Baldacci's oil deal with Venezuela a hot idea

Monday, January 16, 2006

Do not fault Gov. John E. Baldacci for doing whatever it takes to keep low-income Mainers warm this winter -- even if it means accepting cheap oil from a South American dictator who has chilly relations with President Bush.

If there is fault, it is with the U.S. government, whose national energy policy has put Baldacci and other governors in the position of having to find affordable oil wherever they can.

Baldacci announced last week that Venezuela had agreed to sell discounted oil to Maine in a deal that will provide about $5.6 million in cash to help poor Mainers heat their homes in the coming months.

The agreement means the 48,000 Mainers enrolled in the Low Income Home Energy Assistance Program, or LIHEAP, will receive an additional $100 worth of heating oil at a time when prices remain at historic highs.

In addition, Citgo, a Houston-based subsidiary of Venezuela's state-owned oil company, will donate 120,000 gallons of heating oil to 40 homeless shelters across Maine.

Maine's deal with Venezuela comes about a month after Massachusetts began accepting 12 million gallons of Venezuelan oil at a 40 percent discount. The oil is being distributed statewide by two nonprofit organizations.

Because Maine does not have a nonprofit energy group to distribute oil, Venezuela has agreed to sell 8 million gallons at regular prices on the open market and give Maine a check for an amount equivalent to a 40 percent discount. That would be $5.57 million at a wholesale price of $1.74 a gallon.

The oil donated to Maine's homeless shelters will be delivered by the shelters' heating oil suppliers.

Some in Maine object to the state's deal with Venezuela, whose president, Hugo Chavez, is Latin America's harshest critic of the United States and U.S.-style capitalism.

One of the critics, state Rep. Kenneth C. Fletcher, R-Winslow, said Maine is being forced to accept assistance and even charity from another country because the state has failed to create a long-term energy strategy.

More likely, Maine finds itself needing assistance and charity from Venezuela because of decisions and funding cuts being made in Washington, D.C.

"It seems to be a very shaky strategy to have to depend on another kind of government -- a dictatorship -- for our supply of oil," said Fletcher, the ranking Republican on the Legislature's Utilities and Energy Committee.

Saudi Arabia, Kuwait and many of the world's other leading oil producers are also dictatorships. The United States buys a lot of oil from them, too.

Baldacci is smart not to allow global politics and personal dislikes interfere with a deal that helps needy people in Maine.

We know that Chavez, an ally of Cuban leader Fidel Castro and supporter of Saddam Hussein, has leveled strong and repeated criticisms at Bush, including calling him a "madman."

We also know that last week, just after Baldacci announced the oil deal with Venezuela, the U.S. said it had denied Spain permission to sell 12 military planes with U.S. parts to Venezuela.

Chavez has accused the Bush administration of hypocrisy, of conspiring to overthrow him and of attempting to dominate weaker countries.

Clearly there are not warm feelings between Bush and Chavez.

Baldacci knows it. But to his credit, the governor has not allowed it to be the reason thousands of poor Mainers go cold this winter.