Venezuela: Environmental Issues

Venezuela:

• Known for the “petroleum bonanza” that forever changed the face of the country

• Venezuela was not tempting for conquest

           -The Spaniards eventually took over but expectations were small

           -It soon became known for its livestock and agriculture

           -Its main role was to produce food for New Spain (Mexico)

• Caracas

         -became the central hub of political and economic life

         -became empowered and wanted independence

Petroleum Age (1908-1940)

• Juan Vicente Gomez –President of Venezuela

• Oil was becoming essential for industrial development and military strength

•  Under Gomez, Venezuela was now in the petroleum age and everything changed.

• “The government had only to produce scraps of official paper granting rights to drill on relatively worthless agricultural land” all petroleum profits were free.

• 1914: concessions were not equivalent to sales-subsequent law said that concessionaires would have rights to exploration of designated parcels not outright ownership.

• 1922: the law changed when the parcels were increased and lengthened periods of exploitation. 

• 1926: petroleum became the country’s chief export

• 1929: Venezuela was the largest oil exporter in the world

Dutch Disease (Royal Dutch/Shell)

•  An increase of oil production restricted Venezuela’s overall ability to create and maintain other industries.

• Government ignored serious social problems, including education, health, infrastructure, agriculture, and domestic industries

• Caused Venezuela to fall behind other industrialized countries

OPEC (Organization of Petroleum Exporting Countries) 1950S-1960S:

• Goals: Five countries (Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela) working together in order to secure and stabilize the international oil prices.

The Years of Decline 1970s-1990s

• 1973: Oil crisis
• By the 1980s oil prices plummeted again.
• 1990s: More symptoms of Dutch Disease
• 1990-1998: industrial production declined

1998-Present

·         Hugo Chavez took office

·         Policy changes involving the oil industry were made

·         Strengthened Venezuela and other national industries to create a more developed nation.

·         Made drastic changes for the nation and became a historical figure.