Bloomberg
Toxic spills in Venezuela offer a bleak view of the end of oil
(Bloomberg) – Tropical rains have wiped out most traces of the oil spill that ravaged Rio Seco this fall. But the fishing village, in the shadow of Venezuela’s main refining center, presents the scars of deeper pollution: ships with oil-stained hulls have to travel more to the Caribbean to catch themselves. The crude has soaked the roots of nearby mangroves and left the shrimp fields barren. With no future in sight, dozens of fishermen and their families have fled their homes; those who remain wandering in the village, waiting for Petroleos de Venezuela, the state oil company known as PDVSA, to make up for the loss of boats, equipment and sales. Venezuela’s oil industry, which triggers an environmental disaster in one of the most environmentally friendly nations on Earth. As the country’s vast resources become a toxic burden, Venezuela offers a bleak view of the end of oil in a founding member of OPEC. Rio Seco is just the latest to bear the consequences, following the rupture of a marine pipeline that produced a huge toxic geyser in the middle of local fisheries in September. The incident only came to light after Nelio Medina, the leader of a village fishermen’s council, posted a video of the catastrophe on social media causing a outcry. This is not an isolated case. In the past, protests were needed to force the state oil company to act, Medina said in an interview. Fishing boats have even blocked sea lanes to refineries, a drastic move in a country known for persecuting dissidents. However, the despair is real: Medina sees no end to the problems caused by the falling pipes: “They should have replaced them a long time ago,” he said. Venezuela has the largest known oil reserves in the world, but is struggling to produce gasoline at all, as sanctions restrict crude exports that are the basis of its economy and prevent the import of essential parts for maintenance. The result is a downward spiral of spills, scarcity and even more economic suffering that disproportionately affects the poorest of the poor: those who cannot afford to join the approximately 5 million Venezuelans who have fled to neighboring countries. The Paraguayan peninsula, which is home to PDVSA’s Cardon and Amuay refineries, showed how far Venezuela has fallen. Due to the endemic shortage, preparations for a round trip from the capital, Caracas, of just over 1,000 kilometers include the purchase of enough fuel for the route and a vehicle capable of transporting the drums. necessary. the days and abandonment of today are everywhere. The Paraguayan complex was once the largest in the world, and by the turn of the century its refineries were such dominant exporters to the United States that even minor production failures often blew up gasoline futures. Currently, only two of the six produce anything. The complex has a processing capacity of nearly 1 million barrels per day. Now, even cooking gas is so scarce that many residents have to rely on firewood: “We don’t understand how with two refineries so big next to us we don’t have gasoline or gas,” said Queen Falcon, 69. he prepared fish for his four grandchildren and five great-grandchildren. Falcon has seen PDVSA’s declining fortune close to the shores of the Amuay refinery city. Living so close to the resort, she is concerned about the health and safety of her family: a giant explosion in 2012 left at least 42 dead, and fires and explosions have become almost routine. able to dodge sanctions and export some cargoes of tankers – as happened when an Iranian ship loaded crude this fall – frees up storage space to start pumping oil through leaking pipes. Iran’s largest tanker fleet is still at sea bound for Venezuela. Best practices came out the window two decades ago after a failed coup and a national strike against the late Hugo Chávez, the populist president of Venezuela who renationalized the industry and generated massive debts even during the ‘was $ 100 a barrel of oil. Prices have fallen below Maduro and have highlighted the cumulative impact of negligence, corruption and mismanagement. PDVSA was one of the most technically advanced national oil companies in the late 1990s; it is now an empty skin that presides over the demise of the industry. Venezuela’s crude oil production reached a minimum of 337,000 barrels a day in June, only 10% of the country’s maximum production in 2001. PDVSA did not respond to email requests or send text messages. . With the fall in world demand during the pandemic, the reality in Venezuela as elsewhere is that the world is shifting from fossil fuels. Oil-dependent economies everywhere will need billions of dollars to safely withdraw decades of infrastructure construction, but in the case of Venezuela the money is not there and there are few prospects for foreign aid, while the legacy of the industry dates back a whole century. the negligence has been brutal, “said Raul Gallegos, director of Control Risks, an international consulting firm based in Bogota. In addition, the impact will only get worse, as the Maduro government” is going nowhere, “he said. Maduro, who bolstered power in this month’s National Assembly election and appears to have seen the Trump administration, has expressed hope for improved U.S. relations with President-elect Joe Biden. Biden criticized Trump’s push for regime change, but also called Maduro a dictator: Venezuela exported its first barrel of oil in 1539, when it is recorded that sent a shipment to the Spanish court to deal with the drop of Emperor Charles V. Lake Maracaibo, a Caribbean entrance the size of Connecticut, was the starting point of the industry.In 1922, Royal Dutch Shell went make a discovery in Cabimas: the residents from Maracaibo about 20 miles away they could see the source of the oil on the other side of the lake from their rooftops. The gigantic oil field then known as El Barroso II, later the Bolivar Coastal Complex, made Venezuela the world’s largest exporter by the end of the decade, a crown it held until 1970. Oil revenues fueled the state of the art airports and highways of the fifties, made it a destination for immigrants from Europe and neighboring countries and helped pave the way for a golden age of excesses. Hilton established hotels in the capital and near the Caribbean coast; Concorde flew a direct Caracas-Paris service. A century after the initial fountain, the streets of Cabimas are once again dirty with crude oil. On September 18, a few blocks from the 1922 well site, oil spilled from a residential sidewalk during heavy rains and flooded several streets, according to videos and photos posted on Twitter. Ninoska Diaz, a Cabimas resident who runs a small school in her home, said she had to send students home when the school was flooded with oil soaking desks and chairs, forcing her to throw them away. the bear. “We don’t see any response from the government,” he said over the phone. Oil spills are a chronic byproduct of daily production in Venezuela, although sanctions limit the scope of foreign aid, even if Maduro asks for help. The spills are larger and more frequent out of sight on the plains of the Orinoco River, where livestock and crops are found, according to Ismael Hernandez, a remediation expert at the Central University of Venezuela. Maduro prioritizes the most important fields in the region in a last stand to maintain any production. biologist of the University Simon Bolivar of Caracas. A huge example was in July, when oil from a PDVSA refinery spilled over the white sand and coral reefs of the renowned Morrocoy National Park, where there are more than 1,000 marine species, many of them endangered. As a signatory to regional conventions on safeguarding the Caribbean ecosystem, Venezuela has a duty to protect the area, said Villamizar, a mangrove expert in the region. Instead, he left the first response to environmental and local groups, as authorities downplayed the Morrocoy incident, accusing environmental groups of exaggerating the damage. Environment Minister Oswaldo Barbera said in October that the 25-kilometer coastline of the park had been cleaned “100%” without “finding oil”. However, environmental damage continues to come. The El Palito refinery in western Caracas is prone to accidents and fires due to lack of staff and spare parts. According to people working there, the refinery’s waste collection wells overflow and spill into the Caribbean when it rains. The nearby beach smells of diesel. Satellite images compiled by Eduardo Klein, coordinator of the Center for Marine Biodiversity at Simon Bolivar University, show dark exits from the refineries of El Palito and Cardon as if they were crying oil into the Caribbean. The paradox is that the collapse of production did nothing to curb emissions from Venezuela. This is because the industry is not able to capture and use as much gas as it did a decade ago, so it burns. Only the United States, Russia, Iraq and Iran, all with much larger production, fired more gas last year, according to a World Bank study, which can now take time for Venezuela’s industry. World oil production fell in response to Covid-19, and OPEC + partners in Venezuela are restricting the speed with which they restore production to put land below prices. Russia, although an ally of Maduro, produces a similar degree of heavy crude oil and has invaded some of Venezuela’s traditional markets. Canada’s tar oil has taken on others. The European oil companies that helped Venezuela develop its tar fields in the late 20th century are unlikely to return even if Biden rushes out of Maduro. Shell and Total are under pressure from shareholders to curb emissions, and that means avoiding more carbon-laden crude grades, such as those from the Orinoco. Maduro continues to challenge himself: “We are ready, we have trained and Venezuela will do it. not to be stopped by oil at 10, nor less than 10 [dollars a barrel]”In Rio Seco, heavy off-season rains washed away much of the beach’s chronic oil waste in November, allowing locals some temporary relief. PDVSA has not yet estimated.” the damage after the spill and officials have told the community that they are waiting for funding to be able to offer compensation.Giovanny Medina, 40, from all over the Gulf of Cardon, a fishing village that has managed to coexist with the built refinery by Shell in 1949, he is not worried about the competition from displaced fishermen in Rio Seco. we want to paint more the hulls of our ships white to cover the raw stains. “He said.” We’re tired of doing this. “For more articles like this, visit us at bloomberg.com. Subscribe now to stay per day with the most reliable business news source. © 2020 Bloomberg LP