LIBERTY GASOLINE IS GOOD NEWS

On a whim today, I decided to research these new Liberty gas stations that are becoming ubiquitous in the Tri-State area of Maryland, the District of Columbia and Virginia. Imagine my surprise to learn that this gasoline supply outfit is a Virginia founded and operated company, and pumps up fresh American Gulf of Mexico crude via pipelines to Fairfax and Richmond refineries. It's a remarkable story. Finally my conscience can rest. Goodbye Saudi and Venzuelan oil.

For my research efforts, I now have a family gasoline pump wholly American, and I salute with all I have—dear Virginia Liberty!

Thank you, Mr. Holtzman...

THREE AREA OIL PRODUCERS qt the turn of this new century were tired of competing against Sheetz's low gasoline prices so they did something about it. They formed Liberty Petroleum LLC to sell unbranded gas at some of their convenience stores.

In 2001, Bill Holtzman, owner of Holtzman Oil in Mt., Jackson, (Shenandoah County) Va., has joined with Blackie Bowen of Ewing Oil in Hagerstown and Frayser White of Valley Oil in Charlottesville to form the new company. Earl Cox, a former oil industry executive, is heading up the Liberty Petroleum operation based in in Staunton, Va.

Holtzman said the three Liberty owners met while serving on committees with major oil companies. "I said that I was going into the private brand business. The three of us said, 'Yes, it's a good idea to join together because we're not in each other's territories.' That was about a year and a half ago, and now things are really rolling."

Within the next few years, the trio hopes to sign up 90 oil distributors (also known as jobbers) to form a group of as many as 2,000 C-stores east of the Mississippi selling private-branded Liberty gasoline. About 95% will be conversions of existing stations, the balance new builds.

"Liberty is a LLC and the three of us own it," said Holtzman. "It's like a major oil company. Holtzman Oil, Ewing Oil and Valley Oil will all buy from Liberty, and Liberty will sell to other jobbers. We just picked up another one in Bedford [Pa].

"It could snowball with monster numbers. There are lots of jobbers who need a private brand. For gasoline customers, it's 40% who buy by brand and 60% who buy on price. This puts us on both playing fields and gives us the ability to compete with Sheetz."

Altoona, Pa.-based Sheetz has 270 C-stores, mostly in Pennsylvania, Maryland, West Virginia and Virginia. Its sales are estimated by Hoover's Online to be $1.6 billion, or about $5 million per store. Another competitor, mainly in Pennsylvania, is Wawa with 500 stores that do about $1 billion in annual sales.

In the past, Holtzman and Bowen have spoken out against Sheetz's business tactics. Holtzman complained about a so-called Sheetz C-store at the Mt. Jackson Interstate 81 exit really being a truck stop, while Bowen testified before the Maryland legislature in support of a law that would outlaw pricing gas below wholesale cost. It passed, as did similar legislation in Pennsylvania and West Virginia that prevents gas retailers from selling below cost for extended periods of time to drive out local competition.

The Liberty Petroleum may yet encounter another competitor, the Petroleum Marketers Association of America (PMAA) based in Arlington, Va. "We've formed the Petroleum Marketers Oil Company LLC, and we're looking into it as a separate company," said Holly Tuminello, director of communications at the PMAA. "We're just in the beginning stages, talking to potential suppliers. We haven't yet come up with a brand name, but it will be a national brand."

Tuminello said driving the PMMA strategy is concern over "all the mergers of big oil companies. Eighteen months ago we did a survey of our members and they are looking for an alternative to the majors." Through its state associations, PMAA represents 8,000 oil distributors.

As for the Liberty operation, Tuminello said, "They're members of our organization, and we think it's a great idea and support their efforts."

Holtzman said Liberty's gasoline supplier is Energy Merchant Corp. out of its Baltimore office, but the gas comes from the Gulf of Mexico by two pipelines into Fairfax and Richmond, where jobbers will pick it up in their own tanker trucks.

Sheetz and Wawa sell their unbranded gas at four to five cents below the price at Exxon, Chevron and Amoco stations. Liberty will be in that same price range. All claim their gas is the same as that of the big oil companies, the only difference being in the additives used. In fact, Liberty's pumps display a logo which says, "100% Certified Quality Gasoline."

Echoing Holtzman, Cox said demographic changes are dictating that C—store owners consider selling unbranded, less expensive gas. "This is an important marketing situation, where the older age population, 45 to 50 years old and up are more brand loyal, where they say, `What's good for Dad is good for me.' However, Gen X and Gen Y people look for price and convenience. Sheetz has done a good job in that area because they're capturing the customer that is price conscious."

Cox said Liberty Petroleum is basically a licensing agent. "Liberty does not invoice or have receivables. We license them [other jobbers] to use the brand, and we earn a fractional cent on aper gallon basis."

Liberty hopes to have funneled of between 50 million and 60 million gallons by the end of the year, said Cox, earning $.002 on each gallon purchased by participating jobbers. This will pay for Liberty's salaries, office overhead, travel and advertising. By next year, Cox hopes volumes increase to between 75 million and 100 million gallons.

A native of Mount Jackson, Va., Bill Holtzman initially began his career in agriculture in the Shenandoah Valley of Virginia. In 1972, while working full time in the apple industry, he purchased a small, local Gulf fuel business for $37,000, and worked tirelessly in the evenings and on weekends to launch his new business, Holtzman Oil. Today, Holtzman Oil Corp. is a Chevron, BP, Exxon, Texaco, and Liberty supplier in Virginia, Maryland, and West Virginia, and is one of the largest employers in Shenandoah County, Virginia.

OIL PRICES, CONSUMPTION CONTINUE SLIDE

An article by Neil King, Jr. of the Wall Street Journal should have conservationist Americans dancing with joy. However, only half the story is actually good news. If these prognostications are true, then the West has some measure of hope of curtailing those runaway oil prices that help cripple our economy this past year. However, the general wisdom that oil prices need to be at a certain level in order to fuel exploration of other energy resources needs to go the way of $140 a barrel oil prices.

Because this week's outlook also included news that the frackas between Russia and the Ukraine has interrupted the delivery of energy resources to Europe, this is not the time for a return of the freewheeling energy glutton America had become. The United States cannot continue to delay its search for viable alternative fuel technologies. The following article and the news out of Russia are testament to the cold hard fact that we need inependence from our energy masters. King writes:

The global downturn is thwarting efforts by Saudi Arabia and other big oil exporters to prop up prices of crude amid rising supply and dwindling demand.

Big producers in the Organization of Petroleum Exporting Countries have struggled for months to keep pace with global economic woes, which have sent oil prices down more than 70% since July.

The world's biggest oil exporter, Saudi Arabia, tried to nudge the market up this week by announcing plans to cut output to its lowest level since 2003—around 7.7 million barrels a day, which would put its production roughly two million barrels a day from the summer. Other OPEC members, including Venezuela, are calling for another round of cuts when the group meets next in March.

Global economic woes continue to trump OPEC actions amid signs of weakening energy demand in almost every corner of the world. Reports of rising crude stocks and falling retail sales in the U.S. drove oil prices down again Wednesday, with U.S. benchmark crude settling at $37.28 on the New York Mercantile Exchange, down 1.3% from Tuesday.

OPEC's 12 members last month announced the group's largest supply cut—2.2 million barrels a day—after pledging to cut two million barrels a day in the autumn, when the slowdown began to take hold. OPEC produces about 40% of the world's daily oil needs, which now run around 84.5 million barrels.

OPEC officials expressed concern that the market thus far has been unaffected by the cuts, which have been more disciplined than many analysts predicted. OPEC officials say they hope the cuts will begin to register soon and help drive prices back above $50 a barrel. But pessimists within the cartel say continuing bad news could drive prices well below $30 a barrel in coming months.

Saudi Oil Minister Ali Naimi, speaking at an oil conference Wednesday in New Delhi, said prices had fallen below the level warranted by market fundamentals. The oil market, he said, needs prices that "encourages investment, helping create a climate conducive for the development of all viable energy sources." Mr. Naimi recently put that price at $75 a barrel.

Nonsense. Development of new technology does not compete with oil production. Delivery of those technologies may one day compete, but that is no reason to delay the process of finding and perfecting an alternative to oil. If oil did not exist, what then? This general economic wisdom is bunk. Thomas Edison's perfected electric light technology was to compete with gas lighting, but buildout costs were enormous.

The battle between electric and gas lighting lasted some 30 years, and although advances were made in gas-lighting technology, electricity won out. During that time, the Cleveland OH City Council, viewing comparative costs, voted to go back to gas light in 1883 but reversed itself 17 days later. About the time that Brush was developing his arc light, Thomas Edison designed a practical incandescent lamp which later had great significance for Cleveland, because the companies that formed the National Electric Lamp Assn. in 1906 centered much of their light-bulb production in this area. When NELA became the National Quality Lamp Division of GENERAL ELECTRIC CO., it established Nela Park in the suburbs. The division took the leading role in GE’s incandescent lighting development program from 1915 until 1935, when fluorescent lighting research became prominent.

For years, the world's oil surplus was negligible. This year, OPEC's spare capacity is expected to surge to around four million barrels a day, according to the U.S. Energy Department. In 2009, global oil demand will fall by 800,000 barrels a day—the sharpest retreat since the recession of the early 1980s, the Energy Department predicts.

Gasoline demand is down almost 4% in the U.S. from a year ago, despite the drop in fuel prices. The U.S. is now importing about 750,000 fewer barrels a day than it did last year. Yet crude and refined-fuel stockpiles rose by 9.8 million barrels last week, the Energy Department said Wednesday. Stockpiles at the country's main delivery point for U.S. crude in Cushing, Okla., are at record highs.

OIL PRICE COLLAPSE WEAKENING DESPOTS

IMAGINE THIS MY FRIENDS, I'm quoting the ineffable Dick Morris. The sky is indeed falling. Good news comes in strange packages sometimes. This is one of those times.

The depression—let's call it what it is—leaves us, well, depressed. But there is very good news from around the world. Our enemies are collapsing under the strain of dropping oil and gas prices.

What we had all hoped conservation and offshore drilling would achieve, the global economic collapse is accomplishing: the defeat of OPEC, Iran, Chavez, Putin and the weakening of the financial underpinnings of Islamist terrorism. In each of these nations, the hold of the dictator is weakening as, one after the other, they face the consequences of dropping oil prices.

Read it all.