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The country votes to annex their oil-rich neighbor, Guyana.
Under pressure from the U.S. to hold a free and fair election, Venezuela’s President Nicolás Maduro upped the ante.On Sunday, the nation went to the polls — to vote to invade its neighbor and the world’s newest petrostate, Guyana.
Approval was seemingly swift and suspiciously overwhelming. According to the Venezuelan National Electoral Council, the ballot’s five-question referendum — which culminated in asking if Caracas should incorporate Guyana’s Essequibo region “into the map of Venezuelan territory” — passed by a margin of 95%.
Calling the vote a free or fair election might be a bit of a stretch; local opponents seized on the fact that the National Electoral Council touted “10.5 million votes cast,” rather than the overall number of voters, meaning that — given the five ballot questions — potentially as few as 2 million people actually turned out to vote in the nation of 28.2 million. Reuters also reported that lines were scarce at voting centers.
Still, snatching the Essequibo region, which makes up about two-thirds of Guyana and is roughly the size of Florida, is popular among Venezuelans due to a controversial 1899 decision by an international tribunal that gave the territory to what was then the British colony of Guiana. Venezuelans have long considered themselves to have been swindled by Western powers in the deal, with decades of revanchist schooling and local propaganda making the Essequibo issue an easy and appealing way for Maduro to shore up domestic support.
It remains unclear, though, how far Venezuela might go in the enforcement of its claim on the land, CNN notes. International Court of Justice President Joan E. Donoghue has nevertheless warned that Caracas appears to be “taking steps with a view toward acquiring control over and administering the territory in dispute.” Comparisons to Russia’s invasion of Ukraine and Argentina’s 1982 invasion of the Falkland Islands are already popping up, with commentators wondering what President Biden will do if the crisis escalates to actual fighting — and on America’s hemispheric doorstep, no less.
Many experts on the region also say the referendum, and any ensuing land grab, are distractions meant to bolster nationalist sentiment and Maduro’s popularity during a time of domestic turmoil and outside pressure for a leadership change. But it’s hardly a coincidence that the land in dispute is oil-rich — and newly considered to be so. Guyana was a poor, remote, and tiny neighbor to Venezuela before the discovery of oil offshore (and in Essequibo) in 2015. Now the country is thought to be sitting on 11 billion recoverable barrels and international oil companies are jostling for a go at the reserves, even as Guyana faces the irony of being especially susceptible to climate change.
The easy comparison between the two oil states makes the situation even more bruising for Caracas: Guyana is now “set to surpass the oil production of Venezuela,” CNN writes, while the latter country’s production has dropped from a height of 3 million barrels per day in 1999 to a mere 700,000 barrels per day this year, due to ongoing mismanagement and U.S. sanctions. No wonder the oil reserves just across the border look so tempting.
Perhaps, then, this will be the way the world’s next oil war starts: Not with a bang but with a vote.
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There were a lot of tariff losers, but only one tariff winner.
The U.S. stock market has taken its worst hit this week since March 2020, with the S&P 500 falling over 10% in just two days, while the tech-heavy Nasdaq is down 22% from its all-time high in December. The tremendous decline in stock values is a reflection of Donald Trump’s chaotic attempt at reordering the global economy, wrenching America’s average effective tariff rate to the highest level since 1909 — four years before the establishment of the federal income tax.
The clean energy economy has not been spared, although the effect has hardly been uniform. Some of the highest flying companies of 2024 and early this year — think Tesla or anyone selling power to a data center — have been some of the hardest hit, while some companies closer to the residential solar market have held their own.
Here’s a look at how some of these companies have performed over the past two days:
President Donald Trump has exempted some — but certainly not all — of the critical minerals necessary for the energy transition from the sweeping tariffs he announced Wednesday. Minerals such as lithium, nickel, cobalt, manganese, and copper are key components of clean energy infrastructure such as lithium-ion batteries, which are used in electric vehicles or stationary storage, and copper wires, which conduct electricity in solar panels and wind turbines.
The White House has published a complete list of hundreds of products that are exempt from tariffs. We combed through the list looking for key transition minerals. Here are the ones that caught our eye, plus some that were notably left off. If you see anything on the list you think we missed, my inbox is open.
Just about every other renewable energy company is taking a beating today.
American solar manufacturer First Solar may be the big winner from the slew of tariffs Donald Trump announced yesterday against the world’s trading partners. Sorry, make that basically the only winner among renewable energy companies.
In a note to clients this morning, Jefferies analyst Julien Dumoulin-Smith wrote that “in this inflationary environment, we expect FSLR's domestic manufacturing to be the clear winner” in the long term.
For everyone else in the renewable industry — for example, an equipment manufacturer like inverter company Enphase, which has been trying to move its activities away from China — “we perceive all costs to head higher, contributing to a wider inflation narrative.”
First Solar’s’s stock is up almost 4% in early trading as the broader market reels from the global tariffs. Throughout the rest of the solar ecosystem, there’s a sea of red. Enphase is down almost 8%. Chinese inverter manufacturer Sungrow is down 7%. Solar installer Sunrun’s shares are down over 10%. The whole S&P 500 is down 4%, while independent power producers such as Vistra and Constellation and turbine manufacturer GE Vernova are down around 10% as expected power demand has fallen.
First Solar “is currently the largest domestic manufacturer of solar panels and is in the midst of expanding its domestic manufacturing footprint, which should serve as a competitive advantage over its peers,” Morgan Stanley analyst Andrew Perocco wrote in a note to clients Thursday morning.
Nor has First Solar been afraid to fight for its position in the global economy. It ispart of a coalition of American solar manufacturers that have been demanding protections against Southeast Asian solar exporters, claiming that they are part of a scheme by Chinese companies to avoid preexisting solar tariffs. In 2023,80% of American solar imports came from Southeast Asia, according to Reuters.
Tariff rates specific to solar components manufactured in those countries will likely be finalized later this month. Those will come in addition to the new tariffs, which will go into effect on April 9.
But the biggest question about First Solar — and the American renewables industry as a whole — remains unanswered: the fate of the Inflation Reduction Act. The company benefits both from tax credits for advanced manufacturing and investment and production tax credits for solar power.
“Government incentive programs, such as the Inflation Reduction Act of 2022 (the “IRA”), have contributed to this momentum by providing solar module manufacturers, project developers, and project owners with various incentives to accelerate the deployment of solar power generation,” the company wrote in a recent securities filing.
If those tax credits are at risk, then First Solar may not be a winner so much as the fastest runner ahead of an advancing tide.