PW Español




PW Live



Very usefull links



PW
Bookstore





Institutional
links


OPEC







PW
Business Partners

 


IRAQ OIL THE FORUM

 


Blogspots

The Global Barrel

Tiempo Cultural

Gustavo Coronel

Iran Watch.org

Le Blog des
Energies Nouvelles

News Links

AP

AFP

Aljazeera

Dow Jones

Reuters


Bloomberg

Views and News
from Norway

 

 

 


Editorial/Opinion

 

Nick Cunningham: U.S. pushes energy exports
to undermine Venezuela's Petrocaribe


 

The United States is seeking to dislodge Venezuela's energy influence in the Caribbean, capitalizing on the collapse in oil prices.

Vice President Joe Biden hosted the first ever Caribbean Energy Security Summit in Washington DC on January 26. The summit, attended by leaders of Caribbean nations, was intended to find cleaner and more affordable sources of energy. As island nations with few indigenous sources of energy (save natural gas in Trinidad and Tobago), many rely on costly oil and gas imports.

But beyond providing sustainable alternatives, the energy summit appears to be an attempt to peel off Caribbean nations from Venezuelan influence.

Since 2005, Venezuela has provided very generous support to ideological allies in the western hemisphere. Using its abundant oil reserves – Venezuela is sitting on an estimated 298 billion barrels of oil, according to the EIA , arguably the largest reserves in the world – the late President Hugo Chavez built a sphere of influence in Central America and the Caribbean.

He setup PetroCaribe , a program in which Venezuela provides members oil at a cut rate and/or issues low-interest loans to purchase oil. The program was a godsend for countries like Cuba and Nicaragua, where imported petroleum strains government budgets. It also kept many Central American countries from growing too close to the United States.

However, Venezuela is now the one in trouble. Venezuela's economy was not exactly growing like gangbusters when oil prices exceeded $100 per barrel. Now, with prices having dropped by half over the last six months, Venezuela is in dire straits. Its bonds are now trading at 40 cents on the dollar, and the markets are pegging the probability of a default at some point over the next five years at 97 percent.

Venezuelan President Nicolas Maduro flew to China in early January, looking for financial assistance. He ostensibly secured a $20 billion investment commitment from the Chinese government, although when looking at the fine print, some analysts believe the pledge was merely a rewording of a preexisting promise.

The beneficence provided by Venezuela to the Caribbean is costly – the program set the government back by $2.3 billion each year between 2011 and 2013. The Economist noted in an October 2014 article that the loan terms issued under PetroCaribe have been becoming increasingly onerous as Venezuela's fiscal situation has worsened. Guatemala pulled out of the program in 2013 as a result.

Worse yet, many worry that PetroCaribe could be the one kicking out member countries soon, as Venezuela simply runs out of funds. PetroCaribe reserves the right to cancel agreements with just 30 days' notice. That puts Caribbean nations – some of which depend on PetroCaribe for more than half of their oil imports – in a very precarious situation.

“It's absolutely the case that the economic situation has deteriorated for Venezuela and therefore the risk has gone up for all of these countries,” said David Goldwyn , a former State Department special and Nonresident Senior Fellow at The Atlantic Council, which co-hosted the energy summit. Will Plunging Oil Prices Crash The Stock Market?

When oil crashed in 2008 all hell was breaking loose. Lehman Brothers went up in smoke and stocks were in a nosedive. Oil has once again crashed -50% in only 6 months but equities haven't followed - at least not yet! Will stocks hold up going forward? You might find it hard to believe just how much wealth could have been created last time this happened. If we learn from the past, this could be a second chance to make an absolute fortune.

Enter the United States. While the U.S. announced the Caribbean Energy Security Initiative back in June 2014, American officials are putting much greater weight on it now that oil prices have collapsed. “I just don't think it's going to be around much longer, or at least not in its full form,” said Peter Schechter, director of the Atlantic Council's Latin America Center. “We don't want our closest neighbors in the Caribbean to suddenly be surprised by a situation in which Venezuela is suddenly unable to provide oil,” he said.

Nearly all Caribbean nations participated in the energy security summit (Cuba was not present).

Although the U.S. government hopes to seize on Venezuela's weakness, the ultimate outcome of the summit is still unclear. An official that works for the Vice President told the AP that the U.S. plans on providing technical assistance, financing, and policy advice to eliminate market distortions.

In practice, that likely means a greater emphasis on U.S. exports of oil and liquefied natural gas (LNG) to the Caribbean even though the U.S. to some extent has been billing the event as a sustainable energy forum.

Former State Department official David Goldwyn has been heavily involved in the planning of the Caribbean Energy Security Summit. Given his long record of trying to convince the U.S. Congress to liberalize oil and gas exports, the U.S. will likely prioritize fossil fuel exports over cleaner alternatives.

The U.S. government may pay lip service to a desire to reduce greenhouse gas emissions (the official White House press release said the forum is intended to “promote a cleaner and more sustainable energy future in the Caribbean”), but ultimately the U.S. is seeking to carve out greater geopolitical and economic influence at the expense of Venezuela.


 
Nick Cunningham is a Washington DC-based writer on energy and environmental issues. You can follow him on twitter at @nickcunningham1. Petroleumworld does not necessarily share these views.

Editor's Note: This commentary was originally published by oil price.com, 01/26/2015. Petroleumworld reprint this article in the interest of our readers.

All comments posted and published on Petroleumworld, do not reflect either for or against the opinion expressed in the comment as an endorsement of Petroleumworld. All comments expressed are private comments and do not necessary reflect the view of this website. All comments are posted and published without liability to Petroleumworld.

Use Notice:This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of issues of environmental and humanitarian significance. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml.

All works published by Petroleumworld are in accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.Petroleumworld has no affiliation whatsoever with the originator of this article nor is Petroleumworld endorsed or sponsored by theoriginator.

Petroleumworld encourages persons to reproduce, reprint, or broadcast Petroleumworld articles provided that any such reproduction identify the original source, http://www.petroleumworld.com or else and it is done within the fair use as provided for in section 107 of the US Copyright Law.

If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner. Internet web links to http://www.petroleumworld.com are appreciated

Copyright© 1999-2009 Petroleumworld or respective author or news agency. All rights reserved.

We welcome the use of Petroleumworld™ stories by anyone provided it mentions Petroleumworld.com as the source. Other stories you have to get authorization by its authors.Internet web links to http://www.petroleumworld.com are appreciated

Petroleumworld welcomes your feedback and comments,
share your thoughts on this article, your feed. back is important to us!

Petroleumworld News 01/27/2014

We invite all our readers to share with us
their views and comments about this article.
Follow us in : twitter / Facebook
Send this story to a friend Write to editor@petroleumworld.comBy using this link, you agree to allow PW
to publish your comments on our letters page.

Any question or suggestions,
please write to: editor@petroleumworld.com

Best Viewed with IE 5.01+ Windows NT 4.0, '95,
'98,ME,XP, Vista, Windows 7,8 +/ 800x600 pixels


 


Port Spain, Trinidad
January 26th and 27th 2015




Mexico Gas Congress
February 24-26, 2015

 

 






WGC Paris, June, 2015
ow.ly/ziUh0

 

TOP

Editor & Publisher:Elio Ohep F./Contact Email: editor@petroleumworld.com

Contact:
editor@petroleumworld.com/ phone: Office (58 212) 635 7252,
or Cel (58 412) 996 3730 / (58 414) 276 3041 / (58  412) 952 5301


CopyRight © 1999-2010, Elio Ohep F.- All Rights Reserved. Legal Information

- CCS Office Tele
phone/Teléfonos Oficina: (58 212) 635 7252

PW in Top 100 Energy Sites


Technorati Profile


CopyRight © 1999-2010, Elio Ohep F. - All Rights Reserved.
This material may not be published, broadcast, posted online, rewritten or redistributed by any type of means, except with permission of the author/s

The information in this web site is proprietary and is protected under United States and International Copyright and Trademark laws. No part of this web site may be reproduced or transmitted in any form by any means whatsoever, except with permission of the author/s..

Petroleumworld encourages persons to reproduce, reprint, or broadcast Petroleumworld articles provided that any such reproduction identify the original source, http://www.petroleumworld.com or else and it is done within the fair use as provided for in section 107 of the US Copyright Law. If you wish to use copyrighted material from this site for purposes of your own that go beyond
'fair use', you must obtain permission from the copyright owner.
Any use of this site or its material, in any form, without the express prior written consent of the author, is prohibited by law and is subject to legal action. Legal Information

Top 100+

Technorati Profile
Fair use notice of copyrighted material:

This site is a public free site and it contains copyrighted material the use of which has not always been specifically authorized by the copyright owner.We are making such material available in our efforts to advance understanding of business, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have chosen to view the included information for research, information, and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from Petroleumworld or the copyright owner of the material.