What Chávez Wants with Us

Deflecting fresh evidence that his regime is hosting nearly 40 Colombian guerrilla training camps, Venezuelan dictator Hugo Chávez warned that in case of a yanqui invasion he would not send "another drop of oil to the United States." That sent a State Department spokesman to reassure Chávez that "we want our mutually beneficial energy relationship with Venezuela to continue."

Here are a few clues about what kind of relationship Chávez wants with us. He is waging an illegal proxy war against our ally Colombia, helping Iran evade international sanctions and continue its push for nuclear weapons, sending weapons to Middle Eastern radicals, fueling a costly regional arms race and abetting drug traffickers who operate in his country with impunity.

It is a shame that the only time our diplomats summon the courage to say anything about Venezuela it is to express the fervent wish that Chávez will continue to let us bankroll his rogue regime by buying his oil. What makes the U.S. response even more underwhelming is that Chávez is working relentlessly to find new markets for his oil so he can leave us high and dry. So, perhaps our government should stop coddling Chávez and get busy defending our economy and security.

Chávez's intentions are clear. Although official data on Venezuela's oil exports are notoriously unreliable, trustworthy experts reveal a dramatic drop in sales to the United States since Chávez took office. In 1998, we purchased about 1.74 million barrels a day of Venezuelan crude. That number slipped to 1.42 million by 2002, and is running about 950,000 per day this year.

The decisions by Venezuela's gasoline retailer Citgo to cut back on retailing and refining in this country confirms Chávez's plan to supplant the U.S. market by entering long-term strategic accords with China and other countries.

China's footprint in Venezuela's petroleum industry has increased dramatically since Chávez took power in 1998. Recent bids by Chinese companies in Venezuela's Orinoco belt "represent a significant leap forward in the quantity of Chinese investment in the country and the quantity of oil that the Chinese expect to extract," according to a report presented by Dr. R. Evan Ellis of the U.S. Army War College at a June 3 event organized by the University of Miami's Center for Hemispheric Policy.

A series of recent investments and loans totaling more than $44 billion will expand China's consumption of Venezuelan oil imports from 39,000 barrels a day in 2005 to a million barrels a day by 2012.

In addition to helping Venezuela build new tankers to carry its product to new markets, Ellis reports, China will begin construction this November on a $6 billion refinery in Guangdong province of China--the first of several being discussed--that is engineered specifically to refine Venezuela's unique heavy oil. A high-level delegation from the China Development Bank visited Venezuela in May 10-24 to tour facilities and oil fields where they intend to invest and to hammer out the terms.

Of course, it will take several years for these tankers or refineries to be completed, so, for now, Chávez is dependent on the existing Citgo refineries that serve the U.S. market. He knows that embargoing the United States would be an act of economic and political suicide. He already has run the economy into the ground and is selling off the country's future to China to raise fast cash. If he were to choke off U.S. oil revenue for political reasons, the Venezuelan people would probably run him from office.

Nevertheless, we should take measures to protect our economic interests.

  • First, as I counseled privately when I served as assistant secretary of state during the Bush administration, we should send a message to Chávez that if he disrupts the flow of oil to the United States we will respond by tapping the strategic petroleum reserve. The 700 million barrels of oil that we keep on hand for emergencies is the equivalent of two years of Venezuelan exports.

  • We also should encourage our oil companies and energy policymakers to work with Brazil, Colombia, Mexico and others to maximize their production and negotiate contingency plans to tap these sources in case of a Venezuelan embargo.

These simple steps will send the message that when Chávez threatens to cut off oil to the United States, he is playing Russian roulette with Venezuela's future.

After 10 years of watching Chávez at work, it is clear that he considers the United States a mortal enemy. It is time to rethink our "mutually beneficial" arrangement under which Chávez gets to wage war against us, and we get to pay for it.

Roger F. Noriega, a senior State Department official from 2001 to 2005, is a visiting fellow at AEI and managing director of Vision Americas LLC, which represents foreign and domestic clients.

Photo Credit: Agência Brasil/Creative Commons

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