Monthly Archives: July 2010

IPS covers Maracaibo oil spill

Pollution in Lake Maracaibo may be oldish news, but coverage by Inter Press Service is very interesting. IPS is a fantastic wire, one that openly sides with the powerless against the powerful. Worth a read.

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Oil prices must be too low

Rafael Ramirez is saying again that Venezuela is ready to cut of oil shipments to the USA in the case of a U.S. military attack on Venezuela. Suffice to say that this isn’t going to happen, and further analysis of the “what if”s would be silly. This is Ramirez trying to talk up the price of crude. Anyone who trades on this stuff deserves to lose money.

Speaking of hot air: there’s a reason why I’ve been ignoring the supposed spat between Colombia and Venezuela.

Great moments in bait-and-switch

In researching Venezuelan oil nationalizations I stumbled onto this little article by Bernard Mommer, dated April 1999. I had seen it before but this part never jumped out at me like it did today (emphasis added):

President Chávez appointed Alí Rodríguez as his Minister of Energy and Mines. In PDV, he appointed as President Roberto Mandini, a high-ranking member of PDV’s meritocracy who had nevertheless kept a critical distance from Luis Giusti and his policy. Chávez also appointed three outsiders as Vice-Presidents, two military and one civilian, all of them belonging to the inner circle of the President. Although the government has pledged that it will fully respect the private contracts, nevertheless these appointments signal very significant changes in Venezuelan oil politics.

For those late to the show, they didn’t respect the private contracts (PDF). Instead they forced private oil companies operating in Venezuela into joint ventures that had some advantages but in which the private companies lost their independence. They got risk with very limited reward.

One time in late 2007, I asked a PDVSA official from the 1990s what he’d like to ask PDVSA President Rafael Ramirez or Venezuelan President Hugo Chavez. He thought for a few seconds and then said something like, “If you really believe what you’re saying today, that the Apertura was such a bad deal, why didn’t you cancel the contracts when you first came to office rather than waiting until now, with the projects built and operational?”

Fun to ponder.

Blackouts all over the place

South America is in blackout season:

Peru: All-day outage in northern section of the country because a single 220 kilovolt power line went down. What was some dude saying about redundant systems? Winning quote from that story is the electric utility saying they have a contingency plan, but they couldn’t implement it because there was no electricity. Hmm.

Chile: Blackout hits half of Santiago, halting a subway line and ending express service on two other lines in the middle of the busiest time of day, the morning rush hour. Then someone died on a train later in the day, extending the day’s chaos. Why it all starts to sound like

Venezuela: Power problems persist all over the country following the end of formal power rationing. Most notable was the situation in Caracas a week ago, where the Metro was halted because of electric outages during the morning rush hour. This account captures the unpleasantness.

Ecuador: Explosions in the underground power lines, all-day blackout. Yeah yeah we get the point. Destruction is boring. Give us death….

Argentina, etc: Cold spell. More a gas outage than a power outage, but deserves a mention. 30 dead in Argentina and 50 more in neighboring countries. It’s not even that cold — we’re talking about nightly lows of between 0 and -8 Celsius. Few buildings are insulated, and what natural gas there is seems to all get burned in the heated outdoor smoking salons in Belgrano and Palermo (no really, I’m not kidding) rather than going to the homes (or even shelters) of the needy. The eternal flame for San Martin at the Buenos Aires cathedral could alone probably heat a row of homes. But hey no big deal, what are a few (dozen) dead bodies compared to patriotic symbolism?

(Updated to fix a couple typos. Yes, I had called the Buenos Aires neighborhood of Belgrano by the name “Belgravia.”)

Guri Dam fills up

Water level at Guri Dam, in meters above the level that would require that turbines be shut down. Guri provides about 70% of Venezuela's electricity. Water levels are rising better than anyone expected, meaning that the end of the world is deferred until further notice. The next crisis: electricity transmission, which can't handle the fast-growing power load. Yesterday's catastrophic blackout on the Caracas Metro may be a sign of things to come. SOURCE: Centro Nacional de Gestión daily reports.

Shock troops of capitalism, literally

Oil exploration often goes into areas that are, for one reason or another, off limits to a country’s government. Could be that the borders are contested, there are indigenous land claims, or the area is very environmentally sensitive. You hear about the oil companies being “shock troops” of capitalism, or modernity, or development. But in Colombia, the real live shock troops are now training to do oil exploration. Let Heather Walsh and Matthew Bristow tell the tale.