In 2009 when Hugo Chavez was still president of Venezuela, he announced on television that the country surpassed Saudi Arabia as the nation with the largest oil reserves in the world.
It was an announcement with pomp, on national television, foreshadowing that a country considered rich in resources would be even more prosperous.
The area, a formation called the Orinoco Oil Belt in the south of Venezuela, is located just below the riverbed with the same name, Orinoco. It is equivalent to 42 times Los Angeles’ city extension, or the size of the whole of Croatia.
Chavez and his XXI Century Socialism project won the lottery overnight.
Although it was not many years ago, fossil fuels still played a fundamental geopolitical and economic role on the board of international relations, regional accommodation, and even a country’s creditworthiness.
The current ranking of oil reserves looks like this:
https://public.flourish.studio/visualisation/4578197/
The Orinoco Oil Belt contains some 235 billion barrels of extra-heavy oil (between 4 and 16 API grades), which, although challenging to extract, the technology available had made them reachable. Problems such as the refining cost were of little importance compared to the barrel’s price in the market, which average between 2010–2012 was around US$85.
It would be a matter of time before exacerbated nationalism took control of the oil company, a couple of years before the industry resisted being dominated by nationalist, socialist, and anti-elitist approaches. They based their intervention on the thesis that oil had been a tool of the rich and had served only a few, increasing class differences.
The oil activity requires a high degree of reinvestment of the capital obtained, amortizing the equipment, and acquiring new devices. However, the government opted to distribute the funds from the sale of oil in social programs called “missions.”
Even though these programs paid for part of the social injustice and inequality present in Venezuela, they were simultaneously a source of corruption. They constituted an instrument of political propaganda to strengthen the influence of the XXI Century Revolution among the sectors with fewer resources.
A perverse process was beginning. Not only was disinvestment in exploration, prospecting, extraction, and refining, but the state oil company was losing a significant part of the talent generated after decades of formation.
Simultaneously, a second phenomenon was taking place; the general deterioration of the capacity to do business in the country was diminishing the ability to produce in other areas of the economy. Tourists’ numbers fell, and textile, food, and auto parts industries, among others, shut their doors and in some cases relocated their plants abroad.
The latter’s consequence is that oil was not only the largest source of income, but its weight in the overall export revenue increased, resulting in more power to the government.
Today, in 2020, these two concepts are commonly used by institutions and their leaders, and by the media, even by girls as young as 15 years old, who are demanding in front of their country’s parliament in the “Skolstrejk för klimatet.”
If we consult Google Trends, we will see that it was in 2006 when the term ”Global Warming” became popular, the year Al Gore made public the documentary “An Inconvenient Truth,” showing clearly the direct relationship between carbon emissions and rising temperatures.