I think the fact that Venezuela is trying to sell off their electric utilitities is significant. I ask the question Why?? and I think that the letters Y2K are a part of the answer. I was surprised to learn that the U.S. imports more oil from Venezuela than any other country (I think approx. 17%). Sorry, I cant find the link to the Government PDF file that breaks down where our imported oil comes from.

Below I give a link to a Bloomberg News article that speaks of the offering for sale, but first ...

I appreciate two older threads about international electricity issues:

I found the threads below by using this site's search engine with "Venezuelan" :

10: Response to ITA Report - The Global Electricity Picture (Rick Cowles and Jim Smith's comments)

(Thanks Jim, for your "3 Reason's The Vens are important to Electricity")

10: Response to What about the rest of the world?

*---

To revist this subject, there was a story from Bloomberg News on June 25th that basically says that the Venezuelan government is trying to sell their state owned utilities. However, partially because of Y2K issues, there is doubt as to whether anyone will buy them.

The article quotes Energy and Mines Minister Ali Rodriguez saying : `Our electric network is in a horrible state,'

I think this does not bode well for our ability (United States) to continue to import oil from Venezuela because I would expect that if they have significant power problems there, this would make it harder for them to continue to export oil to us.

I would like to copy from the article here but the story includes this toward the end:

Any redistribution of Bloomberg content, including by framing or similar means, is expressly prohibited without the prior written consent of Bloomberg L.P. Any reference to the material must be properly attributed to Bloomberg News.

Does this mean I can't legally copy from it to here???? .......................................................

Anyway -- I found the story today at : http://www.aol.com/mynews/business/story.adp/cat=020102&id=1999062509364078

In the future you might need to do a search for "Y2K Venezuelan" from http://www.aol.com/mynews/business/story.adp/cat=020102&id=19990630080 19182

Sorry, but I'm new to this posting stuff, so if someone can help me out with appropriate do's and don'ts (showing me the ropes), I'd appreciate it.

-- Anonymous, July 08, 1999

Answers

About 17% of US oil imports come from Venezuela, and about 55% of US oil consumed is imported. So, about 9% of US oil consumed is imported from Venezuela.

-- Anonymous, July 08, 1999

Er... right, Jim? :-)

-- Anonymous, July 08, 1999

Oops, sorry I guess I didn't make it very clear where to find Jim's comments about the three reasons Venezuela is important to electricity: they are in the thread entitled: Response to ITA Report - The Global Electricity Picture ( http://www.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=000sOA )

I suppose I can just copy them into this message: here goes: ...

Jim's comments below:

3 Reason's The Vens are important to Electricity.

1. They supply a major portion of our crude oil. Interruptions in this supply mean interruptions in supply for fuel for utilities.

Venezuela is important to world energy markets because it holds proven oil reserves of 72 billion barrels, plus as much as 1.2 trillion barrels of extra-heavy oil, including orimulsion. In the first half of 1998, Venezuela was the largest supplier of total U.S. oil imports (although it ranked #2 in crude oil -- behind Saudi Arabia). Venezuela currently ranks as the world's fifth largest oil producer.

As of July 1998, Venezuela was producing around 3.0 million barrels per day (bbl/d) of crude oil, compared to its OPEC quota of 2.8 million bbl/d, and down from 3.4 million bbl/d in January 1998. About 1.4 million bbl/d of this was exported to the United States, which has become increasingly reliant on oil imports from the Western Hemisphere in recent years, and which in 1997 imported more oil from Venezuela than from the entire Persian Gulf region.

2. Venezuela exports refined products to the US, including fuel that goes to utilities.

About one-third of Venezuela's refined product exports are exported to the United States, where they are distributed mainly by Tulsa- based Citgo, PdVSA's U.S. refining and marketing subsidiary. With about 14,855 service stations in 48 states throughout the United States, Citgo ranks as the largest U.S. gasoline retailer. Venezuelan oil shipments to Citgo (and to its Lyondell Citgo joint venture) fell during the summer of 1998 vs. the same period in 1997.

3. Venezuelan Orinoco upgraded crude is used by utilities around the globe (thankfully, FFPL dodged a bullet here, they should thank the greenies for this one).

Orimulsion PdVSA is aiming to develop the country's vast extra-heavy oil reserves, particularly in the Orinoco Belt. PdVSA is examining four more Orinoco oil sands ventures for possible future development. PdVSA is counting heavily on foreign and private sector investment to achieve its goals. Bitumenes de Orinoco (Bitor), a PdVSA subsidiary, manages the production and marketing of the country's boiler fuel, Orimulsion. Orimulsion is made up of natural bitumen (70%), water, and non-toxic additives. Bitumen is abundant in the Orinoco Belt. Bitor anticipates exports of up to 20 million tons of Orimulsion by 2000. In the long term, Bitor is planning to build three new Orimulsion production plants at a total cost of near $1 billion.

Bitor's main marketing objective for Orimulsion in the United States appears to be electric utilities -- particularly those planning to switch from fuel oil. For instance, Florida Power and Light (FP&L) signed a 20-year contract in April 1994 to buy 4.5 million tons per year starting by 1998. In April 1996, however, state officials in Florida blocked the deal for environmental reasons (orimulsion contains high levels of sulfur and other pollutants). FP&L appealed the decision, and Florida Governor Lawton Chiles called a new hearing on the matter. In early August 1998, FP&L decided not to appeal the July decision by Florida's Cabinet and Governor Chiles to deny FP&L's orimulsion plan. FP&L had claimed that converting its 1,700-MW (nameplate capacity) Manatee power plant would have saved its customers $4.4 billion over 20 years while reducing emissions. Environmental groups warned that orimulsion could cause serious damage in the event of a spill.

Despite its lack of success with FP&L, Bitor exports Orimulsion to Canada, China, Denmark, Germany, Italy, Japan, and Lithuania. In August 1998, Bitor signed an agreement with the Korean Power Engineering Company (Kopec) to explore use of Orimulsion in South Korean power plants. At the same time, Taiwan has approved an environmental impact "basic proposal" for use of Orimulsion in a power plant in that country. Bitor also is looking at other possibilities in the United States.

-- Jim Smith (cyberax@ix.netcom.com), May 26, 1999.

-- Anonymous, July 08, 1999

Yeah, I'd like to meet the investment banker with the Stones to do that deal! Just for grins, I went and dug up my latest monthly import data. The latest month that I had full stats for is March of 99 (sad but true). In any event, I show the US importing approximately 38 million bbls of crude from Venezuela in March. This is probably typical.

I will total up the petroleum products later and get back to you. Suffice it to say that Venezuela is reasonably important to the US. The only countries with bigger imports to the US of crude are Saudis with 48 million per mnth and the Mexicans with 38.4 million.

-- Anonymous, July 08, 1999