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Energy

Venezuela oil czar in surprise resignation amid graft probes

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8 minute read

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.

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Economy

Oil Lobby Working With Republicans Behind-The-Scenes To Push ‘Gateway’ To Carbon Tax

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From the Daily Caller News Foundation

By NICK POPE

 

America’s leading oil and gas trade group is working behind the scenes with moderate House Republicans to push support for a bill that critics say could lead to a domestic carbon tax, according to an email obtained by the Daily Caller News Foundation and sources familiar with the matter.

On May 14, Chris Boness, the director of federal relations for the American Petroleum Institute (API), sent an email to an API mailing list that named several House lawmakers intending to co-sponsor the PROVE IT Act alongside Republican Utah Rep. John Curtis. The trade group has also met with staffers to try to secure support for the bill, which API supports, according to sources familiar with the matter.

Assuming the House version is the same as the already-introduced Senate version, the bill would instruct the Department of Energy (DOE) to study the carbon intensity of goods — including aluminum, steel, plastic and crude oil — produced in the U.S. and the carbon intensity of products from other countries, according to E&E News.

Dozens of the PROVE IT Act’s critics have described the bill as a possible “gateway” to domestic carbon taxes because it would effectively instruct the federal government to calculate an implicit cost of carbon with few restrictions on how that official metric is used in the future.

“Thanks for those that joined today’s meeting,” Boness wrote in the email obtained by the DCNF. “Here is the list of current [Republican] cosponsors of the PROVE IT Act: Curtis, [Michigan Rep. Tim] Walburg (sic), [Ohio Rep. Bob] Latta, [New York Rep. Andrew] Garbarino, [Florida Rep. Maria Elvira] Salazar, [Michigan Rep. Mariannette] Miller-Meeks, [Indiana Rep. Larry] Bucshon, [Oregon Rep. Lori] Chavez-DeRemer. Additionally, [Georgia Rep. Buddy] Carter, [New York Rep. Mike] Lawler and [Pennsylvania Rep. Dan] Meuser seemed interested. Will keep you updated if others join and send updates on introduction.”

API representatives have had meetings addressing the PROVE IT Act with lawmakers’ offices, sources familiar with the matter told the DCNF. The offices of Curtis, Walberg, Latta, Garbarino, Salazar, Miller-Meeks, Bucshon and Chavez-DeRemer did not respond to questions about why they apparently support the bill.

Carbon pricing is broadly unpopular with Republicans, according to E&E News. Generally, polling indicates that Republicans do not consider climate change to be a problem in need of major government-led solutions and that energy affordability, for example, is a much stronger concern.

API Email re: PROVE IT Act by Nick Pope on Scribd

 

The bill’s proponents tout it as a measure to reward American companies for producing products more cleanly than foreign competitors, but opponents are strongly concerned that the bill instructs the federal government to effectively set a price on carbon with insufficient restrictions what the government can do in the future.

Notably, Republican West Virginia Sen. Shelley Moore Capito introduced an amendment to the Senate version that would prevent the data collected from being used as the basis for carbon taxes or tariffs, but Democrats killed that proposal while the bill sat in the Senate Environment and Public Works Committee.

Despite concerns from those opposed to the bill that it could be a first step to carbon taxes or tariffs, API supports the PROVE IT Act. Notably, API is in favor of carbon pricing.

“America’s oil and natural gas is produced under some of the highest environmental standards in the world,” a spokesperson for API told the DCNF. “Efforts like the PROVE IT Act are bipartisan opportunities to help study and quantify that advantage and demonstrate our industry’s commitment to producing cleaner, safer, and more affordable energy here at home while still supplying the energy our world needs.”

Some of the lawmakers API suggested could be interested in co-sponsoring the PROVE IT Act are wary, however.

Rep. Meuser, whose district includes energy-rich parts of Pennsylvania, is opposed to the bill as it stands, despite API’s suggestion that he is potentially interested in supporting it, a source familiar with Meuser’s thinking told the DCNF.

Rep. Carter is skeptical of policies that could lead to a carbon tax.

“Mr. Carter is reviewing the legislation,” a spokesperson for Carter told the DCNF. “He is absolutely opposed to anything that could lead to a carbon tax.”

In the eyes of those opposed to the bill, the PROVE IT Act would make it easier for a second-term Biden administration to pursue carbon taxes or tariffs that would hurt American consumers and certain types of energy producers.

“Our opposition to the PROVE IT Act is clear and concise. The latest attempt by some in Congress who are trying to create a structure that would lead to a domestic carbon tax will have price implications on our energy, particularly our fuel,” Tom Pyle, president of the American Energy Alliance, told the DCNF. “I do think that it is important to recognize that John Podesta made it clear that this is a second term agenda item for the Biden administration. And why would any Republican want to be the lead on helping President Biden further his war on affordable energy?”

Mike McKenna, a GOP strategist with extensive experience in the energy sector, expressed a similar view.

“The big problem with the bill is that it creates infrastructure to impose a carbon dioxide tax,” McKenna told the DCNF. “As everyone who has had more than ten seconds of exposure to the federal government knows, once that infrastructure can be put in place, it’s going to be used.”

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Energy

Tech giants’ self-made AI energy crisis

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For years tech giants have been helping climate catastrophists shut down reliable fossil fuel electricity. Now the grid they’ve helped gut cannot possibly supply their growing AI needs.

For years tech giants have been helping climate catastrophists shut down reliable fossil fuel electricity, falsely claiming they can be replaced by solar/wind.

Now the grid they’ve helped gut can’t supply their growing AI needs.¹

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  • For the last decade, tech giants such as Apple, Microsoft, Meta, and Google have, through dedicated anti-fossil-fuel propaganda and political efforts, promoted the shutdown of reliable fossil fuel power plants in favor of unreliable solar and wind.
    Image
  • Tech giants have propagandized against reliable fossil fuel power plants by falsely claiming to be “100% renewable” and implying everyone could do it. In fact, they have just paid utilities to credit them for others’ solar and wind use and blame others for their coal and gas use.²
  • In addition to their “100% renewable” propaganda, tech giants directly endorsed people and policies who shut down reliable fossil fuel power plants.E.g., The RE100 coalition, including Google, Apple, Meta, and Microsoft, advocates for policies to “accelerate change towards zero carbon grids at scale by 2040.”³
  • Companies’ propaganda that solar/wind could rapidly replace fossil fuels has proven false. 

    Statewide blackouts in California (2020) and Texas (2021) were caused by the failure of solar/wind—which can go near zero at any time—to make up for lack of reliable fossil fuel capacity.

  • Thanks in significant part to tech giants’ advocacy, we have now shut down enough reliable power plants to be in a nationwide electricity crisis. 

    For example, most of North America is at elevated/high risk of electricity shortfalls between 2024-2028.⁴

  • The anti-fossil-fuel, pro-unreliable solar and wind political climate that tech giants have fostered is getting much worse, as the Administration has pledged to further reduce reliable electricity supply via power plant shutdowns and add artificial demand through EV mandates.

    Biden’s EV mandate: a dictatorial attack on the American driver and the US grid

    ·
    APR 22
    Biden's EV mandate: a dictatorial attack on the American driver and the US grid
     

    Biden’s de facto mandate of over 50% EVs by 2032 is a dictatorial attack on the American driver and the US grid that will 1. Force Americans to drive inferior cars. 2. Place massive new demand for reliable electricity on a grid that is declining in reliable electricity supply.

     

    Read full story
  • While for years tech giants didn’t seem to have any concern about the electricity supply disaster their propaganda and policies were bringing about, they are now very interested because of the accelerating power requirements of computing, above all the hyper-competitive AI space.
  • To function at its potential, AI requires massive amounts of power. E.g., state-of-the-art data centers can require as much electricity as a large nuclear reactor.⁵
  • Electricity demand from US data centers already doubled between 2014 and 2023. Now with the fast growth of energy-hungry AI, demand from data centers could triple from 2.5% to 7.5% of our electricity use by 2030, according to Boston Consulting Group.⁶
  • In large part due to AI, nationwide electricity demand is projected to skyrocket. Official 10-year projections for the US have summer and winter peak demand rising by over 79 gigawatt and over 90 gigawatt. 90 gigawatt is equivalent to adding the entire power generating capacity of California (!)⁷
  • Given the woeful underpowered grid that AI giants have helped bring about, dramatically rising demand from AI will not only contribute to massive electricity shortages, but it will also destroy a lot of potential for AI to occur in the United States.
  • Limited and expensive electricity will force data centers to operate with higher cost or lower capacity within the US—or take a performance hit in the form of increased latency (which can drastically reduce the value of the product) by moving offshore.
  • Not only is offshoring data centers destructive from an economic standpoint, it also poses a substantial security risk. E.g., Building a data center in China—which we already depend on dangerously for critical minerals—gives the CCP physical power over more parts of our economy.
  • Economically, data centers are a gold mine of opportunities.Globally, data centers employed 2M people full-time in 2019, many in high-skill/high-pay jobs—and this number is forecast to increase nearly 300K by 2025.

    Our gutted grid will cost many Americans these opportunities.⁸

  • In the face of woefully inadequate electricity supply for their AI goals, tech giant CEOs are finally speaking up about the lack of power. 

    E.g., Meta CEO Mark Zuckerberg said in an interview that energy will be the #1 bottleneck to AI progress.

  • It is not enough for tech giants to warn us about the lack of reliable power. They need to take responsibility for their anti-fossil-fuel advocacy that helped caused it. And they need to support energy freedom policies that allow all fuels to compete to provide reliable power. 

    End preferences for unreliable electricity

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    DECEMBER 14, 2022
    End preferences for unreliable electricity
     

    Today’s grids are being ruined by systemic preferences for unreliable electricity: 1) no price penalty for being unreliable 2) huge subsidies for unreliables 3) mandates for unreliables Congress should end these now. The Opportunity America, given its combination of abundant domestic energy resources, technological ingenuity, and free-market competition, has …

     

    Read full story
  • An example of a tech giant influencer not taking any responsibility for causing the electricity crisis is BlackRock CEO Larry Fink, who pushed companies and governments to adopt “net-zero” policies using mostly solar/wind, but now admits they can’t power AI data centers!
  • A better attitude toward electricity was expressed by OpenAI CEO Sam Altman: “There will always be people who wait and sit around and say ‘we shouldn’t do AI because we may burn a little more carbon’… the anti-progress streak” and this “is something that we can all fight against.”⁹
  • America faces a choice. We can either continue our current trajectory, descend into a Third World grid, and become totally inhospitable for AI, or we can adopt energy freedom policies and become a world leader in both AI and electricity.
  • Share this article with tech giant CEOs and tell them to publicly apologize for damaging our grid and to commit to energy freedom policies.Google: @sundarpichai ([email protected])
    Apple: @tim_cook ([email protected])
    Meta: @finkd ([email protected])
    Microsoft: @satyanadella ([email protected])

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Michelle Hung contributed to this piece.

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