By John Daly: The biggest geostrategic change of the past decade overlooked by
Washington policy wonks in their fixation on their self-proclaimed “war
on terror” is that Latin America has been throwing off the shackles of
the Monroe Doctrine.
These ignored developments may well soon refocus Washington’s
attention on the Southern Hemisphere, as Venezuela’s President Hugo
Chavez reorients his country’s to China.
It is not an inconsiderable element of concern for the Obama
administration. According to the U.S. Energy Administration, the United
States total crude oil imports now average 9.033 million barrels per
day, with the top five exporting countries being Canada (2.666 mbpd),
Mexico (1.319 mbpd), Saudi Arabia (1.107 mbpd), with Venezuela in fourth
place at 930 thousand barrels per day. Note that two of America’s top
four energy importers are south of the Rio Grande.
Furthermore, Venezuela’s reserves according to OPEC
now top those of Saudi Arabia, with Venezuela now estimated to have the
largest conventional oil reserves and the second-largest natural gas
reserves in the Western Hemisphere. Two years ago OPEC reported that of
the organization’s 81.33 percent of the globe’s known oil reserves
Venezuela had 24.8 percent, exceeding Saudi Arabia with 22.2
So, why is Chavez in Washington’s bad books?
Well, among other
reasons, for the company he keeps, as the Russian Federation, Iran and
Cuba are all allies. Note that the first two are also major oil
exporters.
Worse however are the social programs that Chavez has implemented to
benefit his people, which not only smack of socialism but offer an
alternative to Washington’s proscriptions. Case in point - Venezuela’s
health care system. A joint Cuban-Venezuelan medical program, “Barrio
Adentro,” has made health care free and accessible to all Venezuelans.
Founded in 2003, Barrio Adentro expanded Venezuela’s national health
care system by employing more than 30,000 Cuban medical professionals as
the government equipped clinics and hospitals with advanced high
technology diagnostic and surgical equipment.
Something that Americans might consider as the presidential race
heats up, with Medicare on the table. Such alternatives hardly please
the powers that be in Washington, but are increasingly considered in
Latin America.
But, back to energy. Despite the primacy of Venezuelan oil sales to
the U.S. Caracas is shifting gears, and China will soon to become
Venezuela’s main trade partner, with oil sales surging 60 percent in
2012.
During a recent interview Oil Minister Rafael Ramirez said, “We are
selling 640.000 barrels of petrol per day to China.” This is now
equivalent to 2/3 of Venezuela’s oil exports to the U.S., up from
400,000 barrels per day in February. For those with a sense of history,
before President Chavez took office in 1999, Venezuela did not ship oil
to China, but Chavez has stated that by 2015 he intends to ramp up
Venezuelan oil exports to China to one million barrels of crude per day.
According to Ramirez, the rise in exports will come from increased
production in the natural resource-rich Orinoco Oil Belt in the east of
the country.
It is hard to see this emphasis shift as anything but a short-sighted
diplomatic disaster for the U.S. Compounding the degradation of
Washington, which insists that China in Africa in particular exploits
poor nations by buying resources at rock bottom prices, Ramirez said
simply, "We are selling oil to China at a better price than what is sold
in the U.S. market.'' And, given Washington’s foreign aid stinginess,
last week President Chavez announced that China Development Bank will
bankroll $4 billion dollars in development projects, to include housing,
energy and industrial growth.
Again, those with a sense of history might note that the year Chavez
took office, Venezuela exported to the U.S. market 1.5 million bpd.
So, where does Washington go from here? If it wants to preserve its
increasingly tenuous foothold in a nation with the world’s largest oil
reserves, it might begin by engaging in some honest diplomacy.
And match Chinese rates of pay.
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