Venezuela implements nationwide power-rationing plan

[ChangoLoa]

Source: El Universal

It will last about three hours from noon

Igor Gavidia, the head of the National Center for Electric Power Delivery, said in an interview with state-run TV network Venezolana de Televisión (VTV) that the National Electrical Corporation (Corpoelec) will implement on Tuesday a power-rationing plan in most of the Venezuelan states, aimed at stabilizing the power grid.

He added that rationing could reach up to 800 megawatts (MW). He pointed out that the plan will be implemented from Tuesday noon to 3 p.m.

Gavidia explained that the states affected by the rationing plan are Carabobo, Yaracuy, Guárico, Cojedes, Portuguesa, Miranda, Aragua, Falcón, Mérida, Táchira, Trujillo, Barinas, Apure, Sucre, Monagas, Anzoátegui, Nueva Esparta, Zulia and Lara, for a total of 19 Venezuelan states.

Read more: http://english.eluniversal.com/2011/05/10/venezuela-implements-nationwide-power-rationing-plan.shtml

[slackmaster]

1. Maybe they should nationalize the power industry

A major exporter of petroleum that can't generate enough power for its own people.

:crazy:

[ChangoLoa]

2. Corpoelec is already public nt

[rayofreason]

3. "A major exporter of petroleum that can't generate enough power..."

..."for its own people."

That is what brilliant economic management and the building of wonderful socialism by an indispensable genius brings you!

[makhno]

4. The perils of socialism ...

... or the result of rapid economic growth that's straining an antiquated grid, coupled with unreliable, sabotaged power supply from Colombia?

I'll go with the prevailing progressive vibe here and blame socialism for the failure to magically turn crude oil into useable megawatts.

[slackmaster]

5. I'll go with "Piss-poor planning" for $1,000

[makhno]

6. No argument there

But is it a corollary of a socialist system? Would privatization automagically transform crude into electricity?

[rayofreason]

10. "magically transform crude into electricity?"...

...Somehow capitalism does so regularly.

Socialist economies always produce massive inefficiency and shortages. Every one has (USSR, etc.) and every one will. The reasons include:

1. Planners can never know everything, therefore they make bad decisions even if they are smart people. (Where "bad" means poor use of resources).
2. Politics trumps everything, and people are people, so corruption thrives.
3. As a corollary to 2, bad/stupid apples are protected for political reasons. In market economies, bad/stupid apples fail and are washed out of the system (except where crony capitalism holds sway - and the similar economic problems result).

So all of this produces shitty planning and oversight, and good planning will produce only somewhat less shitty results.

[makhno]

12. Socialism, capitalism, central planning

I think we need to distinguish between a planned economy and "socialism" as employed in a broader sense to criticize any government that does not subscribe to the neoliberal doctrine.

A planned economy as it existed in the Soviet Union implies total control of production and distribution across the entire economy. Taking the Soviet example, five year plans were obviously flawed as it is impossible to predict the behavior of economic variables outside of a completely autarkic system. For instance, take the mid-80s slump in oil prices. Could Soviet planners have predicted it? Possibly. Did they? Apparently not. Did it screw up the Soviet economy, based as it was to a large extent on oil exports? It sure did. Essentially, this is what your first points addresses.

In Venezuela, however, we are not really talking about a planned economy, but merely an economy where the government does have a say about the overall direction key sectors such as energy should take. Call it socialism if you will, but it sure as hell is not some kind of rigid, Soviet-era planned economy.

To stay with the energy sector, France, among other countries, has employed a "socialist" approach in that the entity responsible for the generation and distribution of electricity, EDF, is essentially state-owned. Does it make the French grid less efficient? Hardly, as the country is a net exporter of electricity in spite of a relative scarcity of fossil fuel.

It's a pity that the word "socialism" immediately conjures images of the worst implementation of state capitalism, which is what the Soviet Union was. There are many examples of state-owned industries that have prospered in any number of Western countries. I don't really see why Venezuela should shy away from the positive examples of state ownership of key business assets we've seen in Europe or Asia.

As for points 2 and 3, that's simply human nature, whether we're talking about a planned economy, a liberal one, or a mix thereof.

[boppers]

20. France is heavy into nuclear energy.

Turns out it's a valuable export product for them.

Maybe Venezuela should take a hint.

[makhno]

22. Nuclear energy is definitely the way to go

However, as I mentioned in an earlier post, any development in the nuclear area will most likely result in Venezuela joining the rogue state shortlist.

Geopolitical questions aside, it's still a long and expensive road to energy self-sufficiency via nuclear power.

[boppers]

23. Well, the way to make it less expensive, historically:

Has been to threaten to go it alone, watch the other nations freak out, and "negotiate" for the nuclear nations to help subsidize the internal costs.

[makhno]

30. Not sure how that works

The map is pretty revealing. With few exceptions, it looks like countries with active, past, or dormant nuclear weapons programs are the ones that also have civilian power plants. I can't really point to an example of the scenario you're proposing.

Still. Can't see Venezuela approaching Russia on nuclear energy matters without all hell breaking loose in Washington (and on DU).

[boppers]

31. See: Iran.

And North Korea.

[rayofreason]

21. OK,..

..then 2 and 3 apply in spades in Venezuela.

The megalomaniac in chief is a bombastic blowhard, and his idiotic policies are at the root of the shortages in Venezuela. It is not a situation where it is just "the government does have a say about the overall direction" of the economy. Price controls on food are just one example.

http://www.guardian.co.uk/world/2007/nov/14/venezuela.international

Regarding France, they export electricity because of a huge nuclear power installation. It is not because of EDF, which post-dates the nuclear boom (no pun intended).

[makhno]

24. Google is fickle

Some argue that price controls were a necessary reaction to economic sabotage.

That particular aspect of Venezuelan life aside, there is indeed a sizable part of the population that does support the policies enacted by the Chavez regime. Personally, I don't really care if the lifestyle of the local bourgeoisie has been negatively impacted. After all, Miami's only a short one way flight away.

As to EDF, it's been around since right after WWII. Didn't get its first nuclear plants until the late '60s, I believe.

[rayofreason]

27. You are correct...

...EDF was founded in 1946. Nuclear power came later, but it seems that EDF had control of distribution, not production, until 2002, when they took control of production as well. Still, the decision to go nuclear was a government, not private sector, decision.

From Wikipedia (http://en.wikipedia.org/wiki/Électricité_de_France):

For a long time, EDF suffered from very low profits for a group benefiting from such a monopoly, especially since its weak domestic results, were complemented by the poor performances of its foreign subsidiaries. Its balance sheet was very fragile, because of its international development, of its tariff policy in France and rapid deterioration of its profitability.

From 2001 till 2003, EDF was forced to reduce its equity capital due to untoward deviations of conversion in South America and write-down of its assets in Germany, Italy and in Brazil for a total of €6.4 billion total.

This is probably why

Until November 19, 2004, EDF was a state-owned corporation, but it is now a limited-liability corporation under private law (société anonyme). The French government partially floated shares of the company on the Paris Stock Exchange in November 2005,<5> although it retains almost 85% ownership as of the end of 2008.

Hmm....

Any monopoly generates inefficiencies, and when it is a government monopoly there are strong political incentives to cover up problems since financial losses are shifted to the public at large and do not impact the managers directly. A private monopoly in the same situation will eventually go broke (unless it gets access to the public purse), so there are greater pressures to private monopolies to at least break even. Not so for public monopolies.

Now EDF is running under the rules of a private company, with the government a major shareholder.

[joshcryer]

17. It's more corruption than it is planning, almost every other oil state has nationalized power.

It's corruption to the core. Chavez is blaming the outages on his opposition, indeed, if anything goes wrong at all it's the oppositions fault, conspiracies to cut power. Remember when he blamed the earlier outages on saboteurs?

[slackmaster]

29. I'm not saying that socialism can't work, just that the Chavez government is inept

Bad government is bad government regardless of what kind of economic system it's trying to run.

[naaman fletcher]

8. magically?

What you do is refine it into fuel oil and burn it in generators. It's not exactly magical technology.

[makhno]

9. Can't build refineries overnight

Given the country's energy demands, this is definitely an area where the Venezuelan regime should focus, along with other power sources, nuclear or hydroelectric.

It's just that arguments along the lines of "they have oil, so it must be socialist mismanagement that's causing all the problems" fall a little bit flat. France did and still does pretty well with the government-owned EDF.

Then again, if Chavez so much as mentions any kind of nuclear program, he'll end up right there with Iran in the rogue state category.

[naaman fletcher]

14. Yep

If only Chavez Wasn't new to the job and had time to plan

[makhno]

15. Hard to tell

The articles I found in the English-language press just seem to gloat about whatever electricity problems Venezuela has had in the past couple of years. Little background on the infrastructure or whatever efforts the Chavez regime might or might not have undertaken to remedy the situation or even what the budget priorities are like.

Seen similar restrictions/blackouts in China, Iran, Pakistan, Armenia, Russia and a bunch of other countries. Don't know what the electricity situation is like elsewhere in South America, but it definitely is not on 24/7 East of the EU.

[joshcryer]

18. Their largest refinery was shut down for a week there, likely contributed to the problem.

They don't really have a refinery problem, they have some of the worlds largest and most productive refineries.

[makhno]

25. Thanks for the info

Sabotage, surely. ;)

[joshcryer]

26. Here's the article, state claims it didn't have an effect:

http://online.wsj.com/article/BT-CO-20110510-714691.html

But since they're not saying what caused the outages I'm banking on this being a contributor.

[robcon]

11. "the result of rapid economic growth that's straining an antiquated grid"

Rapid economic growth? Is that supposed to have a 'sarcasm' thingy attached to it?

&g=44ea22819beb4c37ab1291a7c2596ffd

[makhno]

13. Was that supposed to point somewhere? n/t

[Obamaforthewin]

16. Try this link

http://www.tradingeconomics.com/venezuela/gdp-growth

[naaman fletcher]

7. last year they blamed it on the drought. nt

[joshcryer]

19. Don't forget saboteurs...

http://www.usatoday.com/news/world/2010-02-21-chavez-power-grid-claims_N.htm

In Venezuela anything that doesn't go right is a conspiracy. :hi:

[boppers]

28. Drought is blamed in that story, too.

"The plan is aimed at easing energy shortages Chavez blames on a months-long drought. The lack of rain has caused water levels to drop to critical lows behind the Guri Dam, which supplies roughly 70% of Venezuela's electricity."

One dam, 70%? Yeah, they need to diversify a wee bit more.