Cuba orders extreme measures to cut energy use

Cuba orders extreme measures to cut energy use
Thu Nov 12, 2009 3:30am IST
By Marc Frank

HAVANA (Reuters) - Cuba has ordered all state enterprises to adopt
"extreme measures" to cut energy usage through the end of the year in
hopes of avoiding the dreaded blackouts that plagued the country
following the 1991 collapse of its then-top ally, the Soviet Union.

In documents seen by Reuters, government officials have been warned that
the island is facing a "critical" energy shortage that requires the
closing of non-essential factories and workshops and the shutting down
of air conditioners and refrigerators not needed to preserve food and
medicine.

Cuba has cut government spending and slashed imports after being hit
hard by the global financial crisis and the cost of recovering from
three hurricanes that struck last year.

"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 message from the Council of
Ministers.

"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," according to another
distributed by the light industry sector.

President Raul Castro is said to be intent on not repeating the
experience of the 1990s, when the demise of the Soviet Union and the
loss of its steady oil supply caused frequent electricity blackouts and
hardship for the Cuban public.

The directives follow government warnings in the summer that too much
energy was being used and blackouts would follow if consumption was not
reduced.

All provincial governments and most state-run offices and factories,
which encompasses 90 percent of Cuba's economic activity, were ordered
in June to reduce energy use by a minimum of 12 percent or face
mandatory electricity cuts.

The measures appeared to resolve the crisis as state-run press published
stories about the amount of energy that had been saved and the dire
warnings died down. The only explanation given for the earlier warnings
was that Cuba was consuming more fuel than the government had money to
pay for.

The situation is not as dire as in the 1990s because Cuba receives
93,000 barrels per day of crude oil, almost two-thirds of what it
consumes, from Venezuela. It pays for the oil by providing its
energy-rich ally with medical personnel and other professionals.

Cuba has been grappling with the global economic downturn, which has
slashed revenues from key exports, dried up credit and reduced foreign
investment.

The communist-run Caribbean nation also faces stiff U.S. sanctions that
include cutting access to international lending institutions, and it is
still rebuilding from last year's trio of hurricanes that caused an
estimated $10 billion in damages.

In response, the government has cut spending, slashed imports, suspended
many debt payments and frozen bank accounts of foreign businesses. It
reported last week that trade was down 36 percent so far this year due
mainly to a more than 30 percent reduction in imports.

(Editing by Jeff Franks and Eric Beech)
Cuba orders extreme measures to cut energy use | Reuters (12 November 2009)

http://in.reuters.com/article/environmentNews/idINTRE5AA4PW20091111?sp=true