Venezuela, world’s No. 2 in oil reserves, goes dark - President claims sabotage

Venezuela, one of the top 10 oil exporters and No. 2 in proven crude reserves, went dark on Tuesday. The massive blackout hit parts of the capital, Caracas, and at least 11 of Venezuela’s 23 states — according to media reports, 70% of the country’s population was affected.

Traffic in Caracas snarled without traffic lights and people had to be evacuated from stalled underground trains. The military was called to keep order. The power was out at the building housing the Ministry of Energy and the state-controlled oil company Petroleos de Venezuela SA, or PdVSA.

One of Venezuela’s main transmission lines faltered, and power was out for about three hours before being gradually restored. The oil industry was not affected as oil refineries are powered by separate plants, the BBC reported.

In a series of tweets, President Nicolas Maduro blamed sabotage by the “extreme right” intent on making Venezuela unstable. Read more >>

NSA collecting data from billions of calls, e-mails in Latin America

A Brazilian newspaper on Tuesday published an article it said is based on documents provided by the former American contractor Edward Snowden asserting that the United States has been collecting data on telephone calls and e-mails from several countries in Latin America, including important allies such as Brazil, Colombia and Mexico.

The paper, O Globo, based in Rio de Janeiro, says the documents show the National Security Agency amassed military and security data on countries such as Venezuela, an American adversary that has been accused of aiding Colombia’s Marxist rebels and maintaining close ties with Iran. But the documents also show that the agency carried out surveillance operations to unearth inside commercial information on the oil industry in Venezuela and the energy sector in Mexico, which is under state control and essentially closed to foreign investment.

U.S. officials have declined to address issues about intelligence gathering or the O Globo report, except to issue a statement saying that “we have been clear that the United States does gather foreign intelligence of the type gathered by all nations.” Read more >>

Gasoline Rising To 4 Month High

Hurricane Isaac and a deadly blast at Venezuela’s Amuay refinery pushed gasoline to an almost four- month high and threatened to revive a debate about energy costs in the run-up to the presidential election in November.

Futures jumped yesterday in New York as Isaac forced closures of Gulf Coast refineries and reduced rates at others. That market is also reeling from an Aug. 25 explosion in Venezuela that killed at least 48 people and closed the country’s largest fuel-making plant. Futures are up 23 percent since their 2012 settlement low of $2.5501 a gallon on June 21.

Prices at the pump will be the highest ever for the U.S. Labor Day holiday, AAA said yesterday. The surge reignites an issue that has pitted President Barack Obama, who has called for the elimination of billions of dollars of subsidies enjoyed by the oil and gas industry, against the presumptive Republican nominee Mitt Romney. It also spurs speculation that Obama will release supplies from the Strategic Petroleum Reserve to ease prices for consumers. Read more >>

Nine Countries to Replace US Dollar

Nine countries of ALBA, a leftist bloc conceived by Venezuelan President Hugo Chavez, met in Bolivia where they vowed to press ahead with a new currency for intra-regional trade to replace the US dollar.

"The document is approved," said Bolivia's President Evo Morales, who is hosting the summit.

The new currency, dubbed the Sucre, would be rolled out beginning in 2010 in a non-paper form. That move echoes the European Union's introduction of the euro precursor, the ECU, an account unit designed to tie down stable exchange rates between member states before the national currencies were scraped.

ALBA's member states are Venezuela, Bolivia, Cuba, Ecuador, Nicaragua, Honduras, Dominica, Saint Vincent and Antigua and Barbuda. The currency, which was backed in April this year, is named after Jose Antonio de Sucre, who fought for independence from Spain alongside Venezuelan hero Simon Bolivar in the early 19th century.

The bloc also called for the replacement of the World Bank's International Centre for Settlement of Investment Disputes, which arbitrates international contract disputes and has probed a slew of disputes involving ALBA members and western energy firms. Most ALBA members have already withdrawn from the organization, with Ecuador announcing last July that it would pull out of the group.

On Friday Bolivian media reported the country intents to nationalize a electricity distribution firm owned by Spain's Red de Electrica de Espana. It is just the latest in a series of nationalizations in Venezuela, Ecuador and Bolivia.

In May, Venezuela nationalized 74 energy services firms operating in the oil-rich Maracaibo Lake region. Bolivia's Evo Morales has indicated that parts for his country's energy and rail sectors will be nationalized.
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