Monday, August 27, 2012

Venezuela Refinery Explosion Raises Questions of Maintenance

An explosion at Venezuela’s largest oil refinery left 41 people dead, a number that could rise with a reported 121 people wounded.  It is not yet clear how large was the blast radius of the explosion, but it destroyed a nearby National Guard barracks and damaged over 200 homes, reports Reuters. Fires continued to rage at the Amuay refinery Sunday night, although Energy Minister Rafael Ramirez said the refinery could resume production in two days.

The impact of the blast was felt far outside of Venezuela, as the Amuay is the second-largest refinery in the world, capable of processing up to 900,000 barrels a day: gasoline prices spiked to a four-month high in the New York Mercantile Exchange, reports Bloomberg. According to the LA Times, the Amuay exports close to 360,00 barrels a day to the US.

Ramirez blamed the explosion on a gas leak, raising the question how preventable the accident was. A report by the AP includes an eyewitness account that describes the smell of gas Friday night, hours before the explosion took place at around 1 a.m. The secretary general of a local workers’ union told the AP, “We warned that something was going to happen.”

The tragedy looks likely to spark further debate over whether the government has invested sufficient resources in maintenance and safety at oil refineries. The manager of Amuay said that maintenance issues were not to blame, a statement that was echoed by President Hugo Chavez when he visited the installations Sunday, after declaring three days of national mourning. The PDSVA has spent $3 billion in oil refinery maintenance in the past three years, the Amuay refinery manager added.

But the Christian Science Monitor reports that the blast is indicative of how much the PDSVA has allowed standards to slip. The PDSVA has registered 19 accidents so far this year, including an oil spill last February which saw the loss of some 80,000 barrels of crude. One engineer told the Monitor that based on the PDSVA’s own data, the company is only operating at 65 percent capacity due to poor maintenance.

Blog the Devil’s Excrement argues that Amuay explosion is not just a question of neglected infrastructure. It also highlights a fundamental problem of the Chavez government, which emphasizes ideology and loyalty over competence, the blog states. This has contributed to the mismanagement which helped cause the Amuay disaster, according to the writer. Devil’s Excrement also examines the PDSVA’s annual report, which found that the Amuay had nine scheduled stops of maintenance in 2011, but seven of them were postponed.

The tragedy is likely to lead to further questions about the overall capacity of Venezuela’s refineries. El Nuevo Herald reports that Venezuela is now importing processed gasoline and other oil derivatives from abroad, purchasing some 2.2 million barrels from the US in 2011.

More from the New York Times and the Wall Street Journal, while the BBC has a slideshow of the damage.


News Briefs
  • In an incident that the Washington Post called “embarrassing” for a country that has received heavy financial support from the US for training its police force, on Friday morning Mexico federal police opened fire on a US Embassy car, injuring two US-government employees. The identity of the shooting victims is still a mystery: according to the Post, they were not military personnel, DEA, FBI, or ICE. Two federal police officers have been detained; a lawyer for one officer said the incident took place while police were chasing suspected criminals (according to the Post, they were looking for car thieves). Perhaps underlining the delicateness of the situation, the US Embassy called the incident “an ambush” in a statement. The Wall Street Journal notes that the incident will only raise more doubt over the capacity of the federal police, following the shooting between federal agents in Mexico City’s airport last June. The question now is whether the attack will raise further tensions between the US and Mexico. Mexico Institute Director Andrew Selee called it the first case of “friendly fire” between US and Mexico and added: “It probably won't have a large impact on policies of cooperation, but it may raise some tensions in day-to-day cooperation and a few questions in Washington.” US representative Henry Cuellar (D-TX) echoed Selee’s remarks to the AP: "If the Mexicans are cooperating with U.S. officials to find out exactly what happened here then I don't think this will affect the U.S.-Mexico relationship.” 
  • Tropical storm Isaac inflicted some serious damage in Haiti, with the impact especially felt by the homeless survivors of the 2010 earthquake, the New York Times reports, accompanied by a slideshow. The Miami Herald notes that while the storm killed at least seven people, destroyed homes, and blocked roads,  the bad weather did not cause as much destruction as expected.  However, the storm did cause a boat full of 152 Haitian migrants to run aground in the Bahamas. Isaac was originally expected to hit Haiti as a hurricane, not as a tropical storm, leading to concerns that the storm damage would devastate the island, and help cause another upsurge of cholera on the island. 
  • Colombia President Juan Manuel Santos said that amid his cabinet reshuffle, he will be keeping his defense minister in place, a relatively surprising decision considering the criticism Santos has received for his security policies, reports Reuters
  • Robert Saviano, author of “Gomorrah,” examines international money laundering in a New York Times op-ed. In light of revelations that both Wachovia and HSBC failed to do enough to monitor suspicious financial transactions from Mexico, Saviano argues that the relationship between banks and organized crime has never been so complicitat the very highest levels of international finance. He cites a study by Colombian economists last year that found that much of Colombia’s drug money is laundered outside the country in financial centers like New York and London. Saviano also notes that according to the head of the United Nations Office on Drugs and Crime (UNODC), cash from the drug trade may have helped some banks regain their footing during the 2008 financial crisis. 
  • The New York Times profiles former Brazilian president Lula da Silva, noting that asides from battling throat cancer, he faces a new political fight as the Supreme Court reviews one of Brazil’s biggest corruption cases, involving da Silva’s former chief of staff. 
  • The LA Times reports on female killings in Mexico state, where president elect Enrique Peña Nieto previously served as governor. Peña Nieto and other Mexico state authorities have been criticized of neglecting such cases, prompting Peña Nieto’s government to establish a special prosecutor's office dedicated to handling femicides just before he left office in 2011. 
  • The New York Times reports that fire departments based along the US-Mexico border are straining to respond to the number of emergency medical calls received from points of entry. In cities like Calexico, California (which borders the Mexico city of Mexicali), the fire department responded to 725 calls last year, a burden which the department budget is not prepared to meet, according to the Times. 
  • Wall Street Journal columnist Mary Anastasia O’Grady notes that the grenade attacks against Monterrey-based daily El Norte took place shortly after the newspaper published an investigative report on organized crime. El Norte published an article in early July, alleging that the state department of motor vehicles could be selling license plates to a car theft ring, as the car thieves are in need of legal license plates to pass off the stolen vehicles as legitimate. Shortly afterwards, the newspaper was attacked -- an act of violence which may not be a coincidence, O’Grady argues. 
  • The New York Times profiles the volunteer guards who monitor Chile’s student protests, keeping an eye on what happens when the protesters clash with police.