Energy
Venezuela oil czar in surprise resignation amid graft probes
A boy jumps near the “Los Petroleros” sculpture that shows two men working on an oil drill of Petroleos de Venezuela, S.A, PDVSA, on the Sabana Grande boulevard, in Caracas, Venezuela, March 20, 2023. Venezuela’s oil czar, Tareck El Aissami announced his resignation on Twitter and pledged to help investigate any allegations involving PDVSA. (AP Photo/Ariana Cubillos)
By Regina Garcia Cano in Caracas
CARACAS, Venezuela (AP) — The man responsible for running Venezuela’s oil industry — the one that pays for virtually everything in the troubled country, from subsidized food to ridiculously cheap gas — has quit amid investigations into alleged corruption among officials in various parts of the government.
Tareck El Aissami’s announcement Monday was shocking on multiple counts. He was seen as a loyal ruling party member and considered a key figure in the government’s efforts to evade punishing international economic sanctions.
And he led the state oil company PDVSA in a Venezuelan business sector widely considered to be corrupt — in a country where embezzelment, bribery, money laundering and other wrongdoing are a lifestyle.
“Obviously, they are giving it the patina of an anti-corruption probe,” said Ryan Berg, director of the Americas program at the Center for Strategic and International Studies, a Washington-based think tank.
“Rule of law is not being advanced here,” Berg added. “This is really a chance for the regime to sideline someone that it felt for some reason was a danger to it in the moment and to continue perpetuating acts of corruption once particular individuals have been forced out of the political scene.”
Hours after El Aissami revealed his resignation on Twitter, President Nicolás Maduro called his government’s fight against corruption “bitter” and “painful.” He said he accepted the resignation “to facilitate all the investigations that should result in the establishment of the truth, the punishment of the culprits, and justice in all these cases.”
Venezuela’s National Anti-Corruption Police last week announced an investigation into unidentified public officials in the oil industry, the justice system and some local governments. Attorney General Tarek William Saab in a radio interview Monday said that at least a half dozen officials, including people affiliated with PDVSA, had been arrested, and he expected more to be detained.
Among those arrested is Joselit Ramirez, a cryptocurrency regulator who was indicted in the U.S. along with El Aissami on money laundering charges in 2020.
Corruption has long been rampant in Venezuela, which sits atop the world’s largest petroleum reserves. But officials are rarely held accountable — a major irritant to citizens, the majority of whom live on $1.90 a day, the international benchmark of extreme poverty.
“I assure you, even more so at this moment, when the country calls not only for justice but also for the strengthening of the institutions, we will apply the full weight of the law against these individuals,” Saab said.
Oil is Venezuela’s most important industry. A windfall of hundreds of billions in oil dollars thanks to record-high global prices allowed the late President Hugo Chávez to launch numerous initiatives, including state-run food markets, new public housing, free health clinics and education programs.
But a subsequent drop in prices and government mismanagement, first under Chávez’s government and then Maduro’s, ended the lavish spending. And so began a complex crisis that has pushed millions into poverty and driven more than 7 million Venezuela to migrate.
PDVSA’s mismanagement, and more recently economic sanctions imposed by the U.S., caused a steady production decline, going from the 3.5 million barrels a day when Chávez rose to power in 1999 to roughly 700,000 barrels a day last year.
David Smilde, a Tulane University professor who has conducted extensive research on Venezuela, said the moves by Maduro’s government are more than just an effort to clean its image.
“Arresting important figures and accepting the resignation of one of the most powerful ministers in a case that involves $3 billion does not improve your image,” he said. “It is probably because the missing money actually has an important impact on a government with serious budgetary problems.”
The Biden administration recently loosened some sanctions, even allowing oil giant Chevron for the first time in more than three years to resume production. Maduro’s government has been negotiating with its U.S.-backed political opponents primarily to get the sanctions lifted.
U.S. congressional researchers saw El Aissami as an impediment to Maduro’s goals.
“Should Al Aissami remain in that position, it could complicate efforts to lift oil sanctions,” a November report from the Congressional Research Center said.
The U.S. government designated El Aissami, a powerful Maduro ally, as a narcotics kingpin in 2017 in connection with activities in his previous positions as interior minister and a state governor. The Treasury Department alleged that “he oversaw or partially owned narcotics shipments of over 1,000 kilograms from Venezuela on multiple occasions, including those with the final destinations of Mexico and the United States.”
Under the government of Chávez, El Aissami headed the Ministry of Internal Affairs. He was appointed minister of oil in April 2020.
“El Aissami was a key player in the Maduro government’s sanctions evasion strategy. We’re talking about someone who knows where all the bodies are buried, so it will be key to watch where he ends up,” said Geoff Ramsey, a senior fellow at the Atlantic Council focused on Colombia and Venezuela. “If El Aissami ends up being implicated himself, it could have serious implications for the entire power structure.”
In September, Maduro’s government renewed wrongdoing accusations against another former oil minister, Rafael Ramírez, alleging he was involved in a multibillion-dollar embezzlement operation during the early 2010s that took advantage of a dual currency exchange system. Ramírez, who oversaw the OPEC nation’s oil industry for a decade, denied the accusations.
In 2016, Venezuela’s then opposition-led National Assembly said $11 billion went missing at PDVSA in the 2004-2014 period when Ramirez was in charge of the company. In 2015, the U.S. Treasury Department accused a bank in Andorra of laundering some $2 billion stolen from PDVSA.
Alberta
Alberta calling for federal election! Premier Smith demands feds scrap dangerous oil and gas production caps
Premier Danielle Smith, Minister of Environment and Protected Areas Rebecca Schulz and Minister of Energy and Minerals Brian Jean issued the following statement on the proposed federal oil and gas production cap:
“This production cap will hurt families, hurt businesses and hurt Canada’s economy. We will defend our province, our country and our Constitutional rights.
“Make no mistake, this cap violates Canada’s constitution. Section 92A clearly gives provinces exclusive jurisdiction over non-renewable natural resource development yet this cap will require a one million barrel a day production cut by 2030.
“The evidence is overwhelming. Three reports from reputable firms have shown that these regulations will sucker-punch Canada’s economy, a million barrels cut every day according to S&P Global, $28 billion a year in lost GDP according to Deloitte, and up to 150,000 lost jobs according to the Conference Board of Canada.
“The losses to GDP mean billions a year will disappear from the economy. Billions that won’t be going towards new schools, hospitals and roads, all for a reckless ideological scheme that will not reduce global emissions.
“Ultimately, this cap will lead Alberta and our country into economic and societal decline. The average Canadian family would be left with up to $419 less for groceries, mortgage payments and utilities every month. Canadian parents and workers will suffer while Justin Trudeau outsources the duty to provide safe, affordable, reliable and responsibly produced oil and gas to dictators and less clean producers around the world. We could be the solution. Instead, Ottawa would rather sacrifice our ability to lead.
“Tweaks won’t work. This cap must be scrapped. Alberta’s government is actively exploring the use of every legal option, including a constitutional challenge and the use of the Alberta Sovereignty within a United Canada Act. We will not stand idly by while the federal government sacrifices our prosperity, our constitution and our quality of life for its extreme agenda.”
Energy
Ottawa’s plan to decarbonize Canada’s electricity by 2035 not feasible and would require equivalent of 23 Site C hydroelectric dams
From the Fraser Institute
By Elmira Aliakbari and Jock Finlayson
The federal government’s plan to make all electricity generation in Canada carbon-free by 2035 is impractical and highly unlikely, given physical, infrastructure, financial, and regulatory realities. So says a new study published today by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.
“Canada’s federal government has set an ambitious, and, frankly, unrealistic target of achieving complete carbon-free electricity in ten years,” said Jock Finlayson, Fraser Institute senior fellow and co-author of Implications of Decarbonizing Canada’s Electricity Grid.
The study finds that in 2023, nearly 81 per cent of Canada’s electricity came from carbon-free energy sources, including hydro, nuclear, wind and solar. But to replace the remaining 19 per cent which uses fossil fuels, in the next 10 years, would require constructing the equivalent of:
• Approximately 23 large hydroelectric dams, similar in size to BC’s Site C, or 24 comparable to Newfoundland and Labrador’s Muskrat Falls, or;
• More than four nuclear power plants similar in size to Ontario’s Darlington power station, or 2.3 large scale nuclear power plants equivalent to Ontario’s Bruce Power, or;
• Around 11,000 large wind turbines, which would not only require substantial investments in back-up power systems (since wind is intermittent) but would also require clearing 7,302 square kilometers of land—larger than the size of Prince Edward Island—excluding the additional land required for transmission infrastructure.
Currently, the process of planning and constructing major electricity generation facilities in Canada is complicated and time-consuming, often marked by delays, regulatory challenges, and significant cost overruns.
For example, BC’s Site C project took approximately 43 years from the initial planning studies in 1971 to receive environmental certification in 2014, with completion expected in 2025 at a cost of $16 billion.
What’s more, the significant energy infrastructure listed above would only meet Canada’s current electricity needs. As Canada’s population grows, the demand for electricity will increase significantly.
“It is not at all realistic that this scale of energy infrastructure can be planned, approved, financed and built in just 10 years, which is what would be required merely to decarbonize Canada’s existing electricity needs,” said Elmira Aliakbari, director natural resource studies at the Fraser Institute and study co-author.
“This doesn’t even account for the additional infrastructure needed to meet future electricity demand. Decarbonizing Canada’s electricity generation by 2035 is another case where the government has set completely unrealistic timelines without any meaningful plan to achieve it.”
- This essay examines the implications of decarbonizing Canada’s electricity grid by replacing existing fossil fuel-based generation with clean energy sources.
- In 2023, clean energy sources—including hydro, nuclear, and wind—produced 497.6 terawatt hours (TWh) of electricity, accounting for nearly 81% of Canada’s total supply, while fossil fuels contributed 117.7 TWh (19.1%). To replace this fossil fuel generation with hydro power alone would require about 23 large projects similar to BC’s Site C or 24 like Newfoundland & Labrador’s Muskrat Falls. Using nuclear power would necessitate building 2.3 facilities equivalent to Ontario’s Bruce Power or 4.3 similar to Darlington Nuclear Generating Station.
- The process of planning and constructing electricity generation facilities in Canada is complex and time-consuming, often marked by delays, regulatory hurdles, and significant cost overruns. For example, the BC Site C project took approximately 43 years from the initial feasibility and planning studies in 1971 to receive environmental certification in 2014, with completion expected in 2025 at a cost of $16 billion.
- Land requirements for new electricity generation facilities are also significant; replacing 117.7 TWh of fossil fuel-based electricity with hydro power, for instance, would need approximately 26,345 square kilometers, nearly half the size of Nova Scotia.
- The slow pace of regulatory approvals, high and rising costs of major energy projects, substantial land requirements, and public opposition to project siting all cast doubt on the feasibility of achieving the necessary clean electricity infrastructure in the coming decade to fully replace fossil fuels in Canada.
Authors:
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