Guardian: What the...? (or, Hugo Chavez and His Extra Heavy Reserves...)

Here's a Guardian article on Hugo Chávez and his posturing to "launch a bid to transform the global politics of oil by seeking a deal with consumer countries which would lock in a price of $50 a barrel."

That's right.  I said "lock in."

Did Chavez allow for currency inflation?  I did not see a mention of it in the article.  Without an inflation kicker, I assume this is just a PR event.

Bob Shaw in Phx,AZ  Are Humans Smarter than Yeast?

...and did he mean OPEC Basket price or did he mean what he gets for his tar? If it's his tar that he's talking about, then it would be a price increase of over $20, I think.

I agree. It's all PR.

Hello TODers,

Not trying to change the subject, but this might be REAL IMPORTANT if this globally spreads to the very young, very old, and very weak. Bears reading, and continued monitoring in my estimation:

http://tinyurl.com/ltaea

Excerpt from Yahoo News:
-------------
400 Chinese students hospitalized with unknown flu
Sun Apr 2, 8:36 AM ET

Over 400 students at a university in central China's Henan province were hospitalized with high fevers linked to an unknown flu virus, state press and a school official have said.

The outbreak began on March 26 when 22 students were hospitalized with high fevers, Xinhua news agency said.

The next day the number of sick students at the Henan University of Science and Technology in Luoyang city rose to 88, and on March 28 there were 208 sick students in the university's infirmary, it said.

"There were over 400 students that became feverish with the flu," a university official who declined to be named told AFP when contacted by phone.

He refused to detail what type of flu it was or how the outbreak had succeeded in infecting so many students.
-----------
Bob Shaw in Phx,AZ  Are Humans Smarter than Yeast?

This could indeed be dangerous to the weak, as any influenca virus. However it is probably not a form of H5N1, even extremely unlikely, if you're worried about that. The article says that the ill were released from the hospital after 3 days, where H5N1 in humans has a fatality rate of around 50%, including healthy, strong people.
This is a great story. I saw it mentioned earlier. Certainly Chavez is a master at keeping his name in the news. Authoritarian dictator - yes. Strangely likeable in so many ways at the same time - yes.

Rafael Ramirez - a name we should all become more familiar with, the man behind the scenes.

Very curious to see who our resident heavy-oil experts are. Possible, Probable, Proven? What are the ranges on Billions of barrels? Where exactly are they located?

How much of Venezuela's political oil problem stems from Nigerian rebel-type/Iraqi, Sunni-Shiite-type domestic problems, how much from Pat Robertson? In other words, isn't Venezuela a decent environment for Western oil companies as long as they follow Hugo's rules?

Bob's right about the inflation thing. Otherwise the numbers still look a little odd. He's willing to do this for $10 a barrel?

If it ever comes off, it won't happen smoothly, because all the other players will want their own little deals.

We should be trying to get along with Hugo and the Venezuelans. There is everything to be gained from a good relationship with the country. They are as American as you or me. It is possible to get along without necessarily "supporting." God knows we've been doing it with the Chinese for the last 50 years.


THE ART OF THE DEAL
< It is possible to get along without necessarily "supporting." God knows we've been doing it with the Chinese for the last 50 years.>

More to the point, we have been doing it with the Saudi's, the Omani's, the Kuwaiti's, the UAE, Qatar....you get my drift?

It seems as though the idea of dealing on an equal footing with our new world allies and Latin American compadres is so abhorrent that we will lick the shoes of nations in Asia rather than do it...why do we not extend the same good deals to our Venezualen friends....money?

Here's the deal:  A new administration comes in.  They announce that oil is NOT the issue (heeheehee, but say it anyway!), it is time for us to live up to the dreams of the PAN AMERICAN REVOLUTIONARIES, George Washington and Simon Bolivar, and stomp poverty with a turn of brotherly cooperation...we fet and dine Chevez...and offer the deal....America will provide say two nuclear stations in Venezuala to process heavy oil and provide the "energy in" needed to produce it in great volume....and provide domestic electric power to boot....BUT, in a version of "atoms for peace", we will enrich the uranium, and account for it to the gram, and we will dispose of the waste, which will be returned to us, accounted for to the gram....they will operate the plants, and sell us the oil exclusively in exchange, and to show our commitment to the people of Venezuala, we will pay the set price, plus the rate of American inflation each year.  

That's the deal, here's the logic:

>The nuclear processing and some careful sequestering of GHG is the only way to keep the heavy oil from being a greenhouse gas nighmare, and provide the needed energy without wasting valuable natural gas.
>We head off the proliferation issue up front, making Venezuala a defacto "nuclear power", but with no nuclear weapons (status without risk)
>We lock in huge volumes of liquid fuel, and at a fair price....after all, if you really believe in "Peak Oil", $50 or even $60 bucks is a STEAL, and the predictability factor is HUGE...the American economy would take the boot of fuel instability off of it's neck.
>We account for the inflation up front by using our own numbers, which, let's admit, are designed to benefit US.  We don't have to cheat, they are that way by design.

Lastly, we get LIQUID FUEL, and at a short haul from our coast!  We can go even further, a few extra bucks to Venezualan higher education, opening up student exchanges, humanities and arts events....compared to the risk of falling short of liquid fuel, this would be a pittance...we would be willing to out socialize the socialists!

(and remember, should things go sour, we still have our fleet...an invasion of Venezuala, while not preferred, would go at least as well as an invasion of Iran (or as our failed attempts to date in Iraq)

AND WHY NOT?  WE WERE PLENTY WILLING TO LET SAUDI NATIONALS WANDER AROUND AMERICA TAKING FLYING LESSONS AS THEY RECIEVED CHARITY MONEY FROM THE SAUDI ARABIAN AMBASSADOR PRINCE BANDAR'S WIFE, AND SET THE STAGE FOR A MASS MURDER OF AMERICANS....IS DEALING WITH VENEZUALA ANYMORE RISKY THAN THAT?

More to the point, we have been doing it with the Saudi's, the Omani's, the Kuwaiti's, the UAE, Qatar....you get my drift?

I don't know. Do you get my drift? Cuz it wuz kinda mine. You just added some countries to it. Whatever. I liked your post yesterday on Qatar. I don't really understand your post here. I'm not a big fan of capitals/shouting or cut-and-paste-carets.


My apology if I sounded as if I was repeated your point, i.e., willing to deal with China, and I generally don't like to use all caps myself, but, It was to make my major point stand out, which is simply this:

The anti-Latin American lean of America is astounding when you consider the crap we take and the deals we cut with OPEC countries, and somehow that never injures our pride.

I am not familiar with your reference to "cut and past carots", unless you mean the carots I use to indicate major points....nothing to do with "cut and paste, but I have a Mac and it is just the easiest way to create de facto "bullet" lists.
Is that conisdered a breach of a rule I am not aware of?

My post was simply this:  We could play the game with real imagination and "lock in" to use the original articles words, a predictable reasonable price for liquid fuel, and buy time....not a terrible arrangement if you compare that scenario to the grubing for worms survivalist terror ridden, complete collapse even beyond nuclear war scenario that many peakers love so much.  If we use the time we buy well, it could be a big thing....if Chevez is serious, let's find out.  Again, apologies for any misunderstanding.

WE WERE PLENTY WILLING TO LET SAUDI NATIONALS WANDER AROUND AMERICA TAKING FLYING LESSONS

Um, 911 was made in America

CNN: 85% of Americans believe in a US Cover Up of 911.

Noone can account for the failure of WTC7
or how the antenae on WTC N fails first while it's bolted to
the core.  Or that NORAD is still lying about it's timeline
or Cheney's quote-via Mineta,to the military officer saying Flight 77 is 100, then 50, then 25 miles out-"Do the Orders still stand?"-"Of course the orders still stand.  You haven't heard anything different have you?

James

I really do not want to confuse issues here with
gasoline inventory record drops and crude at $67.50
per bbl and at a record in the UK, but we're going to
get 911 facts strait here.

...and UFOs crashed in Roswell,
...and the moon landings are a hoax,
...and monkeys fly out of my ass.

Blah blah blah.

Thank You: Well said.
Undeadfiz: You are protesting too loudly. You don't believe the 9/11 nonsense any more than McGowan does.
It's a fair cop.

Curse you BrianT, you are much too clever for us naughty people.

And their goes a monkey now.
How does Flt 93 leave a trail of debris if it dove into the ground?
Why is NORAD still lying?

http://www.prisonplanet.com/articles/april2006/040406mainsuspect.htm

So you're really not going to like the fact that Dead Eye Dick
is the Main Suspect.

Cheney was in charge of all War Drills being carried out on 911.

Abd why did the Secret Service not rush Bush out of the Elementary School or even allow him to go into it?

These Jokers are going down.

James

PS-Wait til they try to explain what Atta was doing on Abramoff's Casino Boat.

Business as usual.

Grow, grow, grow.

Good thing we live on a sphere, or we'd run out of space.

Oil CEO --

 If by "authoritarian dictator" you mean elected in two internationally-sanctioned, democratic elections and surviving one coup attempt instigated by "outside" forces, then I'll agree with the term.  

  While I agree the above isn't quite as brilliant an example of the glories of democracy as, say, getting appointed by five right-wing jurisprudents  after losing the popular vote, achieving sixty-plus percent of the vote ain't bad.

Ha Ha. Very good. No, I knew that. You are right, of course. He is extremely hard to figure out.

But I think that I have made this clear. Nothing I have ever said would suggest that I can be classified as either a supporter or detractor of the man.

While I have one definition of dictator and of free elections, I know these things have different interpretations. I am a citizen of the world, I understand the differences.

He is simply a fascinating character.

For $30 million dollars a year(and a suitable security detail) he and Rafael can hire me as their chief consultant on the US. I know they already pay somebody else more to do the same thing. Are they happy with the results? - ask them.

I like Chavez.  I like his populist stands, and he's got pluck!  I support him as best I can - I buy all my fuel at Citgo.

I do worry about what he could become - he may have the potential for authoritarianism, but I can't hang the man for what he hasn't done yet.  So far it's above-board, and the large majority of his country support him.

And I agree, we should be doing business with the man.  He's shown every willingness to do business with us, it will just be on terms that are favorable to them.  It's still far cheaper than the alternatives.

I've been thinking about this, and I think "dictator" means anyone who blocks free trade.  

See, "democracy" doesn't really mean democracy, it means "free market capitalism."  We said we wanted democracy in Iraq, but were dismayed when the Islamicists won.  We said we wanted "democracy" in the West Bank, but pitched a fit when Hamas won.  Clearly, it's not really "democracy" we want.  

Once you understand that "democracy" is a codeword for free market capitalism, it all makes sense.  Chavez is "undemocratic" because he's bad for business.

But he's good for business, isn't he?
Ahh,that's just a little thing. They'll get over that once both sides understand they have so much to gain by getting along, and so much to lose by quibbling.
A little Thing?

Can you recall the last time that XOM was
kicked out of a country?

James

PS-Maybe they haven't officially been "kicked out" yet
but XOM is not moving oil thru pipes and replacement oils are being located.  Fat Lady is warming up.

James

PS-Carrier Group on the Way

hee hee
"Authoritarian dictator - yes."

Based On What Evidence?

This seems to be a meme repeated by the press with no evidence provided.

I could make the same claim for George W. Bush with more credibility since he has already attacked one country without provocation and did nothing to stem the misery in New Orleans.

As I said to the Prof. "keep your amateur political philosophizing to yourself unless you can back it up with facts!"

"keep your amateur political philosophizing to yourself unless you can back it up with facts!"

You are a fucking jackass.

You just said a bunch of stuff. Where are your "facts."

You "could" say the same stuff about Bush. Why don't you? You did say those things to Prof. Goose. And your statements were just as stupid then as they don't exist now. I think I responded to your nonsense back then, too. Is that why you confront me now? A grudge?

I never offered my "amateur political philosophizing" as anything more than that.

But now you have a serious problem. You have to somehow prove with "facts" that you are not a jackass.

Somehow, I don't know how, you missed everything else I said about Chavez. This has to be a grudge.

I, of course, have plenty of "evidence." And can afford to sit on it.

Squirm away.

Oh, and in case I didn't make myself clear...

Fuck You

I will not dignify your inappropriate comments with a complimentary salvo.

However, you still did not justify your original comments on Chavez!

Seems that you have a very thin skin when your "august" comments are challenged.

It also seems that my comments about the wealthy elites not liking him hold true.

I don't have to justify anything.

The ball is still in your court. You have to counter me.

Perhaps you have forgotten your comments in the March 23/24/25 thread. You still haven't responded to my defense of Pofessor Goose.

Thin skin? Yes. I have a very thin skin.

"I don't have to justify anything."

My god...GW is a member of TOD.  I always wondered about Oil CEO's true identity.  Although, I would have guessed perhaps Rove or Cheney, since I'm pretty GB can't use a PC very well.

Did you know that during his entire time in office, Bill Clinton only sent two emails, and one of them was a test message to himself to make sure his address was correct? That's a true fact. And Cheney does suck with PC's but he sure is hell with the birdshot. We'll give you a 30 second head start.
HIHIHI!! ;-)

Prole must be right on target with his response.
Otherwise you wouldn't react so angry emotional, oil ceo!!

Huh? Does that mean you must be wrong since you can't spell? Good logic.
tsktskstsk... You should react on the content, not on the form. But it confirms again what I was thinking; right on target ;-)
Of course. Anything that goes through your mind is always right on target. Interestingly, neither you nor the others above who have been making these veiled attacks have provided any content whatsoever.
Agree.  Even Lou Dobbs of CNN, who prides himself on seeing through the spin, refers to Chavez as a "strongman."  WTF?  The man was elected.  It may be inconvient for us, but that doesn't make it undemocratic.  

The truth is, we really don't support democracy.  Democratic nations have an unfortunate tendency to do things that are not in our interest.  We say we want democracy, but it's only lip service.  

And interesting write up on Chavez and Venezuela.  Non lefties should probably ignore the comment section.
Some other rather unsavory types have been "elected" in the past. I don't think I'm alone in recognizing Hugo's authoritarian tendencies.

I think we do support democracy. All other nations have a tendency to do things that are not in our interest.

What was the real motivation for all those actions that we took where democracy was the "lip-service" reason we gave.

What do we want, if not Democracy? What is the conspiracy. What, in my amateur political philosophizing, have I missed?

I don't think I'm alone in recognizing Hugo's authoritarian tendencies.

The guy's a populist, not a strongman.

What do we want, if not Democracy?

We want leaders who will act in our interests.  Hence our tendency to support dictators who are U.S.-friendly.  Ferdinand Marcos, Saddam Hussein, etc.  

And as I said elsewhere in this thread, when we say "democracy" what we really mean is "free market capitalism."  

when we say "democracy" what we really mean is "free market capitalism."

But then this is about what we call it rather than what it is. From a "Western" perspective these are one and the same. Then maybe this becomes about perspective.

When was Saddam Hussein "U.S.-friendly?" Were we ever friends? Wasn't our positive relationship with him, when it existed, based on much larger geo-political factors? It wasn't because he kept sending flowers to the White House.

From a "Western" perspective these are one and the same.

No, they aren't.  But the fact that you think they are pretty much proves my point.  

When was Saddam Hussein "U.S.-friendly?" Were we ever friends?

Hell, yeah.  When Iran was the enemy, Saddam was our pal.  We gave him the chemical weapons he used "on his own people," remember.  Saddam may have been a brutal dictator, but he was Western-friendly.  Far more so than the mullahs in Iran.  In Saddam's Iraq, there were American movies in theaters, people could wear the latest French fashions if they wanted to, women could drive and go to college and work at just about any job a man could.

Some go so far as to say without U.S. support, Saddam would never have risen to power.  I wouldn't go that far, but we certainly helped him stay in power.  

There is a decent article on Chavez in last October's European  Edition of Fortune. I will post parts of it probably the next time the subject of Hugo comes up. But since it relates mostly to his oil policy, I post the following piece regarding his politics.

This is an old thread, so I hope posting this in its entirety is not a problem.

http://www.vcrisis.com/index.php?content=letters/200603211834

A dictator is a dictator.


Hugo Chavez, Demagogue
By Pedro Camargo

21.03.06 | Hugo Chavez is in command and he wants you to profiteer from his dirty business scams. With no judicial integrity, with the media being shuttered, and with no independent government function, as all is under his control, any who do business in Venezuela do business solely with and through the Chavez circle. The Caracas government, as such, is simply an extortion racket for protection schemes. Those who do not pay to play in Caracas are either dead or hounded out or selling Hugo Chavez look-alike dolls on the street corner.

Hugo Chavez is a demagogue. A demagogue is defined as, "a person who tries to stir up the people by appeals to emotion, prejudice, etc., in order to win them over quickly and so gain power." Chavez is a demagogue and that is not the only thing he is up to. Every time Chavez lets lose his now standard demagogic vitriol, he is trying to control and manipulate events. This communist caudillo habitually takes over Venezuelan air waves each week-end, commanding center stage, to rant and rave like a manipulative, scolding, aggravating wife.

Hugo Chavez is trying to manipulate, among several agenda items, global oil prices to pad his personal wallet and increase his political buying capital. Each and every time Chavez opens his long-winded vitriol against the U.S., oil prices spike and Chavez and his cronies make profit. Every time Chavez's paid protesters blow up a gas or oil pipeline, oil and gas prices spike as well, as increase costly repairs and police-military expenditures. Of course, Chavez's paid propaganda agents remind us to not complain when the Chavez agents of doom and harm come their way. Silence is required of these minions. Any who speak out or question the wisdom of Chavez's Bolivarian take-over profiteering plan is silenced or forced in to serving as a complicit enabler of the regime. These habitual dyspeptic, and at times racist and misogynistic, screeches of the harpy Chavez-as-desperate-housewife are more than some lithium-induced hysteria by Chavez, although that could be a factor as well. We suspect this is more about control.

While some claim that Chavez's tirades are a diversionary tactic to steer the public away from the collapsing infrastructure that his regime has failed to maintain or to divert attention from his clique's criminality and nation-looting, we sense more of a mania underway. Hugo Chavez is out of control as the cameras role while his plan goes apace.

Every time oil prices spike based on some perceived, real or engineered geo-political instability, energy speculators potentially make billions. We are not referring to refineries or drillers but offshore, dark, opaque, tax-evading speculators. Hugo Chavez is their toyboy: he sets up regional instability in oil and gas producing zones -both physical and political- which drives up energy costs and makes for Chavez new income in two ways: price per barrel jumps and his gaggle of inner group speculators make money.

This one-trick pony, populated mostly by offshore global oil speculators, is driving the Chavez administration. Without Chavez's absurd vitriol and his total control of his own media, Chavez's dirty speculations -aka price fixing and profiteering from staged, well planned attacks- would not progress.

To cover over these criminal acts, Chavez has set about to convince the world that he is a benign, charitable leader. To do this, he sells reduced rate oil to some groups. But closer inspection shows us that the vendors for Chavez's reduced oil are simply new found political puppets: mouthpieces of the new Left who are willing to take Chavez's oil. In return, these new found oil vendors must be willing to sit by passively as Chavez rails against the United States and rails against functional democracies. Chavez is selling a goofy, incomplete democracy which is actually a bastardized communism. All who profiteer from Chavez know that dealing with Chavez carries strings. One of the major strings of doing business with Chavez is this: his cronies are required to be complicit with him to denounce the benefits of free trade and functional democracy.

Recall that the converse of free trade is either dependency on centrist state hand outs or abject isolationism in wretched poverty. Chavez entices his oil-for-political influence peddling through monetary graft whole attaching riders of complicity to support an end to free trade and functional democracy.

To this anti-free trade political swap or rider, Chavez also carries a message that democracy needs to be redefined. That is, democracy, to Hugo Chavez, must be rejiggered to mean something else entirely. And that something else that Chavez seeks is, by his own words, a non-democratic statehood controlled by a powerful central actor who co-opts the courts, the media, the military and police, as well as education and healthcare. This is supposedly to "help" the poor. But as we know, it is the crueler attack on the "poor" that exists. Poverty is never alleviated when justice is perverted, a police state exists, schools teach revolutionary propaganda and not career building tools, medicine is spotty and under badly trained Cuban neighborhood agents of no real medical training except -at best- triage nurses and any free speech is shuttered or bought out.

Chavez's oil for political bribes is exactly that. Any who sit at table with Chavez are part of his dirty schemes. One becomes known by the company one keeps.

Double-speak remains double-speak. Oil bribes for political favor remains oil-bribes for political favor.

What do we make of those who make the self-enriching deals with Hugo Chavez on cut-rate oil? We know that this is a political game of bribery by dirty oil profiteering. We would do well to denounce these mute spectators. Once bribed, there is no free speech, no openness and no independence from Chavez who demands total dependence and allegiance. No one openly criticizes Chavez for fear of reprisals. This fear of reprisal is quite real and is reflected in the absurd murder and crime rates in Venezuela, which reflect the gross spikes in political assassinations, if any care to actually review the crime statistics in that land, which contains impossibly unjustifiably over-the-top murder rates, reflecting a death-for-hire schemata by local thugs to remove large numbers of undesirables. When one is bought by Chavez, one stays bought.

Chavez is so enamored of his greed that he now refuses to disclose basic business practices of his hand-held PDVSA-CITGO pocketbook. He refuses to even present requisite audits to the US SEC and refuses standard business principles. This is because he wants none to grasp how illegal PDVSA and CITGO are today by his hand. Any who purchase PDVSA-CITGO oil do so today at the expense of standard, globally accepted business practices, knowing full well that they are buying dirty oil. Dirty oil which comes at he expense of the people of Venezuela whose lives are deteriorating so that Chavez can continue his megalomaniacal global take over plan of hatred and instability for neo-communists.

PDVSA and CITGO are no longer functioning, legitimate corporations. To be sure, PDVSA-CITGO still refine heavy crude, albeit increasingly spotty as well, and still have some gasoline stations in the U.S.. But this is not a normal corporation and as such, has broken U.S. and international regulations and laws to such an extent that its corruption is quite apparent. All who participate with this corrupt group, previously known as PDVSA-CITGO, are dealing with corrupt actors and are today tainted with the stench of that same corruption.

Chavez totally controls PDVSA and CITGO, as he controls everything else in Venezuela. PDVSA-CITGO is Chavez. Venezuela is all about oil. In other words, Venezuela is a one trick state and that is Chavez's oil. It is now dirty oil. And any who play with Chavez's dirty oil are now known as supporters of Chavez's dirty state.

But having destroyed Venezuela, Chavez and his minions want to corrode U.S. foreign policy and help destroy North American businesses, all part of the North American free trade zone. Chavez seeks to convert/subvert the US democratic republic toward the Chavez-Castro non-democratic state where the courts, police, military, media and government serves the overarching state, controlled by Chavez. They want this for the U.S. and are spending millions to begin the conversion. Although this sounds like a laughable archaic KGB style disinformation campaign, in 2006 it is quite real. These errant souls actually hate the U.S. and all it stands for. Money to Chavez is now being spent on undoing the U.S. and its ethos.

We as people are known by the company we keep. Chavez's company are profiteering pirates who will stoop to any level to profiteer and propagandize their take-over.

The Clinton era disease of enabling the profound rise in illicit activities is enshrined in the infamous `look at what he does, not at what he says' theory about Chavez. This policy has had its day. While ostensibly uttered to inform us that as long as Chavez's tanks were not rumbling down the road, we were to be assuaged that Chavez was no menace. As with all corporate crimes, the victims and the money trail is harder to follow. Tanks were not needed to seize the entire government and monies of Venezuela: Chavez did this with the help of a complicit global foreign policy machinery that stupidly believed that Hugo Chavez was on earth to help the "poor" and other myths. We were urged to look the other way and maintain silence. Such gullibility was understandable but no longer unacceptable. We pay today for the Clinton era theories as if not paid before. We are watching what Chavez says and what he does. And we are tired of paying for this at the gas pump, in wasted lives, and senseless political assassinations. We are weary of our South American friends being spied on by Chavez, having their lives and loved ones ripped apart, and we are quite weary of failed sycophants across the globe telling us that this is all somehow wonderful. It is not wonderful. A dictator is a dictator.

There is no peace with a harpy of instability on the make in the Andean region. While Chavez's crude cacophony distracts attention from the underlying self-enrichment money stashing by his cronies -pathetically robbing his own citizens- his meager piecemeal efforts to ease grinding poverty are random and unsustained, like crumbs from a banquet table, tossed off to the "poor." A blow-hard, screeching, harpy as dictatorships does not seem to be working well for the common man. We are watching what Chavez does and we refuse to listen to his manipulative diatribes and embarrassingly florid speeches. Chavez's routine to cow and control Venezuelans into submission is now affecting the Andean region, particularly Bolivia, Peru and Ecuador. While the screeching Chavez tries to bully confused Latin Americans in to a silent, compliant mass, he is in fact paralyzing what could be vibrant, sustainable quality of life. By un-manning the local leadership, he seeks to control by submission and manipulation. Make no mistake: Hugo Chavez is at the door of these Latin nations and he wants in their beds, so to speak, in their daily lives, with full dominion over their nascent democracies so as to convert their republics to his Bolivarian bloc.

Chavez is not preparing his nation for self-defense. A quick review of his recent weapons spree confirms that Chavez is preparing for regional subversion in the best of cases and invasion in the worse. He is on the move to upend each standing Republic to his own. Who is left to stand with honor against the screeching, manipulative communist caudillo? Where are the local leaders and free press who are not yet cowed into enabling submission or corrupt deal making with Chavez? Who stands with honor to defend liberty, increased education and training, and the backbone of integrity while the Latin American geo-political world is under intense media manipulation, political scams, financial crimes, and their future shatters?

There is only one solution to Hugo Chavez's manipulations: the reinstallation of liberty and integrity given to each man to apply at will. Without this, each nation in South America is lost, soul by soul.



How about a $20 Billion Lock-in?



NW Shelf China Gas Deal Burns A$20 Billion

Friday, March 31, 2006 - A landmark gas contract with China stands to cost Australia's biggest natural resources project up to A$20 billion (US$14.3 billion) in lost sales due to contractual terms that fail to account for the increase in oil prices to record levels.

http://www.rigzone.com/news/article.asp?a_id=30842

If this deal goes ahead, and subsequently the oil price on the open market increases dramatically, as most peak oil adherents expect, how long will it survive?  Will Chavez be then seen as a forward looking hero, or someone who signed away his nations wealth?
This is a ploy to get Venezuela's tar reserves counted as oil.  That would give Venezuela a larger share in OPEC, a bigger power base.
MircoHydro,

I agree. But I think it also goes beyond OPEC.

  1. Chavez really is a spokesperson for the great unwashed of Venezuela. There is an element of class war here. A lot of those rich expats mentioned in another posting ignored the poor for too long and reaped Chavez. (Watch a Miss Venezuela pageant sometime - you can see the race dark vs light skin, before your eyes. For years the pageant was considered their #2 or #3 export product - watched by ALL of Latin America.)
  2. Chavez has argued from day one of his regime that oil is priced too low.
  3. Interestingly, one of his early projects, though I have not seen too much done on it, was to be a heavy investment into new railroads to help the poor be able to move about the country easier.

With this move he kills more than one bird with one stone.
A quick google search turned up this:

Infrastructure In one of Venezuela's more expensive initiatives at $5 billion total, the government is currently developing projects to create a considerably expanded modern rail transport system for both passengers and cargo. At present Venezuela has only 329 kilometers of railroad, and much of what short length they do have, such as the railroads in Bolívar state, is only available for use to members of the mining industry. Eventually the goal is to bring this number up to 4,000 kilometers of railroad throughout Venezuela, thereby enjoying the advantages of all that modern railways can provide and boosting the country's development. Though the project as a whole will take around 20 years to fully complete, work will start in the coming year with an initial increase to 475 kilometers of rail. This small expansion should allow for the annual mobility of 35 million passengers and 35 million tons of cargo. Specific projects in Venezuela's railroad initiative will include routes from Cúa to Caracas, La Encrucijada to Puerto Cabello and Puerto Cabello to Barquisimeto, among many others.

In addition to the priority being placed on Venezuela's railroads, the highway system is also a priority area for the country in the immediate future. The government will invest $134 million through 2006 in its national road infrastructure investment plan, which will be spent on rehabilitating and building new regional highways. The Inter-American Development Bank will provide the government with the necessary funds to complete the eleven projects in the Venezuelan states of Portuguesa, Apure, Barinas, Falcón and Lara. Guárico state will also receive some needed revamping this year, as Venezuela's infrastructure ministry Minfra will spend $9 million via national urban transportation fund Fontur to refurbish a total of 636 kilometers spread out over 14 roads serving agricultural areas of the state. During the project's first phase, the company elected to perform the works will rehabilitate seven of the 14 sections. The seven stretches, located in regions that primarily produce maize, milk, meat and grain, will total 388 kilometers. Minfra and Fontur will soon be accepting bids on the projects from interested companies.

Micro Hydro,

I think you nailed it.

Chavez is detested by the West, and the likes here, because he brings the subject of "Class Warfare" front and center.

One thinks addressing this issue sooner, rather than later, will only help the greater good by preventing unnecessary bloodshed as Peak Oil unfolds.

One thinks that will never happen in this country because the "elites" would never consider sharing their wealth with anyone.  Just look at Bush's tax policies for proof.

One also thinks that the elites in this country are fools if they believe that all those Gun Aficionados are not capable of hunting Homo Sapiens.  The elites forget that these same folks have been practicing on Deer and Rabbit for decades.

I hear Cheney practices on Homo sapiens (though maybe lawyers don't count).
Well, I guess that's why he let the bridge fall down... the only bridge connecting Caracas to the coast... because it was helping the rich more than the poor?

To be fair, the bridge was known to be in trouble for two decades, and it was legal wrangling and corruption that kept it from being fixed.

Chris

These long term commitments can be a real albatros later on. Time will tell if this is hot air or not.

The province of Newfoundland in Canada made a promise to sell electricity to Quebec in the 60s at a fixed rate from a dam they had just finished. The deal didn't factor in the inflation of the 70s. Bad idea.

My 2cents on Chavez: He's a cross between egomaniacal clown and savior to the poor. Rich Venezuelan expats I know here hate his guts but that's not surprising. He knows how much of the world's politics are played out in the media. I think many of his programmes have falsified results but that doesn't mean it isn't worth trying some of his wealth redistributions.

"My 2cents on Chavez: He's a cross between egomaniacal clown and savior to the poor. Rich Venezuelan expats I know here hate his guts but that's not surprising."

So the wealthy hate him because the Poor like him?

What is your point?

I could make the same points about Bush in reverse with equal credibility - improper jokes, inability to command the english language, favoritism to the wealthy elites.

Seems that the unstated assumption is that a leader is bad if the wealthy and well connected are not behind him or her.

Well maybe that assumption needs rearranging with a return to power by the people.  One thinks that a few heads lopped off by guillotine will aid the ultra wealthy in reassessing their priorities.

With Peak Oil this will come to pass -  All those gated communities are just begging for remodeling!

Please, the rich don't hate him merely because of a few million or billion here or there, they hate him because he quite proudly doesn't claim to be a white European.

There is a lot more to Central and South America politics than money or even class (whatever that might mean) - think race when you hear about elites in South America.

America has nothing to teach South Americans when it comes to racism - and for those who think 'Hispanic' means some sort of all-inclusive concept, do ask a someone who calls themselves Hispanic if they have Indio (or the appropriate local term - probably  translates to 'animal' well enough in practice) parents to get a feel for what I mean.

This is certainly true for the people I have known from Mexico, Ecuador, and Bolivia. Nothing suggests Venezuela is different at all.

Not all politics reduces to economics or class, even in an oil exporter with a world looking at Peak Oil.

Chavez simply being in power is insult enough for that thin strata of Venezuelan society which considers itself better born than all the low life scum around them.

Watch how this plays out in Bolivia - could be quite instructive. And remember - Morales partially won an election by promising not to sell natural gas to outsiders. Something quite interesting is going on in South America, and it has a lot to do with a changing voice for people who had no rights for generation.

Hmm - in that case similar to the Shites?  Repressed majorities taking power in oil-rich regions?
An unfortunate misspelling.... sure wish we could fix those!
Really don't know what to make from this article. However let me share some of my amateur political philosophizing unsupported by evidence. With elections coming up in December it would be neat for Chavez to have the largest reserves in the world.
The energy cornucopians always cite Canada and Venezuela as the salvation for the $50,000 Hummer/$500,000 mortgage way of life here in America.  

Let's look at total crude + condensate production for the two countries.  

  1.  4,641 mbpd
  2.  4,934 mbpd

This is an increase of about 300,000 bpd over a two year period, or 150,000 bpd per year.   The EIA had been estimating that Canada alone would show an increase of 700,000 bpd from 2003 to 2005.   Before these two countries can show a net increase in production, they have to offset declines in conventional production.  Also, we probably have to discount nonconventional production by 35% to 50% to get net energy.  

My WAG is that these two countries may be increasing their oil production, on a net energy basis, at the rate of probably about 1% to 2% per year, 50,000 bpd to 75,000 bpd per year.  

The Canadian themselves are only predicting that their tar sands production will increase from one mbpd now to about three mbpd in 10 years.  (If you look at total liquids production, Canadian production actually fell from 2003 to 2005.)   And again, we have to discount to get net energy.  What is somewhat sobering is that the country that is putting the most capital into nonconventional, Canada, is showing a production decline.  Ponder that for a moment.

If Deffeyes is correct, and I think he is, this year well will probably start seeing a net decline worldwide of about two mbpd to four mbpd.  

I cannot imagine anything more irresponsible than encouraging Americans to continue driving their SUV's to and from their $500,000 mortgages based on expectations that Canada and Venezuela will save our hugely energy intensive way of life.

"this year well will probably start seeing a net decline worldwide of about two mbpd to four mbpd"

This is production decline right? How much would you guess will be lost in net export capacity from important producers like Russia due to domestic demand growth?

And do you have any idea when we will feel the real squeeze? I mean not the pain at the pump, that's obvious if Deffeyes is right, but I mean real lack of availability of oil as a raw material?

Just interested in your educated guess.

And I would like to throw some oil on the fire: How the hell is Canada going to produce 3 mbpd from tar sands in 10 years when running out of NG in 8 years?

The French company TOTAL is proposing to pay for a nuclear plant in Alberta. I think the price tag is 2 bill.
I always use my hypothetical Export Land Model.  

Assume:  two mbpd production; one mbpd consumption; production decline of about 25% over a six year period (based on North Sea, which peaked at 52% of Qt); consumption increase of 10% over six year period.  Result:  a 25% production decline equates to a 70% drop in net oil exports.  

As I said before, the net oil export crisis will hit, IMO, before the global oil shortage becomes readily apparent.  

If we look at the past four weeks of 2006 versus the same time frame last year, oil imports are down about 3.6%.  IMO, the markets are sending a price signal right now that the US market needs more light sweet crude oil.  Key point:  we have no idea what percentage of current imports and current inventories represents light sweet versus heavy sour.

My WAG, we will see a worldwide decline in net oil exports of 50% within five to ten years.

That is going hurt really, REALLY, bad!

As for the nuclear power plant to power tar sands operations, AFAIK it takes 5 to 10 years to complete these monsters. Not quite in time wouldn't you say?

Not in time. However it looks like Alberta will have more than a few privately sponsored nuclear plants down the road.By hook or by crook, every last drop of liquid fuel is going to be squeezed out, no matter what.
This is of course assuming that a country's oil production goes first to its domestic consumption and then the remainder is exported (or the equivalent that it imports sufficient quantities to make up for any over-export).  Now this may well be the case where the producing country is wealthy and/or has a nationalised oil industry, but in those countries where this is not the case the present fungibility of oil means that it will be sold to the highest bidder which does not necessarily mean the domestic market.  It's analogous to the situation where a lot of developing nations produce large amounts of cash crops that are bought up by developed nations while suffering frequent famines/malnoutrition etc (perhaps the best known historical example of this would be the Irish Potato Famine).  We can therefore expect that, as the price of oil goes up and the quantity produced goes down, there will be increasing political tussles within the major oil producers as to whether to produce primarily for the international market or whether the domestic market is compulsorily catered for.
I don't buy crude oil I buy gasoline. As of last Friday the NYMEX had gas at $79.58 per barrel. I see the NYMEX price as the product of the light sweet/heavy sour ratio. Chavez's offer of $50 bbl is nearly $30 less than NYMEX gas. Is his oil sand that much more expensive to refine?
The Oil Sand companies will make their own NG substitute

By using the Waste by-product "Coke", from Bitumen Processing, to generate Syngas for oil sands production energy. See Opti Canada for a diagram :)

I believe Suncor is doing the same from 2008 onwards.

Other oil sand producers will follow as NG goes up in price

It is starting to look like 2005 was the peak. The media has done a good job B/S the public about the pumping potential of the oil sands. Different topic: as we slide down the post-peak hill, energy and the quest for it will become a larger and larger % of the total economy (in terms of dollars spent and people employed). At least in the short-to-medium term it looks like all other sectors of the economy will trail energy (in terms of capital invested). Comments?
Re:  Two Texas Billionaires & Peak Oil

I wrote a 2,700 word essay on this topic (and tar sands production) in the form of an open letter to the Dallas Morning News & the Fort Worth Star Telegram.

http://graphoilogy.blogspot.com/2006/04/open-letter-to-publishers-of-fort.html

westexas,

Good letter. Also liked the electric rail link.

Nice letter!
Exceptional Letter!

Well Done.

Keep us apprised of the reply from the editorial powers that be.

I think that Matt Savinar is going to be posting the letter on his website:

http://www.lifeaftertheoilcrash.net/

Feel free to use my letter as a guide for letters to media outlets in your areas.  Rainwater & Pickens make a pretty damn persuasive pair.

Note that the Urban Rail article was written by Alanfrombigeasy.

I'd also join the chorus urging you to let us know if this outstanding letter is ever published...will tell us a lot about the prevailing climate of denial and how hard it will be to break through the MSM.
I'm mighty glad you wrote this great letter at just the right time for the people in my  town to see it when they read my little recent letter on the same subject urging them to go to TOD to get educated.  I sure hope they read your letter and skip all the harsh infights flying around here.

On the other hand, maybe the infights legitimize your letter!?  Ain't that the way science works?  Hope.

Now posted at the Energy Bulletin

http://www.energybulletin.net/14606.html

 Open letter to Texas newspapers about peak oil: 'Why aren't you listening?'

Jeffrey J. Brown, GraphOilogy
The US media have two choices regarding the Peak Oil issue. To paraphrase Winston Churchill, you can now have either your honor or the status quo. If you do nothing regarding Peak Oil, you will soon have neither the status quo nor your honor.
published April 4, 2006.

I'm sure everyone (with cable TV) also saw the drumbeat for conflict with Iran over the weekend.  Flipping channels, I saw a lot of news, but whenever I flipped by Fox they were talking about "Iranian terrorists"

Weird when one news channel is so out of sync with the others.

On the other hand, Karen Kwiatkowski was on C-SPAN, filling in some of the gaps on how these drumbeats work (sadly) within even our military organizations.

I know this sounds absurd, but if you observe US foreign policy since 2000 it seems to be directed toward DRIVING UP the price of oil. Certainly this situation fits the bill.
Did you read the news articles over the weekend about Iran's new missle and cavitating bubble rocket torpedo?  Looks like Russian technology to me - a nimble move by Putin to capitalize on our strategic mistakes.  I think this is intended to prevent us from betting it all on a move against Iran, and force us to live with the mistakes we have made.  I also think that the US would not strike against Iran, even before these new developements - there's too much that could be lost in such a move - I believe what's going on right now is good cop diplomacy/bad cop saber rattling to try to bring Iran to terms, but the Iranians are on to us because they know how limited our options are.  It's brinksmanship on the part of both sides.  The real danger is the chance of a false alarm being escalated into something real.  That's my take, anyway.
Well, Faux News is still giving us "terror alert: elevated" so there you go. (What color is "elevated" anyway?  Fuschia? Yellow? Purple?)
So where's the refinery capacity to make gasoline from this Venezuelan crap going to come from? See HO's cracking story.
http://newsvote.bbc.co.uk/1/hi/business/4873202.stm

Venezuela takes back oilfields.  Never a dull moment.  And still the oil price goes up.

Hmmm.  The BBC coverage of this story sounds more like Chavez is suggesting the new floor is $50.  That's not quite the same thing as locking it at $50.
Interesting article. Am I correct in assuming the same difficulties in ramping up Orinco oil as in the tar sands of Alberta? Is the process similar (i.e. mining?)  
That's a good question and I'd have to research it. I do know that right now Venezuela produces 0.5/mbpd of their "heavy" oil reserves and I believe they refine it themselves for export.
Please do research it! Lets see how much capex it will take to get production levels up.

The capital cost for the Alberta Long Lake Project is ($CAN) 4 billion which generates 60,000 bbls/day of upgraded Light Sweet @ 39 API.

So very roughly, to get 1 million bbls/day of new production from Venezuela you would need to invest:
1,000,000/60,000 = 17 Projects x $4billion = 68 Billion Canadian dollars + another say $32 billion for inflation over the following ten years to get an extra 1 mbbl/day.

Who's going fund deals of that size in Venezuela ?
I highly doubt western investors will be gagging for it.

There was a NPR story this morning about Chavez's fear that the US is going to invade Venezuela.

"Venezuela has begun to train military reservists based on lessons from the war in Iraq. President Hugo Chavez has been warning Venezuelans that there is a possibility the United States will invade their country. U.S. officials have repeatedly tried to dismiss these fears."
http://www.npr.org/templates/story/story.php?storyId=5319193

This reflects exactly what goes on inside Iran except for the "dismissing fears" comment concerning Venezuela. The US is flaming those Iranian fears and not trying to quiet them. I should add, which I did not in a prior post above, that threatening a military action against Iran's nuclear facilities--a direct attack--does little to quiet those concerns in Iran where the man on the street believes that an American attack is imminent. There is also the issue of Iranian pride to consider. If Pakistan and India have the bomb in South Asia, why shouldn't they? Iran has got the oil & natural gas, they are benefiting from the Iraq fiasco and, given their business connections in Asia, have lots of leverage on their side. The leaders there are not concerned and why should they be? They've got the hydrocarbons (especially natural gas) and the world over a barrel. As Iraq self-destructs, their geopolitical position becomes stronger, not weaker, given their connections and tacit support to these Iraqi shiite political factions who will inevitably take over the Iraqi government. In fact, the Grand Ayatollah al-Sistami, religious leader of Iraq's Shia', grew up in Iran. He is said to be indifferent to politics but I don't believe that for a second.

We can only pray that these American threats are never carried out.