Thursday, April 24, 2008

How to screw Hugo Chavez and make the US more energy independent at the same time

Sounds like a tall order doesn't it? After all, we get about 1200k barrels of petroleum per day from Venezuela. But it is possible, it merely takes the will to do it. If the US acts now, we can squeeze that pimple on the ass of society until it spurts bloody pus. After all, the first step in healing is getting rid of the infection. Only the US is capable of refining the sulfurous tar that passes for Venezuelan crude oil in large amounts. So we merely need to stop buying his oil. within 6 months or less, Venezuela will have a new government. We merely need to be able to bring 1200k barrels of additional crude per day onto the market to replace that which we are embargoing from Venezuela. We have a number of possible sources for this, but it will require some lead time and planning to get it done, and unfortunately time is relatively short. We of course have the option of opening Florida, California, and ANWAR up for drilling. But that will probably be a minimum of five to ten years from large scale production. We could negotiate with Mexico or Brazil for them to send additional oil our way in return for technology assistance in bringing that oil to market, and possibly paying a premium for social programs and assistance.
Brazil is especially attractive because they do not have the technical capability to bring their oil to market. They also have recently found a number of very large oil and gas reservoirs in deep water off the Brazilian coast.

If we can further pacify and stabilize Iraq, we could also increase our oil purchases from them. Iraq is sitting on reserves that approach those of Saudi Arabia. The limitation has been the pacification of the country.

So as you can see there are a number of short and longer term solutions that could be implemented to accomplish this task. And we do not have to completely embargo his oil, merely buy as much as we can obtain from other sources, thereby reducing the amount we buy from Chavez. This will of course severely impact the amount of money flowing into his country. Without money flowing in, he cannot pay for the social programs that up until now, have endeared him to the low income populace of that country. If that money were to dry up, Chavez will find himself still standing when the music stops, and that will not end well for him.

I said earlier that time was short. The reason is that as of now, we are the only country that can utilize a large amount of his oil. That will be changing in the next decade or so. Both France and China currently can refine only a small fraction of his available output, but in the next decade or so, that heavy sour crude refining capacity will increase, making our ability to exercise our options that much harder. We should be working now to increase our ability to influence Venezuela's politics, because if we do not deal with Hugo now, we will have to deal with him later. it is better to deal with a problem when you have the ability to do so, instead of waiting until the problem is much bigger and less amenable to being dealt with.


Anonymous IJ said...

I'm afraid we don't even have the political will power to have stare at a giant Citgo sign when we enjoy our national past time (courtesy of nohatnocattle):

April 24, 2008 7:54 PM  

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