
Venezuela to Shut Down for a Week to Cope With Electricity Crisis - prostoalex
http://www.bloomberg.com/news/articles/2016-03-16/venezuela-to-shut-down-for-a-week-as-electricity-crisis-mounts
======
hellcow
Related anecdote: a friend of mine is an engineer that builds and operates
glass factories all around the world, mostly producing bottles for beer, wine,
and liquor. One of his company's factories was in Venezuela, and while he was
there working, Chavez et co decided to nationalize that industry because they
were "forcing unfair labor conditions."

The company rushed to get every American out of the country before the
military showed up and seized control of the factory.

But as it turns out, making glass is hard and requires constant tuning and
adjustment. None of the new Venezuelan managers had the expertise needed to
continue glass production at anywhere close to the same levels of efficiency
and quality. Thus the factory started to lose its ability to produce glass
bottles at all.

I can imagine a similar lead-up to this in Venezuela's power industry.
Nationalization -> loss of expertise -> loss of efficiency -> national crisis.

~~~
MichaelGG
A similar thing happened in Zimbabwe. Using a race-based system, they changed
control of farms from one set of people to another (with rather strong
rhetoric about how certain people would never be welcome again). Turns out a
bit of experience was required, so they had to back down on that position:
[https://www.washingtonpost.com/world/africa/zimbabwe-
seized-...](https://www.washingtonpost.com/world/africa/zimbabwe-seized-white-
farmers-land-now-some-are-being-invited-
back/2015/09/14/456f66d6-45d2-11e5-9f53-d1e3ddfd0cda_story.html)

The article indicates that Zimbabwe went from being an exporter of food to
requiring food aid to prevent starvation.

Zimbabwe just recently took over all diamond mines. Which sounds sorta OK in
theory, but I can only imagine it's going to result in less official output
and more corruption. Seems like they'd be better just insisting on very high
fees.

~~~
tim333
Venezuela has gone after farms as well. Similar results.

------
malbs
Here in Tasmania we're not at the shut down stage yet, but it's something no
one wants to talk about. They're not asking residents to shutdown yet, but if
things continue the way they are, who knows. The major companies/power users
are currently being rationed (Aluminium smelters, paper mills etc)

The state relies on hydro-electric power, and last year sold off a lot of its
"excess" power to Victoria via the Basslink cable at a huge profit.

However we're suffering a fairly bad drought, and the dams are at historically
low levels. Worse still, the Basslink cable (which allows the state to both
export and import electricity) failed on December 20th 2015, and the repair
ship has been unable as yet to actually locate the fault in the cable (it's a
270km long under-sea cable)

Apparently the repair ship costs are running @ $100,000 per day, and it could
take months.

On Friday they severed the cable in order to begin testing to locate the
fault, and half of Tasmania's internet went down. I was unlucky enough to be
with one of the ISPs who didn't provision enough backhaul connectivity on the
other network cables, so my 100mbit fibre internet now looks something like a
1998 dialup connection

malby@peep:~$ wget ftp://ftp.iinet.net.au/test10MB.dat

\--2016-03-14 16:07:41-- ftp://ftp.iinet.net.au/test10MB.dat => `test10MB.dat'

Resolving ftp.iinet.net.au (ftp.iinet.net.au)... 203.0.178.32

Connecting to ftp.iinet.net.au (ftp.iinet.net.au)|203.0.178.32|:21...
connected. Logging in as anonymous ... Logged in!

==> SYST ... done. ==> PWD ... done.

==> TYPE I ... done. ==> CWD not needed.

==> SIZE test10MB.dat ... 10000000

==> PASV ... done. ==> RETR test10MB.dat ... done.

Length: 10000000 (9.5M) (unauthoritative)

100%[===============================================================================>]
10,000,000 6.82K/s in 43m 41s

2016-03-14 16:51:24 (3.73 KB/s) - `test10MB.dat' saved [10000000]

I mean, I feel bad complaining about my internet speeds, because in 6 months
times if there hasn't been any rain.. well, it's going to get a lot more
serious.

~~~
CyberDildonics
Is anyone installing solar panels on a small or large scale?

~~~
caf
The latitude means that Tasmania isn't great for solar, but jutting out into
the Southern Ocean as it does means it has good wind resources.

~~~
oska
_> The latitude means that Tasmania isn't great for solar_

Just for comparison:

Berlin is at lattitude 52°31′N.

Marseille is at lattitude 43°18′N.

Hobart is at lattitude 42°53′S.

So Tasmania is more similar to southern Europe in levels of insolation. Not as
great as mainland Australia, which has some of the best insolation levels in
the world, but still not too bad.

And yes, Tasmania also has great wind resources.

------
klenwell
I remember back when parts of California would shut down for an afternoon to
deal with an electricity crisis:

[https://en.wikipedia.org/wiki/California_electricity_crisis](https://en.wikipedia.org/wiki/California_electricity_crisis)

Strange times.

~~~
AI_Overlord
Caused by Fraudulent Enron employees. Not because of lack of supply.

~~~
saryant
Because of the world's dumbest attempt at privatization. Forcing utilities to
buy power _regardless of cost_ was destined to fail from day one.

~~~
gozur88
It was no more, or less, "privatised" than the previous arrangement. It was
just a change of regulation. A stupid change, as you noted.

Preventing utilities from hedging... how could that ever work?

~~~
DrScump
No, he is correct. It was a setup that provided huge _incentives_ to
artificially limit/withdraw supply, reaping huge profits in the process. The
biggest price effects were on natural gas, which affected both gas consumers
and electric consumers (since much of electric supply is from gas-burning
plants... including within Silicon Valley proper). There's one by my gym near
San Tomas and 101, for example.

I had a gas bill of well over $350 one month for just water heating and
furnace... and my thermostat was never over 62F, and on only 10 hours a day.
(For local climate perspective, this is with an average overnight temperature
never below freezing... it's not like the furnace was fighting blizzards.)

------
randiantech
Thats a really sad situation, but is common in some LATAM countries. In
example, in Argentina there's an active "energetic crisis" plan [1], where
government defined an scheduled program to cut electricity in cities to try to
mitigate demand.

[1] [http://www.buenosairesherald.com/article/149949/power-
cuts-i...](http://www.buenosairesherald.com/article/149949/power-cuts-in-
argentina--a-crisis-foretold)

~~~
toomuchtodo
Could this be helped by first world countries donating solar and wind
generation equipment, and peace corps training programs to train and supervise
the installation in country?

EDIT: thanks for the replies everyone. sadness.

~~~
aortega
No. Argentina, Brazil and other latam countries really do not need donations.
Venezuela is a very rich country that actually have the second largest oil
reserves, ironically. It would be like donating stuff to Saudi Arabia.

Our problem is rampant corruption, populism and mismanagement derived from it.

Brazil is trying to get out. Argentina is out of it, lets hope is not too
late. For Venezuela is already too late.

~~~
adventured
Venezuela is not a very rich nation. It would be like claiming that
Afghanistan is very rich because they have massive deposits of metals.

In just three years, their inflation (the bolivar has lost 97% of its value)
and economic contraction has taken their GDP per capita from ~$14,000 to
~$4,000. They've lost at least 70% of their economy, and it's not over yet.

Saudi Arabia's economic output is nearly five times greater per capita. Their
median income and median household net wealth are both vastly higher than
Venezuela. Saudi Arabia still has substantial capital reserves, while
Venezuela has almost none.

Venezuela now has a $20 monthly minimum wage. [1] Most of the nation is
struggling to afford food.

Saudi and Venezuela couldn't be any more different outside of being petro
states.

[1] [http://www.bloomberg.com/news/articles/2015-03-06/monthly-
sa...](http://www.bloomberg.com/news/articles/2015-03-06/monthly-salary-
of-20-shows-why-venezuelans-wait-in-food-lines)

~~~
stickfigure
I don't think you and the parent contradict each other. Venezuela has natural
resources, favorable geography, a reasonably well-educated population, and
(until recently) reasonably modern infrastructure. Many countries have fared
far better with far less. The problem is management.

~~~
noir_lord
> The problem is management.

When isn't that true sadly.

> No one pretends that democracy is perfect or all-wise. Indeed it has been
> said that democracy is the worst form of Government except for all those
> other forms that have been tried from time to time

Churchill quoting one of his predecessors in his autobiography "Churchill by
Himself".

------
rafaelm
If anyone wants to understand why this is happening in one of the largest oil
producers in the world, there is only one word. Corruption. At every single
level of the government.

The government can blame El Niño all you want, but they can't hide the fact
that they stole most of the money that was invested in non-working power
plants all over the country. I worked in 3 of those (one from Derwick, see
below) and saw power plants from 1995 that were sold as new at 3x the price of
a NEW power plant.

One of the companies is called Derwick. Run by some guys with ties to the
government, some as young as 23 years old, with ZERO experience in the field.
They are all now multi-millionaires.

You can read more here:
[http://infodio.com/021014/how/to/steal/70/million/one/day/de...](http://infodio.com/021014/how/to/steal/70/million/one/day/derwick/associates/bariven/proenergy)

[http://infodio.com/030813/jose/aguilar/derwick/associates/bi...](http://infodio.com/030813/jose/aguilar/derwick/associates/billion/scam)

[http://www.infodio.com](http://www.infodio.com) is a site that tracks a lot
of corruption cases. It is of course, blocked in Venezuela.

[https://en.wikipedia.org/wiki/Derwick_Associates](https://en.wikipedia.org/wiki/Derwick_Associates)

[http://www.wsj.com/articles/venezuelan-energy-company-
derwic...](http://www.wsj.com/articles/venezuelan-energy-company-derwick-
investigated-in-u-s-1407516278)

[https://cryptome.org/2015/06/ve-us-
corruption.htm](https://cryptome.org/2015/06/ve-us-corruption.htm)

More on the power crisis in general:

[http://www.eluniversal.com/nacional-y-
politica/160227/nation...](http://www.eluniversal.com/nacional-y-
politica/160227/national-power-grid-nearing-collapse)

I can go on and on about this. But this basically boils down to massive,
massive corruption that has penetrated Venezuela at every level.

Where I live, we've already had blackouts 2-3 times a week. Once this problem
hits Caracas, the capital, we know things are going to get bad. The government
has done everything possible to keep things normal there but they might not be
able to for much longer.

~~~
grp
For fighting against corruption, there are those guys too:
[https://www.transparency.org/whoweare/contact/org/nc_venezue...](https://www.transparency.org/whoweare/contact/org/nc_venezuela)

It seems there are active in Venezuela:
[http://transparencia.org.ve/](http://transparencia.org.ve/)

I just discover them a few days ago, I don't know more.

------
onion2k
So, technically speaking, they're going to turn it off and on again.

~~~
ycmbntrthrwaway
It is not as simple as it seems.

[http://www.catb.org/jargon/html/koans.html#id3141171](http://www.catb.org/jargon/html/koans.html#id3141171)

------
nfriedly
I've been to Venezuela a couple of times and have friends there currently. I'd
ask them how they are doing, except that we usually communicate over Skype and
Hangouts...

I believe they'll be alright though. The one family I know owns a farm on the
side of a mountain, so plenty of food, and they get fresh water from a
mountain stream, so no worries there. They use a bit of electricity, but don't
really need it to live.

The other one, the husband is a US citizen who does some occasional work
online. He needs electricity, but he's told me before that he can get by on
~$130 a month, so he should be fine for a week.

------
eruditely
This ends the great socialists experiments and arguments. It used to be that
people in ultra-leftist circles used to cite Venezuela as an argument for
socialist successes, now even those arguments are crumbling.

It's hard to be a determined leftist nowadays. I moved off long ago. If you
want better standards of living for people, it's high trust capitalism that's
going to do it.

------
orvtech
It is worth to note that Venezuela is an oil producer country that used to
sell electricity to Brazil, Guyana and Colombia.

------
aortega
Ironically, Venezuela has so much oil that gas is almost free. Most people
dont even know the cost, they fill a car's tank with about 0.10 us$.

Probably, people will start using the portable power generators that everybody
already have, because this is not the first time the power goes out, and it
will become a gas-powered country for a week.

~~~
hellcow
The "almost free" gas was from fixing the price of oil, which caused massive
shortages within the country.[1][2] The new government overturned Venezuela's
policy on this and raised oil prices by 6000%.[3]

[1]
[http://www.laht.com/article.asp?ArticleId=334115&CategoryId=...](http://www.laht.com/article.asp?ArticleId=334115&CategoryId=10717)

[2]
[http://www.wsj.com/articles/SB100014241278873240007045783867...](http://www.wsj.com/articles/SB10001424127887324000704578386771059515346)

[3] [http://www.theguardian.com/world/2016/feb/18/venezuela-
presi...](http://www.theguardian.com/world/2016/feb/18/venezuela-president-
raises-fuel-price-by-1300-and-devalues-bolivar-to-tackle-crisis)

~~~
mikeash
The recent price increase falls far short of overturning this policy. The new
price is still ridiculously cheap and far below market prices, something like
the equivalent of $0.11/gallon.

~~~
protomyth
Also, their oil needs more processing than the stuff coming from Saudi or
Texas / ND. This has an effect on the break even price.

------
known
Should have setup saving fund
[https://en.wikipedia.org/wiki/Sovereign_wealth_fund#Nature_a...](https://en.wikipedia.org/wiki/Sovereign_wealth_fund#Nature_and_purpose)

~~~
hackerboos
But rather they did what we did in the UK - massive internal spending which
caused huge instability in the economy.

Unfortunately not all countries are as intelligent as Norway.

------
vamur
They should have built nuclear plants when oil was expensive.

~~~
saint_fiasco
That's a good idea in the general case, but in the case of Venezuela would
lead to disaster.

Actually in Venezuela every power plant ends in disaster but disasters in
nuclear plants have much more severe consequences.

~~~
vamur
Why would it be a disaster? The plants would be built and operated by an
outside company - e.g Areva, Rosatom.

And hydro power they have today is not reliable. So they would need to use
coal or natural gas. And both of these pollute compared to nuclear.

~~~
Laforet
Nuclear power stations require a high initial capital input. AFAIK nothing of
this sort has been happening since Chavis became president. They have
essentially starved their own energy industry of necessary reinvestments to
get a quick buck.

This is of course, ignoring the risks that the government claiming that they
will take over the nuclear plant and put a high school dropout in charge.

~~~
vamur
Venezuela had a mostly positive balance of trade last 10 years. So they had
enough money to ask for financing for a nuclear plant (usually 5-10bln) to
stabilize their grid. Instead they wasted money on the ridiculous gasoline
subsidy, creating a huge smuggling industry.

------
lucio
oh, the joys of full-swing populism, the beauty of the United Socialist Party

------
thebmax
A real life Ayn Rand story.

~~~
kafkaesq
Here's another:

[https://www.vice.com/read/atlas-
mugged-922-v21n10](https://www.vice.com/read/atlas-mugged-922-v21n10)

The eagerness of a different (but overlapping) libertarian cabal to court
favor with the notoriously corrupt (and murderous) regime in Honduras to build
their own version of paradise on the northern coast of that country (at the
expense of the local Garífuna community) is also quite telling.

Her legacy would seem to cut both ways, we might say.

~~~
13thLetter
Except for the small detail that these guys' project swiftly disintegrated due
to personality conflicts, zoning issues, and possible fraud before it ever
started, and the most damage it did was that a couple of contractors didn't
get paid. Meanwhile, Chavismo has immiserated millions of people and imposed a
corrupt authoritarian government on a whole nation. So the parallels aren't
really very close at all.

~~~
kafkaesq
If you want a larger-scale example, the wholesale transformation of life in
the U.S., Britain and much of the rest of the world since the early 1980s --
not strictly Randian, but definitely Rand-inspired -- hasn't exactly gone
swimmingly well, either:

[https://en.wikipedia.org/wiki/Neoliberalism](https://en.wikipedia.org/wiki/Neoliberalism)

Of course radical libertarianism and authoritarian socialism, while both pipe
dreams, are basically apples and oranges to one another, and can't be compared
side by side.

But the point about the smaller-scale fiascos in Chile and Honduras is that it
shows how farcical (and corrupt) that ideology can be whenever people _do_ try
to incarnate it in its purest form, out there in the real, actual world. This
coming from people who _claim_ to know vastly better about reinventing the
world from the ground up.

"Glass houses, throwing stones", and all that.

~~~
13thLetter
If you really want to count up the number of corpses created by "radical
libertarianism" and authoritarian socialism, we can just go right ahead and do
that. I don't think you'll like the result, though.

~~~
kafkaesq
Of course "libertarianism" as such -- being even more farcical than nearly any
version of socialism -- has never gotten a real toehold anywhere for any
length of time, making the comparison moot. That's why I prefer to stick with
comparisons of large-scale, real-life ideological systems ("by their deeds
shall ye know them"). That is, not the platonic ideals that people (pretend
to) believe in; but the actual, real-world systems they compromise for as its
"best viable" approximation.

Which is where the body counts, ecological toll and general misery -- domestic
_and_ exported -- of the two allegedly opposite systems tend to even out to a
far greater degree.

~~~
mikerichards
It doesn't matter how you to try to spin it. The vast scale of the horrors
inflicted on humanity because of authoritarian socialism is well known and
won't just go away.

~~~
kafkaesq
I never denied them, so I don't know what you're driving at.

I just don't think that being "horrified" at the excesses of only one extreme
on the ideological spectrum -- whilst remaining indifferent (or willfully
oblivious) to the skeletons in one's own ideological basement -- makes for a
particularly useful or instructive view of the world.

~~~
mikerichards
The problem is that there are no real horrors of say libertarianism compared
to the 100 million or so that were slaughtered, starved to death, enslaved,
whatever..in the name of socialism.

At some point in time you have to deal with the reality that there isn't
equivocation. I know some people have hard times dealing with it, and thus
always pull the trick of "but look over here at this". It just doesn't work,
but people don't seem to understand that it doesn't work.

------
mahato
They can just pretend that it's for the best of the planet.

------
BurningFrog
> there is only one word. Corruption

The word I would use is Socialism. They are of course related.

~~~
kafkaesq
I associate corruption with large-scale human endeavors, generally.

If one prefers to believe that any particular _-ism_ has some kind of a corner
on the corruption market, as it were... well, that must be a nice, simple,
orderly world they get to live in.

~~~
BurningFrog
I didn't say - or mean - that socialism is the only or worst cause of
corruption.

I can agree with "large-scale human endeavors" being where it thrives the
easiest.

------
Zelmor
The same thing will come to Hungary in 5 years. Mark my words.

Edit: who the hell actually downvotes without a response?

~~~
prawn
Don't say "Mark my words" \- explain why you think it will happen in Hungary
and leave people to judge.

~~~
Zelmor
Essentially this: the current big dog party has been taking over every public
facing company like electric, gas, oil and even the bloody chimney sweepers.
Their approach is to loosen regulation, cut budgets and not to invest into the
systems.

Recently, schools were hoarded under onem administrative body whp issues
paper, chaulk, replacement chairs and everything. Even pays the gas bills on
account of the schools. Guess what, schools have been shutting down because of
unpaid bills and gas being cut in the middle of winter.

Whoever can find a job away from the country does and most never return. IT
companies struggle to find good people because most there is now are tumblr
dwelling mediocrity.

------
lucaspottersky
yeah, it's always Mother Earth's fault.

Same thing everywhere.

------
djschnei
If only they had sprinkled in the word "democratic"... such a shame...

