This series by Nelson Bocaranda on PDVSA buying oil tankers at inflated prices, maybe having them seized for nonpayment, and then some of them not fitting in Venezuelan ports makes some interesting reading. That is all.
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!
Countries across Latin America and the Caribbean are figuring out that slashing the sulfur content of their diesel fuel can be good for people. Curacao is the latest to shift to 500 ppm (0.05%) diesel while in Chile one can buy diesel with as little as 50 ppm — a policy that it started in 2004 in Santiago and is extending the length country. (And the breadth, but that’s easier.) In Colombia, the nationwide maximum is now 500.
Governments have set 50 ppm limits in some cities in Argentina, Brazil, Peru and Colombia, Liisa Kiuru, executive director of the International Fuel Quality Center, said today in a phone interview. Her organization tracks fuel quality standards worldwide.
In Venezuela, we don’t need no stinkin rules. We pay with our lungs, rather than our wallets.
Venezuela has the world’s cheapest diesel, at 2.8 cents a gallon*, less than 1% of U.S. prices. This probably helps with economic development, to a point — imagine being able to take a 12-hour ride in a privately owned luxury bus with high air conditioning half-way across the country for $10. However, it also has a host of less desirable effects, including the lack of an incentive to cut truck traffic by using trains or proximity. And people use diesel generators rather than conservation in order to reduce demand on the power grid.
Perhaps the most insidious problem with the country’s diesel price is that it leaves Venezuelans breathing much lower-quality air. Our diesel is 0.5% sulfur, or 5000 parts per million. That’s 10 times higher than in Colombia, and 100 times higher than in Santiago de Chile. Most of the time you don’t notice the stench, even in Caracas, where a steady wind out of the east flushes our toxic cloud out to El Junquito and beyond. It’s only when trying to ride a bike or run on Francisco de Miranda or Urdaneta or Fuerzas Armadas, the big bus-choked avenues, that you realize just how thick the sooty, sulfrous cloud can be. Flying out of Caracas, you can see the plume from the Tacoa generating station, which burns not only diesel but 3%-sulfur fuel oil. I’ve seen the plume extend 75 miles (more than 100 km) to Valencia.
I’ve had construction going on next to my house for months. Now that I’m freelancing and home during labor hours, I have the pleasure of experiencing the toxic gas cloud from the steam shovel all day long. My lungs burn. It’s frustrating to know that the technology and money exists to clean this up, with benefits that range from lower public health costs to, who knows, maybe more Olympic medals — but it doesn’t happen.
* (5.4 bolivar cents/liter) * (3.78 liters/gallon) / (7.3 bolivar cents/U.S. cent) = 2.8