Outages dim Chavez popularity
Power failures, unpaid civil servants and falling oil revenue play havoc with support for the Venezuela leader.


Reporting from El Consejo, Venezuela - Power outages are hitting Henrique Vollmer's rum distillery several times a week, interrupting production, damaging equipment and jeopardizing the jobs of his 375 workers.

President Hugo Chavez blames the inadequate power production by Venezuela's hydroelectric plants on low rainfall. But Vollmer says the problem has deeper roots.

"The blackouts have gotten more frequent over the last couple of years," said Vollmer, whose family-owned Santa Teresa distillery 50 miles southwest of Caracas, the capital, is the nation's second-largest rum producer. "It's not just us -- glass, paper and oil companies are suffering too."

Power outages in this sugar-growing region now last from a few minutes to four hours and are just one symptom of deteriorating conditions in an oil-rich but politically unsettled country. Others are regular cutoffs of running water, even in Caracas hospitals. So are double-digit inflation, rising crime and a sinking economy.

And the government's failure to pay its employees -- be they healthcare workers in San Cristobal in the west or professors in Caracas -- has become another rallying point for unrest, with numerous groups taking their complaints to the streets this week.

Several crises have appeared to converge recently in Venezuela, highlighting the effect of declining oil revenue and what Chavez's critics say is a failure to invest adequately in public works since he took office in 1999.

Chavez, on the other hand, blames Mother Nature, the news media and excessive consumption by upper classes for the nation's growing problems.

Owing partly to the decline in public services, the public's confidence in Chavez is flagging, according to a new public opinion survey released this week by pollster Alfredo Keller. Only 35% of those polled said they would vote for Chavez-aligned candidates in September's legislative elections, compared with 46% saying they favor opposition candidates.

The number of respondents pointing to public services as the biggest problems they face grew to 19% this month from 5% in August, Keller said.

On a more ominous note, two-thirds of 1,200 poll respondents believe that a popular uprising against Chavez is a possibility in this deeply polarized nation, Keller said.

"The public thinks the government isn't doing its job," Keller said, adding that rampant crime is the biggest public preoccupation. Caracas police reported 40 slayings over a 36-hour period last weekend.

The controversy over public services swirls as new data show Venezuela's economy is dropping deeper into recession, even as other countries in Latin America are emerging from the global crisis, said economist Francisco Monaldi at IESA, a Caracas graduate school and think tank.

Venezuela's central bank reported that the nation's total output of goods and services declined 4.5% over the quarter ended Sept. 30 when compared with the gross domestic product of the previous three months. Unemployment in October rose to 8.1%, according to official figures, a 1.4-percentage-point bump from a year ago.

"The worsening trend is clear and contrasts with most of the region. The . . . economic decline was worse than anyone expected," Monaldi said.

Chavez responded to the economic news by saying that the measurement being used is an old capitalist method and that new forms should be used to measure economies in socialist transition. He didn't offer any specifics, however.

Any way you measure it, Venezuela is in the midst of classic stagflation, a shrinking economy combined with rampant inflation, currently exceeding 30% annually, the highest in Latin America, one multinational bank economist in Washington said.

Much of the economic decline can be pegged to the falling price of oil, which accounts for 90% of the nation's exports and more than half the government's budget. For the first six months of the year, oil revenue plummeted to $32.5 billion, a 52% drop from the same period last year, the state-controlled oil company PDVSA reported this week, tracking the slide in global crude prices. As has happened before, Venezuela's oil-fueled boom economy is suffering a severe hangover with plunging prices.

Some economists say Venezuela's decline is exacerbated by price controls and the inefficiencies that have resulted from the nationalization of dozens of energy, telecom and manufacturing companies.

Peasant takeovers of 6 million acres of cattle and farm land have also cut food production, said Ismael Perez Vigil, director of the country's largest manufacturers' trade group, Conindustria.

The result has been periodic scarcities of chicken, cooking oil, milk and other items. Increasingly, Chavez has had to import food because domestic producers can't meet the artificially low prices set by his government.

And the Keller poll results were released as Chavez also finds himself at the center of a divisive foreign-relations controversy. This month, Chavez told the nation to prepare for war over the Pentagon's use of seven Colombian bases to fight drug and guerrilla operations -- an idea that, according to a different poll, four-fifths of Venezuelans oppose.

On Wednesday, army units in Venezuela blew up the moorings on its end of two footbridges connecting the two countries, a move Colombia's defense minister described as an "act of aggression against civil society."

As for the power shortages, an industry group this week urged the Chavez government to invest $15 billion to upgrade the national grid and transmission lines. Chavez has responded by ordering companies to share excess electricity.

At Vollmer's rum company, which has been in his family since 1885, the fifth-generation distiller has been able to keep his head above water by pushing exports to Spain, Italy and Britain. But Venezuela's business environment is increasingly "detrimental" to domestic manufacturers, Vollmer said.

"It would be easier to produce outside the country and import [products] here," he said.

"Not being able to rely on electricity . . . well, it's no way to operate a business."

How would this affect PetroCaribe & the DR??

“A Black Swan is a highly improbable event with three principal
characteristics: It is unpredictable; it carries a massive impact;
and, after the fact, we concoct an explanation that makes it appear
less random, and more predictable, than it was. The success of Google
was a black swan; so was 9/11.”
The Black Swan – The Impact of the Highly Improbable – By Nassim
Nicholas Taleb, Dean’s Professor in the Sciences of Uncertainty,
University of Massachussetts at Amherst.
At 1:20 a.m. on 17 August 2009, a fire broke out at the Bratsk
hydropower plant/dam complex (officially named “50 years of Great
October”), which is located at the second level of the Angara River
hydroelectric power plants cascade in the east-central Russian
province of Irkutsk Oblast.
The Bratsk hydropower plant immediately shut down, and other power
generation plants in the Russian power grid were ordered to increase
their power generation, including the Sayano-Shushenskaya hydropower
plant in southern Siberia several hundred kilometers away from Bratsk.
On 17 August 2009, the Sayano-Shushenskaya hydropower plant was the
largest in Russia and the sixth-largest in the world.
However, at approximately 8:13 a.m. that morning, turbine unit No. 2
at the Sayano-Shushenskaya hydropower plant, one of 10 Russian-made
640 MW turbines weighing almost 2,000 tons each, was blown loose from
its seating and flew in pieces over 40 meters into the air.
The control rooms and turbine hall flooded immediately. But two other
turbine generating units continued to run under water for over a
minute, causing massive short circuits and explosions which left the
hydropower plant without power, increasing the scale of the
catastrophe and killing 76 workers inside the control rooms and
turbine hall.
The surging water and electrical explosions caused massive structural
damage that will take at least four years to repair at a cost of
billions of dollars.
An investigation headed by Rostekhnadzor director Nikolai Kutin
concluded that turbine unit No.2 was overstressed and structurally
damaged as a result of years of poor maintenance and technical
deficiencies.
More detailed information is available here, here, and here.
Photographs and videos of the catastrophic failure can be viewed here, and here.
How does this relate to Venezuela? Why should a catastrophic failure
at a Russian hydropower plant in Siberia matter to Venezuelans
concerned about the fate of their nation?
It matters because officials at the Guri hydropower plant/dam operated
by Corpoelec subsidiary Edelca report that turbine unit No.2 – which
is currently shut down for maintenance – vibrates abnormally when in
operation.
The Edelca officials also report that the concrete spillway that
funnels water into turbine unit No. 2 has suffered structural damage
(“perforations”) about 93 meters above the turbine unit, which make it
increasingly difficult to control the volume/flow of water running
through the power generation turbine.
However, turbine unit No.2 is only one of seven turbine units
currently out of service at Guri, which has 20 turbine units with a
combined power generation capacity of 10,000 MW. The other turbine
units offline at present include Nos. 5, 6, 8, 10, 12 and 16.
Regional newspaper Correo del Caroni reports that turbine unit No.8 is
almost ready to be restarted.
But Edelca officials at Guri complain that Corpoelec’s insistence that
the repairs be accelerated is creating a dangerously unsafe situation
in the turbine hall.
One attempt to restart turbine unit No. 8 earlier in October had to be
suspended when the turbine’s rotation speed red-lined.
Turbine unit No. 16 has unspecified operational/technical problems
which Edelca officials decline to disclose, even off the record. But a
union official at Guri tells Caracas Gringo that turbine unit No. 16
is also, like turbine unit No. 2, a prime candidate for a catastrophic
failure.
The other inoperative turbine units – Nos. 5, 6, 10 and 12 – are in
the process of being maintained/repaired and soon will be restarted,
according to Edelca and Corpoelec managers.
But union officials at Guri warn that these inoperative units also
have unspecified problems which technicians are having problems
repairing.
Complicating matters further, an explosion and fire on 20 October 2009
at Planta Centro, the thermal power generation plant with a capacity
of 2,000 MW near Puerto Cabello, completely destroyed one of the
plant’s five 400 MW generation units.
Cadafe officials who manage Planta Centro confirm that three other
Planta centro power generation units with a combined capacity of 1,200
MW are unsalvageable. One of these units – No. 5 – is being
cannibalized for parts and components in a desperate attempt to
restart the other units.
And the only power generation unit still operating at Planta Centro is
incapable of generating even 130 MW, which means it is operating about
70% under its rated generation capacity
Investigators with the Interior and Justice Ministry’s political
police (Disip) have been sent to Planta Centro to determine if
saboteurs caused the explosion and fire. But Cadafe managers and union
leaders at Planta Centro say the explosion/fire last week was the
result of 10 years of almost zero maintenance.
Venezuela has an installed power generation capacity of 23,000 MW,
according to Corpoelec and the Energy Ministry. About 71% of this
power generation capacity is hydro, and the rest is thermal (fuel oil
mainly, and decreasingly gas).
But Venezuela’s current real operational power generation capacity is
between 16,000 MW and 17,000 MW.
The three hydropower generation plants/dams on the Lower Caroni River
– Guri, Caruachi and Macagua – currently generate 71% of the country’s
power, or roughly 11,000 MW of the 16,000 MW to 17,000 MW of effective
operational generation capacity nationally.
Overall, about 7,000 MW of power generation capacity is inoperative,
of which about 2,100 MW is hydropower generation capacity and the rest
is thermal power generation capacity.
Corpoelec officials confirm that at least 57% of the country’s
installed power generation capacity is currently inoperative.
Will there be a catastrophic failure at Guri? Impossible to answer,
but we certainly hope not.
Why?
If Guri were to suffer a catastrophic failure in its turbine hall,
Venezuela would be hurled literally back into the dark ages – perhaps
for several years.
Power outages would not be the current average of 6-12 hours per day
everywhere in Venezuela except Caracas. Instead, if Guri fails power
outages would be national in scale, including Caracas, and easily
could last days or even weeks.
Pdvsa’s crude production, refining and export operations would be
affected. It’s conceivable that most of the country’s oil production
would be shut down, depriving Venezuela of the foreign exchange
earnings without which the Chavez regime, and the country, cannot
survive.
The petrochemicals sector likely would be forced to shut down, and so
would the basic steel/aluminum industries located in Ciudad Guayana.
Gasoline shortages would surge nationally because Pdvsa’s refinery
operations would decline and service stations would have no power to
operate their pumps.
Private manufacturers also would be forced to shut down, and most
commercial activities would be sharply reduced.
Agricultural production probably would collapse too.
The financial sector would come to a standstill. ATM’s would not work,
and banks would be unable to process any transactions electronically,
including credit card and debit card operations, and the
“conformacion” of checks.
Ports, airports, and urban transportation would be forced to
significantly scale back operations or even shut down. Imagine the
vehicle congestion in Caracas and other cities if traffic lights stop
working. Imagine the congestion in Caracas if the Metro has to suspend
operations.
The “barrios” where up to 80% of the country’s inhabitants live would
be hellishly, lethally darker at night. Imagine how violent crime
could explode completely out of control.
As economic activity collapses, unemployment would climb into the
clouds, shortages of food, gasoline and everything else would quickly
escalate, possibly pushing inflation into very high double or even
triple digits.
Higher unemployment, more violent crime, hunger, popular rage would escalate.
And, perhaps sooner than President Chavez and his criminal associates
suspect, millions of poor Venezuelans might start eyeing light posts
as a convenient place to hang chavistas upside down – like the Italian
communist partisans who executed fascist leader Benito Mussolini on 28
April 1945 in the small village of Giulino de Mezzegra, and then hung
his corpse upside down at an Esso (Exxon’s ancestor) service station.

jua:

The black swan article was interesting, but your assessment of the effect of power outage seems to be more in tune with your desirer than a reality. why? because why hasnt this happened in the DR ?? We have had blackouts since I was born, no uprising , no hangings, no nothing!

If teh power outages were to remain throughout the lives of Venezuelans, they will simply learn to live with it as have we. That my fellow earthiling will not be the cause of Hugo's downfall.... keep searching , there are many more substantial reasons around...or at least arguably so.