7-20-05,10:00am

In spite of sharing the same geography, a common history and countless similarities, the Caribbean nations have lived isolated and distant for centuries.

Still today, after long years of political independence and communications, trade between most of the countries in the region is insignificant if compared with the flow of people and goods coming from more distant areas.

With this backdrop and right on the doorstep of the biggest energy crisis in history, PetroCaribe creation has an extraordinary significance for small countries located around the so called “American Mediterranean.”

With a population of nearly 60 million inhabitants, mostly settled in a long string of islands, the countries of the Caribbean region are much the same today as they were in the past, even in the economic or social fields.

Formerly colonies of European powers for more than four centuries, they suffered the annihilation of their native populations and the Caribbean was turned into an agro-producers and raw material provider –mainly sugar– for the Old Continent with the use of slave labor brought over from Africa. Politically independent in the 20th century, the Caribbean region had to change its economic base after the plummeting of prices in their principal products; these were replaced by tourism. This is now the main source of income for several nations which every year receive more than 10 million visitors, although a large share of them are on American cruise ships, whose main profits remain on board.

With scarce natural resources, the Caribbean was also dependent in respect to energy, causing large expenditures on fuel imports, largely in the hands of intermediaries and subject to the market’s speculative maneuvers, while the islands lacked the necessary infrastructure.

With notable exceptions, this is the common profile of the nations forming part of PetroCaribe. For these nations, the neighborly initiative of the Venezuelan government represents a unique alternative and a decisive step towards regional integration.

Going beyond the commercial goals of any company, the entity just created in the Venezuelan city of Puerto La Cruz is the first action supporting unity in a region paradoxically lacking close commercial ties.



Under the Bolivarian Alternative’s Choice

Organized as a result of the Bolivarian Alternative for the Americas, PetroCaribe substantially exceeds agreements reached in San Jose and Caracas (its legal precedent in the energy field) since it now has the political support of fourteen nations forming part of the treaty.

With the largest reserves of hydrocarbons in the world, the only Latin American member of OPEC and fifth largest world exporter, Venezuela has the determination make a reality the true ideals of Latin America and possesses the ideal conditions to lead an unprecedented process in the history of the hemisphere.

According to data from the state-owned company PDVSA, during the first four months of 2005, the average fuel production was 3,240,000 barrels daily, of which 2,623,000 barrels were produced by companies along Venezuela’s Orinoco fuel belt.

With respect to exports, Venezuela places on the international market 1,423,000 barrels of crude oil and some 751,0000 of byproducts, for a total figure of 2,174,00 barrels of crude oil and derivatives everyday.

According to international figures, consumption levels of hydrocarbons for countries attending the First Energy Summit of the Caribbean Heads of State are nearly one million barrels per day, including the total demand of Trinidad Tobago, Barbados and Venezuela. As maintained by Venezuelan Foreign Minister Ali Rodriguez, if Cuban and the Dominican Republic are excluded, the quantity of hydrocarbons Venezuela supplies on easy terms to the rest of the Caribbean countries is small (a little more than 30,000 barrels a day), but decisive for these former nations.

For the Caribbean, energy supplies from PetroCaribe will represent a cost reduction of six dollars per barrel of petroleum or petroleum by-products. It will also mean the elimination of speculators, who in some cases impose on these small countries prices higher than those on the world market – in addition to controlling fuel storage facilities.

But far from the manipulating arguments of the North American mainstream media, the Chavez government does not give away Venezuelan fuel; instead it shares its richness with its neighboring countries.

In addition to selling fuel and its by-products at lower prices, Venezuela is offering its infrastructure, its technological experience of almost a century, and is capitalizing an initial fund of $50 millions in support of what is being called the ALBA-Caribbean project.

The Energy Cooperation Agreement for the Caribbean Region reveals its character as a cooperative effort between the nations of the area through an exchange that – in addition to providing steady energy resources at lower prices – includes two year payment terms with forms of payment unknown to countries that have been subjected to neo-liberal policies. From its very outset, this agreement is also establishing financial and compensatory instruments which are truly favorable to all.

Furthermore, it includes preferential prices in cases of stable alliances for the exchange of goods, direct supplies of crude and derivates, the avoidance of intermediary costs and freights, in addition to financing plans which vary according to the changes in fuel prices.

Due to this, the Dominican government has decided to export food to Venezuela. Likewise, Cuba is both sponsoring mass educational programs, thus assisting in the elimination of illiteracy suffered by more than one million people, and providing regular health services to the majority of the Venezuelan people – including high cost treatment and surgery for thousands of people.

PetroCaribe has come into being as a new type of integration vehicle, an example for those trying to impose greed and over-consumption on humankind’s rational needs. It has emerged out of the will to make even greater the homeland which Bolivar and Marti longed for.

The Crisis in Figures

Since 1880, hydrocarbon extraction at a world scale has increased 3,500 times, but on unequal terms. Europe and North America, with less than the fifth of the world’s population, consume 60 percent of its fuel.

The United States today produces half of the fuel oil derivates than it did in 1970, while Saudi Arabia has not again reached extraction levels of 1980.

Present world demand is estimated in 83 million of barrels per day, and surveys indicate that this can reach 86 million. If this increasing tendency is sustained, the world will consume 120 million barrels per day by 2020.





Sources: OLADE (Latin American Energy Organization) – Statistics found on the Internet