News and opinions on situation in Venezuela
Will Washington Tolerate A Chinese-Venezuelan Petro Pact?
Friday, January 14, 2005 – 06:03 PM ::: Posted by: Admin
The U.S.-Venezuela Oil Split Approaches A Boiling Point
Although Venezuela has long been one of the U.S.’s top four foreign suppliers of crude, relations between the two countries have grown quite acrimonious since the Bush administration’s tacit support of the failed coup against populist president Hugo Chavez in April of 2002. How the Bush administration has been dealing with Caracas repeats a well-known cycle to any student of U.S./Latin American relations: support of overt or covert coups against democratically-elected regimes eventually ignites a backlash of popular support for the embattled government against the “imperialist gringos.” This is likely to motivate Washington to even more aggressively back its favored opposition, generating an even stronger wave of popular backlash.
The crucial difference between the recent U.S. support of the middle-class opposition in Venezuela – mainly through the National Endowment for Democracy (NED) and the U.S. Agency for International Aid (USAID) – versus its earlier backing of the Somoza, Batista, Duvalier and Pinochet dictatorships, is that Washington can ill afford to antagonize the populist government from which it receives anywhere between 11% and 15% of its imported petroleum. This is one situation where Washington simply cannot risk an oil crisis for the sake of indulging the administration’s numerous nostalgic cold warriors, like Assistant Secretary of State Roger Noriega and Undersecretary of State John Bolton. But despite the Bush administration’s tacit support of the 2002 coup and the substantial funds that the NED poured into the failed recall referendum last August, Chavez has, so far, not given any indication that he intends to cut petroleum exports to the U.S. He did, however, tell Washington to not “even think about trying something similar in Venezuela,” referring to what he claims was Washington’s orchestrated coup against former Haitian President Jean-Bertrand Aristide in February, 2004. Should the U.S. follow this course, he optimistically observed that Venezuela “has enough allies on this continent to start a 100-year war,” and that “U.S. citizens could forget about ever getting Venezuelan oil.”
This dimension cannot simply be chalked up to the Chavistas’ heady nationalistic rhetoric or to Chavez’s frequent cheeky barbs against Washington. Rather, Chavez likely sees such a block as a defensive bulwark against any conceivable future U.S. intervention against him as well as a means of gaining the kind of steely international leverage that has been famously found in OPEC. Garrido continued, Venezuela “is not only buying Russian weapons to free itself from military dependence on Washington, but the government is also trying to get Venezuelans ready for a possible scenario of confrontation, as reflected by (Chavez’s) recent calls to prepare the reserve.”
of the Monroe Doctrine
Drawing a bead on the largest Western Hemispheric reserves would certainly represent a dicey move on Beijing’s part. Moreover, China’s recent initiative towards Venezuela comes at a time when Beijing has just recently indicated that it has similar designs on Canadian oil markets that today are dominated by the U.S. In other words, not only is Beijing poking its nose in ‘our backyard,’ but Washington’s front yard as well. The New York Times reported on December 23, 2004 that, according to Murray Smith, a former Alberta energy minister, “The China outlet would change our dynamic. Our main link would still be with the U.S., but this would give us multiple markets and competition for a prized resource.” How will Washington view Beijing’s initiative towards the US’s largest source of oil imports? The same Times story cited Calgary’s The National Post, which pithily editorialized, “Watch the Americans have a hissy fit if a Chinese incursion materializes . . . So far, the Americans have taken Canada’s energy for granted.”
Thus, the immediate short-term problem facing Washington from the Caracas/Beijing axis is two-fold; on the one hand, it cannot allow China to get too cozy with one of its closest suppliers, which may provoke Washington to exhume the Monroe Doctrine. On the other hand, Washington’s current policy of siding with the anti-Chavez opposition risks the very outcome Washington seeks to avoid; pushing Caracas into Beijing’s arms or precipitating an anti-Washington embargo. Given the seemingly unstoppable popularity of Chavez, who has, to date, won two presidential elections and a referendum – all with comfortable majorities – the first sensible thing Washington must do is cease its open courting of the opposition. After all, how would Washington policymakers feel if French Foreign Minister Dominique de Villepin spent millions of euros in support of a domestic opposition in the U.S., whose stated goal was the removal of President Bush from office?
If the NED intends to live up to its own charter, then it has to stop backing the egregiously undemocratic, even authoritarian methods of the opposition. Claiming that Chavez “must die like a dog because he deserves it,” former president and would-be leader of the opposition, Carlos Andres Perez, revealed his reverence for democratic ideals in an interview with the Caracas daily El Nacional last July: “We can’t just get rid of Chavez and immediately have a democracy… we will need a transition period of two or three years to lay the foundations for a state where the rule of law prevails . . . When Chavez falls, we must shut down the National Assembly (Congress) and also the Supreme Court.”
Some analysts are already predicting a global clash between the U.S. and China over oil reserves that could trigger a veritable casus belli. As stated by Gal Luft, executive director of the Institute for the Analysis of Global Security, in a recent editorial in The Los Angeles Times, “Without a comprehensive strategy designed to prevent China from becoming an oil consumer on par with the U.S., a superpower collision is in the cards.” Dr. Luft suggests the U.S. do everything it can to shift China in the direction of non-petro based energy supplies, such as hydrogen or natural gas. However, barring such a spectacular advance in the technology of harvesting hydrogen fuel cells or the like, China will need to look anywhere it can in order to satisfy its petro consumption demand.
So far, neither Chinese nor U.S. authorities have, at least publicly, anticipated anything like a global clash over energy sources. Reported by Stephanie Ho of AXcess News, Chinese Embassy spokesman Sun Weide said, “Of course, as our two economies continue to grow, we both need reliable and, I think, affordable energy supplies… So, there is very good basis for cooperation between the two countries.” But such optimism belies the fact that Washington is facing an almost certain intrusion into its oil markets by the world’s second largest petro importer. Though Beijing will somehow have to satisfy its energy demand, which grows annually at 7.5%, Washington will not look kindly on any such incursion into its traditional oil suppliers. As observed by Luft in The New York Times, “China’s gone after the low-hanging fruit so far. Now they’re entering another level of ambition, in places such as Venezuela, Saudi Arabia and Canada that are well within the American sphere.”
Washington could begin repairing its frayed relationship with Caracas by supporting what is bound to be a growing oil-based alliance between Caracas and Beijing. Given the near inevitability of this new alliance, Washington would be foolish to obstruct China’s economic growth by trying to dictate to Chavez where he can and cannot sell his country’s oil. Furthermore, just as many U.S. public figures are demanding that their government reduce its imports of Middle East oil, so too are Venezuelans urging Chavez to reduce his country’s traditional reliance on the U.S.’s oil consumption. Now that China is offering Chavez just that opportunity, the question is, will Washington tolerate a Sino-Venezuelan petro pact or begin dusting off the Monroe Doctrine?
Note: With China now making moves in the Canadian energy sector, it is important that we know the larger issues at hand. They will all play off one another.