Energy
March 8

Plans to increase consumption of fuel by 31 percent due to electricity crisis
The Venezuelan government plans to increase its fuel consumption by a third in 2010 to fuel thermoelectric plants with which President Hugo Chávez hopes to overcome energy crisis.

Officials expect a total consumption of 104 million barrels in 2010, about 285,000 barrels of oil equivalent per day (bpd) of fuel oil, diesel and gas, which will be used to increase thermoelectric capacity by 4,000 megawatts (Mw).

The projected figures for the year do not specify which part corresponds to liquid fuels and which part to gas, Reuters reported.

Electricity Minister Alí Rodríguez acknowledged some days ago that the ability to increase domestic supply of gas, which is mostly associated with oil extraction, will remain limited in the future.

Businessmen ponder on halting day in the face of electricity crisis
Noel Álvarez, the president of the Federation of Trade and Industry Chambers (Fedecámaras) is to discuss the potential implementation of a halting day.

He explained that, while the proposal will not prevent a drop in the domestic output, companies will at least meet the goal of saving electricity and will help minimize inter-day outages nationwide.

Álvarez noted, however, that the step will depend on the discussions and resolution to be made by each economic sector.

The senior executive officer regretted as "poor" the conditions of some companies and business premises due to the ongoing electricity crisis.

March 11

Venezuelan energy crisis hits workers' income
Pablo Castro, the director of the Venezuelan Workers' Confederation (CTV), warned that the energy crisis has seriously undermined the domestic labor market, as layoffs have increased and income continues to deteriorate.

The union leader added that the situation facing the manufacturing sector is worrying. While industries have not cut payrolls, electricity rationing has led reduced productivity bonus, a benefit included in several collective bargaining agreements.

Castro stressed that following the reduction of operating hours at manufacturing industries, such bonus has declined, as productivity is restricted due to power outages.

The leader of the CTV said that rather than layoffs, "the work dynamics has been restructured," especially in industries that operate with four work shifts.

For example, General Motors removed a third shift, but did not fire workers. The carmaker reassigned workers in the first and second shifts. Union leader Joel Torres said that the company is assembling vehicles from 6:30 a.m. until 11 p.m.

"This is the right way to keep production at the assembly plant without affecting labor," he said.

Castro stressed said that in other cases employers urged their workers to recover lost time or, during the power cuts, to perform maintenance activities in the company.

Sources said that in several Pepsi bottler plants the working day was also restructured, while in Coca-Cola Femsa, the Mexican beverage company, there have been some adjustments in the use of electricity. Sixto Materán, a representative of Femsa's union, said that an electricity generation plant will be used at the headquarters of the company in the neighborhood of Antímano to reduce the use of energy from the national grid.

With regard to the trade and service sectors, Castro is concerned because there have been some layoffs. He said that the situation is mostly affecting shops in malls, since most employees are temporary workers. This means that businesses do not report layoffs to labor inspectorates.

According to the CTV leader, the power crisis together with high inflation levels, devaluation and increased prices of some staple foods have created a sort of "Molotov cocktail against workers." As a result, the recent 10 percent increase in minimum wage, which came into force last week, and the additional 15 percent raise in September will be meaningless.

March 12

Oil Minister: Venezuela to consume 100,000 barrels of diesel to generate 5,000 MW
Venezuela's Minister of Energy and Petroleum, Rafael Ramírez does not believe that the South American country will be affected by an electricity collapse. "We will not allow a collapse and we will not collapse," Ramírez told journalists.

He added that energy officials expect an estimated consumption of 100,000 barrels of diesel per day to generate about 5,000 MW. Ramírez also reported that the government will purchase 100 semitrailer Chinese trucks to improve the logistics of fuel shipments.

The oil industry has the capacity to produce currently 300,000 bpd, of which 296,000 bpd are destined for export, he added.

He also said that industry officials are discussing the possibility of using the coke produced by heavy crude upgraders at the Orinoco Oil Belt in electricity generation plants.

The minister added that Pdvsa plans to purchase 1,200 MW this year to generate its own electricity rather than using power from the national electricity system.

Meanwhile, he announced that the Venezuelan government is close to reach a compensation agreement with cement companies Lafarge and Holcim after the nationalization of their assets. He highlighted that Cemex should return ships it removed from the country. These ships are included in the nationalization process.

Ramírez said that OPEC members will gather soon. In the meeting, Venezuela will propose that member countries keep production levels steady.