Cuba as the End Times Approach
By Erasmo Calzadilla
Havana Times
October 29, 2014

Picture: Omar Santana

HAVANA TIMES — In my previous post, I mentioned in passing that this and all other countries would face a devastating crisis of civilization sooner rather than later.

In view of the pronounced interest the issue seems to have among Havana Times’ commentators, I have decided to return to it in this post. I hope you’ll enjoy it and, as usual, inviting intelligent reflection on the subject. If, as a result of anything described here, someone should decide to commit suicide, I ask that they please leave a farewell note.

Here it goes.

The Big Shots Are Leaving the Scene

The graph below (which has nothing to do with the gay flag) represents the performance of large oil corporations over the past decade.

The five big companies that peddle the crude are leaving the business at high speed. The reasons? Million-dollar losses and the conviction that fossil fuels have no future. The easy-to-get-at, light, “well-cooked”, pure, accessible oil, the one that produced one hundred barrels of profits per barrel invested, was sucked out of the earth and devoured long ago. The remote, heavy, pasty and impure oil is the one left. Finding and processing this product is becoming unviable from the energy point of view and extremely expensive. The costs of prospecting, to mention only one of the intermediary processes, are increasing at the alarming rate of 12% every year.

State and semi-State oil companies are filling the void left behind by the bigwigs. Should this be cause for joy? Not really. States extract the fuel through great efforts and, wherever possible, keep it for their own use, to the detriment of non-producing countries.

The graph below shows that, even though international crude production grew in stable fashion over the past decade, oil exports reached a plateau. Poor countries that have no underground reserves of black gold have tough times ahead of them. Will colonialism return?

Fractured Fracking

The following graph, “courtesy” of expert David Archibald, illustrates the production of oil through fracking at the three largest reserves in the United States. Hydraulic fracturing is the last hope of the United States’ convalescent economy and, owing to their intimate relationship, of the world economy as well.

For the time being, fracking is faring so well that some analysts think it responsible for the current drop in crude prices. Others, however, point to data and testimonies that reveal this is a bubble inflated by Wall Street with the fraternal aid of the media and the International Energy Agency.

If fracking is truly a bluff, how long do we have before the bubble bursts? The more skeptical of the lot believe we will reach the peak in a few years, while the more conservative speak of a decade. Gabriel, a regular commentator here, insists we will have oil from fracking for two centuries. We’ll see.

Last July, the consultancy company Goldman Sachs estimated that hydraulic fracturing, as it is practiced in the United States, requires oil prices above 85 dollars the barrel. West Texas oil is currently being sold at around that price.

Venezuela: From Exporter to Importer

The last graph reflects a phenomenon that affects Cuba more directly.

Venezuela has the largest proven oil reserves in the world. A quick calculation – dividing existing reserves by annual consumption – tells us that, at the current pace of consumption, humanity would be able to live on Venezuelan oil reserves for nearly a decade. This is false.

So what is the problem? The same one we saw before: the light and easily accessible oil has already been extracted and burnt. The heavy, inaccessible (and therefore expensive) oil is what’s left.

PDVSA’s oil production and exports have dropped by more than 20% since 1998. The difficulties are so many that the company has to regularly import naphtha and (according to Reuters) light crude to improve the quality of its extra-heavy product.

The Venezuelan Right claims that the Bolivarian revolution is to blame for all of this, without caring to mention that there are also geological obstacles: the higher-quality wells are already aged and aren’t producing like before, and many of the new ones are producing an unprocessable paste that was not long ago considered bitumen.

Venezuela is a big time bomb. If the current drop in oil prices continues, the explosion will come sooner. Deutsche Bank estimates that oil production in the country is profitable at prices over 120 dollars the barrel. At less than 80 dollars the barrel, the country is losing money by the millions. I’m going to cover my ears so as not to hear the coming Big Bang.

Conclusion

For their more than fifty years in power, the Castros have zealously “protected” us from contact with the evils of capitalism. It is highly ironic that they should have decided to reconcile themselves with the system precisely when it is going under. The current president is preparing the country for the time when the crisis blows over and the party can start again. It hasn’t dawned on Raul Castro that this particular crisis will never blow over.

Fidel Castro’s faith in “socialism” and lack of foresight plunged us into the Special Period. Raul Castro’s faith in capitalism and lack of foresight will make the crisis even more terrible than it’s going to be. The Soviet-like policies of Fidel Castro were supported by the communists. Raul Castro’s policy of development at all costs is applauded by nearly the entire political spectrum.

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