Alaskans Benefit from Free Venezuelan Heating Oil

Map reflects 2007-'08 winter. Source.
Venezuela's Chavez offers heat to villages
By Kyle Hopkins / November 28, 2008

VENEZUELAN OIL: Controversial but free program in 3rd year.

With heating oil prices approaching $10 a gallon in rural Alaska and reports of neighbors stealing fuel from neighbors to warm their homes, a Venezuela-owned oil company plans to supply free fuel to villages again this winter.

That's what a Citgo executive who oversees the company's free heating oil program told the Alaska Inter-Tribal Council earlier this month, said council director Steve Osborne.

Citgo has provided roughly 15,000 Alaska village households 100 gallons of heating oil each for the past two winters. If the company donates the same amount this year, some families will save as much as $1,000 on their fuel bills. It's part of a program providing assistance to low-income communities in 23 states.

In the Inupiat village of Noatak, north of Kotzebue, heating oil sells for $9.79 a gallon. Villagers are crossing their fingers for the Citgo assistance while locking their fuel tanks under plywood and padlocks to protect them from thieves, said Eugene Monroe Sr., a local councilman.

"You got to be watching your tank all the time," he said.

But the free oil comes with political baggage, particularly in an oil-rich state with a potential presidential candidate for governor.

Venezuelan President Hugo Chavez is a proud socialist who once referred to President Bush as "the devil" before the United Nations. He teamed with Iran to fund other nations' efforts to, as Chavez put it, "liberate themselves from the (U.S.) imperialist yoke."

The fact that the heating assistance is coming from Chavez led some eligible Alaska communities -- such as St. Paul -- to reject Citgo's gift in the past.

It would have been unpatriotic to participate, said Steve Senisch, a local councilman who voted against the gift in 2007.

He predicted the council will vote the same way this time.

"I don't think the rhetoric coming from Hugo Chavez has really changed in any way."

But Osborne said that villages that once opted out of the program, such as St. George, plan to participate this year as Citgo's program grows internationally and prices remain high in rural Alaska.

Melanie Edwards lives in Nome, where she's the vice president of the regional nonprofit that manages the heating-oil program for more than a dozen nearby villages.

"Last time I checked, (Citgo is) paying corporate taxes to the U.S. Treasury," she said. "And we figure until such time that the U.S. government is so offended by Venezuela and Citgo that they're not accepting any more funding, then we're not being unpatriotic by accepting the same."

RESOURCE REBATE HELPED

High fuel prices this year filled Alaska's coffers even as residents struggled to pay their bills. In response, the state gave all Alaskans a $1,200 "resource rebate" at the urging of Gov. Sarah Palin.

Palin's team is now working on the state budget and new state energy plan. She's also fresh off her vice presidential bid, where Sen. John McCain presented her as a leading expert on energy policy.

Palin's office did not respond to questions Wednesday about the governor's stance on the Citgo program, and whether she would call for another round of state-funded energy relief next year.

Anchorage Rep. Bob Lynn, a Republican, said he doubts the state would cut checks again because oil prices are dropping and the payment was meant to be a one-time measure.

Lynn said it's not right for Alaska to receive oil from Chavez. "We need to be able to take care of our own. The United States needs to do something about this," he said.

Still, Lynn added later, "It's one thing for me to speak philosophical thoughts here in the warmth of my home in Anchorage. It's another thing to have a wife and kids in danger of freezing to death out there."

VILLAGE COSTS LOCKED IN

Branson Tungiyan grew up in the St. Lawrence Island village of Gambell and is now the general manager.

Come January, when temperatures sink to 20 and 30 below, he'll burn up to 30 gallons of heating oil a week, he said.

But the cost has jumped from $4.75 a gallon last year to $7.65. And unlike the cities, where local fuel prices dip along with the national market, the village price is locked in place all winter.

It won't change again until the next supply barge arrives sometime this summer, Tungiyan said.

Villagers are turning to hauling driftwood that washes ashore about 10 or 15 miles out of town and burning it for heat, he said.

"We feel for our government, but we also have more concern to our families' survival to have heat in our homes ... That's what I meant by leaving politics to the politicians."

This week, the local tribal government approved a gift of its own -- 30 gallons of heating oil per household, to help with the bills, he said.

PROGRAM FOR U.S. POOR

Citgo Petroleum Corp. started the heating assistance program in 2005 after Hurricane Katrina flooded New Orleans and Chavez toured poor neighborhoods in the Bronx, officials said in 2006.

Venezuela is one of the world's top oil-producing nations and now provides low-cost or free fuel in 23 states. In 2006, New Hampshire refused the free oil, saying it was an attempt at political grandstanding by Chavez. But this year state officials changed their minds in the face of rising fuel prices, according to The Associated Press.

Company spokesman Fernando Garay, in Houston, declined to talk about the company's plans for Alaska this week. "We cannot discuss it at this point in time and once the program is approved, we will release all the pertaining information."

But over the past two winters, Citgo donated roughly 4 million gallons of oil worth more than $15 million, the company said.

About three weeks ago, a Citgo executive called Osborne at the AITC and said the company was "planning on doing the program" again this year.

The paperwork isn't finished, Osborne said.

So is there a chance Citgo wouldn't provide the aid?

"Boy, I don't think there is a way. They're good at their word," Osborne said.

The gift is available to anyone who lives in an Alaska community that is more than 70 percent Alaska Native, said Osborne, who hopes to see the program expand to other rural towns and even cities such as Anchorage and Fairbanks in the future.

Citgo doesn't actually send oil to Alaska.

Last year, the company gave oil to a nonprofit, Citizens Energy Corp. -- founded by former U.S. Rep. Joe Kennedy -- which in turn sold the oil and delivered the money to the Alaska Inter-Tribal Council, which manages the program in Alaska.

Fewer households appear eligible for the program this year because local nonprofits are finding fewer families living in Alaska Native communities, Osborne said.

"You always hear about villages closing or people moving out of villages. ... the numbers that I've received so far would seem to indicate that is the case," he said.

CONCERN IS GENERAL

With Alaskans in villages and cities alike calling for help with energy bills this year, governments at all levels are kicking in money to curb costs.

Rocketing fuel prices and worries of a migration from villages to cities dominated the Alaska Federation of Natives annual meeting in October, where Sen. Lisa Murkowski said the federal government is doubling the amount of money it's sending to Alaska to help low-income families heat their homes.

Congress approved $34 million for Alaska this year through the federal program, which is called Low Income Home Energy Assistance and sends aid to families with incomes at or below 150 percent of the federal poverty level.

Households that make slightly more money can apply for a similar state program created by the Legislature this year. Lawmakers appropriated $10 million for that program and the money is being distributed now, said Ron Kreher, chief of field operations for the state Division of Public Assistance.

President-elect Barack Obama's transition team has invited the Alaska Inter-Tribal Council and other tribal leaders from around the country to meet in Washington, D.C., on Dec. 8, Osborne said.

Obama's team wants to hear two or three priorities that the tribes think the new president should focus on, he said.

"One of them will be, I think, that energy crisis."

Meantime, the state is working on a long-term energy plan that's expected to be unveiled in time for the Legislature to consider in January.

Source / Anchorage Daily News

Thanks to Betsy Gaines / The Rag Blog