Energy profile: Venezuela
Fuel mix (fossil fuels vs renewables)
Venezuela relies heavily on domestic production of fossil fuels, with oil and natural gas comprising approximately 90% of the country's total energy supply. Hydro power also plays a key role in electricity generation, accounting for roughly half of installed capacity. Venezuela's national electricity plan, PDSEN (Plan de Desarrollo del Sistema Eléctrico Nacional) calls for other renewable energy sources (wind and solar) to be incorporated in the country's long term strategies, particularly for rural communities.
Greenhouse gas emissions targets
The Venezuelan government's Nationally Determined Contribution calls for a 20% decrease in greenhouse gas emissions by 2030. While Venezuela is a signatory of the Paris Climate Accord, the government contends that Venezuela is not truly the problem, noting that the country only produced 0.48% of global emissions as of 2018.
Government energy agencies & other key players
National energy ministry
The Ministry of Oil, PDVSA, National Executive, National Assembly, and other State agencies are responsible for permitting, licensing, and joint-venture agreements.
Regulation of the oil industry is handled by the Hydrocarbons Act, while the gas industry is regulated by the Gas Act.
Corpoelec (Corporación Eléctrica Nacional) is the state power company in Venezuela, under the Ministry of Electric Power formed in 2007 following the merger of ten state-owned and six privately-owned electrical companies.
National oil company
PDVSA (Petróleos de Venezuela, S.A.) is the state company which explores, produces, refines, transports, stores, manufactures, and commercializes petroleum products within and outside of Venezuela. The company was put under military control in 2018.
Energy sector employment data
Due to layoffs, reduced hours, and outward migration, employment data for Venezuela's energy sector is unclear.
Venezuela's installed electrical capacity totals just over 30 GW, split roughly equally between fossil fuels and hydropower. The country's largest single power generator is the Guri hydroelectric project (also known as the Simon Bolivar hydroelectric project), with an installed capacity of 10,235 MW.
As of April 2022, Venezuela's electrical grid was said to be operating at 20% of capacity, with actual generation running 6 GW to 10 GW short of the country's needs, and an estimated investment of US$12 to 15 billion required to restore the system to normal operating conditions. Venezuela's power plants and electrical grid are plagued by maintenance issues that severely reduce available capacity, and the country is prone to regular blackouts, including the notorious March 2019 blackout that impacted the entire nation. As of March 2022, daily blackouts of up to nine hours were reportedly affecting several of Venezuela's western states, including Zulia, home to Venezuela's second largest city, Maracaibo.
The majority of Venezuela's electrical demand is met by the Simon Bolivar Hydroelectric Plant. However, a fall in production in recent years means that Venezuela is not meeting the demand of its population.
Electricity consumption in Venezuela has dropped steadily since 2013 due to economic and political turmoil, population exodus, and crumbling infrastructure.
Coal in Venezuela
Venezuela has an abundance of coal - with the third largest reserves in Latin America- on which it has begun to rely more heavily due to US oil sanctions. Increasing coal production is the State strategy to mitigate the economic damage caused by lost oil revenues.
As of 2016, Venezuela had proven coal reserves equivalent to 4,460 times the annual consumption. The country consumes approximately 180,696 short tons annually.
Imports & source countries
Venezuela does not import notable amounts of coal, particularly since the economic crisis began.
Venezuela exports coal primarily to European nations for a total of 310,000 tons during 2019. Britain was one of the destinations for Venezuelan coal in 2019 and 2020 after receiving no Venezuelan coal during 2018.
Oil & Natural Gas in Venezuela
As of 2019, despite having the largest oil reserves of any country in Latin America and the Caribbean, Venezuela slipped from third to fourth place among the region's oil producers (after Brazil, Mexico, and Colombia). Declining oil and gas production in Venezuela has corresponded with political turmoil in the country and worsened during 2020 due to the COVID-19 pandemic. Venezuela was a founding member of OPEC and has some of the largest oil reserves in the world, but corruption, mismanagement, lack of investment, obsolescent machinery, and lack of qualified personnel have squandered Venezuela's resources and greatly diminished the country's power in the marketplace.
As of November 2021, domestic oil production targets in Venezuela set by the national oil company PDVSA were 1 million barrels per day by the end of the year, despite geopolitical turmoil. The production recovery was being pushed by President Nicolas Maduro and contractors were said to be receiving payment in scrap metal or backpacks full of US dollars according to a December 2021 Bloomberg report. A recent initiative to privatize PDVSA has provoked allegations of corruption and concerns about the government's lack of transparency.
Domestic consumption of oil and gas in Venezuela is hindered by poor distribution, lack of product, and inflation.
Venezuela's oil exports have steadily fallen in recent years due to declining production and US government sanctions. Most of Venezuela's current exports are shipped to China, Russia and European companies such as Eni and Repsol in the form of loan repayments. Despite ongoing sanctions against Venezuela, the US government has allowed shipments to Eni and Repsol to continue to help reduce Europe's dependence on Russian oil.
Venezuela's oil reserves, estimated at 302.3 billion barrels in 2019, are by far the largest of any country in Latin America and the Caribbean. Venezuela also has nearly 70% of the region's natural gas reserves.
Proposed new sources & projects
New gas projects in Venezuela have been slowed by the economic and political crisis within the country, a situation that has been further exacerbated by US sanctions. During 2021, the Maduro government hoped the new Anti-Blockade Law would attract foreign capital so that 70 oil fields could be developed that would otherwise have remained inactive. As of 2021, the Hydrocarbons Act of 2006 was still in place, requiring that primary oil exploration and production be carried out by the State or entities more than 50% owned by the State, and thus greatly limiting new contracts and explorations.
Renewable Energy in Venezuela
The decrease in the cost of renewable installation, particularly solar, makes renewables a more viable option for Venezuela. In 2019, Venezuela had installed 5.32 MW of solar power generation capacity and 71.28 MW of wind capacity. Venezuela plans to incorporate an additional 10,000 MW of wind energy by 2035. The use of renewable energy in remote areas would alleviate the risk of blackouts common to much of the country.
In June 2021, Venezuela connected its first solar PV system to the power network.
Iron & Steel in Venezuela
Venezuela's large state-run steelmaker Sidor, in decline since its nationalization in 2008 and long unable to produce anywhere near total capacity due to dilapidated machinery, ceased operations permanently after the Venezuelan blackout of March 2019. The plant produced less than 1% of its total capacity in 2020. Oxygen from Sidor facilities - previously used as an input during the steel production process - was repurposed during 2020 and 2021 to treat COVID-19 patients. Venezuela's iron ore deposits are of high quality, but a 2009 deal to develop them with Chinese investment created massive debt for the Venezuelan government due to extremely low prices and Venezuela's inability to meet its contractual obligations. Iron ore production by state-run mining company CVG Ferrominera Orinoco has fallen precipitously over the past decade.
The Venezuelan government frequently covers up the true social and environmental impacts of energy and mining projects, but despite these attempts reports are still able to ascertain corruption, human rights violations, environmental contamination, release of greenhouse gases, deforestation, pollution of potable water reservoirs, and more. As Venezuela's environmental institutions have collapsed due to government corruption there has been a chain reaction of unsustainable natural resource extraction. Mining projects are able to operate without environmental impact assessments or public consultations. Oil spills are frequent occurrences and are likely to continue without adequate funding to update and maintain pipelines, wells, floating terminals, and other necessary infrastructure. The risk of environmental disaster has intensified with the decline of the Venezuelan economy, as evidenced by continued reports of abandoned oil wells, ruptured pipelines, spills and gas leaks, and the stranding of a rusty tanker loaded with more than a million barrels of crude oil off Venezuela's coast in 2020. Between January-September 2021 there were 53 oil spills, primarily along the Caribbean coast.
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