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Blackouts, gas bombs and gunplay: How the Canadian embassy is holding on in Venezuela

Blackouts, gas bombs and gunplay: How the Canadian embassy is holding on in Venezuela


The United States signed an accord yesterday that will allow for a U.S. ‘interests section’ in the Swiss embassy in Caracas, the same arrangement it has had at the Swiss embassy in Tehran for the past 40 years.

But the Canadians remain entrenched in their five-story embassy on the corner of Altamira Square, with no plans to go anywhere.

“I’m glad that Canada didn’t do the same thing as the U.S. because you need people on the ground in places like Venezuela to get a sense of what the citizens are saying on the ground,” said Ben Rowswell, the last person to serve as a full ambassador for Canada in Caracas.

“There’s a reason that the U.S. sometimes acts in foreign policy like it’s blind and deaf, and that’s because it actually ends up removing its eyes and ears from the places that matter the most, like Caracas.

“The core function of diplomacy is listening and that’s one thing our embassy excelled at. The embassy has probably had face-to-face conversations with tens of thousands of Venezuelans of every stripe over these past few years and that’s one of the reasons we’re so confident in our judgments of what Venezuelans really want.”

Live and let live

Canadian officials and their Venezuelan counterparts — both the ones who support current President Nicolás Maduro and those backing opposition leader Juan Guaido — have described a strange diplomatic equilibrium that allows Canada’s embassy to remain in Caracas despite government orders to leave, and also lets Maduro’s government retain five diplomatic properties in Canada, despite the fact that Ottawa doesn’t recognize it.

“I have an accreditation issued by the Government of Canada as a diplomat in this country,” Prof. Luis Acuna Cedeno told CBC News. The former graduate of the University of Western Ontario served as both a cabinet minister under President Hugo Chavez and as governor of Sucre state under Nicolas Maduro. Today, he retains control of Venezuela’s embassy in Sandy Hill, Ottawa, with the title of ‘charge d’affaires’.

“The diplomatic mission of the Bolivarian Republic of Venezuela has its staff working at the embassy in the city of Ottawa, the general consulate of Montreal, the general consulate of Vancouver and the general consulate of Toronto. The Bolivarian Republic of Venezuela does not have any other diplomatic staff working in Canada. As it is already known, in December 2017, Canada decided to downgrade diplomatic relations with Venezuela to the level of Chargé d’Affaires.”

Meanwhile, the man Canada does recognize as Venezuela’s legitimate representative is unable to set foot in his country’s embassy or official residence. He’s also barred from becoming a diplomat in Canada because of his immigration status as a Canadian permanent resident.

Orlando Viera Blanco told CBC News he plans to renounce his permanent resident status. “We are in the process, just to respect the protocols, and to improve our final status as an ambassador. The Vienna Convention requires us not to be a citizen or a permanent resident as part of the process that we have to comply (with).”

Viera Blanco said he’s also unable to visit the nation he represents because he faces a criminal charge of treason for accepting the post of representative for the man Canada has recognized as Venezuela’s acting president, Juan Guaidó.

The unusual modus vivendi the parties described to CBC News appears to have endured because — for the moment — it works for all three parties.

Canada’s toleration of the presence of two rival representatives from Venezuela is a pragmatic quid pro quo for Venezuela’s tolerance of the Canadian diplomatic presence in Caracas.

“It’s a unique situation. It’s an unprecedented situation. When you have people from Canada working in Venezuela, you have to be prudent,” says Viera Blanco. Partly for that reason, he told CBC News, taking possession of Venezuela’s diplomatic properties in Canada is a “low priority.”

“We respect the uniqueness of that situation and that’s why we have to move forward with diplomacy, prudence and moderation that are required in this unique situation.”

The situation stands in sharp contrast to that of some of the other key players in the fight over Venezuela’s future who have been unable to maintain a diplomatic presence in Venezuela.

‘Get back, Satan!’

“I have decided to break all political and diplomatic relations with the fascist government of Colombia and all its ambassadors and consuls must leave Venezuela within 24 hours. Get out of here, oligarchy!”

With those words on February 23, Maduro announced the end of all ties with the country many Venezuelans refer to as their “sister nation.”

“You are the devil Ivan Duque, you’re the devil,” Maduro said, referring to the Colombian president. “And you’re going to dry up for interfering in Venezuela. Get back Satan, get out of here devil!”

For six weeks now, the border has been closed between two countries that were, for the first twelve years of their independence, a single nation.

Colombia and Venezuela have since engaged in a war of words that occasionally has spilled over into border clashes, pitting the Colombian military against shadowy paramilitary groups that Bogota considers to be protegés of the Maduro government.

Colombia also has lost the ability to help its citizens in Venezuela, where they are by far the largest group of foreign residents.

Bolivarian National Guard ride their motorcycles over Fransisco de Miranda Avenue, painted with the word “resistance” and the names of protesters killed by statwe forces in 2014. The Canadian embassy is at top right. (Tomas Bravo/REUTERS)

U.S. throws in the towel

Just hours after a State Department briefing on Venezuela that made no mention of closing the U.S. embassy, Secretary of State Mike Pompeo surprised many with a late-night tweet from Texas in which he announced that Washington was pulling out the last of its diplomats.

Non-essential staff and family members had departed two months previously. On January 24, Maduro gave the U.S. embassy 72 hours to either withdraw its recognition of Guaido or withdraw its diplomats.

When it became clear that the U.S. did not intend to comply, Maduro issued a face-saving 30-day extension, which he renewed for another 30 days in February, ostensibly to allow for negotiations on setting up a U.S. interests section in another country’s embassy.

But those talks (if they happened) went nowhere, and the U.S. pulled the plug on the embassy just before midnight on March 11.

The U.S., like Canada, has urged its citizens to leave Venezuela and has given the country its highest-level travel warning.

Gas, blackouts and threats

Canada’s embassy has stayed open despite logistical difficulties — including prolonged city-wide blackouts caused by the collapse of Venezuela’s electricity network — by running diesel generators and stockpiling water.

Its location on Plaza Altamira has put it at the heart of numerous protests, some of which have ended in gunfire, injuries and deaths.

“The protesters themselves were never a problem,” said Rowswell. “But when the police forces would enter the square to try to clear it, that would create a situation of tension in the plaza.

“There were some times when there were particularly intense protests or repression and we would have to suspend some of our public-facing operation such as providing consular service for a day or two, but we would get right back into action very quickly.”

When Rowswell finished his term as ambassador, the Venezuelan government refused to allow him to be replaced, as it had been angered by Magnitsky Act sanctions brought against certain members of the Maduro regime. A more junior diplomat, Craig Kowalik, took over as charge d’affairs. He lasted for about six months before he learned from social media that he had just been declared persona non grata — along with the fully-accredited ambassador from Brazil.

As 2017 turned into 2018, Kowalik found himself briefly camping out at his parents’ house in Canada before taking on a new assignment in Colombia, where much of his work these days involves Venezuelan exiles and migrants.

Diplomats in Caracas have grown used to a steady stream of denunciations, including trips to the Venezuelan foreign ministry to receive protest notes.

In a typical statement on May 30, Venezuela’s foreign minister Jorge Arreaza suggested that Canada’s criticisms of the Maduro regime were prompted by its desire to maintain the NAFTA accord with Washington:

“It is blindingly obvious that the obsessive conduct of the government of Canada against Venezuela results from its humiliating subordination to the foreign policy of the racist and supremacist administration of Donald Trump. The facts suggest that this servile policy of the Canadian authorities is the product of the desperation of that government to avoid losing benefits and preferences in its commercial treaties with the United States.”

Ultimatum ignored

As well as surviving downgrades and expulsions, the Canadian embassy managed to ride out one ultimatum to close up shop by simply ignoring it.

On January 9, the Venezuelan government gave Canada 72 hours to retract a statement saying that Maduro, whose presidential term had ended that day, was no longer a legitimate president. If Canada did not retract, Venezuela would break off relations.

Canada did nothing.

On the Saturday the deadline was to expire, Venezuela’s foreign ministry announced that President Maduro had decided to extend the deadline for Canada (and fellow miscreant Paraguay) to the following Monday.

Again, Canada did nothing. It’s position on Monday was the same as on Friday, and remains the same today.

The Parauguayan embassy is closed and its diplomats are gone. Canada’s are still there.

‘Performing for the cameras’

“(Members of the Maduro regime) are aware of how isolated they are,” said Rowswell, “and they sometimes lash out in anger in ways that aren’t entirely thought through. And they’re sometimes performing for the cameras, and not engaged in real conversations. Often you’ll see them making a threat on television without ever having communicated with the embassy.

“My experience was you never knew who they were going to pick on. You’d wake up one day and it would be the Italians, the next day it would be the Spanish, almost every day (it) would be the United States, and then regularly every single Latin American country would be singled out for abuse.

“It got to the point there was no observable pattern, just whoever Maduro was mad at from one day to the next.”

On March 4, Guaido returned to Caracas after a tour of South American capitals, during which he was fêted by the presidents of Argentina, Brazil, Chile and Colombia as the legitimate president of Venezuela.

Fearing that he would be arrested, diplomats from several countries, including Canada, went to the airport to greet him. Venezuela responded by giving German Ambassador Daniel Kriener 48 hours to leave the country, which he did.

Again, the Canadians escaped a sanction.

Rowswell said he hopes this unusual situation can be maintained, even though it rests on shaky diplomatic ground.

“Once you remove Canadian diplomats, over time the kind of granular feel we have for what is really happening on the ground would diminish. And that’s where I feel the Americans are really making a big mistake by losing their eyes and ears on the ground.”





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Gas prices could jump another 15 cents by summer — and it's not because of the carbon tax

Gas prices could jump another 15 cents by summer — and it’s not because of the carbon tax


Drivers hit by the jump in gas prices at the pumps this week after the introduction of the carbon tax should brace themselves for even higher prices in the coming months.

Some analysts predict gas prices could rise by another 10 to 15 cents a litre by this summer, and that has nothing to do with the carbon tax.

A combination of higher world oil and an increase in demand for diesel, plus seasonal factors such as the shift from winter to summer gasoline and higher demand in the warmer months means the big drop in prices that started late last year could be a thing of the past.

Dan McTeague, senior petroleum analyst at GasBuddy, expects prices to raise another five cents as early as next week as the shift from winter to summer gasoline takes place across much of Eastern Canada.

“Ontario, Quebec, and the Maritimes are looking at a net five cent increase on top of Monday’s five cent increase,” McTeague said. That federal carbon levy at $20/tonne that applied in Saskatchewan, Manitoba, Ontario and New Brunswick added about 4.4 cents per litre.

“Western Canada, sort of, is seeing this being phased in a little slower, and they’ve already started seeing [a rise of] probably about two cents worth.”

B.C. and Alberta already had a carbon tax and their gasoline is refined closer to home, making a difference in when price increases take effect. 

Big demand for diesel

Susan Bell, oil analyst at IHS Markit, expects gas prices to rise by 10 cents from now to the end of summer as a gasoline inventory glut in the market starts to ease, and crude oil prices head higher, in part due to demand for diesel fuel.

The IMO is introducing a sulphur limit rule for 2020, known as IMO 2020, which will decrease the amount of sulphur allowed in the fuel from 3.5 per cent to 0.5 per cent. This will affect large ships that use low grade fuel, which is considered the bottom of the barrel, because of its air-polluting qualities. In order to comply, many ships will likely have to switch to diesel, pushing up demand for heavy crude oil, which is used to make diesel.

“International factors such as the International Maritime Organization’s (IMO) global bunker fuel oil specification change will require refiners to increase crude oil runs to meet strong diesel demand,” Bell said. 

“This, along with crude oil supply challenges that result from U.S. sanctions against Iran and Venezuela, will support crude oil price increases. Gasoline prices will respond in kind with the increase in crude oil prices.”

McTeague said a more-than-six-cents-a-litre jump in the price of diesel “will pretty much affect the price of everything.”

“It has direct and indirect costs, and I think it’s the indirect ones that we really haven’t calculated,” McTeague said. “But, I do get nervous when I see that food prices, the basket of goods that make up grocery prices have skyrocketed this year compared to last year, much of it driven by fuel.”

He said many people have already made the switch to smaller cars, but this kind of price rise may necessitate new ways to economize.

“Most people have moved to more efficient vehicles, but is there room for more efficiencies? For sure.”

The price of benchmark U.S. crude oil — West Texas Intermediate (WTI) — has surged nearly 47 per cent since hitting a one-year low in December, now trading around $62 US a barrel. Meanwhile, the price of Western Canadian Select (WCS) has quadrupled — jumping more than 300 per cent to around $54 US — since hitting a yearly low in November. 

Impact of the carbon tax

Meanwhile, analysts are split over how much of an impact the carbon tax on fuel will have on consumers. 

McTeague said those shrugging their shoulders over a five cent increase in gas prices this week need to remember that a 2.5 cent per litre increase annually over the next three years will result in gas prices higher by at least 12.5 cents when all is said and done.

“When there’s a component that pushes prices up that is discretionary such as the carbon tax, which is a policy decision as opposed to an economic factor, it means that price remains permanently cemented in place, and it will continue to build over the years,” McTeague said.

“We’ll have to see how that affects the bottom line — disposable incomes. The concern, of course, is if you’re not spending on gasoline — what other purchases are they foregoing, and in what parts of the economy and how will this cascade through the economy.”

Bell, however, said while higher prices at the pumps will affect the affordability of fuel, the overall impact of the carbon tax is relatively small when compared to the wild swings in the oil market.

With the carbon tax adding 4.4 cents per litre to the price of fuel, that equates to less than $100 per year of increased cost per vehicle (assuming a typical 20,000 km of driving per year at an average 10 litres/100 km fuel economy). 

“On a single [gas] fill of 60 litres, the carbon levy is less than $3. So, the overall impact is relatively small,” Bell said.

“Layering on the 10 cents per litre in expected gasoline price increase that is the result of increased crude oil costs and refining margins results in a more significant hit to the consumer.”

The 10-cents-per-litre increase will cost the consumer an additional $6 per fill-up, or about $200 a year using the same annual assumptions, Bell said. “At this cost increase, some consumers may back away from discretionary gasoline spending.”



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LNG Canada could approve expansion before natural gas export facility is complete

LNG Canada could approve expansion before natural gas export facility is complete


One of the most expensive energy projects in Canada could soon get larger.

Construction ramped up this month on LNG Canada’s massive natural gas export facility in northern B.C., but the consortium is now talking about possible expansion.

LNG Canada is a consortium of companies led by Shell Canada and includes Petronas, PetroChina, KOGAS and Mitsubishi Corporation. The project includes a pipeline across B.C., a port and terminal that liquifies the gas so it can be transported on tankers. The potential price tag of the entire project has been estimated to be upwards of $40 billion.

Chief executive Andy Calitz spoke confidently of how it’s likely just a matter of time before the ownership group commits to an expansion of the Kitimat site. A decision on making the investment could happen before the initial five-year construction project is finished.

A 34,000-tonne heavy lift vessel carrying barges for LNG Canada is completing pre-construction work in Kitimat harbour, to prepare the existing port for larger vessels once the new $40-billion natural gas export facility is constructed. (Youtube/LNG Canada)

“The five joint venturers now have probably two main considerations in their head as to when they go ahead with [the final investment decision] on the expansion trains,” said Calitz, referring to the system of compressors that turn the natural gas into a liquid. “The first one is, what is the market doing? What is the market doing globally in terms of Korea, Japan and China, South Asia and India?”

The other consideration is whether construction of the initial facility and pipeline are on schedule and on budget. 

Positive for beleaguered sector

The pipeline, which had faced a blockade from a group of Indigenous hereditary chiefs, is being built by a subsidiary of TransCanada. Calitz said construction is underway on the pipeline in the area where the blockade occurred.

Calitz said he has no doubts the pipeline and export facility will be completed. 

“Right now, the focus of the team is to make sure that we give them that confidence [to move ahead],” said Calitz, commenting on efforts to keep the construction on schedule.

LNG Canada is a joint venture of Shell, Petronas, PetroChina, KOGAS and Mitsubishi Corporation. (Submitted by LNG Canada)

Any talk of an expansion is positive for the beleaguered natural gas sector. It has suffered from poor commodity prices for much of the last decade. The additional spending by LNG Canada would also be noteworthy, considering the decline of investment in Western Canada’s energy sector since the oil price crash in 2014.

“I’m surprised they’re talking about [the expansion], but I’m not surprised that they see the potential for it,” said Kevin Birn, an analyst with IHS Markit.

‘They win in terms of scale’

Birn pointed to the growing demand in Asia, the plethora of natural gas in Western Canada, and the relatively close geography of Canada and Asia as reasons the project likely makes financial sense.

“They win in terms of scale,” he said about the possible expansion. “And you have that resource potential that is so large there. It’s not a question about whether they can supply that expansion.”

The joint venture partners will look at construction progress of the initial facility and pipeline. 1:02

Calitz didn’t want to speculate about the cost of the expansion. But he said there would be many cost savings compared to the initial facility, including the fact there would be no need to repeat the costly expense of site preparation.

“The joint venturers see a very competitive export project for the second phase,” said Calitz, who made the remarks to journalists in Houston at CERAWeek, an annual global energy forum.

Outstanding dispute over import tariffs

One outstanding issue for LNG Canada is the continued dispute over import tariffs for fabricated industrial steel within the Chinese modules used for the project.

LNG Canada has argued it cannot afford to wait years to see whether Canadian manufacturers can construct the large LNG modules it needs. However, industry stakeholders such as the Canadian Institute of Steel Construction want Ottawa to maintain the border duties.

LNG Canada has launched a judicial review of the import tariffs. The partner companies decided to go ahead with the project despite the outstanding issue and the potential costs associated with it. 

When asked if the dispute with Canada Border Services Agency has been resolved, Calitz took a long pause before answering, “Not fully.”

From 2 trains to 4

LNG facilities are comprised of a system of compressors known as trains. The LNG Canada facility under construction will have two trains, and Calitz said the expansion would be for an additional two trains.

LNG Canada already has all the environmental permits for four trains, in addition to an export licence to operate all four trains for the next 40 years.

 “So, many things [are] very positively in place,” he said.



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