Could Venezuela’s Anti-Fracking Views Have Been the Cause Behind the Chalmette Refinery Sale?


Exxon Mobil and Venezuela’s national oil company, Petróleos de Venezuela SA, have ended their business partnership and will sell the refinery they co-own in Louisiana.

The refinery will go to PBF Energy Inc., which is based in New Jersey. PBF is buying the refinery in Chalmette, which is about 10 miles from New Orleans, for $322 million.

The deal also spells the end for PdVSA’s ventures with Exxon Mobil Corp. Jesus Luongo, vice president of refining for PdVSA, said that the plant in Louisiana was no longer “aligned with the commercial policies of the company and the country.”

Venezuela is known as one of the world’s largest producers of oil and gasoline. Theirs is also the cheapest in the world.

In January, gasoline in Venezuela was available for just 0.2 cents per gallon, which equates to paying one U.S. dollar for 482 gallons of gas. Gas prices in Venezuela were stagnant since the late 1980s, and it was only this year that the government considered raising the cost per gallon for consumers.

Although the country will not longer have access to the Chalmette refinery, production will still go on at the plant. The refinery can process as much as 189,000 barrels of crude oil per day, most of which comes from Louisiana’s coast or Venezuela.

PBF also runs three other refineries in the United States. With the fourth in Louisiana, the company will refine more than 725,000 barrels of crude oil per day.

Yet the oil and gas industry has faced serious scrutiny from anti-fracking (or hydraulic fracturing) advocates and environmental activists. Just 3% of the Earth’s water is freshwater suitable for drinking, and when polluted by fracking chemicals, that contamination can have far-reaching effects that require environmental remediation services to reverse.

This month, Rolling Stone published an in-depth look at the link between fracking pollution and miscarriages and birth defects in the oil boomtown of Vernal, Utah. The story followed a local midwife who has witnessed the effects of the town’s pollution firsthand on area pregnant women.

Although much of Rolling Stone’s exposé was based on anecdotal evidence, it’s also backed up by science. Last year, the Center for Environmental Health published a report that linked the environmental factors of fracking with birth defects, miscarriages, and infertility.

Venezuela, however, remains critical of fracking, despite having done business with U.S.-based Exxon Mobil.

At a UN summit in September 2014, President Nicolas Maduro criticized fracking, calling the practice environmentally destructive. He said the U.S. used such methods to dominate the market and hurt countries like Iran, Russia and Venezuela.

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