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Why Venezuela’s People Are Suffering

What’s dooming Venezuela isn’t merely a local situation, but instead is global and environmental.

Eric Zuesse

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Originally posted at strategic-culture.org:


INTRODUCTION

The case that will be documented here is that Venezuela’s people are suffering from a tragic national situation which actually cannot be reversed by anything that’s within the power of Venezuela’s Government to do or to block. In order to understand this very unfortunate reality (if one wants to understand it), one must first understand the relevant parts of the broader situation in the world that affects Venezuela. What’s dooming the country isn’t merely a local situation, but instead is global and environmental. It also is economic, pertaining to the role that Venezuela is playing in the global economy. But the economic factor is definitely not of the kind that it’s commonly assumed and alleged to be. It is instead very different.

Here, this very different reality will be both described and documented (instead of just founded upon assumptions — many of which are false — such as the standard, basically local, economic ‘explanation’ of Venezuela’s troubles is, which focuses on Venezuela’s socialism, or the economy’s being not sufficiently capitalist).

What it all comes down to, stated in its briefest terms, is that no nation can do anything but lose money by selling the world’s dirtiest oil, tar-sands oil, which costs $100+ to clean and produce, into a global oil market that’s paying less than $100 (currently around $65) per barrel. Venezuela was able to sell it profitably when oil-prices were high, but is getting crushed now, because its oil is no longer profitable to produce and sell. But 95% of Venezuela’s export-earnings come from oil. Unless and until oil-prices are again above $100 (which probably won’t happen again, except perhaps for very brief periods), Venezuela is doomed. Venezuela’s only chance to diversify its economy away from “the natural resources curse” (from which it especially suffers) was long ago, decades before the current Government came into power. That chance was missed. This ship is now sinking, and no one can save it. (And the US Government and its allies have no actual interest in saving it, but only in exploiting it, parasitically.)

So, here the real history and context for what is happening in and to Venezuela will be presented, and the reader will be able easily to verify any detail of it (by means of the links) — on one’s own, (not accepting anything on mere ‘authority’, which, in such a politically charged matter as this, is almost invariably propaganda). The reader can verify any allegation here simply by clicking onto the given link, at any point in the presentation that might seem to be questionable.

These links are directly to the items of evidence, in the specific case of: why Venezuela’s people are suffering.

Here is that case — the realistic case, without any propaganda, but with only credible news reports and source-documents as constituting its basis — regarding this question.

THE CASE

The two lands that produce the world’s highest-cost-to-produce oil are Canada and Venezuela. Both extract their oil overwhelmingly from tar-sands, which is the dirtiest of all oil and thus (by far) the costliest to refine. (Thus, it’s called “extra-heavy crude”, and that is the least desirable type. It’s also the type that, in a global-warming world, should remain in the ground, never be burned at all, as will also be explained here.)

An accurate summary statement in Wikipedia is that, “With present technology, the extraction and refining of heavy oils and oil sands generates as much as three times the total CO2 emissions compared to conventional oil,[20] primarily driven by the extra energy consumption of the extraction process.” That reference at “[20]” also states: “As the price of oil rises and as conventional hydrocarbon resources become scarcer, increased exploration and production activity is occurring in heavy oil, tar sands, and bitumen deposits. While these contribute significantly to the global energy …, they also contribute a greater share to… the detriment of the global environment.” (That’s referring to “a greater share” of “detriment” than normal crude does.) As another source phrased this matter in more explicit terms: “85 gallons of water, two tons of soil, 700-1200 cubic feet of natural gas, and 170 pounds of greenhouse gases make one barrel of crude oil” from tar-sands. That oil is simply not usable as-is to go into refining, like, for example, the standard Brent crude is. Furthermore, to produce that barrel of tar-sands-derived oil requires also the production of tons of sheer waste, none of which is left behind from producing normal oil. The cost of dealing with that waste is not factored into the cost of the barrels of oil. For examples, the future “impact upon water supplies,” and that “this water is polluted by toxic substances,” are not counted in. Therefore, the full cost of such oil has never been calculated. And yet, even so, everyone recognizes that tar-sands-derived oils are the costliest to produce.

On 25 January 2013, HSBC Global Research issued a landmark report, “Oil & Carbon Revisited: Value at risk from ‘unburnable’ reserves”. It defined the key concept of “Unburnable reserves: The IEA’s World Energy Outlook (2012 edition) estimated that in order to have a 50% chance of limiting the rise in global temperatures to 2ºC, only a third of current fossil fuel reserves can be burned before 2050. The balance could be regarded as ‘unburnable’.”

The oil in Canada and in Venezuela is the world’s least burnable, the most “heavy,” and therefore it’s not only the costliest to produce, but it’s also the worst environmentally. There is consequently increasing pressure upon large investment funds such as Harvard’s 39-billion-dollar endowment fund, to disinvest in fossil fuels. Because of interlocked boards of directors or trustees, and the needs that such ‘charities’ have to appeal to wealthy donors, these public pressures are often (as in Harvard’s case) ignored, but the movement toward divestment is gradually gaining strength in the less corrupt investment funds.

On 13 December 2018, the environmental organization 350.org headlined “Landmark fossil fuel divestment reached! 1000+ institutions are withdrawing investments from coal, oil and gas companies”, and announced:

The 1000th institution to divest was the Caisse des dépôts et consignations (CDC), which manages France’s public sector pensions, savings, and investments worth ˆ173 billion (USD$196 billion). It recently announced that from 2019 it will no longer invest in companies that make more than 10% of their business from coal – this implies that the top 200 companies in the coal-industry are now effectively blacklisted. …

On the momentum for divestment since 2013 – Nicolas Haeringer, an organiser who supports divestment groups globally, at 350.org said:

“This is a moral movement as well as a financial one. Just five years ago we had 181 divestment commitments and USD$50 billion shifted away from polluting industries and today we’re over 1000 and approaching USD$8 trillion dollars.”

This has already helped to drive many coal companies out of business. Though coal-mine owners and employees might lose from that, the entire world gains vastly more from it. Such a transition is called “progress.” Transition in the opposite direction — toward more bad than good — is called “regress,” or, simply, “harm.” Some people call it “conservatism,” but whatever it is, certainly isn’t progress. Not in any way. But that’s what the US Government and the Canadian Government want: extreme conservatism — not conservation. And they view Venezuela’s tar-sands oil as being a prize that they could profit from if Venezuela’s Government could be ‘persuaded’ to reduce their environmental regulations on extracting it. However, in 2012, Venezuela strengthened, instead of weakened, its environmental laws. That strengthened the motivation for the US and Canada to take over Venezuela. Hugo Chavez died in 2013, and Nicolás Maduro replaced him. Then, in 2016, Maduro instituted a new policy, to weaken environmental enforcement in Venezuela. Perhaps he was hoping that this would reduce the US-and-allied efforts to overthrow him. Venezuela’s economy was already on the ropes. The US continued its efforts to overthrow Maduro. Now desperate, he started selling off 12% of the land to international mining companies. Environmental enforcement at PDVSA also plunged, and on 24 November 2018, Bloomberg News bannered “Venezuela Is Leaking Oil Everywhere”. Apparently, the weaker Maduro gets, the worse he becomes. He had entered a doomed office as the president, and seems willing to do anything not to drown in it. Apparently, the weaker he gets, the more that US-allied billionaires want to take over the country, entirely on their own terms. It’ll be like what had already happened in Greece, when the Syriza Party there capitulated to the international financial firms in 2015, and the Government stripped pensions, education, social services, etc., and privatized the infrastructure. But the path toward that end is quite different in Venezuela.

With the world’s increasing move toward renewables, the disinvestment in oil companies will increasingly be targeted toward selling the stock in the ones that have invested the most in oil fields in Canada and Venezuela. However, the situation is radically different for Venezuela than it is for Canada. Here is why:

The biggest market for Canadian oil is just next door, the United States. Most of the oil that’s imported into the US comes from Canada. And, because most of the oil companies that are producing oil in Canada are US owned or allied (such as in UK), the US Government isn’t sanctioning Canada and trying to bring its Government down by reducing Canada’s oil-sales via sanctions, such as is the case with regard to Venezuela’s oil-sales. The US Government doesn’t need to do that in order for America’s corporations to become enabled to sell the oil that comes from Canada: they’re already selling that oil, and Canada’s Government (as well as America’s Government) is already helping America’s companies to do this. America’s and Canada’s aristocracies are allied — not only with Venezuela’s aristocracy (which wants to replace Venezuela’s existing Government), but also with each others’ aristocracy.

Furthermore, unlike Venezuela, Canada isn’t nearly 100% dependent upon its oil-sales in order to support its economy, such as Venezuela tragically is. Venezuela receives around 95% of its export-income from its oil. That’s ridiculous and, for geostrategic and geoeconomic reasons, should never have been tolerated by Venezuela’s Government, but it nonetheless has been tolerated by them — and, for many decades, not only by Venezuela’s present Government. Indeed, Oil&Gas Journal headlined on 8 February 2010, “All about Orinoco” and reported that there had been “early efforts to produce heavy crude from the [Orinoco] belt” and these efforts “led PDVSA predecessors to output by the early 1980s of 93,000 b/d.” Furthermore, “Petroleos de Venezuela SA estimated 1.18 trillion bbl of oil in place in the Orinoco in 1987 and revised that in 2006 to a median of 1.3 trillion bbl, a maximum of 1.4 trillion bbl, and a minimum of 900 billion bbl.”

At that time, Richard Turcotte, of Peak Oil Matters, warned about this report, by headlining “A Look at Venezuela”, and pointing out that:

Unlike the light sweet crude oil produced by the US and the light oil which has made Saudi Arabia such a force, the Orinoco oil is “heavy oil” found in oil sands — similar in characteristics to the tar sands bitumen found in Alberta, Canada. (See my prior post here.) The Venezuela oil is thus much harder to extract and refine, making it more costly. Significant investments of time and money are required to provide adequate refinery capabilities. Needless to say, extracting this heavy oil is a much more energy-and time-intensive effort than is the process for extracting the more familiar light crude. It is not anyone’s answer in the next few years.

Lead researcher and USGS geologist Chris Schenk admitted that their report is not asserting that the “technically recoverable” oil is in fact “economically recoverable.” That’s a significant distinction, and one that needs to be emphasized. All the presumed underground reserves in the world won’t mean much if it makes no sense to invest the time, effort, and money to try and extract them.

The USGS nonetheless estimates that a stunning 40 – 45% of that resource will be ultimately recoverable. One prominent geologist (and a former board member of Petroleos de Venezuela SA — Venezuela’s state oil company) is already on record as doubting anywhere near that amount can be recovered, and stated that much of what might actually be recoverable would in fact be too expensive to produce. 

Perhaps Venezuela’s President Hugo Chavez and his predecessors were thinking that if the US Government says that this oil is an asset, then it is reasonable to consider it to be an asset; but if the US Government was instead merely aiming to get Venezuelans to think that it’s an asset so as to keep that country accepting its existing oil-monoeconomy (its over-dependence upon oil), then ultimately as the disappointment hits when the Venezuelan people experience the poverty after having hoped and tried to develop that ‘asset’, the US Government will become welcomed in, to take over Venezuela’s failing Government. Anyway, that would be a conceivable reason why the US Government would be promoting the ‘economic potential’ of the Orinoco belt. The aristocracy’s agents (in this case the petroleum industry) tend to be very clear-eyed about what’s of benefit to their paymasters. For whatever reason, the actual fact — that this oil was no asset — has remained hidden from the Venezuelan public. It still isn’t publicly acknowledged by Venezuela’s Government. Nor is it publicly recognized by America’s.

So, this tragic error (of presuming that tar-sands oil should be developed) goes back even to well before the time of Hugo Chavez. Moreover, it’s worth pointing out that the actual source of the ‘error’ is the petroleum industry itself, which, like the tobacco companies before it, constantly propagandized for increased production and sales, regardless of what the science says. A good example of that propaganda is the Editorial in Oil&Gas Journal on 24 January 2019, headlining “Costs, energy needs discredit ‘keep it in the ground’ agenda”. It says: “Preemptive opposition to oil and gas projects by ‘keep it in the ground’ activists promises needless hardship in two broad areas.” This is a denial of the entire concept of “unburnable reserves.” They want, instead, to burn it all — and even to keep prospecting to find yet more oil and gas (at this time of already greatly excessive inventories of cleaner reserves that should be burned before any of Canada’s or Venezuela’s filth is). They could lay off their entire teams of oil-explorers, who are wasting their time to find yet more dirty energy sources that won’t ever need to be used by anybody. Either these people are stupid and insane, or else they are psychopaths who care only about keeping their existing jobs and don’t care at all about the world that future generations will be experiencing. If their children knew, then what would they think of what their parents had done to the world that they will be living in?

Consequently (perhaps after — for whatever reason — listening too much to self-interested advisors), Venezuela’s Government has allowed itself to become trapped by its addiction to selling its extraordinarily filthy oil. There was no Governmental demand, no sufficient priority placed upon Venezuelan firms, for them to diversify the economy away from petroleum. Neither the present Government, nor any previous Government of Venezuela, did.

Hugo Chavez and Nicolás Maduro didn’t create this problem; but, now, and especially on Maduro’s watch, the oil-market transformations that result from the global-warming phenomenon are accelerating; and, unlike Canada, which is part of the US empire, Venezuela isn’t receiving US Government protection of its investors, and so there is no helping hand from the US Government (i.e., from America’s aristocracy) to assist Venezuela’s oil sales (such as the US does provide regarding Canada). There is, instead, to the contrary — as Venezuela’s Government has become weaker and weaker, and has less and less public support while global oil prices have plummeted — the grabbing hand, of both the US and Canadian Governments, to take over Venezuela’s Government, whose biggest sin, actually, was to have left itself open to such a take-over, by its having failed to diversify its economy away from the country’s doomed, and dooming, extraordinarily costly-to-refine, and undesirable to refine, oil. It’s now just a coffin in the ground, but it’s nonetheless still the source of virtually all of Venezuela’s export sales. No government could sustain supporting such a zombie. It’s a deadweight that’s dragging Venezuela down and economically suffocating all Venezuelans. And the documentation that this situation exists is incontrovertible:

The current WTO report on Venezuela indicates that 96.9% of the country’s exports are of “Fuels and mining products,” and that over 98% of this 96.9% consists of oils. Also shown is that the biggest five importers from Venezuela account for only 1.9% of Venezuela’s exports, and therefore all other countries account for 98.1%. So, when Venezuela loses its US market, that would mean loss of only 0.6% of its total export market.

However, America’s sanctions will additionally cause some US vassal nations such as in Europe to stop importing from Venezuela. So, Maduro is very vulnerable, indeed. Diversifying the markets (to that 98.1%) isn’t what was needed by Venezuelans; diversifying the economy was; and neither he nor his predecessors did any of that.

On February 2018, Petroleum Science headlined “Analysis of Venezuela’s oil-oriented economy: from the perspective of entropy” and reported that, “the current breakeven price has achieved to over $100/bbl in Venezuela.” Right now, oil is selling at around $65 per barrel. So, how can Venezuela make money selling its $100+ oil into the global $65 oil market? It’s just not possible, at least not sustainably. The Petroleum Science article therefore said that “it is unwise for Venezuela to count on selling raw oil to support the country’s economy,” because any per-barrel price that’s lower than Venezuela’s $100+ per barrel production cost will produce a loss on the sale of that barrel of oil, and because there will be very few if any future days when the per-barrel oil-price will again be above $100. The more that the world cuts back on petroleum and increases non-carbon energy-sources, the lower that the price of oil will become. And the more that investment funds steer clear of high-carbon firms, the lower the corporate stock of those companies will sink in value. Both investors and consumers are therefore going to be turning away from them.

When global oil prices were high, Venezuela could sell even its costly-to-refine oil profitably, but those times are now long gone and probably will never return, as the world increasingly switches away from fossil fuels. Especially tar-sands oils, such as from Canada and from Venezuela, should stay in the ground, and not only because today’s oil prices are too low to sustain selling them, but also because those extra-heavy oils are the worst to burn, from the standpoint of causing global warming.

As an example of this economic reality, a major US corporate investor in Venezuelan oil is Chevron Corporation, and Zacks Investment Research headlined on 5 October 2011, “Chevron Sees Carabobo Oil in 2012”. It stated:

According to a company executive, US energy behemoth Chevron Corp. (NYSE: CVX – News) may see the start-up of an oil field in Venezuela’s Orinoco Belt next year. The super-major is confident that it can commence production from Orinoco’s Carabobo Project 3 – which has estimated reserves of 66 billion barrels – in the third quarter of 2012. …

Chevron holds a 34% interest in Carabobo Project 3, while Venezuela’s national oil company Petroleos de Venezuela S.A. (or PDVSA) controls 60%. The remaining stake is owned by Venezuelan and Japanese firms.

Following the first production of 50,000 barrels per day, … [Chevron] is looking to boost volumes by an additional 50,000-100,000 barrels per day every two years. Carabobo 3, one of several Orinoco projects, is estimated to reach a maximum output of approximately 400,000-480,000 barrels of crude oil per day by 2016.

There is no public indication, at least not online, that even the “first production of 50,000 barrels per day” has been yet achieved, though it had been expected to occur within a year. Chevron’s 2017 Annual Report (covering the year 2016) is the latest online, and it doesn’t so much as even mention “Carabobo.” And this was after the 5 October 2011 prediction that “Carabobo 3, one of several Orinoco projects, is estimated to reach a maximum output of approximately 400,000-480,000 barrels of crude oil per day by 2016.” Clearly, that’s a poorly performing investment. Chevron’s current web-page on “Venezuela” says “Chevron has a 34 percent interest in Petroindependencia, S.A., which includes the Carabobo 3 Project,” but it provides no number of barrels of oil being produced there (if any) — not even now, in 2019. Bad investments die in silence and in obscurity, but good investments get trumpeted everywhere — and this one is being trumpeted nowhere.

Any oil sales from those fields will not only be delayed until when oil prices are again high enough to sell those dirty oils at a profit (which is increasingly unlikely ever to happen again). The investment values of those companies will likewise be especially hard hit as the problem of unburnable reserves becomes increasingly widely recognized and understood by the public. The public won’t remain ignorant and deceived about these matters forever. This is like a Ponzi scheme.

Russia’s Government seems determined never to accept this US coup imposing America’s “regime-change” upon the sovereign nation of Venezuela, and has made the decision to send military assets, and to invest both in Venezuela’s Government and in the oil company. On January 29th, Russia’s Interfax News Agency headlined in Russian, “The Ministry of Finance of the Russian Federation hopes to get external debt payments from Venezuela”. The neoconservative Jamestown Foundation remarked about that on January 31st by saying that “These debts may eventually be written off by a new opposition Venezuelan government led by the self-proclaimed interim president, Juan Guaido, if it manages to push Maduro out (see EDM, January 28, 2019). Yet, even if Maduro somehow succeeds in clinging to power with Russian help, he will hardly have the resources to service the loans.” That, unfortunately, happens to be true. The only sensible reason why Russia would be committing itself to protecting Venezuela’s sovereignty would be in order to say to Washington that America’s long string of foreign regime-changes (Iraq, Libya, Syria, HondurasUkraine, etc.) has now ended — to establish the principle (as Russia has recently done in Syria) that no longer will Washington’s invasions and coups be tolerated, no more conquests (additions to its empire) will be allowed. Somebody has to draw the line, finally, and the other nuclear superpower could be the one to do it. Other than that, however, Russia, like other investors, can only experience losses from investments in Venezuela. Venezuela is now an asset only in “The Great Game”. Russia’s protecting in Venezuela the principle of national sovereignty — no coups, no conquests, at all — is as moral as America’s repeatedly rejecting that principle is immoral; but, as an investment, Venezuela simply is a loss. If “The Ministry of Finance of the Russian Federation hopes to get external debt payments from Venezuela,” then Russia’s Ministry of Finance should be expecting to be disappointed in that “hope.” But that hope wouldn’t, in any case, be a sound reason for what Russia is doing there. The only “asset” to be won in Venezuela is protection of the most basic principle of international law: the independence and sovereignty of each nation. Hitler and his fascist allies, and Stalin and his communist allies, violated that principle; but now fascist America and its allies routinely violate it. Venezuela’s allies (unlike Neville Chamberlain) are supporting the foundation-stone of international law: national sovereignty and independence. For the US and its allies to reject the results of Venezuela’s (or of Syria’s or of Iran’s) elections is no basis for invalidating those results, and the US Government’s stooge Juan Guaido is simply a Venezuelan traitor, and should be treated as such, by an appropriate trial for treason. Certainly, there is no Constitutional basis for Guaido’s power-grab, despite the lies to the contrary by the putchists such as in America and its allied regimes.

All oil-exploration should therefore now stop, and existing tar-sands oil fields should simply be abandoned altogether. Only the easiest-to-refine (the “lighter”) oils should be sold and burnt right now. There is going to be a rush for the exits in the stocks of those “extra-heavy oil” companies, and the only question is when it will happen. Regarding that rush, the situation is very different in Venezuela than it is in Canada, because the US Government will delay as long as possible the collapse of Canada’s oil-sales, but the US (and Canada) want to expedite the collapse of Venezuela’s — at least until and unless the current Venezuelan coup succeeds. (And Canada’s Foreign Minister, Chrystia Freeland, did the key preparatory work for US President Trump to pull the plug on Venezuela’s Government; so, both of those governments have actually led in overthrowing and replacing Venezuela’s non-US-allied Government.)

Venezuela became addicted to selling its filthy oil, but now can only lose money with every barrel it sells of its oil. Each day of the company’s operations is simply eating the company’s seed-corn — and there is nothing like Canada has, to soften the blow. That’s not only unsustainable, it has already become a crisis, and Washington is exploiting it.

PDVSA’s latest online financial report is for 2016 and it shows that “Profit before income tax” was $16,317,000 in 2014, then $1,469,000 in 2015, and then $955,000 — less than a million dollars — in 2016. During the three-year period, “Current assets” declined from $55.2 billion to $54.6 billion, and “Current liabilities” declined from $55.7 billion to $50.0 billion. “Financial debt” declined from $40.0 billion to $33.9 billion. “Total assets” declined from $217.4 billion to $189.7 billion; and “Total liabilities” declined from $127.7 billion to $102.6 billion. Probably the company is already operating in the red now, but with every year of deteriorating infrastructure, just wearing out, with more and more and longer deferred maintenance, and with a bad long-term prospect for profitability, could the Government even sell the company? If Trump succeeds and PDVSA and every other state-owned asset in Venezuela becomes privatized, Venezuela’s citizens will be left with nothing, and the only beneficiaries will be the international bankers, even as international investors will need to take haircuts on their existing Venezuelan loans. The oil that PDVSA sells shouldn’t even be bought; it should simply remain in the ground.

According to the latest public information, PDVSA showed less than a million dollars of profit in 2016 — and the trend was downward. Anyone in Venezuela who thinks that the country can be sustained in the future, as it was in the past, from the sale of Venezuela’s exceptionally costly-to-produce oil, isn’t taking into account the broader picture, and the impact that the global-warming phenomenon will inevitably have upon the fossil-fuels industries.

There may be ways to jiggle the books to make PDVSA fool some investors into buying the company, but only the international bankers would be profiting from a sale of that firm.

Foreign Policy magazine, which represents America’s aristocracy, headlined on 5 June 2018, “It’s Time for a Coup in Venezuela”, but even if that turns out to be the final solution to the Venezuelan problem for America’s aristocrats, it won’t solve anything for the Venezuelan public — basically like Hitler’s “final solution” did nothing to benefit Germany’s Jews. Germany’s aristocracy did nothing for Jews then, and America’s aristocracy will do nothing for Venezuelans now. They’re all on their own. The leaders of the US-allied nations don’t want to save them, and instead follow in the fascist and Nazi tradition. The leaders in Venezuela’s current Government, who want to save them, simply can’t save them. It’s far too late for them to start now, to do what needed to start back in “the early 1980s of 93,000 b/d” from Venezuela’s Orinoco belt — which would have been for them to stop what ought never even to have been started there: extraction of that oil.

CONCLUSION

The poverty and violence that now rack Venezuela result from a broader situation in which selling what shouldn’t even be bought has run its miserable course until the final act, which is a Government that has reached the stage where it can produce income only for international bankers and for the aristocrats who control them. Any oil company now that would want to buy those assets would merely be adding to its assets — chiefly the dirty oil in the ground — ‘assets’ (oil reserves) that can never even be used (unless the propaganda becomes even more effective in the future than it has always been until now, which might be impossible to achieve). Oil companies already have lots more of that dangerous filth than anyone except people in finance will ever be able to benefit from buying or selling.

For Venezuelans, this is a great tragedy. The US and its allies are (and have been) doing everything they can to exploit the tragedy.

It’s like a hungry lion chasing a fleeing exhausted deer, who now is finally trapped.

That’s the ugly reality.

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Olivia Kroth
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Venezuela’s people are not suffering at all. On the contrary, they live well, in spite of the US economic sanctions.

teles
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Telesur English:

Venezuelan Government presents evidence of US coup plot
The US gangsters want to steal Venezuela’s oil

Olivia Kroth
Guest

TELESUR ENGLISH: In an interview for teleSUR, Venezuela’s Vice President for Planning Ricardo Menendez said that about 80 percent of Venezuelans reject any interventionist action against the South American nation. Menendez indicated that the figure is derived from the recent study conducted by the Venezuelan Planning Institute over a period of two years. The official said that the results of the analysis contrasts with the story the opposition has tried to write over the so-called crisis in the country. The results of the study show 92 percent of people responded negatively to a military invasion of Venezuela and 86.5 percent… Read more »

Olivia Kroth
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Why People in the USA Are Suffering
What’s dooming the USA isn’t merely a local situation, but instead is global and moral.
The US government is hated worldwide because it is brutal, criminal and murderous. Therefore US citizens abroad are treated as international pariahs. Nobody welcomes them anywhere.
The only way that people in the USA will stop suffering is if they stay at home, stop traveling, stop exporting their immoral ideas, and their ugly, stinking green toilet paper money.
They should use all of this exclusively for themselves. Then they will stop suffering.

Raymond Comeau
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Raymond Comeau

if the problem in Venezuela is that it is trying to survive on just an oil income. What about Saudi Arabia. What other resources does Saudi Arabia have? Are they making crystal from sand? Or, are they selling chopped heads.

The USA is one of the world’s worst Terrorist Nations along with Isra-Hell. The USA needs to be reined in by the UN or the World International Criminal Court in the Hague. If those two Organizations have the guts to do so. If not, we will have to wait until the USA destroys itself which is happening as I type!

Olivia Kroth
Guest

Very true. And furthermore, Venezuela will even sell more oil in 2019, because the demand for oil is rising. GAZPROM bank is handling Venezuelan oil sales now. The revenues are deposited in Venezuela’s accounts with the Russian bank, so the US cannot steal it any more. The sales are made in rubles and other international currencies, not in US dollars. So Venezuela will not suffer at all. TASS reports: International Energy Agency maintains 2019 forecast for oil demand growth Business & Economy February 13, 12:50 UTC+3 IEA experts attribute revision of the forecast growth in supply in the oil market… Read more »

Olivia Kroth
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TASS reports: Venezuela to increase oil output by 1 million barrels — President Nicolas Maduro World February 14, 1:00 UTC+3 Venezuelan President Nicolas Maduro said the country is “using difficulties that resulted from sanctions to create a modern, self-sustainable economy” BEIRUT, February 13. /TASS/. The Venezuelan government plans to increase oil output by more than 1 million barrels, President Nicolas Maduro told Al Mayadeen TV channel on Wednesday. “We are using difficulties that resulted from sanctions to create a modern, self-sustainable economy, and call upon investors from Arabic and Islamic countries to invest their money into developing the oil and… Read more »

Olivia Kroth
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PRESS TV: US Congress won’t let Trump invade Venezuela: Democratic rep. Thu Feb 14, 2019 11:09AM [Updated: Thu Feb 14, 2019 11:14AM ] US Democratic lawmakers have made it clear that Congress won’t allow Trump launch a military intervention in Venezuela, where the US-backed opposition has been challenging the legitimate government of President Nicolas Maduro. Eliot Engel, the Democratic chairman of the House of Representatives Foreign Affairs Committee, raised concern on Wednesday about Trump’s talks of military action, which he described as “saber-rattling.” “I do worry about the president’s saber rattling, his hints that US military intervention remains an option.… Read more »

Olivia Kroth
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Venezuelans are not beggars. They live well and do not need US “humanitarian aid”, which would be just another pretext of invading. TASS reports: Maduro says he will not allow US humanitarian aid in Venezuela Society & Culture February 12, 18:27 UTC+3 The Venezuelan leader harshly criticized the US administration, blaming it for the “political war” February 12. /TASS/. Venezuelan President Nicolas Maduro has stated that he will not allow the delivery of US humanitarian aid to Venezuela, as the US is thus trying to justify a military intervention. The US is sparking a war to seize Venezuela, he said,… Read more »

Olivia Kroth
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TASS reports: Venezuelan vice president discusses bilateral cooperation with Russian ambassador World February 14, 5:51 UTC+3 The Venezuelan Foreign Ministry said that “261 agreements in the sphere of energy, industry and construction” have been signed between Caracas and Moscow so far CARACAS, February 14. /TASS/. Venezuelan Vice President for Economic Affairs Tareck El Aissami and Russian Ambassador to Caracas Vladimir Zaemsky have discussed strengthening bilateral economic cooperation, the Venezuelan Foreign Ministry reported on Wednesday. “On Tuesday, Vice President Tareck El Aissami met with Russian Ambassador to Venezuela Vladimir Zaemsky at the building of the Ministry of Industries and National Production… Read more »

Olivia Kroth
Guest

TELESUR ENGLISH: India Vows to Continue Buying Venezuelan Oil Despite US regime’s Threats against Venezuela India refuses to subordinate itself to the U.S.regime’s strategy against Venezuela. India’s Ministry of Foreign Affairs spokesman, Raveesh Kumar, said Thursday that the country will keep on doing business with Venezuela on the basis of purely economic considerations, a statement which does not submit to the United States strategy to isolate the Bolivarian country. “Venezuela is the chair of OPEC (Organization of the Petroleum Exporting Countries) and GECF (Gas Exporting Countries Forum). We don’t have any barter system with Venezuela; commercial considerations and related factors… Read more »

Olivia Kroth
Guest

TELESUR ENGLISH: Venezuela Receives 933 Tons of Medical Aid From Allies Abroad Sixty-four containers holding 933 tons of medical supplies, from gastrointestinal medication to prenatal vitamins, arrived from Venezuelan allies Thursday, the Health Ministry reported. Twenty-five million euros-worth of humanitarian aid was delivered to Puerto de la Guaira, Venezuela from international partners in Cuba, China, Russia, Palestine, Turkey, among others. Over 22,570 units of spare parts for medical equipment, 192,000 kit for diagnostic tests and “more than 100,000 kit for cytology” were included in the shipment, which Health Minister Carlos Alvarado said is received regularly in the port city. “It… Read more »

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Airline wars heat up, as industry undergoes massive disruption (Video)

The Duran Quick Take: Episode 145.

Alex Christoforou

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The Duran’s Alex Christoforou and Editor-in-Chief Alexander Mercouris examine the global commercial airline industry, which is undergoing massive changes, as competition creeps in from Russia and China.

Reuters reports that Boeing Co’s legal troubles grew as a new lawsuit accused the company of defrauding shareholders by concealing safety deficiencies in its 737 MAX planes before two fatal crashes led to their worldwide grounding.

The proposed class action filed in Chicago federal court seeks damages for alleged securities fraud violations, after Boeing’s market value tumbled by $34 billion within two weeks of the March 10 crash of an Ethiopian Airlines 737 MAX.

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According to the complaint, Boeing “effectively put profitability and growth ahead of airplane safety and honesty” by rushing the 737 MAX to market to compete with Airbus SE, while leaving out “extra” or “optional” features designed to prevent the Ethiopian Airlines and Lion Air crashes.

It also said Boeing’s statements about its growth prospects and the 737 MAX were undermined by its alleged conflict of interest from retaining broad authority from federal regulators to assess the plane’s safety.

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Boeing said on Tuesday that aircraft orders in the first quarter fell to 95 from 180 a year earlier, with no orders for the 737 MAX following the worldwide grounding.

On April 5, it said it planned to cut monthly 737 production to 42 planes from 52, and was making progress on a 737 MAX software update to prevent further accidents.

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Via Zerohedge…

Step aside (fading) trade war with China: there is a new aggressor – at least according to the US Trade Rep Robert Lighthizer – in town.

In a statement on the USTR’s website published late on Monday, the US fair trade agency announced that under Section 301 of the Trade Act, it was proposing a list of EU products to be covered by additional duties. And as justification for the incremental import taxes, the USTR said that it was in response to EU aircraft subsidies, specifically to Europea’s aerospace giant, Airbus, which “have caused adverse effects to the United States” and which the USTR estimates cause $11 billion in harm to the US each year

One can’t help but notice that the latest shot across the bow in the simmering trade war with Europe comes as i) Trump is reportedly preparing to fold in his trade war with China, punting enforcement to whoever is president in 2025, and ii) comes just as Boeing has found itself scrambling to preserve orders as the world has put its orderbook for Boeing 737 MAX airplanes on hold, which prompted Boeing to cut 737 production by 20% on Friday.

While the first may be purely a coincidence, the second – which is expected to not only slam Boeing’s financials for Q1 and Q2, but may also adversely impact US GDP – had at least some impact on the decision to proceed with these tariffs at this moment.

We now await Europe’s angry response to what is Trump’s latest salvo in what is once again a global trade war. And, paradoxically, we also expect this news to send stocks blasting higher as, taking a page from the US-China trade book, every day algos will price in imminent “US-European trade deal optimism.”

Below the full statement from the USTR (link):

USTR Proposes Products for Tariff Countermeasures in Response to Harm Caused by EU Aircraft Subsidies

The World Trade Organization (WTO) has found repeatedly that European Union (EU) subsidies to Airbus have caused adverse effects to the United States.  Today, the Office of the United States Trade Representative (USTR) begins its process under Section 301 of the Trade Act of 1974 to identify products of the EU to which additional duties may be applied until the EU removes those subsidies.

USTR is releasing for public comment a preliminary list of EU products to be covered by additional duties.  USTR estimates the harm from the EU subsidies as $11 billion in trade each year.  The amount is subject to an arbitration at the WTO, the result of which is expected to be issued this summer.

“This case has been in litigation for 14 years, and the time has come for action. The Administration is preparing to respond immediately when the WTO issues its finding on the value of U.S. countermeasures,” said U.S. Trade Representative Robert Lighthizer.  “Our ultimate goal is to reach an agreement with the EU to end all WTO-inconsistent subsidies to large civil aircraft.  When the EU ends these harmful subsidies, the additional U.S. duties imposed in response can be lifted.”

In line with U.S. law, the preliminary list contains a number of products in the civil aviation sector, including Airbus aircraft.  Once the WTO arbitrator issues its report on the value of countermeasures, USTR will announce a final product list covering a level of trade commensurate with the adverse effects determined to exist.

Background

After many years of seeking unsuccessfully to convince the EU and four of its member States (France, Germany, Spain, and the United Kingdom) to cease their subsidization of Airbus, the United States brought a WTO challenge to EU subsidies in 2004. In 2011, the WTO found that the EU provided Airbus $18 billion in subsidized financing from 1968 to 2006.  In particular, the WTO found that European “launch aid” subsidies were instrumental in permitting Airbus to launch every model of its large civil aircraft, causing Boeing to lose sales of more than 300 aircraft and market share throughout the world.

In response, the EU removed two minor subsidies, but left most of them unchanged.  The EU also granted Airbus more than $5 billion in new subsidized “launch aid” financing for the A350 XWB.  The United States requested establishment of a compliance panel in March 2012 to address the EU’s failure to remove its old subsidies, as well as the new subsidies and their adverse effects.  That process came to a close with the issuance of an appellate report in May 2018 finding that EU subsidies to high-value, twin-aisle aircraft have caused serious prejudice to U.S. interests.  The report found that billions of dollars in launch aid to the A350 XWB and A380 cause significant lost sales to Boeing 787 and 747 aircraft, as well as lost market share for Boeing very large aircraft in the EU, Australia, China, Korea, Singapore, and UAE markets.

Based on the appellate report, the United States requested authority to impose countermeasures worth $11.2 billion per year, commensurate with the adverse effects caused by EU subsidies.  The EU challenged that estimate, and a WTO arbitrator is currently evaluating those claims

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Mueller report takes ‘Russian meddling’ for granted, offers no actual evidence

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Via RT…


Special counsel Robert Mueller’s ‘Russiagate’ report has cleared Donald Trump of ‘collusion’ charges but maintains that Russia meddled in the 2016 US presidential election. Yet concrete evidence of that is nowhere to be seen.

The report by Mueller and his team, made public on Thursday by the US Department of Justice, exonerates not just Trump but all Americans of any “collusion” with Russia, “obliterating” the Russiagate conspiracy theory, as journalist Glenn Greenwald put it.

However, it asserts that Russian “interference” in the election did happen, and says it consisted of a campaign on social media as well as Russian military intelligence (repeatedly referred to by its old, Soviet-era name, GRU) “hacking” the Democratic Congressional Campaign Committee (DCCC), the DNC, and the private email account of Hillary Clinton’s campaign chair, John Podesta.

As evidence of this, the report basically offers nothing but Mueller’s indictment of “GRU agents,” delivered on the eve of the Helsinki Summit between Trump and Russian President Vladimir Putin in what was surely a cosmic coincidence.

Indictments are not evidence, however, but allegations. Any time it looks like the report might be bringing up proof, it ends up being redacted, ostensibly to protect sources and methods, and out of concern it might cause “harm to an ongoing matter.”

‘Active measures’ on social media

Mueller’s report leads with the claim that the Internet Research Agency (IRA) ran an “active measures” campaign of social media influence. Citing Facebook and Twitter estimates, the report says this consisted of 470 Facebook accounts that made 80,000 posts that may have been seen by up to 126 million people, between January 2015 and August 2017 (almost a year after the election), and 3,814 Twitter accounts that “may have been” in contact with about 1.4 million people.

Those numbers may seem substantial but, as investigative journalist Gareth Porter pointed out in November 2018, they should be regarded against the background of 33 trillion Facebook posts made during the same period.

According to Mueller, the IRA mind-controlled the American electorate by spending “approximately $100,000” on Facebook ads, hiring someone to walk around New York City “dressed up as Santa Claus with a Trump mask,” and getting Trump campaign affiliates to promote “dozens of tweets, posts, and other political content created by the IRA.” Dozens!

Meanwhile, the key evidence against IRA’s alleged boss Evgeny Prigozhin is that he “appeared together in public photographs” with Putin.

Alleged hacking & release

The report claims that the GRU hacked their way into 29 DCCC computers and another 30 DNC computers, and downloaded data using software called “X-Tunnel.” It is unclear how Mueller’s investigators claim to know this, as the report makes no mention of them or FBI actually examining DNC or DCCC computers. Presumably they took the word of CrowdStrike, the Democrats’ private contractor, for it.

However obtained, the documents were published first through DCLeaks and Guccifer 2.0 – which the report claims are “fictitious online personas” created by the GRU – and later through WikiLeaks. What is Mueller’s proof that these two entities were “GRU” cutouts? In a word, this:

That the Guccifer 2.0 persona provided reporters access to a restricted portion of the DCLeaks website tends to indicate that both personas were operated by the same or a closely-related group of people.(p. 43)

However, the report acknowledges that the “first known contact” between Guccifer 2.0 and WikiLeaks was on September 15, 2016 – months after the DNC and DCCC documents were published! Here we do get actual evidence: direct messages on Twitter obtained by investigators. Behold, these “spies” are so good, they don’t even talk – and when they do, they use unsecured channels.

Mueller notably claims “it is clear that the stolen DNC and Podesta documents were transferred from the GRU to WikiLeaks” (the rest of that sentence is redacted), but the report clearly implies the investigators do not actually know how. On page 47, the report says Mueller “cannot rule out that stolen documents were transferred to WikiLeaks through intermediaries who visited during the summer of 2016.”

Strangely, the report accuses WikiLeaks co-founder Julian Assange of making “public statements apparently designed to obscure the source” of the materials (p.48), notably the offer of a reward for finding the murderer of DNC staffer Seth Rich – even though this can be read as corroborating the intermediaries theory, and Assange never actually said Rich was his source.

The rest of Mueller’s report goes on to discuss the Trump campaign’s contacts with anyone even remotely Russian and to create torturous constructions that the president had “obstructed” justice by basically defending himself from charges of being a Russian agent – neither of which resulted in any indictments, however. But the central premise that the 22-month investigation, breathless media coverage, and the 448-page report are based on – that Russia somehow meddled in the 2016 election – remains unproven.

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Rumors of War: Washington Is Looking for a Fight

The bill stands up for NATO and prevents the President from pulling the US out of the Alliance without a Senate vote.

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Authored by Philip Giraldi via The Strategic Culture Foundation:


It is depressing to observe how the United States of America has become the evil empire. Having served in the United States Army during the Vietnam War and in the Central Intelligence Agency for the second half of the Cold War, I had an insider’s viewpoint of how an essentially pragmatic national security policy was being transformed bit by bit into a bipartisan doctrine that featured as a sine qua non global dominance for Washington. Unfortunately, when the Soviet Union collapsed the opportunity to end once and for all the bipolar nuclear confrontation that threatened global annihilation was squandered as President Bill Clinton chose instead to humiliate and use NATO to contain an already demoralized and effectively leaderless Russia.

American Exceptionalism became the battle cry for an increasingly clueless federal government as well as for a media-deluded public. When 9/11 arrived, the country was ready to lash out at the rest of the world. President George W. Bush growled that “There’s a new sheriff in town and you are either with us or against us.” Afghanistan followed, then Iraq, and, in a spirit of bipartisanship, the Democrats came up with Libya and the first serious engagement in Syria. In its current manifestation, one finds a United States that threatens Iran on a nearly weekly basis and tears up arms control agreements with Russia while also maintaining deployments of US forces in Syria, Iraq, Afghanistan, Somalia and places like Mali. Scattered across the globe are 800 American military bases while Washington’s principal enemies du jour Russia and China have, respectively, only one and none.

Never before in my lifetime has the United States been so belligerent, and that in spite of the fact that there is no single enemy or combination of enemies that actually threaten either the geographical United States or a vital interest. Venezuela is being threatened with invasion primarily because it is in the western hemisphere and therefore subject to Washington’s claimed proconsular authority. Last Wednesday Vice President Mike Pence told the United Nations Security Council that the White House will remove Venezuelan President Nicolás Maduro from power, preferably using diplomacy and sanctions, but “all options are on the table.” Pence warned that Russia and other friends of Maduro need to leave now or face the consequences.

The development of the United States as a hostile and somewhat unpredictable force has not gone unnoticed. Russia has accepted that war is coming no matter what it does in dealing with Trump and is upgrading its forces. By some estimates, its army is better equipped and more combat ready than is that of the United States, which spends nearly ten times as much on “defense.”

Iran is also upgrading its defensive capabilities, which are formidable. Now that Washington has withdrawn from the nuclear agreement with Iran, has placed a series of increasingly punitive sanctions on the country, and, most recently, has declared a part of the Iranian military to be a “foreign terrorist organization” and therefore subject to attack by US forces at any time, it is clear that war will be the next step. In three weeks, the United States will seek to enforce a global ban on any purchases of Iranian oil. A number of countries, including US nominal ally Turkey, have said they will ignore the ban and it will be interesting to see what the US Navy intends to do to enforce it. Or what Iran will do to break the blockade.

But even given all of the horrific decisions being made in the White House, there is one organization that is far crazier and possibly even more dangerous. That is the United States Congress, which is, not surprisingly, a legislative body that is viewed positively by only 18 per cent of the American people.

A current bill originally entitled the “Defending American Security from Kremlin Aggression Act (DASKA) of 2019,” is numbered S-1189. It has been introduced in the Senate which will “…require the Secretary of State to determine whether the Russian Federation should be designated as a state sponsor of terrorism and whether Russian-sponsored armed entities in Ukraine should be designated as foreign terrorist organizations.” The bill is sponsored by Republican Senator Cory Gardner of Colorado and is co-sponsored by Democrat Robert Menendez of New Jersey.

The current version of the bill was introduced on April 11th and it is by no means clear what kind of support it might actually have, but the fact that it actually has surfaced at all should be disturbing to anyone who believes it is in the world’s best interest to avoid direct military confrontation between the United States and Russia.

In a a press release by Gardner, who has long been pushing to have Russia listed as a state sponsor of terrorism, a February version of the bill is described as “…comprehensive legislation [that] seeks to increase economic, political, and diplomatic pressure on the Russian Federation in response to Russia’s interference in democratic processes abroad, malign influence in Syria, and aggression against Ukraine, including in the Kerch Strait. The legislation establishes a comprehensive policy response to better position the US government to address Kremlin aggression by creating new policy offices on cyber defenses and sanctions coordination. The bill stands up for NATO and prevents the President from pulling the US out of the Alliance without a Senate vote. It also increases sanctions pressure on Moscow for its interference in democratic processes abroad and continued aggression against Ukraine.”

The February version of the bill included Menendez, Democrat Jeanne Shaheen of New Hampshire, Democrat Ben Cardin of Maryland and Republican Lindsey Graham of South Carolina as co-sponsors, suggesting that provoking war is truly bipartisan in today’s Washington.

Each Senator co-sponsor contributed a personal comment to the press release. Gardner observed that “Putin’s Russia is an outlaw regime that is hell-bent on undermining international law and destroying the US-led liberal global order.” Menendez noted that “President Trump’s willful paralysis in the face of Kremlin aggression has reached a boiling point in Congress” while Graham added that “Our goal is to change the status quo and impose meaningful sanctions and measures against Putin’s Russia. He should cease and desist meddling in the US electoral process, halt cyberattacks on American infrastructure, remove Russia from Ukraine, and stop efforts to create chaos in Syria.” Cardin contributed “Congress continues to take the lead in defending US national security against continuing Russian aggression against democratic institutions at home and abroad” and Shaheen observed that “This legislation builds on previous efforts in Congress to hold Russia accountable for its bellicose behavior against the United States and its determination to destabilize our global world order.”

The Senatorial commentary is, of course, greatly exaggerated and sometimes completely false regarding what is going on in the world, but it is revealing of how ignorant American legislators can be and often are. The Senators also ignore the fact that the designation of presumed Kremlin surrogate forces as “foreign terrorist organizations” is equivalent to a declaration of war against them by the US military, while hypocritically calling Russia a state sponsor of terrorism is bad enough, as it is demonstrably untrue. But the real damage comes from the existence of the bill itself. It will solidify support for hardliners on both sides, guaranteeing that there will be no rapprochement between Washington and Moscow for the foreseeable future, a development that is bad for everyone involved. Whether it can be characterized as an unintended consequence of unwise decision making or perhaps something more sinister involving a deeply corrupted congress and administration remains to be determined.

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