Venezuela--Escalating sanctions. Do you understand this?

[yellowwoodII]

I listened to Diane Rehm this morning in a discussion about escalating sanctions with Venezuela. Calling them a threat?

I really don't know anything about this, but I feel uneasy about getting us in more conflicts with the rest of the world.]
Because of corruption? We'd better get ready to get into a conflict with a lot of countries!
Or is this about oil?

Listen here:
http://thedianerehmshow.org/shows/2002-12-12/venezuela

[leveymg]

1. This is about Exxon-Mobil's efforts to collect $1.9B in nationalized assets; it's also about a

larger effort to knock off an OPEC producer with the world's largest proven reserves and privatize those huge deposits before they're all leased to China.

[djean111]

2. Exactly.

[Spider Jerusalem]

3. We'd be a lot better off paying them not to exploit that oil at all

those "largest proven reserves" are in the Orinoco heavy oil belt; it's as environmentally damaging as Canadian tar sands, only there's a lot more of it. If we aren't looking to drive ourselves to extinction maybe we should leave it where it is.

[leveymg]

7. Are you sure that after refining, Citgo gas is any more polluting than Exxon?

Please explain what the differences actually are.

[Spider Jerusalem]

10. It's not the "after refining" part that's the problem.

Heavy oil has an EROEI (energy return on energy investment) of around 3:1 (for comparison, Saudi Arabian crude oil is around 10:1). That means you get three barrels of oil for every barrel of oil equivalent energy you spend developing the resource. (And the EROEI on oil shale is not much above break-even; it's at around 2:1). It's also very heavy, few refineries can process it, it's more difficult to process and requires more extensive catalytic cracking to yield lighter hydrocarbons--and the light chain hydrocarbon fraction is smaller which means you need more of it for an equivalent amount of, say, gasoline than you would from a light, sweet crude like West Texas Intermediate, or Brent. Which means releasing relatively more carbon because the resource return is less for what you're using to get it, and because you simply need more of it.

[leveymg]

11. That's an economic reason for disfavoring both shale oil and heavy crude

I understand your argument that the payoff is less than Saudi or Brent, but that would not necessarily entail greater carbon release per barrel of refined product distilled from heavy versus light crude stock. The refined product will be equivalent when burned.

I believe that refining sweet crude results in less bi-products, like bitumin or asphalt, used for road paving. Those bi-products do passively emit some carbon by evaporation, but not nearly as much as by combustion of distilled products.

Tar sand oil, however, must be "cooked" out of the ground, and that extraction process raises CO2 emissions in the extraction stage.

[Spider Jerusalem]

32. It's more than an economic reason

you have to release more carbon dioxide in energy used to *get* heavy crude and shale, and it takes more heavy crude and shale to make an equivalent amount of light hydrocarbons like gasoline. It doesn't matter if the refined product is "equivalent when burned". Heavy oil has a significantly higher carbon footprint. See here: http://www.ibtimes.com/us-shale-oil-boom-when-it-comes-co2-emissions-not-all-crude-oil-created-equal-1843616

[leveymg]

35. Thank you for article. Total difference in GHG emissions (450-550) between light and heavy isn't

nearly so great as between crude and tar sands oil (up to 800). If we want to save the world, faster, shut down the Alberta and Utah tar sand fields. As you pointed out, economics more than anything else may decide which gets shut down first.

[Spider Jerusalem]

36. When you're talking about billions of barrels, it is.

There's a trillion barrels of reserves in the Orinoco belt. Far more than tar sands in Alberta or Utah.

[leveymg]

37. It's unrealistic to expect that anyone is going to just leave the VZ reserves in the ground while

there is a global demand for oil. It's just a question of who gets title to them. This is really another US-China trade dispute masquerading as a human rights issue being treated as a national security matter by the US Gov't.

[yellowwoodII]

4. I suspected that

Listening to this broadcast caused me to suspect that there was more to it than "corruption charges.

[hack89]

14. Exxon-Mobil and Venezuela took the case to international arbitration

where Venezuela lost. Venezuela has lost several such cases and have payed up every time so I don't think Exxon-Mobil is worried about getting their money.

[leveymg]

16. I think Exxon-Mobil would like to replace the gov't with one that would reprivatize more of the

upstream supplies that the large multinationals once held before the nationalizations of the 1970s. It's not just about this one case.

[hack89]

18. But won't all the other big oil companies presently working with Venezuela stop them?

why would they forgo profits to help out Exxon?

[hack89]

15. Perhaps you should look at all the foreign oil companies VZ is presently working with

before you make silly claims about China.

Shell, Chevron, BP and a multitude of foreign oil companies in a multitude of joint ventures are presently working with the Venezuelan government.

[leveymg]

19. Please don't say "silly claims about China" if you don't know that. You don't. See below:

http://www.bloomberg.com/news/articles/2014-01-30/venezuela-oil-sales-to-u-s-at-1985-low-shows-china-cost

Jan. 31 (Bloomberg) -- Venezuelan oil sales to the U.S. are approaching 28-year lows as the country turns to China amid a shale boom that’s flooding U.S. refineries. Now a Canada-U.S. pipeline threatens to further curb its Gulf of Mexico access.

Venezuelan exports of crude and petroleum products to the U.S. averaged 792,000 barrels a day in the first 11 months of 2013, which would be the lowest annual rate since 1985, according to data published yesterday on the U.S. Energy Information Administration’s website.

State-run Petroleos de Venezuela SA, which oversees the world’s largest oil reserves, is sending hundreds of thousands of barrels a day to China to pay back government loans. At the same time, refiners along the U.S. Gulf Coast are sourcing more domestic supply as a surge in drilling shale rock sends output to the highest in a quarter-century. A proposed pipeline to transport Canadian crude from oil sands in Alberta to U.S. refining centers could further restrict Venezuela’s access to profitable export markets, according to Tissot Associates.

Please restrain yourself from acerbic comments, particularly on topics you clearly don't have factual support.

[hack89]

20. You know that your post is actually bad news for Venezuela?

A proposed pipeline to transport Canadian crude from oil sands in Alberta to U.S. refining centers could further restrict Venezuela’s access to profitable export markets

The US oil companies are deliberately turning away Venezuelan crude - sending oil to China is not Venezuela's first choice. And sending it to China certainly does not hurt Exxon-mobile or any other large oil company. Oil is a fungible product and there are plenty of profits to be made with or without Venezuela.

In any case, my post was about oil companies working with Venezuela to explore and develop Venezuelan oil fields. China is not a player.

[leveymg]

21. That's what makes VZ a prime takeover target, a "cash-starved OPEC producer"

as I've described Venezuela numerous times. In the long-term, nonetheless, because of that country's vast reserves (by far the largest in the world), VZ will continue to be credit worthy, with China the chief creditor. That's another reason to target the Maduro gov't.

[hack89]

22. Credit worthy? Don't think so

there is a reason their bonds have been downgraded to junk bond status.

Those reserves are worthless in the ground. Venezuela does not have the money nor the expertise to develop those fields without the help of the major oil companies. They don't need to take over the country - the government is going to make them richer anyway.

[leveymg]

23. Venezuela has a long, long line of credit with China, which was just extended last year.

And, there are a lot of oilfield service firms in the world. Venezuela doesn't need Exxon or Conoco for technology, that is contracted.

[hack89]

25. You need to research what oil companies are working right now in Venezuela.

you really do.

[leveymg]

30. I never said US firms weren't still in joint production agreements with the VZ national firm.

Are you incapable of doing this research? Here's the major source of official information about the Venezuelan oil industry and another source that references US companies still doing business in VZ. Have fun.

Venezuela Overview - US Energy Information Administration
www.eia.gov/.../Venezuela/venezuela...
Energy Information Administration
Jun 20, 2014 - Venezuela is one of the world's largest producers and exporters of ... exports of crude oil to the United States have been among the top. ..... In September 2008, Venezuela signed initial agreements to create three joint venture.

Chevron Agrees To Lend $2B To Joint Venture With ...
sacramento.cbslocal.com/.../chevron-agrees-to-lend-2b-to-joint-ve...
KOVR
May 28, 2013 - Click here for CBS13 news stories Send us your breaking news tips here ... Venezuela's PVDSA oil company owns 60 percent of the joint venture, ... Venezuela has the world's largest oil reserves but production has been ...

[hack89]

31. It is pretty ironic how dependent VZ has become on these multi-national corporations

interesting situation for a socialist country to be in - absolutely dependent on large capitalist enterprises for it's economic survival. But that is what economic mismanagement does - creates holes you can't get out of by your self.

[Octafish]

28. Pivot petroleum from China

Slam dunk coming.

[Tierra_y_Libertad]

5. The reason we don't put sanctions on our government is because it isn't corrupt.

[mmonk]

6. I understand it completely. Neoliberals and neocons and gunboat diplomacy

for our corporate lords, the IMF, etc. Same ol same ol in the long history of imperialism.

[Comrade Grumpy]

8. Some people here are fine with it. It's all nice and legal like, see?

'Cuz Congress passed a law and Obama was helpless.

[Nuclear Unicorn]

9. Well, it is legal but

I fail to see how VZ is a national security threat. "Comically inept," would be a better descriptor.

[ND-Dem]

34. Their economy is about 2% of ours. They're a threat like the guy down the street could make

a pipe bomb and throw it at one of the Rockefellers.

it's probably not going to happen -- but it *could,* possibly. it's conceivable, whereas Vz beating us in a race to Mars is not.

[TBF]

12. It is rarely NOT about the oil -

Do you see us interfering in the affairs of countries where we don't have an interest in their natural resources?

[Hutzpa]

13. I don't fully understand what this is all about

but since VZ had oil and the price of oil was reduced, then suddenly there is an increase again, could they be done for tampering or corruption?

[Comrade Grumpy]

17. You'd think if Obama wanted to sanction abusive cops, he wouldn't have to look as far as Caracas.

[Adrahil]

24. I heard that show...

It sounded like the designation was just a legal trigger to enable the President to order sanctions in response to the recent tension.

I don't really agree with it though. Venezuela is really irrelevant to us. We should just ignore them, IMO.

Maduro is corrupt and incompetent, but it's not up to us to do anything about him.

[hunter]

26. We are the top banana of the American banana republics.

Sometimes it behooves us to throw our weight around lest our smaller siblings get too uppity.

[PeoViejo]

27. Got to make an example of someone.

Like we did with Cuba.......

[Eleanors38]

29. Old line Monroe Doctrine stuff, via Big Oil...

Even in the age of micro processing, those old tube still light up reliably.

[burrowowl]

33. Right On!

Obama is really in the hands of Wall Street.