Category Archives: Oil subsidies

Part I: Venezuelan heavy oil: China’s persistence is finally paying off

In my travels and interviews in Venezuela this summer, it became clear that there has been a major advance in the relationship between China and the Bolivarian administration of President Chavez.  China’s dogged persistence and large state-sponsored investments in Venezuela – apparently the largest they’ve made to date in any country – are finally beginning to bear fruit.  The new Chinese influence is being simultaneously extended to both oil and non-oil sectors. 

Partly this development is due to the many crises affecting the Bolivarian state, and decisions it has been forced to take to make increasing national oil production a priority.  To advance this program, President Chavez’ administration has made initial moves to grant Beijing access to Venezuelan oil in major ways it had not previously. 

However, there are two sides to this story: on the other side, increasing Chinese participation is also a product of China having step-by-step put some quite sharp demands on PDVSA and the Venezuelan Bolivarian state for financial transparency and accountability, for geopolitical stabilization, and in particular, for Chinese firms being granted large-scale access to new heavy-oil fields in the Faja of the Orinoco River.  The key ingredient here is that Continue reading

Ending U.S. Federal Subsidies for Oil Companies to Drill

Boston, MA (From the road, with visits to Lynn and Marblehead)

I had the unexpected opportunity yesterday to hear the Governor Patrick of the State of Massachusetts and local Boston U.S. Congressman Ed Markey – Chair of the House Select Committee on Energy and Environment –talk to a meeting of union activists who will be canvassing local Boston voters to ascertain their concerns before the next elections.  I spoke briefly with the congressman.

Markey has been instrumental in the recent attempts to repeal Bush-era federal legislation that grants subsidies to oil companies to encourage them to drill for oil in US territory. As he pointed out, this seems especially inappropriate at a time when oil prices are about double what they were when these subsidies were adopted. The congressman explained how he felt there was no need for such encouragement now, especially at taxpayer expense and when there is such concern to reduce the federal deficit.   (I thank my old friend and union organizer/analyst here in Boston for inviting me.)

My next post, in a day or two, will be on what I see as: “The Pragmatic Turn in Venezuelan Foreign Policy.” This is a complex (and controversial) topic and it will occupy many future posts. However, first one has to establish whether this turn is or is not actually taking place … and only then can we analyze what the implications and effects, for better or worse, might be.