What the oil spill in Venezuela tells us about its politics

Oil contamination at El Palito beach in Puerto Cabello, Venezuela, from an oil spill this summer. Photo: Samuel Cabrera – EPA, via Shutterstock


The largest oil reserves and one of the world’s most incompetent governments have brought authoritarianism, economic collapse and environmental disaster to the country.

By The New York Times – Javier Corrales

Sep 7, 2020

It has been a tough summer for Venezuela. The already ailing country, in the throes of a severe lockdown, is also experiencing a major environmental disaster. In July, a state-owned refinery began to spill oil into the Morrocoy National Park, one of the country’s most biodiverse areas. Venezuela also experienced a new political crisis. The government essentially voided several opposition parties by taking control of their executive boards.

These catastrophes are two sides of the same coin. Rising authoritarianism in Venezuela has led to oil mismanagement, which in turn has led to environmental degradation. And oil mismanagement is now turning the regime even more autocratic, which in turn is leading to opposition debasement.

Pundits often debate whether rising oil fortunes contribute to the rise of authoritarianism. Large oil windfalls, the argument goes, allow states to offer consumption booms to the public in lieu of political rights and to fund repressive forces. But the Venezuelan case seems to be showing that declining oil fortunes can be both a cause and a consequence of hardening authoritarianism.

Venezuela used to be one of the most competitive oil producers in the world. But its oil industry has been run into the ground over the last two decades, first under President Hugo Chávez and now under his successor, Nicolás Maduro. Measured in terms of proven reserves, Venezuela may have more oil than Saudi Arabia. But in terms of output, Venezuela’s oil industry has collapsed. The country’s production of oil is at a 77-year low.

The lesson is clear. Political accountability, human rights and environmental sustainability constitute a modern-day trifecta. Lose the former, and the rest disappears as well.

Mr. Chávez eroded the checks and balances inside and outside the state oil company and turned it into his own A.T.M. Party loyalists replaced oil engineers. Investment protocols were discontinued. Safety standards were ignored. All that mattered was for the oil company to channel dollars to fund the ruling party’s elections.

Not surprisingly, production declined between 2003 and 2014. Oddly, the decline took place at a time when the price of oil price was booming. No freely trading oil nation experienced this strange outcome. While many blame U.S. sanctions under President Trump, the evidence that the collapse was homemade and pre-Trump is overwhelming.

Venezuela’s oil collapse has taken a huge environmental toll. Corruption, underinvestments and weak controls led to the state-owned oil company’s economic collapse. They are also responsible for an increase in company accidents and oil spills. According to a report, the country experienced 46,820 toxic spills from 2010 to 2018, totaling 856,000 barrels of spilled oil. From July to August of this year, an estimated 26,000 barrels of oil may have affected more than 210 miles of shoreline. The July spill is the second major spill in a year. And a few days ago, reports surfaced that a huge oil tanker stationed in Venezuelan waters, the FSO Nabarima, was on the verge of sinking because of a lack of proper maintenance. If it sinks, the resulting oil spill could be five times larger than the Exxon Valdez spill of 1989.

The collapse of oil prices from mid-2014 to early 2016 also deepened Venezuela’s economic crisis, overwhelming the administration of Mr. Maduro. Because production was already so low in 2015, Venezuela’s economy sank more than those of other petrostates. The country’s economy has continued to contract every year since then, leading to a humanitarian and refugee crisis comparable to that experienced by war-torn Syria.

Read More: The New York Times – What the oil spill in Venezuela tells us about its politics

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