Friday on-topic: Evening light

Artesenal silver-zinc mine, Termas de Obrajes, Bolivia, March 23, 2008, 5:48 p.m.

Setty Venezuela travel guide Part I

Bring cash.

That’s the key thing to know about Venezuela. Currency controls mean that your foreign cash is worth more than a foreign ATM or credit card. And with the way things are going this week, way more.

A foreign credit card or ATM card will give you a constant exchange rate of 4.3 bolivars to the dollar. Today, the bolivar has fallen to almost 7.5 to the dollar for people seeking to buy bolivars, 7.7 for those seeking dollars. So if something costs 4,300 bolivars, that is $1,000 at the official government exchange rate, but only $573 if you can get your bolivars at 7.5

The Gringo Discount, now offering 43% off list price for anyone with access to dollars.

Oh, did I mention the Iran-Cuba-Venezuela-Nicaragua-Russia nuke threat?

If there’s one topic that the world outside Venezuela seems curious about, it’s the Iran-Venezuela-Russia (and maybe China, Bolivia, Nicaragua, and/or Cuba) group that by some accounts are trying to destabilize the U.S. and its allies. It’s a hot topic. April 13, the Defense Intelligence Agency told Congress:

The Qods Force maintains operational capabilities around the world. It is well established in the Middle East and North Africa, and recent years have witnessed an increased presence in Latin America, particularly in Venezuela. As U.S. involvement in global conflicts deepens, contact with the Qods Force, directly or through extremist groups it supports, will be more frequent and consequential.

Luckily the head of the U.S. Southern Command came out yesterday and clarified what the Pentagon report meant:

We see a growing Iranian interest and engagement with Venezuela. … It’s a diplomatic, it’s a commercial presence. I haven’t seen evidence of a military presence.

Let’s let them figure out what they really want to say and get back to us. Moving along, April 15, the Hudson Institute put on a forum, Venezuelistan: Iran’s Latin American Ambitions (audio here).

Speaking of ride a bike

The bike-riding, beard-trimming, mime-hiring, spandex-sporting weirdo Antanus Mockus (no really, click the link, watch the video, it will be one of the best hours you spend in front of a screen this year) is now the front-runner for presidency of Colombia.

OK, worry if you like

A few posts ago, I upset a Venezuelan reader by suggesting that we probably don’t have to worry about massive electricity outages in 2010, what with rain arriving and Guri Dam’s water level starting to rise. Since then, nationwide power use and hydropower generation both jumped to 1-month highs, the streams feeding Guri settled back to well below their normal rainy-season levels, Planta Centro turbine 1 went back out of service after only one day, and Guri’s water levels fell to 248.66 m above sea level, 13 cm below the prior bottom April 16. So, worry away.

However, collapse won’t happen this year, unless the rains just quit. Water levels have declined 8.66 cm a day for last 3 days. That works out to a meter every 11.5 days, and we have about 7 meters to go before things really fall apart nationwide. Even if the decline speeds up, we have a couple months of slack in there. The problem comes at the end of the rainy season, if we still have only a couple months of slack.

The refinery outage frenzy

PDVSA’s refineries are having problems. This is good news for companies that still have operating refineries, as profits rise when there is less competition, but bad news for consumers of diesel and gasoline. Not to mention bad news for PDVSA, which needs to get all that gasoline and diesel from somewhere.

The latest from Isla in Curacao is that it won’t be back til the beginning of May. I still say that’s wishful thinking. When it went down at the beginning of March, they said it would be at least two weeks til it was fixed. Then April 1, then April 15. From the start, I have said it would be June, and I’m sticking with that. I have never been there, the people I know there have no special information, and I originally didn’t even know which piece of equipment had broken down. I just know how these things work. As soon as we knew they would have to order equipment from overseas, it was clear that it would be months.

This just bums me out. After the weekend fire at the Cardón refinery’s catalytic cracker, one of the most complex parts of the refinery, they are saying all is under control and it will be up and running in a week. They had a fire at the same damn unit less than a month earlier, at which time they got it up and running quickly. This isn’t an old broken-down unit either, this is a piece of equipment that was just rebuilt in a $650 million project that took well over a year.

Meanwhile those projects that are operating are not well maintained. For some reason Youtube is rejecting my video I shot a couple weeks ago from the bus going past the upgraders at Jose, where tarry crude is refined into something that can actually flow at room temperature. The flaring was out of control. A couple stacks had constant 5-meter orange flames illuminating the night, and another was like a dragon, exhaling a raging burst of fire every three seconds.

This is where your fuel comes from. Ride a bike!

Mmm arepas

(click for full size) The arepera socialista, in a former chicken joint in Parque Central. The glass blocks and heat give it a deco, 30s feel. The bathrooms, left, show male and female icons, each with a 5-pointed star where the heart would be.

I finally took a friend up on her long-standing offer to take me out for a socialist arepa. (Pictures and hot dogs below the jump.)

Run and hide! Operations are “normal”!

When PDVSA says refinery operations are normal, get out your gas mask:

April 24 2010: Contingency Plan Activated

Paraguaná Refining Center maintains operations in total normalcy

Paraguaná.- Petróleos de Venezuela, S.A. (PDVSA) informs that at 1:25 p.m. on Saturday, April 24, 2010, a fire broke out in the charge-preheating interchangers of the catalytic complex of the Cardón refinery, belonging to the Paraguaná Refining Complex, Falcón state. The event didn’t leave any victims or damages to the environment thanks to the quick action of emergency prevention and control personnel.

As a security and prevention measure, the plant was halted to protect personnel and facilities. Once an evaluation is completed, the secure startup protocol will begin, as planned for these cases. It’s important to emphasize the quick action and celerity of the firefighters and emergency personnel involved in this incident.

As a result of this incident, an increase in emissions from the La Botija flare stack will be appreciated, which shouldn’t cause any alarm.

PDVSA guarantees the reliability of Paraguaná operations and fulfillment of its commitments, both in the domestic and international markets, as it can count on sufficient inventories in the refining system.

Now, let’s play a game. What if Chevron’s Richmond refinery had a fire at its catalytic cracker, followed by flaring, and this was their public response? No quantification of what is being flared off, or how much, or for how long. Just a statement lauding the firefighters and telling everyone that increased flaring “shouldn’t cause any alarm.” Would the West County Toxics Coalition say, “OK, if you say so!”

This is one of the many problems with state control of large polluting industries. It ends up looking identical to a corporate-controlled state. When the companies and government are on the same side, they can work together to screw the public and the environment. Within the government, there is no balance of power. The oil ministry outweighs the environment ministry many times over. And public questioning of PDVSA’s good will and honesty is tantamount to treason, so citizen protests never gain much traction.

That all said, PDVSA has become more transparent in recent months about its fires, explosions, leaks and other maintenance problems. As someone who personally pleaded with executives including the vice president of refining, the vice-minister of hydrocarbons, the head of the Paraguana refinery, and others, I should be grateful. I am. But there’s still a ways to go before the Nueva PDVSA lives up to its self-billing as a company of the pueblo, by the pueblo, for the pueblo.

Aw rats, another $1 billion debt

These things just keep turning up. From Correo del Caroní‘s generally reliable Natalie Garcia. Workforce now to be cut from 2,000 at beginning of year to 1,200:

More firings announced in third bridge project

The Brazilian construction company Norberto Odebrecht, in charge of the project Bridge III over the Orinoco, which will connect Bolívar state and Guárico, made the decision to fire 500 laborers in coming days for lack of budget, union sources say… 300 fathers and mothers were tossed off the jobsite at the beginning of 2010 for the same reason.

Norberto Odebrecht, the Brazilian company in charge of the project, has run into financial problems since 2008 because the Public Works and Housing Ministry doesn’t release the required money.

Up to now, the state owes the contractor, $250 million from 2009 and $750 million corresponding to the 2010 budget, for a total of $1 billion, just for this project.

Odebrecht is also … developing part of the Caracas metro, the El Diluvio reservoir in Zulia… Union officials doubt the bridge can be inaugurated on time in 2012… In addition the Alumunim City and the train are suffering delays for lack of budget.

Assuming this report is right: I don’t get is how the government can remain behind on so many payments with oil above $80, even as foreign reserves fall. Is it all part of a clever and sustainable plan, in which human needs get covered before corporate greed? Or is this a pyramid scheme collapsing?

Help Stop PDVSA-Iran-Cuba Secret Nuke Missile Genocide Plot

Someone asked me to comment on this e-mail. The note itself, with its conspiracist, telling-you-what-the-MSM-doesn’t-want-you-to-know tone, its plentiful supply of capital letters, and its leaps of logic don’t deserve as much time as I gave it. I’m posting this because it shows the level of discourse in some segments of the U.S., which is the most powerful military and economic power on the planet.

This note includes some memes that have been well propagated by the Wall Street Journal editorial page, among others, about the Iran nuke missile threat from Venezuela. The extreme over-blowing of this threat would be laughable if it weren’t becoming part of the conventional wisdom, and if that conventional wisdom didn’t have the possibility (probability?) of turning into escalating trade sanctions, covert action or a military strike, any of which would probably lead to friends of mine being killed for nothing. We’ve seen the same pattern before in Iran, Iraq, Panama, Nicaragua.