Monday, November 23, 2015

Venezuela: Sean Penn's Socialist Paradise

By Rich Kozlovich

Last week Anthony Dipaola and Golnar Motevalli published an article entitled, Venezuela Sees Crude inMid-$20s If OPEC Doesn't Act”, stating  “Oil prices may drop to as low as the mid-$20s a barrel unless OPEC takes action to stabilize the market” which the desire of , Venezuelan Oil Minister Eulogio Del Pino.  It appears the government of “Venezuela is urging the Organization of Petroleum Exporting Countries to adopt an “equilibrium price” that covers the cost of new investment in production capacity, Del Pino told reporters Sunday in Tehran. Saudi Arabia and Qatar are considering his country’s proposal for an equilibrium price at $88 a barrel”, and “OPEC ministers plan assess the producer group’s output policy amid a global supply glut that has pushed down crude prices by 45 percent in the last 12 months” 

Does anyone besides me see the humor in all of this?  The vast amount of the world’s oil – and the price of oil - has not been controlled by Exxon – or any of the other companies leftists scream about– it’s been in the hands of socialist nations.  These leftist hypocrites screamed against the greedy capitalists raising prices unendingly and now the very countries they laud are worried about …..watch out…..here in comes now….. falling prices.  

Well, in Venezuela’s case it’s a lot more dire than just the price of oil.  It’s the desire for anyone to purchase Venezuela’s oil in the first place.  Venezuela’s crude oil “is so viscous and thick with contaminants that only a handful of refineries anywhere in the world can process the stuff. Almost all f those refineries are on the Gulf Coast of the United States”.  That was written by Zeihan in his book The Accidental Superpower, which I highly recommend.  

The fact of the matter is this.  Fracking will kill Venezuela oil production, or at the very least – they will not be able to sell their oil at the prices they’re trying to get OPEC to demand.
 
Whereas Venezuela’s oil is “viscous and think with contaminants”, oil produced through fracking is sweet and light, in fact it “isn’t just sweet and light, it is ultra-sweet and ultra-light, and so is remarkably easy to refine into light distilled products, like gasoline."  At the current trend, “Venezuela will become the first energy producer in history to not have a market”.

That’s just a part of Venezuela’s problems.  Zeihan goes on to state Colombia and Venezuela “are for all practical purposes in another world”, because the roads that link them are remote and low-quality and their railroad doesn’t even connect Columbia and Venezuela, they don’t connect with any other country either.

 They don’t even have the ability to easily travel into their own interiors.  That means their only hope is to the north, where all their populated centers face…….north….to the hated United States, who is their only natural economic partner.  But the United States has no need to be involved in Venezuela – if Venezuela wants that economic relationship with the U.S. – they will have to initiate it.

Now that does present a bit of a problem – don’t you think?  Hugo Chavez – when he was alive and abusing his people with his insane leftist policies – wanted to “reduce his country’s economic  connections with the U.S. in general and those refineries” he needed to accept his rotten oil specifically.   He wasted huge sums promoting the very socialism throughout South America that  imposed crushing poverty on his own people.  And now if these socialist leaders in Venezuela want any kind of economy they’re going to have to kiss some capitalist butt.  And won’t Sean Penn who just thought Hugo Chavez and his commie buddies were just dandy - be thrilled about that?

Is this a case of paradise lost, or reality overcoming delusion?

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