President Hugo Chavez and his gang of incompetent thugs caught a glimpse of the abyss in Caracas this week, and recoiled like snakes fleeing a fire.
The president “rectified…wisely” because he has the “pulse” of the people, some of his supporters said.
But the truth is that Chavez realized that shutting off power supplies to Caracas could be the spark that could bring two or three million people into the streets, and force “El Comandante” to scurry away in the dark.
The Bolivarian armed forces and reservists certainly won’t confront a million pissed-off barrio dwellers in Caracas. They literally would be ripped to pieces if they opened fire on the “pueblo.”
So Chavez excluded Caracas from Corpoelec’s national rolling power outage program, and sacked Power Minister Angel Rodriguez.
Now the regime is struggling to come up with an alternative plan to cut national consumption by 1,600 MW, spare Caracas any real pain, and keep Chavez’s popularity from sinking further over the coming months. Good luck.
Ad hoc “solutions” already are being announced. For example, officials said the regime will spend $4 billion to buy floating power plants to keep the lights on in Vargas and Miranda states (i.e. Caracas).
But Chavez & gang can’t weasel out of this crisis – even if oil prices soar into triple digits.
Caracas can’t be exempted from the compulsory national outage program because, at 1,600 MW, it is the second largest user of Edelca hydropower after the basic industries in Guayana (1,840 MW). Zulia (1,450 MW) where Pdvsa has major oil production operations is the third largest user.
The regime has to bring down consumption of hydro-power generated by Edelca, not other utilities. If Chavez forces the basic industries and Zulia to absorb all of the consumption cuts, the state-owned steel and aluminum industries will shut down completely and Pdvsa’s operations in Zulia and Falcon states will be disrupted severely.
The power crisis will have unexpected chain reactions nationally. Businesses will be forced to change working hours. Economic output will fall. Labor costs will increase as the regime forces employers to pay workers for time not worked due to the power outages. More inflation, more shortages of everything, and more damages to electronic and other household items like refrigerators, air conditioners, washers and dryers, radios and televisions, computers, etc.
Any disruption of Pdvsa’s activities = less fiscal income for the regime and little/no cash reserves to fund Pdvsa’s investment plans in the Orinoco oil belt and offshore.
No electricity, no oil income to continue spending. It adds up to a potentially grim outlook for the Chavez regime over the coming months.
But Edelca’s report warning of an impending national collapse is very clear: “120 days” – sometime around end-April or sometime in May, Edelca could be forced to shut down 5,000 MW of Guri’s hydro-power generation capacity, and then it is lights out, Venezuela.
All activities in Venezuela would grind to a congested infuriated halt if that happens. No elevators or traffic lights. No Caracas Metro. Airports would have to suspend service. The seaports would close. Service stations would not be able to pump gasoline or diesel into vehicles. Telephone services – land lines and wireless – would be kaput. Adieu, Internet. Ordinary commercial transactions – withdrawing cash from an ATM, cashing a check or paying with a check – would collapse. Anyone selling a good or service immediately would start to demand payment in cash.
Oil production/refining and exports would collapse. Pdvsa probably would be obliged to declare force majeure on the majority of its foreign supply contracts.
Social chaos could result. An angry populace without electricity, combined with increased violent crime, likely would be met by the regime with greater repression. But this would risk sparking a popular eruption if “el pueblo” concludes that the person most responsible for the collapse of their country is hiding deep “inside the cave” in Miraflores (Chavez’s words, no less).
Chavez’s criminal associates – folks like Diosdado Cabello and Jose Vicente Rangel – are wildly rich, and no doubt they are also packed and ready to bail out of Dodge City at the first hint that the regime is seriously at risk of imploding. A few Bolivarian “pendejos” like Lina Ron may fight and die for “El Supremo,” but Chavez’s longtime closest associates will dump him in the blink of an eye when it comes to saving their own hides.