venerdì, marzo 03, 2006

Venezuela's Pipeline Strikes Out - Gustavo Coronel

Venezuela's Pipeline Strikes Out

Thursday, March 2, 2006; Page A20

The Feb. 12 news story "A Latin American Pipeline Dream" did not answer three fundamental questions about Venezuelan President Hugo Chavez's proposal to build a natural gas pipeline: Is it possible, is it economic, is it desirable?

Most probably, it is not possible. Ninety percent of Venezuelan natural gas reserves are associated with oil and cannot be produced at will without ruining the oil reservoirs; 40 percent of the gas currently produced has to be put back into the reservoirs to preserve them. The official projections of Venezuelan gas production for the next decade indicate that the country will have barely enough natural gas to satisfy its domestic needs.

The pipeline probably would not be economic, either. Building costs would be $25 billion to $30 billion, which would require the gas to be sold in Argentina at the equivalent of $110 for a barrel of oil.

Finally, the pipeline would be undesirable for the environment. Amazonia already is in a grave stage of degradation, and a pipeline would constitute a further threat.

In Venezuela poverty runs at more than 80 percent, people die in state hospitals for lack of the most basic help and the unemployment rate is the second-highest in Latin America. Brazil and Argentina should be cautious about supporting this project.



The writer is a former board member of Petroleos de Venezuela, the state-owned petroleum company.

Venezuela's Pipeline Strikes Out