Archive for January 27, 2008

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Chavez Rides on a Tide of Venezuelan Oil, but Will it Ebb Soon?

The economic powerhouse that fuels the grand ambitions of President Hugo Chávez at home and abroad is Petroleos de Venezuela S.A., the state oil company.With oil prices at all-time highs, PDVSA’s sales hit $101 billion in 2006 — making it the biggest company in Latin America — and Venezuela’s economy grew by nearly 20 percent over the past two years.

The oil gusher has unleashed a consumption binge perhaps without parallel in the country’s history. It has allowed Chávez to report that he has slashed the poverty rate by 25 percent and to pledge about $8 billion in foreign aid within the past year alone to export his vision of ”21st century socialism” to other Latin American countries.

His petro-revolution has made him popular among the poor in Venezuela and intensely disliked by others — and boosted his standing as the leader of the Latin American left from Bolivia to Nicaragua.

But PDVSA’s good fortune belies profound problems within the company that could sink Chávez’s goal to stay in power indefinitely and use his petro diplomacy to forge an ”anti-imperialist” bloc of nations as a counter to U.S. influence in Latin America and the Caribbean.

Miami Herald interviews with dozens of Venezuelan and foreign oil experts, and reviews of scores of records, turned up a problematic picture:

Since Chávez took power in 1999, oil production in Venezuela has declined by 28 percent, the company’s debt has soared, corruption has flourished, foreign oil partners have pulled out, PDVSA’s payroll has skyrocketed, and the company has taken to hiring employees for their fealty to Chávez, not their expertise.

FOUNTAIN OF MONEY

PDVSA will continue to supply mountains of money to Chávez as long as oil prices remain high, said David Mares, a professor at the University of California at San Diego who co-authored an in-depth analysis of PDVSA last March.

”But PDVSA is not generating more money through better performance,” Mares told The Miami Herald. “PDVSA is generating this money in spite of its deteriorating performance. The threat to PDVSA will be when prices go down, and I don’t mean collapse. When the oil market weakens, PDVSA won’t be able to increase output to keep up income.”

What happens to PDVSA has enormous ramifications, from Caracas to South Florida and throughout the region:

• In 2006, the company generated at least 80 percent of Venezuela’s export revenue, 50 percent of the government’s estimated $52 billion budget, and one-third of the country’s gross domestic product.

• PDVSA is the fourth-biggest supplier of oil to the United States, with a 10 percent market share, and controls CITGO, which owns several refineries and supplies about 8,000 franchised gas stations in the United States.

• Cuba gets two-thirds of its daily petroleum needs from PDVSA — largely free of charge, according to most experts.

• The last time oil prices sagged, in the 1990s, the ensuing political and economic turmoil in Venezuela sent billions of dollars and thousands of people fleeing to South Florida.

Three times in the past 25 years, Venezuela has boomed and then busted along with oil prices.

Many foreign analysts believe that PDVSA was better managed before Chávez became president in 1999.

”PDVSA is becoming highly inefficient,” said Roger Tissot, who tracks the company for PFC Energy, a Washington-based consulting firm.

Read the rest at the Miami Herald.

At the peak of every oil boom, everybody believes that the high prices and good times will last forever instead of the cyclical roller coaster that oil has always been on.  Chavez is hardly the first to make that error.  Compounding his error, however, he fired the skilled managers and oil workers that could keep production high, and instead created crony jobs where loyalty to Chavez instead of knowledge of the oil business was most important.  Seizing the foreign investments is probably what is going to hurt him the worst, especially since reinvestment in the oil fields to keep them going is apparently kept to a minimum in order to maximize the cash flow.  While the oil prices are high, the incredible mismanagement and falling production is not noticeable but once prices fall, his whole house of cards is going to fall apart and once again, Florida will be inundated with ever more refugees seeking a stable place.

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New House Guests

It was a cold morning and when I fed, I could hear weak peeping noises coming from a duck’s nest. The duck was nowhere to be found (perhaps motherhood didn’t live up to her expectations), and some little duckling bodies were lying huddled over the eggs in the cold. One of the eggs was peeping weakly. It, too, felt cold. I picked it up, and could hear more weak peeping from the nest. Another egg with a tiny hole chipped in it. I put them both in my pocket, and checked the other cold eggs. A tiny little duck bill protruded from one, not moving.

I brought the peeping eggs inside and tried warming them with a hair dryer which was not exactly temperature controlled. I didn’t want to take the chance of cooking them in the shell, so I peeled the shell and dried them. I briefly abandoned them to locate and unpack a Hova-Bator incubator that had been bought for the daughter’s poultry @ 10 years previously, but the box had never been opened. I brought it in from where it had been stored and assembled it, periodically warming the little ducklings with a hair dryer.

The incubator temperature controls works great after all that time!  Now the ducklings are in the incubator with the controls set @ 100 degrees. I’ll probably leave them in there the rest of the day before moving them to a box with a heat lamp so they can get their first meal.

Will they survive after being chilled nearly to death?  I don’t know, but they seem to be gaining strength.

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Spring is coming! It’s nearly time to order chicks!

“SwampWoman”, you may say, “what in the world is wrong with you?” “You’ve been warning us about the dangers of H5N1 for months now, and you put in a link to order newly hatched chicks from Murray McMurray Hatchery?

Yep. I’m concerned about H5N1 but not yet concerned enough to get rid of my poultry. I like to hear the roosters crowing, chickens quietly clucking in content, the hens calling to their chicks as they are on a bug search-and-destroy mission. What I do NOT like is when they are on a flower garden search-and-destroy mission and they eat my newly-rooted hydrangea cuttings or the new petunias. (I need to get them under better control.) Until such time as I get them under better control, I’d better not order any new ones!

Years ago, daughter showed some fancy bantams at the fair. Afterwards, they were turned in with my flock of Araucanas and cross-bred like crazy. Now I’ve got various-sized vigorous chickens running around that are self-supporting, hide their nests so I don’t get any eggs, and raise their young with no help from me (unless I find some peeps that ducks accidentally hatched or whose momma got snatched by a fox or hawk). I can’t just let them be eaten by possums, poor babies! These chickens may have a feathery crest, feathered legs, and some still have the feathered ears and lay the colored eggs of the Araucanas. The roosters will fight each other to the death but are timid around small humans, always a plus.

I actually have 3 separate flocks in 3 different areas–there are the horse barn chickens whose territory is around the stables and pasture. They roost in the stable, and tend to be plain-legged bantams and Araucana crosses. The sheep barn roosting chickens are some descendants, apparently, of the old Australorp rooster (also a show chicken). Those chickens are black. Then I have some that like to roost in the trees around the house and crow loudly at 3 a.m. Those are the Cochin, Polish, and Buff Orpington descendants. These now just have some minor feathering of the legs and a small feathery crest, not the exaggerated feathering of the purebreds. There used to be quite a few white/light-colored chickens in this group, but white chickens are easier to see at night even in the trees by an irate person with a shotgun that has been awakened by said crowing roosters.

Murray McMurray isn’t a source for people that dream of showing champion chickens. It’s a source for folks that, like me, like to have the poultry around and aren’t so concerned about whether the coloring of the feathers and/or conformation is outstanding enough to be of championship quality.

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