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Cuba tries to keep the lights on

Cuba gets plenty of oil from Venezuela. So why is it adopting "extreme measures" to avoid blackouts?

A light display of Ernesto "Che" Guevara, an Argentine who fought in Cuba's 1950s revolution, is seen on the facade of Cuba's Interior Ministry in Havana's Revolution Square, June 8, 2009. The sign reads, "Onwards toward victory always". (Desmond Boylan/Reuters)

HAVANA, Cuba — With more than 115,000 barrels per day of Venezuelan oil flowing to this island, Cuba gets more than enough crude to cover its electricity needs.

But the government may not have enough cash to keep the lights on.

Top officials have ordered state-run companies to adopt “extreme measures” to save energy through the end of the year, shutting down non-essential production across the island in hopes of avoiding the chronic blackouts that afflicted the country in the 1990s, when the Soviet Union’s demise left Cuba in the dark.

"The energy situation we face is critical and if we do not adopt extreme measures we will have to revert to planned blackouts affecting the population," said a recently circulated memo from Cuba’s Council of Ministers directing state managers to keep air conditioners off indefinitely, and shut down refrigerators not needed for food or medicine.

Cuban officials have used the specter of rolling blackouts in the past to spur conservation efforts, but the most recent urgings are more than empty threats.

"Company directors will analyze the activities that will be stopped and others reduced, leaving only those that guarantee exports, substitution of imports and basic services for the population," read another memo distributed to Cuba’s light manufacturing sector.

Such warnings are especially unnerving to Cubans who endured the worst years of the post-Soviet era, which Fidel Castro euphemistically dubbed “The Special Period.” When Moscow’s generous oil shipments to the island abruptly ceased, public transportation virtually shut down and Cubans sweated through summer blackouts lasting 12 hours or more.

These days, Cuba has a new energy supplier in Caracas, and the Castro government’s deep political and commercial ties with Venezuelan President Hugo Chavez have led to billions in new investments for refining capacity upgrades and other oil infrastructure improvements.

Which prompts the question: If Cuba is receiving so much oil from Venezuela — and producing more than 50,000 barrels per day of heavy crude from domestic supplies — why is there an energy shortage?

The answer may be in Cuba’s other economic woes — and the island’s booming petroleum exports.

Last year Cuba generated $880 million in revenue from oil exports, making petroleum the island’s second-leading export after nickel, according to the Ministry of Foreign Trade.

Energy analysts believe the $880 million figure stems from sales of gasoline and jet fuel produced in Cuba using Venezuelan crude, as well as some exports of domestically produced crude to trading partners like China.

http://www.globalpost.com/dispatch/cuba/091117/cuba-energy-shortages