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Why Can't Big Oil Match Hugo Chavez?


By Tim Padgett From TIME Four years ago, Hugo Chávez scored one of the more impressive p.r. coups of the new century when he started delivering free heating oil to low-income Americans. Even if it was political opportunism, as conservative critics insisted, it got home-heating fuel to hundreds of thousands of yanquis during the past four winters, when the price was often skyrocketing. On Monday, however, with world oil prices plunging, the Venezuelan President decided to suspend his large-scale, multistate U.S. program in order to tend to financial concerns at home. Then on Wednesday, at the urging of U.S. politicians whose constituents had come to rely on the oil, Chávez reversed himself and said the heating oil would keep flowing this winter. All of which raises the question: If Chávez can keep donating fuel even as his oil revenues tumble, why can't any U.S. oil companies step up to do the same? (See pictures of the global financial crisis.) The left-wing Chávez caught Washington by surprise in the fall of 2005 when he announced that Citgo — the Houston-based subsidiary of Venezuela's state-run oil firm, Petróleos de Venezuela — would give millions of gallons of heating oil at half price, and eventually free, to struggling households in the American Northeast and Midwest. By this year, the service has expanded to more than 200,000 families in 23 states. The partisan controversy around it has also grown. Republicans grouse that taking fuel from Chávez, America's chief antagonist in the hemisphere, is unpatriotic and simply aids his anti-U.S. foreign policy. Democrats and advocates for the poor disagree. In a website video for Boston-based Citizens Energy, which helps distribute the Citgo oil, director Joseph Kennedy, son of Senator Robert Kennedy, says, "Some people say it's bad politics to [accept the fuel]. I say it's a crime against humanity not to." Chávez was responding to members of Congress who had made a public plea for oil companies to provide lower-cost home-heating oil to U.S. families squeezed by the rising price of fuel. No U.S.-owned firm stepped forward; Citgo did. (Sunoco has since set up a program that provides free heating oil to 1,100 residents in the Philadelphia area.) Admittedly, it was a chance for Chávez to showcase "one of our revolution's most important principles," as then Venezuelan Ambassador to the U.S. Bernardo Alvarez told TIME in 2006: "the redistribution of oil revenues, especially for the poor." But the plummeting price of crude forced Chávez, who controls the hemisphere's largest oil reserves and is a major U.S. supplier, to turn off the Citgo spigot this week and focus more of his aid resources at home. Critics of Chávez point out that his need to shore up domestic funds is even more urgent because he's trying to win support for a national referendum, probably to be held next month, on whether to eliminate presidential-term limits and let him run again in 2012. But late Wednesday afternoon, Citgo and Kennedy announced a reversal. Kennedy thanked Chávez for his "genuine concern for the most vulnerable," adding a bit of political choreography for the Venezuelan's benefit: "This decision is a clear, direct message from President Chávez of his desire to strengthen relations between his country and the U.S.," he said, "particularly at this time, when a new U.S. Administration is scheduled to be sworn in within the next few weeks." With or without Chávez's oil, U.S. homeowners are facing lower heating costs this winter: about $2.25 per gal. of heating oil, compared with a record high of more than $4.50 last year. Still, those households are also confronting the worst economic crisis since the Depression and the unemployment and precarious finances that come with it. As a result, politicians like Democratic U.S. Representative Chaka Fattah, many of whose Philadelphia constituents have received the Citgo fuel, wonder why U.S. oil giants like ExxonMobil — which saw a record $40 billion profit in 2007 and probably broke that in 2008 — don't take advantage of the same p.r. boon that Chávez reaped. "There is no doubt that the Exxons in this country should be participating in a program like this," says Fattah. "It is vitally important, and it would cost them comparatively little when you consider what they've been making." ExxonMobil spokesman Kevin Allexon told TIME that the company "shares concerns about the challenge of meeting the winter heating needs of those who cannot afford the cost." But "it is our view that government programs to assist low-income families with their heating-oil requirements are the best way to address these needs." Allexon is referring specifically to LIHEAP, the federal Low Income Home Energy Assistance Program. It is supposed to provide about $5 billion in home-heating-fuel aid, but in recent years it has seen only half that. President Bush even tried to reduce fiscal 2009 LIHEAP funding to about $2.14 billion, but Congress, in the face of stratospheric fuel costs in 2008, authorized $4.5 billion instead. (ExxonMobil insists it has lobbied for full LIHEAP funding.) It's unlikely, however, that the crisis will allow Washington to keep LIHEAP at that level in the next federal budget — making it just as important, say advocates, that one or more U.S. oil companies pitch in alongside Citgo. President-elect Barack Obama pledged during his campaign last year to force something similar: a windfall-oil-profits tax that would effectively make Big Oil fork over an "emergency energy rebate" for low-income households. But as his Jan. 20 Inauguration approaches, Obama seems to be backing off. So America's fat petro-cats will probably be off the hook again. They'll remain safe inside their arguments that heating-oil aid to the poor should be the purview of the government — as strange as that may sound coming from an industry that was so tight with an outgoing President who championed private charitable initiative over public handouts. What's left is the irony that for four winters now, hundreds of thousands of Americans have had more reason to thank one of the world's most anti-U.S. leaders than their own President or oil companies.