Chavez Aims to Meet Left's Energy Needs

[cal04]

Source: Associated Press

President Hugo Chavez said Saturday that Venezuela is ready to become the sole energy supplier to Cuba, Bolivia, Nicaragua and Haiti, presenting the countries with his most generous offer yet of oil-funded diplomacy in the region.

Chavez said he hoped to sign a deal with the four countries, his main leftist allies in the region, during the summit of The Bolivarian Alternative for the Americas he is hosting this weekend in Caracas.

The bloc, known as ALBA, was formed in 2004 by Chavez and his Cuban mentor Fidel Castro to promote trade and cooperation along socialist lines and to oppose a U.S.-backed free trade area. It has since grown to include Bolivia and Nicaragua. Ecuador has also expressed interest and Haiti was attending the two-day summit that started Saturday as an observer.

``The time has come for this oil, this energy, these resources to in some way serve the development and happiness of our people and the union of our territories,'' said Chavez, whose nation is a major oil exporter with vast reserves.

Read more: http://www.guardian.co.uk/worldlatest/story/0,,-6595012,00.html

[Peace Patriot]

1. "It's time for this oil to serve the development and happiness of our people..."--Chavez

What an idea!

[Judi Lynn]

2. From the Cuban exile-pandering (anti-Chavez) Miami Herald: Chávez in search of leverage

Posted on Sat, Apr. 28, 2007
Chávez in search of leverage
Venezuelan President Hugo Chávez is courting Ecuador and others for membership in a trade pact meant to counter the U.S.-backed FTAA.
BY STEVEN DUDLEY
[e-mail]

CARACAS -- A vague trade agreement that includes Venezuela, Cuba, Bolivia and Nicaragua may get some flesh on its bones when the Bolivarian Alternative of the Americas opens its first-ever formal meeting today.

ALBA, as it's known by its Spanish acronym, has been more of a skeleton since Venezuelan President Hugo Chávez began talking in 2001 about a counter to the U.S.-backed and long-stalled Free Trade Area of the Americas (FTAA).

But now Ecuador is on the verge of joining ALBA, and Chávez is pushing Caribbean countries to join as well, using his discounted oil program, known as Petrocaribe, and other enticements.

''ALBA is the consolidation of a geopolitical space that is just beginning,'' Chávez said in Jamaica in February, during a tour he launched to coincide with President Bush's Latin American tour.

Chávez has said the two-day ALBA meeting in the city of Barquisimeto will bring in Presidents Evo Morales of Bolivia and Daniel Ortega of Nicaragua. Cuba's ailing Fidel Castro is expected to be represented by a high-ranking Havana official. Haitian President René Préval also is expected to attend, according to media reports.

More:
http://www.miamiherald.com/579/story/89520.html

[Joanne98]

3. Good for him!

[happydreams]

4. Viva Chavez!....

He is showing a peaceful alternative to the US's aggressive geo-politics.

[Vidar]

5. Venezuela sends oil, Cuba sends doctors, the US sends murderous

thugs & crippling debt. Why are those latin american leftists so popular?

[ohio2007]

6. but first; "Chavez and Big Oil gear up for struggle "

CARACAS, Venezuela - Forcing Big Oil to give up control of Venezuela's most promising oil fields this week will be relatively easy for President Hugo Chavez, but he will face a more delicate challenge in getting the world's top oil companies to stay and keep investing.

If Chavez can persuade companies to stick around despite tougher terms, Venezuela will be on track to develop the planet's largest known oil deposit, possibly to surpass Saudi Arabia as the nation with the most reserves.

If he scares them away, the Orinoco River region could end up starved of the investment and know-how needed to transform its vast tar deposits into marketable crude oil.




Chavez needs the private oil companies' deep pockets and expertise to upgrade the Orinoco's tar-like crude into more marketable oils. While Chavez says state firms from China, India and elsewhere can step in, industry experts doubt they are qualified.

Amid the turmoil, new investment from the private companies has already dried up. If any leave, Chavez might be hard-pressed to persuade other big players to take over.




http://news.yahoo.com/s/ap/20070429/ap_on_bi_ge/venezuela_oil_takeover

China may have to partner up with Hugo if the western oil companies turn away from all that oil that "dwarfs the Saudi reserves"

[lostinacause]

7. This is what happens. When Chavez is fighting against oil compaines "taking

money away from Venezuela" he is reducing the potential for foreign investment. There are ways to extract economic rents (profits) from companies (and people). None of them involve scaring away many potential partners and relying on only a few to try and get a good deal. He cannot expect China to invest without giving them suitable incentives to do so and he should expect the Chinese to take advantage of the situation.

I'm not surprised that the Venezuelan people view him as positively as they do but the reasonably well educated, largely American (disconnected from the situation) participants on this forum should be able to see through the games that he plays. They should realize that while playing the political games that he does he is actually compromising the wellbeing of his country. Sure it can be argued that he has instigated programs that help the population but the programs that are by and large supported by people here are the ones which are either harmful or less beneficial then they could otherwise be without the political games.

People should realize that his methods for pursuing equality are less effective then the methods of the New Deal. The New Deal was put into place over half a century ago. Since then we have seen a great deal of economic though that allows for much better methods of pursuing equality. At the very best he should be looked on positively because of his stance on equality; however, there should be no desire to emulate his actions.

[1932]

8. Huh? That is such a strange post.

If that were a college paper, I'd give it a C+.

Where's your argument? What's your evidence?

[lostinacause]

10. The argument is clear. Which part(s) do you want me to expand on?

Also it is not a college paper.

[1932]

18. The evidence part.

[Judi Lynn]

19. I couldn't make heads or tails of his post, and I tried. The China part was puzzling.

Here's a very recent article which would reflect a different reality! But what would they know, right?

Last Updated: Sunday, 25 March 2007, 10:04 GMT 11:04 UK

Venezuela aims for China oil deal

Hugo Chavez wants to move Venezuela away from US influence
Venezuela says it is working on a number of new oil deals with China, as it aims to reduce its dependence upon crude exports to the US.
The left-wing Venezuelan government said it would work with China National Petroleum Corporation to boost Chinese investment in its oil facilities.

It added that there were also joint plans to build a fleet of new tanker ships and three refineries in China.

Venezuelan president Hugo Chavez has long spoken of his hostility to the US.

More:
http://news.bbc.co.uk/2/hi/business/6492833.stm

[lostinacause]

20. That helps...

To start out with; investment is generally seen as good. In the oil industry, foreign investment, especially from companies with technical knowledge allow a greater amount of the resource to be captured. Chavez has sent a clear message to companies. The message is not to invest in Venezuela because there is a reasonably high probability that the industry will be nationalized. In the end this means that even if nationalizing the energy industry is beneficial when looking at it in an isolated fashion they would stil end up loosing foreign investment in other industries. It not even a sure thing that nationalizing the oil industry will be beneficial when looking at it in isolation. The process is oil extraction is complicated and conventional methods of learning by doing are not effective because in the learning process every mistake means that oil is not recoverable. The industry in general hires a large number of engineers, geologists and geophysicists (EGGs). While the level of technical level of Chinese EGGs is improving quickly, last I heard their graduates are still inferior to their North American and European counterparts. They surely don't have the senior EGGs needed to effectively carry out the processes.

I will have to finish the rest tomorrow. In supplying further details it seems it was more complex then I originally thought.

[1932]

22. Have you read Nikolas Kozloff's book about Chavez?

[lostinacause]

26. Not yet, but it if the piece that I just read is any indication of what is to be expected

it seems like it will be a worthy read. I will have to add it to my reading list.

[1932]

29. What piece?

[lostinacause]

30. It was just an excerpt that I came across on a search.

[1932]

34. Where is it?

[lostinacause]

35. Here

http://www.counterpunch.org/kozloff10142005.html

[Judi Lynn]

24. It would actually be RE-nationalization. They've been there, already. n/t

[lostinacause]

27. They went from an industry structure with private companies to a state owned

industry structure. So what I said was correct.

The past state is not particularly relevant here.

[1932]

36. What changed wasn't the corp structure but the composition of the PDVSA board

by the time Chavez was elected, they were mostly oil execs from foreign-owned oil companies, and they were privatizing the IT part of the company.

[ProudDad]

9. I'm afraid your thinking is limited

by your apparent love for the capitalist economic system and are captive to its myopia.

There's no reason that President Chavez and his allies couldn't develop their own oil infrastructure. You seem to think that only capitalist pig companies like those to own Big Oil can develop resources. You seem to think only a stock market can supply human needs.

He's not playing political "games", he's trying to develop an alternate to rapacious corporate capitalism for supplying human needs in a socio-economic system built on something other than naked greed.

I believe Sr. Chavez will prove the capitalist zealots wrong.

[gorbal]

12. He obviously has a mixed opinion on the subject.

It's better to convince people than pick a fight. He sounds like me before I realized that many of my "mixed" opinions were based on lies and misconstrued facts. I've always felt the need to be a middle-man, but I had to remember that the "middle" is not between lies and the truth, it is from different ways of seeing the truth; so make sure you have all your facts right first.

I really had to do a LOT of research before I could sort out the truth from the propaganda on both sides of the issue. I still have to accept that there are many things I am not sure of, and I definitely don't have any party painted as angelic in my mind. I hope we can focus our hopes and energies on other aspects of the new left in South America, not only Chavez,. As much as I am exited and interested in what is happening, it is dangerous to put all ones eggs in one basket, especially when he has so much power.

I just received an excellent issue of "The Nation" of which the topic of the week is Cuba. Pick it up if you have a chance. http://www.thenation.com/

One of the few balanced views you will see on the subject of Cuba that is based on facts and NOT propaganda.

[lostinacause]

13. While it is constantly being evaluated, I can ensure you my opinion is both strong and well defined.

It is ignorant to think that people are weak-minded and lack subject area knowledge if they take what is seen a moderate stance on a particular issue.

[lostinacause]

14. To clairify, what do you consider a capitalist economic system?

Certainly everybody in their right mind would consider the utopia of Ayn Rand to be capitalist. Given the nature of your post I would expect you believe that America is a capitalistic society, either in spite of or because of the growth oriented nature of market intervention. What about a country like Canada which has a stronger social security network and provides public healthcare and subsidized education? Where, with perhaps the best social security networks currently in place anywhere on earth, do the Scandinavian fit?

I will address the post in its entirety once this has been clarified.

[ProudDad]

21. I'm afraid most of the industrialized world

is laboring under a corporate capitalist model for controlling the means of production of goods and services.

As you point out, some countries populations have forced their governments to mitigate the damage caused by a capitalist economic system by extorting a small percentage of the wealth from it to supply some public services. This percentage ranges from nearly NONE in the U.S. to a fairly large portion of the wealth in countries like France and the Scandinavian countries. However, as capitalism is ultimately supremely rapacious, even those populations are having trouble maintaining their safety nets against capitalism's acquisitive nature.

My difficulty with this model is that it's totally amoral; the only goal is to maximize profit. If it makes more profit to supply the tools of war rather than the tools of education, then the tools of war will be produced. If it makes more profit to build $600,000 condos rather than affordable housing for folks on minimum wage, then condos will be built and to hell with the well being of most of the population.

In this pursuit of profit the system assumes an infinite supply of resources and therefore is probably going to make the Earth uninhabitable in the not too distant future. This also bothers me.

Sr. Chavez, Sr Castro and others see these truths as I do and have tried to create other models of resource distribution. These alternative models are based on a finite supply of resources and the desire to fairly and equitably decide how to allocate them for the greatest good for the entire population rather than the enrichment of the few at the top.

[lostinacause]

33. What the countries are actually doing is making choices about

the institutions presumably based on some notion of managing the benefits and costs of the potential institutions. In a sense there is very little difference between this and the choices made by countries which favor command economies. Obviously because the basic framework differs significantly the benefits and costs will have a different flavor. The statement about the "extortion" of wealth is surprising coming from someone who is not a market purest. Taxation is a legitimate institution for getting the desired outcome. In fact there are schools of economic though that suggests that "all transfers" should be done through taxation. On the other hand it is widely acknowledged that property rights can have distributional effects. (I generally favor a mixture of the two.)

I also question you statement about countries not being able to maintain institutions that promote the desired outcome again pointing to the Scandinavian countries as examples of counties that have maintained a high standard of living for the lower income earners of their populations.

I disagree with your statement about a market base framework being amoral. The institutional framework that is put into place largely determines the outcome. However there is a great deal of choice that is present given the different institutional framework. Choosing to have a limited armed force and putting up barriers to arms trade would greatly reduce the supply of tools for war. At the same time promoting a strong education system would increase the demand for tools of education. This can all be done with the proper institutions using a market framework just as it can under a command framework.

I question how you can be under the impression that market based institutions can not be formed to deal with finite resources and environmental damage given the existence of quotas on renewable resources and actions taken by the EPA and the environmental protection agencies of other countries.

[The2ndWheel]

11. Venezuela is ready to become monopolistic?

I'm all for fighting US imperailism, but that doesn't seem to be the best way to go about it. It may be the only way, since to fight centralized power you have to centralize power yourself, and that is the problem nobody seems to be able to fix.

[ohio2007]

15. speaking of "fix", When thing$ break.,somebody has to pay replacement

costs. Something nobody want to talk about is the crude sludge below the Hugo's feet that will take "deep pockets" to invest in the refinement of the inferior crude. It will be costly to get the Orinoco sludge up to overseas crude standards.

Chavez wants to be a wild cat in the oil business, fine. My point is the daily operational costs will bleed his discounted oil prices dry in a few years. he can't afford to ignore the existing infrastructure
and
invest in his oil futures.

All I have to say is; "Good luck in the spare parts warehouse inventory Hugo".

This could go they way of the large plantations in Africa that were privatized and taken over by the governments that expelled the land owners.


in a nutshell;
the devil is in the details

[lostinacause]

16. Venezuela could not become a monopoly since they sell into a world market.

Even if they banned inports they have a history of subsidizing the price so that it is below the world price so market power would clearly not be an issue.

[The2ndWheel]

23. I'm talking about Cuba, Bolivia, Nicaragua and Haiti

"President Hugo Chavez said Saturday that Venezuela is ready to become the sole energy supplier to Cuba, Bolivia, Nicaragua and Haiti, presenting the countries with his most generous offer yet of oil-funded diplomacy in the region."

That could be a lot of power to hold over those countries.

[lostinacause]

28. Now I see what you are saying and I agree.

However I don't see this being much different then foreign aid.

[1932]

38. In a world where some nations are so incredibly rich and some are so incredibly poor

it makes sense that you have one price for the rich countries and one for the poor.

[RUMMYisFROSTED]

17. If I respond to this post do I generate a file?

[Judi Lynn]

25. Just found some info. concerning non-oil industry in Venezuela,

a topic which DU'ers have been considering in previous threads, the subject having originally been raised incorrectly by a visiting conservative gentleman who claimed they ain't got none:

These seven mechanisms account for the fact that, since 2004 and in spite of the strong growth in oil prices, the non-oil GDP grew significantly faster than the oil GDP, demonstrating the positive impact of oil exports on activities not directly related to crude extraction. While in the second quarter of 1999 the share of non-oil GDP was 70.5 percent of total GDP, today it stands at 76.0 percent. And, partly as a result, in this period, the share of the oil GDP in total GDP shrunk from 20.1 percent to 14.9 percent.

Even more significant is the acceleration in the manufacturing industry between early 2003 and the present. Manufacturing was the sector that grew the fastest in the period, recently surpassing oil GDP -- for the first time since 1997, starting year of this statistical series at the BCV. This dynamism can be verified especially by the consistent increases in electricity consumption, automotive vehicle sales, cement, durable products for civil construction, iron, and aluminum. Within the manufacturing industry, the branches that grew fastest are: automotive vehicles, trailers, and semi-trailers (13.5 percent); food, drinks, and tobacco (10.6 percent), rubbers and plastic products (10.3 percent), and machinery and equipment (7.0 percent). The share of manufacturing in total GDP, which shrunk to 14.7 percent during the "oil sabotage," is now reaching 16.7 percent with a momentum to grow briskly. These results will be improved upon when the full impact of the "Agreement/Framework for the Recovery of the Industry and Transformation of the Production Model" as well as the "Decree for the Provision of Inputs and Raw Materials to the National Manufacturing Sector" are felt. These policy instruments seek to limit the exports of raw materials and to guarantee basic inputs -- like aluminum, iron, steel, and wood -- to the Venezuelan producers. From early 2003, the share of final consumption goods in total imports has gone down from 37.6 percent to 24.2 percent, accompanied by an increase in the acquisition of goods devoted to gross capital formation from 12.3 percent to 25.7 percent of the total. That is to say, Venezuela has invested its foreign exchange in purchasing machinery, parts, and equipment that make it possible for the process of sovereign industrialization to proceed.

The dollars at the FONDEN have been reserved to finance strategic development plans in such sectors as basic industries, oil, gas, physical infrastructure, transportation, and housing. Within these outlines, new companies are being created and new projects are unfolding like the new Venezuelan iron-and-steel plan for the production of special steels, a factory of "seamless" oil tubes, three new oil refineries, ten sawmills, plants to produce cement, plants to improve iron ore, factories to produce aluminum sheets, plants to produce pulp and paper, and many others. In addition to that, the Inter-American Development Bank recently approved a credit of 750 million dollars for the construction of the hydroelectric power plant at Tocoma. Altogether, just by itself, the national power system will receive investments that approach 3 billion dollars in 2006.

All these plans have been directed by the Venezuelan government, which will control at least 51 percent of these initiatives, although many will involve strategic associations with other countries or private -- national or foreign -- investors. The goal is to strengthen international relations, especially with other nations in Latin America, with China, Spain, India, Iran, and Italy, in the spirit of building an Alternativa Bolivariana para la América (ALBA) and contributing to creating a multi-polar world. Instances of this are the recent initiative to build the oil refinery Abreu e Lima, in the Brazilian state of Pernambuco, agreed between PDVSA and Petrobrás; the agreements with Argentina to build oil tankers at the Santiago River shipyards; and the bi-national tractor factory Venirán Tractor, with the government of Iran, which has already turned out its first 400 units.

The government initiatives to join forces with national entrepreneurs are many, looking to reactivate the industrial and agricultural apparatus. The goal is not solely the economic recovery, but the creation of bases to abandon the rentier model, sustained by raw oil wealth, and to establish a new productive, endogenous model, with internal dynamics and life, able to guarantee economic growth and national development. In March of 2005, the ministry of basic industries and mining (MIBAM) was created, commissioned to build the bases for a sovereign process of industrialization.
(snip/...)

http://mrzine.monthlyreview.org/lws160306.html

~~~~~~~~~~~~~~~

You might want to note the claim within the article that Venezuela's mass media are historically connected to foreign interests, something most of us have known for ages. It's just good to see it in print, from time to time!

[Judi Lynn]

31. Chavez's Not-So-Radical Oil Move

Chavez's Not-So-Radical Oil Move
Tuesday, May. 01, 2007 By TIM PADGETT/MIAMI



Venezuelan President Hugo Chavez (center) operates
an oil rig, near Independencia, Venezuela.
Miraflores / EPA

Venezuelan President Hugo Chavez has a garish knack for making the world think he's the most radical of radicals. So when the left-wing, anti-U.S. leader ascended a raucous stage in front of a petrochemical plant in eastern Venezuela today — May Day, the leftiest day of the year — and announced his government's takeover of the nation's lucrative heavy oil industry, it sent the usual panic through Washington and the international media. "It's national power!" shouted Chavez, who controls the hemisphere's largest crude reserves. "We can't have socialism if the state doesn't have control over its resources!"

But the truth — one that both Chavez and his archfoe, the Bush Administration, would prefer you not know — is that when it comes to oil nationalization, Hugo is hardly the most radical of his global peers. In fact, even after today's petro-theatrics, Chavez is just catching up with the rest of the pack.

From Mexico to China, more than 75% of the world's oil reserves are controlled by national oil companies today. Of the world's top 20 oil-producing firms, 14 are state-run. And even though Chavez has now stripped foreign oil companies like Exxon Mobil of any majority stakes they had in Venezuelan oil production projects — mandating that his state-run company, Petroleos de Venezuela (PDVSA), have at least 60% ownership from here on out — he's at least allowing those private multinationals to continue taking part in the drilling. Not so, for example, in Mexico or the world's largest oil producer, Saudi Arabia. Washington touts those two countries as model energy allies, despite the fact that for more than half a century their national oil companies have barred U.S. and other foreign oil businesses from production ventures.

Apart from his fiery rhetoric, what makes Chavez's move seem more jarring is the fact that, until he came to power in 1999, Venezuela had been a trend-bucking oasis for Big Oil. Venezuela did nationalize its oil industry in 1976, but in the 1990s it had steadily re-opened its fields to foreign investment — in some cases handing the multinationals deals that even conservative Venezuelans considered too sweet. Chavez has just as steadily, and stridently, reversed that policy, paring down the multinationals' ownership while ratcheting up their taxes and royalties. And because Venezuela is America's fourth-largest foreign crude supplier — providing the U.S. with almost 15% of its oil imports — each turn of his nationalization screw tends to provoke outsized alarm.
(snip/...)

http://www.time.com/time/world/article/0,8599,1616644,00.html

[Judi Lynn]

32. " Of the world's top 20 oil-producing firms, 14 are state-run."

Just thought I'd reiterate this statement from the new Time magazine article posted immediately above:

From Mexico to China, more than 75% of the world's oil reserves are controlled by national oil companies today. Of the world's top 20 oil-producing firms, 14 are state-run. And even though Chavez has now stripped foreign oil companies like Exxon Mobil of any majority stakes they had in Venezuelan oil production projects — mandating that his state-run company, Petroleos de Venezuela (PDVSA), have at least 60% ownership from here on out — he's at least allowing those private multinationals to continue taking part in the drilling. Not so, for example, in Mexico or the world's largest oil producer, Saudi Arabia. Washington touts those two countries as model energy allies, despite the fact that for more than half a century their national oil companies have barred U.S. and other foreign oil businesses from production ventures.
(snip/...)

Definitely bears repeating.

[ohio2007]

37. Venezuela: It´s A Lie, No Food Shortage

the propaganda attacks against Chavez continue in his country;

Caracas, May 4 (Prensa Latina) The Venezuelan government denounced a plot by extremist opposition sectors on Friday to spread rumors of a false food shortage or a radical rise in prices of staples.

Washington Strains Venezuela Ties

The warning was given by Agriculture and Land Minister Elias Jaua, who recalled the government s support for the national agricultural sector "both private and others that had been excluded for a long time." Jaua called on the people to fight hoarding and food boycotts and to not pay attention to the destabilization campaign.

He assured that all demands for food items were met during the first quarter of the year and the country reported a sustained increase in food production.

The minister noted that chicken and meat consumption doubled at a time when production of those items dropped due to adverse weather conditions, while production of legumes, beans, tomatoes, coffee and cocoa increased.

"During this government, no drop in production has been reported as some opposition spokespersons, the very ones responsible for the agricultural tragedy in the 1990s due to application of neoliberal measures, have irresponsibly said," the minister concluded.



http://www.plenglish.com/article.asp?ID={961DECAE-75EA-4F16-955D-7973B7B29016}&language=EN


"the meat consumption doubled while the meat production dropped"

That kind of hoarding may result in inflation problems.

[hack89]

39. Good thing we live in a world where governments never lie! nt