo officials say the program is a response to a letter U.S. lawmakers, including Sens. Maria Cantwell, D-Wash.; Hillary Rodham Clinton, D-N.Y.; John Kerry, D-Mass.; and others, sent to oil companies. They asked the companies to help ease the financial burden of high fuel costs on America’s poor.
“The only company that responded was Citgo,” Sappier said. “Where the devil is Exxon or Shell?”
Chavez’s fuel program has improved life for thousands of American families in need, Sappier said. Now, the Penobscot Nation’s Web site features photos of Chavez taken on a tribal trip to Venezuela.
Attacks on Chavez by U.S. officials “demean” the best fuel program in the nation. “It has come from another country, but it’s the best,” Sappier said.
Oil and politics
Recent barbs traded by Chavez and Bush could scare tribes away from Citgo, Conrad said.
“It’s just a business deal,” he said. “I don’t know that there’s any political lay to it other than just background noise.”
Bush has likened Chavez to Hitler. Chavez has repeatedly referred to Bush as a “terrorist” and “a madman.”
In brochures circulated among Pacific Northwest tribal leaders, Chavez said the program brings a better life to the poorest and most vulnerable people.
“This program fulfills a promise I made to the people of the United States, and it is a gift warmly given to our American friends,” Chavez said.
Cantwell did not respond to questions about whether the letter she signed has attracted Chavez to the state.
In an e-mail, Cantwell said she welcomes any oil company’s efforts to help low-income families pay their heating bills.
Cantwell spokeswoman Charla Neuman later said in an e-mail that what matters is that this program could help Washington state families, regardless of political motivation.
“I don’t think any of us really believe oil companies make decisions from their hearts,” Neuman said.
Reporter Krista J. Kapralos: 425-339-3422 or kkapralos@heraldnet.com.
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