I looked into the root causes of the electricity problems and - was surprised to learn that Venezuelans Posted: Feb 21st, 2019 - 1:16 pm In Reply to: What happened to Venezuela was all about - depending on one commodity, oil. nm
didn't use the oil for electricity after they kicked out American companies (crude oil has to be refined first before you can do that), that as late as 2012 no less than 65% of their power needs were met by hydroelectric. That was what was nationalized in 2007 and has degraded since then to the point that it can't keep up, and it's a lot more expensive to rebuild hydroelectric than it is oil-based generation. And in order to bring their oil extraction back on line they're going to need that source to come back on line.
It's one reason that both China and Russia, who are owed a great deal of oil that's still in the ground, have been slow to move on extracting it themselves: it's likely to cost them more than they're owed to get what they're owed. It looks like Russia is going to make the attempt now but they're having to export oil into Venezuela in order to extract it out of Venezuela. And lend Venezuela the money to pay for that oil. Nasty little Catch-22.
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