My purpose in posting these articles here is to enable us to have a better understanding of what's happening in Venezuela today. While I've had no particular desire to politicize this website, I believe that we also need to recognize the fact that many of our fathers worked hard in the oilfields and corporate oil company offices of Venezuela - they worked hard not only to provide for their families, but they also worked hard to help improve the Venezuelan petroleum infrastructure for the Venezuelan people. Much of that infrastructure, along with the legacy of so many of our fathers, is now being systematically destroyed. So I strongly believe that we have an obligation and responsibility to educate ourselves and to keep ourselves informed about the tragedy that's unfolding in Venezuela today.

Some of these articles are somewhat lengthy, but they're also extremely sobering. READ THEM! Remember that KNOWLEDGE IS POWER. Refer others who lived and worked in Venezuela to this page, or to other pages that inform the reader about the tragedy that's unfolding there today. Inform and educate yourself first, then inform and educate others. The people of Venezuela deserve far better than what they're now getting under the oppressive Chávez regime. If they choose to walk away from Venezuela as so many Cubans had to do when they were forced to leave Cuba under Castro, then Chávez will not only be even more of a disaster for Venezuela than he already has been, but he will also prove to be a cancer for all democratic countries throughout the region and the world for many years to come.

It's my sincerest hope that Venezuela and her people will be able to rise to the historic challenge that's now facing them and that they may triumphantly overcome this profound tragedy.

As new items become available, I'll post them here.

“Christmas Wish”

Posted Monday, June 25, 2007

Posted Monday, April 17, 2006

Posted Monday, March 20, 2006

Posted Saturday, March 4, 2006

Posted Sunday, January 15, 2006

Emma Brossard: “Down Falls the Bridge -- Likewise Chávez”

In the wee hours of Thursday, January 5, 2006, the Hugo Chávez government closed the 11-mile, four-lane highway (Autopista) linking Caracas to the Caribbean coast. The No. 1 Bridge (Viaduct), located at kilometer 4, over the Tacagua Creek is collapsing! Of the three bridges on the autopista Caracas-La Guaira, No. 1 and No. 3 were declared in immanent danger, by Japanese experts, in 2000. The condition of Bridge No 1 was known since 1987, i.e., for 18 years. In 1997, two years before Chávez became President of Venezuela, the Caldera government realized that Bridge No 1, could not be repaired, and they needed to build a new parallel bridge at a cost of $280 million. Now, Chávez is promising to build a “temporary” bridge to be completed next month, February 2006, and a permanent replacement to be completed in 2007. As they say in Venezuela, “Si como no.”

The closing of the Autopista from Caracas to La Guaira is a calamity. It threatens to disrupt the Venezuelan economy. The Autopista represents the lifeline between Caracas and the outside world. It connects domestic and international travelers with Simon Bolivar International Airport, and both imports and exports go through the Airport and the Port of La Guaira. La Guaira handles about 40% of Venezuela’s ocean shipping freight. Venezuela imports more than half of its food. And, some 50,000 cars use the Autopista every day, and on weekends, with the beach goers to Vargas state, this number used to double. The small coastal state of Vargas, surrounded by a mountain range, is now practically shut-off from the rest of Venezuela.

Before Chávez (BC), Venezuela was a country with a modern economy and a comfortable life for many. Now, Venezuela is a country ranked in the repressed category of countries, with decreasing per capita income, lack of personal safety as criminals roam free, with increasing shortages (even coffee, which it used to export before the discovery of oil), a country of pot holes, with its infrastructure collapsing. As Chávez has been overseeing all this destruction, he has been giving away Venezuela’s patrimony and resources. With the closing of the Autopista, Venezuelans are writing and reciting a litany of Chávez’s gifts to other countries.

To list just a few of his recent foreign gifts in 2005: Two days before closing the Autopista, Chávez presented Evo Morales, the new President-elect of Bolivia, all the diesel oil Bolivia needed. Chávez added, “I will not accept that you pay me ‘un centavo’ in payment.” The Venezuelans took note of the “pay me,” as if the country’s oil was his! Cuba is at the top of the list in receiving Venezuela’s riches, principally in the form of 90,000 barrels per day (b/d) of oil, which amounts to a subsidy of $1.3 billion per year. With Argentina, Chávez purchased $800 million in Argentine bonds, with a new request from President Kirchner that Chávez buy an additional $3 billion in bonds. Under Chávez’s PetroCaribe agreement, he is promising to supply the Caribbean islands with 185,700 b/d of subsidized oil, which would cost Venezuela some $600 million per year.

Jamaica has become of special interest to Chávez. As Bridge No 1 was collapsing, Chávez was finalizing a $300 million loan to Jamaica to jump-start the Ocho Rios leg of Highway 2000, as well as finance a major island-wide road repair project.

How ironic! And, Chávez has Petroleos de Venezuela funding (50% of $500 million) the upgrading and expansion of Jamaica’s Petrojam refinery. On and on it goes, in every country Chávez visits he gives away Venezuela’s patrimony and raises Venezuela’s national debt from $23 billion in 1999 (when he came to power), to $50 billion, in 2006.

Then there are the billions of dollars he is spending on arms: from assault rifles, to helicopter gun-ships and guided-missile frigates. This arms build-up is to be used against the United States and the democratic governments of Latin America, utilizing multiple military and non-military strategies. Chávez last month signed a $2 billion military contract with Spain, to purchase air transport planes to carry Venezuelan and Cuban troops. Where to?

The superhighway between Caracas and the port of La Guaira was begun in 1950, and inaugurated by President Marcos Perez Jimenez on December 2, 1953. The next day, along with many Caraqueños, I rode down this highway with my small son Todd and my husband, to marvel at this remarkable $71 million Autopista to the seashore. That December, Perez Jimenez inaugurated 450 projects costing $265 million. In addition to the superhighway, he inaugurated a network of highways in Caracas including the Autopista del Este, 63 schools in Venezuela, low-income housing projects, and hospitals, all part of his “new national ideal.”

This is quite a contrast to the government of Hugo Chávez, which has neglected or contributed to the destruction of these public works, and has no credible public work to his credit in seven years of ruling.

The most impressive engineering project ever undertaken in Venezuela starts at sea level and climbs gently with grades of 4% for 11 miles to reach the valley of Caracas, 3,000 feet up. Mountains were cut open or pierced for two twin tunnels, ravines were filled for embankments, and creeks were spanned by three bridges, for a 70-feet wide highway, with a 5-feet dividing central zone, and 8 ½ feet wide shoulders. The design and execution of the entire project was carried out by Venezuelan engineers of the Ministry of Public Works. The tunnels were designed by Smillie & Griffen of New York, and built by Morrison and Knudsen of Boise, Idaho. The bridges were designed and constructed by Campenon Bernard of Venezuela, affiliated to Enterprises Campenon Bernard of France.

The bridges are of pre-stressed concrete, using only 4% steel, and 96% cement. No. 1, the longest bridge, and currently broken, has a length of 991 feet, and a width span of 499 feet, and rises 230 feet above the bottom of the chasm. The foundations on the southern bank of the creek presented problems, and excavations as deep as 88 feet had to be made, until rock stability was found.

Unfortunately, the surrounding mountains became full of shacks (ranchos), without proper water drainage or trash removal, so tons of waste and water weaken the rock and with the rainy season serious landslides have weakened the bridges and the highway. Slums were even created below the bridge, where hundreds of families live, and now must be “re-located” by the Chávez government to free public housing in Caracas.

When built, the three bridges cost $5 million, and the two twin tunnels bored through rock cost $20 million. Engineers had to open 36 miles of secondary roads through the mountains, to supply access to the main construction areas.

This marvelous engineering project was compared to the Panama Canal and it changed our lives in the 1950s. We could zip from Caracas down to the coast in 15 minutes. Not only our standard of living and commerce improved, but also there were unbelievable new pleasures. I was able to pack a lunch and take my two small sons down to Playa Grande, enjoy an empty beach in the middle of the week, and be back home in Caracas by 3 or 4 P.M.

After January 5, Caraqueños no longer can go to their favorite beaches or to their condos on the coast. Previously, Caracas on weekends was desolate, because everyone with a car or bus ticket was at the beach. For the past 50 years, since the Autopista opened, the beach has been the family outing. With the deterioration of this remarkable highway and the heavy traffic, however, the trip took 30 minutes or more..

Venezuelans and foreigners alike will have to use the Old Road, which the Autopista replaced. This curving road -- with 395 curves -- 19 miles of dangerous 12% grade, only 22 feet wide road was completed, in 1845. It takes two hours or more to drive, and winds over the mountains through some of Venezuela’s most crime-ridden slums. It is so dangerous that taxi drivers triple their fares to take passengers from Caracas down to the airport. This Old Road will add heavy costs to transportation costs on goods going up from the airport or port to the Caracas Valley. There are several other longer routes but often impassable and difficult, like the rustic Galipan route over the Avila Mountain, when it does not rain; or the Carayaca--El Junquito road that is very narrow and takes 4 hours. There is the La Carlota airfield in Caracas, but Chávez closed it for personal reasons. This leaves the Old Road, with its many landslides and criminal attacks, and all the Crosses along the road for all the people who have died on this road.

It is going to be a nightmare that is going to bring down Chávez. He and the Venezuelans will remember Los Reyes Magos (Three Kings) 2006 in history, as “down falls the Bridge -- likewise Chávez.” (Abajo el Viaducto, tambien Chávez) Hugo Chávez’s days of stirring up revolutions and violence throughout Latin America will end, and Venezuela’s oil will no longer fund Chávez’s friends and partners. Who would have thought? Maybe soon those in charge will start to pick up the mountains of garbage in the streets of Caracas.

Emma Brossard, Ph.D. is well known for her work in the oil industry in Venezuela and her writings, her book "Power and Petroleum: Venezuela, Cuba and Colombia, A Troika? " was published in late 2001, and another book on Venezuela's think tank, "Intevep The Clash of the Giants", in 1993. Between 1985 and 1994, she was an adviser to the Presidency of PDVSA and its affiliates. Petroleumworld not necessarily share these views.
Editor's Note: All comments posted and published on Petroleumworld, do not reflect either for or against the opinion expressed in the comment as an endorsement of Petroleumworld. All comments expressed are private comments and do not necessary reflect the view of this website. All comments are posted and published without liability to Petroleumworld.
Petroleumworld encourages persons to reproduce, reprint, or broadcast Petroleumworld Editorial articles provided that any such reproduction identify the original source, http://www.petroleumworld.com and it is done within the fair use as provided for in section 107 of the US Copyright Law

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Petroleumworld News 01/10/06
Copyright©2006 Emma Brossard All rights reserved

Posted Sunday, November 6, 2005

TV2 Norway Is Not Fooled By The Demagoguery of Chávez

These are 3 interesting videos from channel TV2 of Norway, which is the most-watched station in Norway. Click on each image to see the video:

•  Video 1: Where is the petroleum money going? This video shows the corruption that exists under Chávez today and the fact that the money certainly isn't improving medical services for the poor as Chávez so righteously claims & despite the massive influx of Castro's doctors (23 OCT 2005) - 6.8 Mb;

•  Video 2: Despite Venezuela's oil wealth, unemployment, chaos, & misery have increased under Chávez (28 OCT 2005) - 8.6 Mb:

  •  Video 3: This video shows Chávez's extreme paranoia and how he uses his imagined "threat of assasination" to his advantage as a political tool with the uninformed masses (FEB 20, 2005) - 8.5 Mb:

Posted Thursday, November 3, 2005

Jesse Jackson and Danny Glover Promote Racial Conflict In Venezuela

Gustavo Coronel

October 8, 2005

As a happy adolescent in the small town of Los Teques (20 miles west of Caracas) two of my best friends were Federico Escobar and José Landaeta. Escobar was known as El Negro Federico, because he was ebony black. Landaeta was called El Chino Landaeta because he had strong Chinese features. They are long dead now but I still remember both with great love. All my life in Venezuela I have freely interacted with people of all shades of color without ever giving too much thought to the racial issue. After all, Venezuelans are almost all brown; very few are pitch black or snow white. My first conscious encounter with race came when I was traveling from New York to Tulsa in a Greyhound bus to enter university, in 1951. My traveling companion was a black soldier and we had been talking non-stop when, at a point in time, he stood up and moved to the back. I thought I had said something to offend him but the reason was different: we had crossed the border into Missouri and blacks could no longer ride in the forward section. Many years later, while living in Lafayette, Louisiana, I was asked to fill out a form for the school of my children, stating their racial composition. I wrote: "white 27%, black 18%, Indian 50%, other 5%." The day after, I was asked to go and talk to the Principal. She wanted to meet the person who had written such an unorthodox description.

Back in Venezuela, in the oil industry, I worked side by side with blacks, browns, whites and considered most of them friends and even family. Those I did not get along with had ideas or attitudes I did not share but not a color I did not accept. As a typical member of the Venezuelan middle-class and living in a country that for many decades, from the 1940's to the 1990's, was a wonderful example of social mobility and fluidity, race played no role in my life. Negrito, mi negra, were and are words of endearment in our Venezuelan social dictionary. We are used to attach descriptive nicknames to people without a pejorative meaning. El flaco means the thin one. El gordo means the fat one. El camello, the camel, refers to someone slightly stooped. El gato, the cat, is usually someone light on his feet or with yellow eyes. We never mean to say that those so called are brutes or animals.

In mentioning this, I just wanted to illustrate the atmosphere that prevailed in Venezuela for many decades . . . until Hugo Chávez took over in 1999. Then, things changed.

In a very long and sugary article by Nicolas Kozloff for CounterPunch ("Hugo Chávez and the Politics of Race") Chávez is described as a "pardo . . . someone of mixed racial roots." The article adds: "Chávez's features are a dark-copper color and as thick as clay; he has protruding, sensuous lips. . . . His hair is black and kinky. . . . With a long, hatchet-shaped nose and a massive chin and jaw." When he arrived at the military academy Chávez had an Afro. He was poor and he married a poor woman. His education was not good, his economic situation not so bright. Chávez had limited possibilities to move up in the Venezuelan social scale, not because he looked the way he looked but because he did not have the required skills. People like him, of modest origins, but who attended the university and graduated as medical doctors, lawyers or geologists made it up the social end economic ladder in a much more fluid manner. As he could not do this, Chávez became resentful. He blamed the social system or his looks for his lack of success. This started him on the way to become a traitor to his oath as a soldier, on the way to use the guns given to him to defend the constitution and democracy to try to overthrow the democratic government of Carlos Andrés Pérez. He failed in his attempt, although he caused hundreds of innocent deaths, due to his military ineptness and his personal lack of courage. However, the desire of Venezuelans for political change brought him to power, through elections, six years later.

Once in power Chávez decided to get even. He started to promote social and racial hate, attacking the "Oligarchs" (the white and rich minorities) and incorporating racial components into his arsenal of hate words. In doing this Chávez has become the top racist in Venezuela. His presidency has become a war against the rich, the educated, and the ones who are high in the social ladder. To claim, as he does, that racism and social exclusion are only exercised against blacks and Indians is stupid. In fact, they are being exercised in Venezuela, today, against the light skinned and the upper and middle-classes.

In following this strategy of racial hate Chávez has found several willing partners in the U.S., people who are either looking for money from him or share the social resentment and psychological deformations that Chávez has brought to the Venezuelan political and social scene. Two of the most prominent Chávez allies, according to the article by Kozloff, are Jesse Jackson and Danny Glover?. What Kozloff fails to add are the motivations behind this alliance. I think that what mostly moves Jackson is money and what mostly moves Glover is resentment. Jackson has a long record of using racial conflict as a means to extort money from large U.S. corporations and now figures that the Venezuelan scene could be a new gold mine for him and his Rainbow/PUSH coalition. Glover is a bitter man who wears his blackness as a cross, in spite of his success as a Hollywood actor and his buoyant economic status.

This alliance of Chávez, Jackson, and Glover should not be underestimated. They seem to have agreed on a rather perverse and hypocritical plan, already in motion at this moment in time and promising to bring great confusion to U.S. society and more poverty to Venezuelan society. The plan has two main components: one, handing out to U.S. poor citizens and racial minorities, cheap oil, as a means to "prove" that Venezuela is generous and Chávez is good and, of course, that the U.S. is mean and Bush is a monster ("Venezuela promises cheap oil to poor Chicagoans," The Chicago Tribune, October 13, 2005 and "Rainbow/PUSH event draws actor Glover, Venezuelan ambassador," Chicago Defender, October 14, 2005). The other, to intensify the racial hate in Venezuela, to convert the revolution into an all-out fight between the colored and the whites. Let us consider these two components:

1. Venezuela giving cheap oil and free medical attention to poor U.S. citizens, members of the black and Indian communities, might sound like a wonderful idea to those who might benefit from this plan and to those who hate the U.S. and love any initiative that promises to antagonize their favorite enemy. But the actions by Chávez are not only self serving, a strategy to gain sympathy among the U.S. poor but also criminal since, whatever help is given by Venezuela to foreign citizens, has to be done at the expense of the tragedy of the 85% of poor Venezuelans who are worse off today under Chávez than before he arrived in power. You see, Venezuelans today are dying for lack of proper medical attention and medicines in State hospitals, they are not being educated to become self starting citizens, they are being subjected to a policy of handouts which has already converted them into a parasitic society. Venezuelan streets are full of garbage, crime is rampant, and corruption is at an all time high. Venezuelan society is in ruins. Is it logical to believe that Chávez would be bringing relief to the U.S. poor as an altruistic initiative? No one should be fooled into believing that this is an altruistic initiative. This is fraudulent political propaganda, one that will only benefit Chávez and whoever assumes the role of "distributing" the oil among the poor. We suspect that Jesse Jackson would play a big role in this "distribution," due to his strength in the Chicago area, although TransAfrica Forum, the organization where Glover is Chairman, also wants to participate.

2. Promoting racial strife and hate into Venezuela. Bill Fletcher, the president of TransAfrica Forum, said to Kozloff: "I feel that black issues need to be injected into [Venezuelan] politics." Fletcher has been in Venezuela only once, for a few days, invited by Chávez all expenses paid. During his brief visit to my country, Harvard educated Fletcher, hardly a New Orleans evacuee, did not lose anytime to compare Chávez with Martin Luther King (when, in fact, he is closer to the dark side of Malcolm X). I have to ask Bill Fletcher, who is a very civilized person: Why do you feel that racial issues have to be injected in a society that never had the type of racial tensions that you might have experienced in the U.S.? Why do you have to export to my country your bitterness, your hates, your frustrations, and your inferiority complexes? I have to warn Bill Fletcher and his colleagues that, by intervening in Venezuela with their imported racial hang ups, they might be doing the equivalent of what European travelers did, bringing small pox into the New World. With one difference: Fletcher and his friends will be doing it consciously.

I am seriously worried about the degree of criminal intervention that foreigners are practicing in my country: Cuban mercenaries, Nicaraguan rapists, Bolivian cocaleros, U.S. social and racial profiteers, European and Latin American ideologues and fanatics, fascist relics, communist fossils, Muslim extremists and radical Islamics, Colombian narco-terrorists. All the intellectual refuse of the globe seems to be descending on my country, invited by a grotesque, semi-illiterate dictator, with their travel expenses paid with the money that is not Chávez's but ours.

I say to Jackson, Glover and all the rest: hands-off my country. Have the decency to leave us Venezuelans sort out our own problems. Do not try to make a buck at the expense of our tragedies. Concentrate on the problems that you think you have at home.

Posted Sunday, October 9, 2005

The Oil Bubble

October 8, 2005

We keep hearing the word “bubble” to describe industries with rapid and unsustainable rising prices. Hence, the Internet bubble, the telecom bubble, stock market bubble, and now, some analysts believe, a housing bubble. Yet for some mysterious reason no one speaks of the oil bubble -- though prices have tripled in two years to as high as $70 a barrel.

Reviewing the history of oil-market boom and bust confirms that we are in the midst of a classic oil bubble and that prices will eventually fall, perhaps dramatically. Despite apocalyptic warnings, the world is not running out of oil and the pumps are not going to run dry in our lifetimes -- or ever. What's more, the mechanism that will surely prevent any long-term catastrophic shortages in energy is precisely the free-market incentive to make profits that many politicians in Washington seem to regard as an evil pursuit and wish to short circuit.

The best evidence for an oil bubble comes from the lessons of America's last six energy crises dating back to the late 19th century, when there was a great scare about the industrial age grinding to a halt because of impending shortages of coal. (Today coal is superabundant, with about 500 years of supply.) Each one of these crises has run almost an identical course.

First, the crisis begins with a spike in energy prices as a result of a short-term supply shock. Next, higher prices bring doomsday claims of energy shortages, which in turn prompts government to intervene ineffectually into the marketplace. In the end, the advent of new technologies and new energy discoveries -- all inspired by the profit motive -- brings the crisis to an abrupt end, enabling oil and electricity markets to resume their virtuous longterm downward price trend.

The limits-to-growth crowd has predicted the end of oil since the days when this black gold was first discovered as an energy source in the mid-19th century. In the 1860s the U.S. Geological Survey forecast that there was "little or no chance" that oil would be found in Texas or California. In 1914 the Interior Department forecast that there was only a 10-year supply of oil left; in 1939 it calculated there was only a 13-year supply left, and in 1951 Interior warned that by the mid-1960s the oil wells would certainly run dry. In the 1970s, Jimmy Carter somberly told the nation that "we could use up all of the proven reserves of oil in the entire world by the end of the next decade."

We can ridicule these doom and gloom predictions today, but at the time they were taken seriously by scholars and politicians, just as the energy alarmists are gaining intellectual traction today. But as the late economist Julian Simon taught, by any meaningful measure oil (and all natural resources) has gotten steadily cheaper and far more bountiful in supply over time, despite periodic and even wild fluctuations in the market.

* * *
If gasoline cost today what it cost a family in 1900 (relative to income), we would be paying not $3 but $10 a gallon at the pump. Or consider that in 1860 oil sold for $4 a barrel, or the equivalent of about $400 a barrel in today's wage-adjusted prices. The first of a continuous series of innovations, in this case the invention of modern drilling techniques in 1869, cut the price by more than 90% -- to 35 cents a barrel.

Fifty years ago people would have laughed out loud at the idea of drilling for oil at the bottom of the ocean or getting fuel from sand, both of which were technologically infeasible. The first deep-sea oil rig went on line in 1965 and drilled 500 feet down. Now these rigs drill two miles into the ground -- and miraculously, the price of extracting oil from 10,000 feet deep in the sea bed today is approaching the cost of drilling 100 feet down from the richest fields in Texas or Saudi Arabia 40 years ago.

This spectacular pace of technological progress explains why over time the amount of recoverable reserves of oil has increased, not fallen. Between 1980 and 2002 the amount of known global oil reserves increased by 300 billion barrels, according to a survey by British Petroleum. Rather than the oil fields running dry, just the opposite has been happening. In 1970 Saudi Arabia had 88 billion barrels of known oil. Thirty-five years later, nearly 100 billion barrels have been extracted and yet the latest forecast is that there are still 264 billion barrels left -- although the Saudis have never allowed independent auditors to verify these numbers.

In this industry, alas, bad news tends to crowd out the good. When Shell announced earlier this year that its oil and gas reserves were down by 30%, there was a global outcry. But when Canada announced in 2004 that it has more recoverable oil from tar sands than there is oil in Saudi Arabia, the world yawned. There is estimated to be about as much oil recoverable from the shale rocks in Colorado and other western states as in all the oil fields of OPEC nations. Yes, the cost of getting that oil is still prohibitively expensive, but the combination of today's high fuel prices and improved extraction techniques means that the break-even point for exploiting it is getting ever closer.

The energy Malthusians counter that China, India and other nations will satisfy their growing appetite for oil by driving demand and prices ever higher. In the short term, yes. But over the longer term, as the Chinese become more prosperous through free markets, China will become vastly more fuel efficient and also help discover new sources of energy.

America produces twice as much output per unit of energy consumed as it did 50 years ago. Liberals who say we need government to intervene in the energy markets, to patch the alleged failings of the free market, fail to comprehend that the command-and-control economies of the last 50 years have been far and away the biggest wasters of energy (and the biggest polluters). South Korea produces about three times as much output per kilowatt of electricity as North Korea does.

This is no call for complacency or inaction in the face of very high energy prices; it's a call for realism. Higher prices for gas and fuel for home heating have cost the average U.S. family about $1,500 to $2,000 a year. (Thankfully the Bush tax cuts have given back about precisely that amount in lower tax payments to the IRS.) The tax on the American economy from higher oil prices has reached $300 million a day and has chopped nearly a percentage point off GDP growth.

* * *
Our point is that the constraints on our ability to find and extract new oil are not geologic or scientific. The real constraints on oil production are barriers created by government. Myron Ebell, an environmental analyst at the Competitive Enterprise Institute, notes that roughly 90% of the oil on the planet rests under government-owned land and these resources are abysmally managed.

In the U.S., environmentalists have erected myriad barriers to drilling for new sources of oil. The American Petroleum Institute estimates that there are at least 100 billion barrels that are fairly easily recoverable in Alaska and offshore that oil companies are not permitted to exploit. Once, we could afford the luxury of not drilling there. Now, thanks to a witch's brew of unforeseen circumstances -- political turmoil in the oil producing countries, China's surge in demand, and hurricanes that have knocked out Gulf refineries -- it's an economic and national security imperative that we do.

Here's one simple idea to increase the domestic supply of oil: Have Uncle Sam share its oil-drilling royalties with the California government. If Californians realized they could go a long way to solving their deficit and overtaxation problems by raising billions of these petro-dollars, the aversion on the left coast toward offshore drilling might well begin to subside.

We will assess at another time the many dreadful ideas -- price controls and "windfall profit" taxes -- that Congress is considering to deal with the energy crisis. But for today it is sufficient to note that the free market will deliver oil, electricity and other forms of energy at declining prices in the future, if only the government will let the market's benign and productive forces work their magic.

Posted Tuesday, July 19, 2005

Chávez's Bold Move: Politicizing The Armed Forces

Jul. 14, 2005

By ANDRES OPPENHEIMER

aoppenheimer@herald.com

The most lasting impact of Venezuela's leftist President Hugo Chávez's self-proclaimed revolution may not be his incendiary speeches against U.S. “'imperialism” nor his daily praise for the Cuban dictatorship, but something that has drawn much less attention -- the politicization of Venezuela's armed forces.

On Tuesday, at the swearing-in ceremony of his new defense minister, Orlando Maniglia, Chávez proclaimed that Venezuela's armed forces are “anti-imperialist and anti-colonialist”, and thus opposed to U.S. policies in the region. “The Venezuelan armed forces are at the heart of the revolution -- alongside the people”, he added.

At another ceremony days earlier, in which he decorated 96 Cuban “internationalist” teachers, Chávez stated that “The Cuban and Venezuelan revolutions are already one and only”, and will defend one another against a potential U.S. invasion, the daily El Universal and the Reuters news agency reported Saturday.

U.S. officials deny any plans to attack Venezuela, and say the idea exists only in Chávez's mind. While Chávez's increasingly belligerent rhetoric is nothing new -- in fact, his revolutionary fervor seems to be directly proportional to the price of oil, which has risen from $9 per barrel when he took office in 1999 to $61 today -- he is taking dramatic steps to restructure the Venezuelan armed forces, which may haunt what is left of Venezuela's democracy for decades to come.

'“People don't take him seriously, but he has been doing everything he said he would do”, says Alberto Garrido, a Venezuelan writer specializing in military affairs. “Chávez has tried to give this process a folkloric connotation, but it isn't folkloric at all.”

TROUBLING SIGNS

Consider the most recent developments:

• On July 5, on Venezuela's Independence Day, Chávez announced creation of a “Territorial Guard”, a force that will be made up of armed civilians fighting clandestinely who will report directly to the president. Pro-Chávez legislator Néstor Leon Heredia was quoted by the Venezuelan press as saying that the new force is modeled after the Iraqi resistance.

• Last month, Chávez announced expansion of the military reserve, currently up to 100,000 civilians, to 500,000 civilians in the short run and eventually to 2 million people. The military reserve reports directly to Chávez. Armed forces commander Armando Laguna has said the Navy conducted its first military exercise with civilians June 15.

• Chávez has resumed wearing a military uniform after nearly three years. He had ended the practice at the request of his former high command, who had asked him to don civilian clothes after a 2002 aborted coup. Those generals have since been retired.

• Chávez has recently changed the armed forces' traditional camouflaged uniform to adopt a Chinese-style one-color garment. He has incorporated the red beret -- the trademark of a 1992 coup attempt he led -- in elite units.

• Simultaneously, Chávez has purchased 15 Russian Mi-17 attack helicopters, more than 100,000 Russian AK-103 rifles, 10 troop transport aircraft and eight navy patrol boats from Spain, and 24 Super Tucano light attack planes from Brazil. Venezuela is also reportedly negotiating the purchase of up to 50 Russian-made MiG-29 planes.

Garrido says Venezuela is embarked on a continental revolutionary project, shared with Cuba. “Under this new military doctrine, the traditional armed forces no longer have the monopoly of the right to wear weapons. Instead, that monopoly is shared by three different levels: the traditional armed forces, the civilian reserve and the armed citizens' Territorial Guard”, he said.

While Garrido thinks Chávez may have reasons to believe that a U.S. attack may be coming, most Venezuelan and U.S. critics of Chávez say his motives are totally different: creating a police state.

DEATH SQUAD

“The Territorial Guard is being created as a death squad, a terrorist and killing apparatus, covered up by the impunity it would get from its direct dependence from the head of state”, said Oswaldo Alvarez Paz, one of the few remaining opposition state governors.

My conclusion: If Chávez means to do half of what he says, his transformation of Venezuela's armed forces -- and distribution of weapons to civilians -- will haunt Venezuela for decades to come, no matter how long he stays in power or who succeeds him.

Posted Friday, May 20, 2005

Oil Wells Refuse to Obey Chávez Commands

May 20, 2005

“We have a little problem,” Venezuelan President Hugo Chávez reportedly told Venezuelans on May 3, “and we are fixing it.”

The “problem” is the drop in output by the Venezuelan state-owned oil company known as PdVSA. The Chávez fixes, thus far, have entailed sending military troops to the oil-rich west of Venezuela to investigate "management errors" and allegations of sabotage, while in Caracas the government is threatening foreign oil companies with contract cancellations and tax hikes.

For most chavistas this may suggest that the whole stink about Venezuela's oil industry's underperformance is about to be resolved. Yet it is likely that the magnitude of the drop in petroleum output is a lot bigger than what Chávez has described. It is equally probable that a military invasion of PdVSA and property confiscations in the private sector won't fix it. Statist economic policies have a sorry productivity record and in this case that record is highly unlikely to be improved.

The big trouble is that Chávez has put Venezuela on a centrally planned economic path not much different from the failed experiments of the 20th century. Indeed, last year he declared that Venezuela was preparing for "the great leap," a seeming reference to Maoist China's 1950s agricultural policies that spread famine. Maybe his books about Chairman Mao never mentioned that disaster.

Closer to home, Chávez emulates Fidel Castro, who once commanded that a 10-million-ton sugar harvest spring from the soil. Fidel also promised to clone a prolific wonder-cow called "Ubre Blanca," so that Cuba would promptly rival Switzerland in cheese yields. Almost 50 years into the revolution, Cuba still isn't Switzerland and milk is a luxury. Venezuela is on the same trajectory.

Chávez has at least one thing right: Tight control of the country's political agenda requires tight control of the country's economy. In Venezuela , that means controlling PdVSA.

PdVSA was born in 1976. Until the Chávez government came to power in 1999, the company made some effort to be politically nonpartisan. Getting a job at PdVSA required business, engineering or technical know-how, not political connections.

That has changed. Not content with just the golden eggs, Chávez wanted the goose. As he began to consolidate his power, he began politicizing both the management and labor arms of the company. That prompted a 66-day strike by employees on Dec. 2, 2002, which brought production levels as low as 150,000 barrels per day (b/d). When the strike ended on Feb. 4, 2003, 18,000 workers were let go, taking the skills and knowledge necessary to run the company with them. PdVSA has never fully recovered.

Today Chávez claims that production is down by a mere 200,000 b/d for a daily output of 3.1 million barrels. Industry experts dispute this and this month critics grew more vocal.

On May 4, Alberto Ramos, an analyst for Goldman Sachs' Emerging Markets Economic Research, noted that since the strike local and international oil analysts have consistently put PdVSA production some 500,000 to 600,000 b/d below government claims. “Such level of production is also corroborated by production statistics published by OPEC and other international energy agencies.”

Venezuela's El Nacional (a daily newspaper) Web site issued a similar report on May 15 -- according to a translation by BBC Monitoring Americas: “An extensive survey of oil industry engineers, geologists, geophysicists and experts indicates that corrective measures have not been taken and the decline in Venezuelan oil production is nearing 1,000,000 b/d. This drop, coupled with a shortfall of associated natural gas, creates an alarming situation with the foreseeable consequence of diminishing crude oil extraction.”

In his report, Mr. Ramos also noted that “several oil analysts” attribute the company's inability to return to pre-strike levels of production to “corruption, mismanagement, inadequate investment levels, sloppy maintenance, and lack of qualified technical personnel.”

Maintenance, management and qualified personnel can be traced to the strike and the layoffs. It is also possible that disgruntled employees are not toiling as they did when they felt they were measured by their work, not their politics. Yet human capital is but one factor of production. Investment is also scarce and likely to grow scarcer as Chávez puts the squeeze on foreign oil companies.

Since being named president of PdVSA, Chávez ally Rafael Ramirez has been working to expand the company's control of the entire industry. On May 6, the research firm Oxford Analytica reported the government is arm-twisting to force the conversion of 32 foreign company contracts into joint ventures that will give the government 51% ownership. The newsletter also said that the government wants -- as prescribed by Chávez -- to raise income taxes on foreign oil companies to 50% from 34%. On Tuesday, Reuters reported that Venezuelan tax authorities "held a second round of talks with seven foreign oil companies, including units of Chevron and Shell" on the matter. The government has also said it will no longer pay foreign oil firms in dollars.

Added to the drain on human and financial capital, are serious internal problems that this power grab is producing at PdVSA. Oxford Analytica writes that Mr. Ramirez fired 30 “Chavista managers” on corruption grounds soon after he took over his post -- although he did not present proof.

Oxford Analytica said that the move was “interpreted inside the Chavista movement as Ramirez settling old scores with high-ranking executives of the previous PDVSA administration.” This has provoked an increase in job insecurity among chavistas who thought their politics gave them security. Analytica says that, “crossed accusations of corruption based on leaked internal documents have increased among different Chavista factions.”

Mr. Ramos notes that “aggressive” policies toward the private sector and weak investment in PdVSA “raise serious risks of a further gradual decline in oil production,” making Venezuela all the more vulnerable to a drop in world oil prices. It's quite possible that Chávez will have no more luck commanding oil out of the ground than Fidel had getting cows to give more milk. The “great leap” is looking more and more like a great flop.

Posted Saturday, April 9, 2005

Arms Deals, Big and Small

April 6, 2005
STRATFOR

Venezuelan President Hugo Chávez announced the planned expansion of his Bolivarian military reserve force from its current level of 80,000 members to nearly 2.3 million armed volunteers. Reportedly, he also hosted a quiet visit by a delegation from North Korea the week of March 27 to April 2. As Chávez weighs the costs of arming and equipping his military reserves, he could be thinking about buying fewer MiGs in favor of adding a North Korean missile deterrent to Venezuela's national armed forces.

Venezuelan President Hugo Chávez said April 3 on his nationally televised weekly program, "Hello President," that he plans to expand the military reserve he created less than a year ago from its current total of 80,000 members to as many as 2.3 million volunteers, or 10 percent of the Venezuelan population. Chávez said this reserve would be trained and equipped militarily. Separately, sources close to the Venezuelan Foreign Ministry said April 1 that a North Korean delegation visited Caracas quietly last week for meetings with senior Chávez government and military officials.

Chávez already is committed to buying more than $2 billion worth of infantry, naval and air force weapons, radar systems and transports from Brazil, China, Russia and Spain. Arming a military reserve force of 2.3 million members with assault rifles at a price of approximately $500 per rifle would cost the Chávez government approximately $1.15 billion -- about 20 percent of the reported $5 billion cost of purchasing 50 Russian MiG-29 Fulcrum fighters. As a result, Stratfor believes that Venezuela's government is rethinking plans to buy the 50 MiG-29s and is instead considering the possibility of purchasing missiles from North Korea to create a strategic deterrent against external aggression from Colombia and the United States. The Chávez government could use the savings achieved by purchasing cheaper North Korean missiles instead of MiG-29s to arm and equip its Bolivarian military reserve.

The MiG-29s theoretically would give the Chávez government air superiority over neighboring countries such as Colombia. However, in an armed confrontation with the United States -- which Venezuela's new national security doctrine portrays as the Chávez government's greatest enemy -- most of Venezuela's MiGs likely would be destroyed on the ground by U.S. cruise missiles, which would strike without warning. The handful of MiGs that might get into the sky likely would be shot down by U.S. fighters before the Venezuelan pilots could locate and engage U.S. targets.

The Chávez government knows this because it has studied U.S. strategies and tactics in the Iraq war with the help of its expanding military links with China, Cuba and Russia. Venezuelan military strategists know their radar, communications and air force assets would be the first targets of a U.S. military strike. In fact, Eliecer Otaiza, president of the National Land Institute and a key figure in the Chávez government's militia defense networks, said April 1 that the government knows the national armed forces (FAN) would be obliterated "in two days" if the U.S. military ever invaded Venezuela.

However, the purchase of a few dozen North Korean missiles with the capability to strike targets hundreds of miles away would give the Chávez government a strong strategic deterrent against attack by the U.S. or Colombian armies. Moreover, North Korean missiles would be easier to conceal and more difficult to destroy.

Pyongyang would not sell nuclear weapons to the Chávez government. However, Stratfor believes North Korea would happily sell Scud missiles to Caracas for profit, or to gain political leverage in its confrontation with the United States. Pyongyang might even consider selling a few Nodong-1s to the Chávez government, which would give the FAN the ability to launch missiles armed with large conventional explosives warheads at targets deep in Colombian territory, including Bogotá.

The North Korean government has both practical and strategic reasons for negotiating the sale of missiles and other weapons systems, such as minisubmarines and armored vehicles, to Venezuela. Besides the hard-currency earnings from selling arms to Caracas, Pyongyang could be seeking some political leverage in the stalled six-nation talks on dismantling its nuclear weapons program. If North Korea is just looking for a fast profit, it likely will try to keep the deals quiet for as long as it possibly can. However, if Pyongyang wants to pressure the Bush administration, it will intentionally leak any deal it reaches with Caracas.

If Venezuela's government decides to go for missiles instead of MiG-29s, Pyongyang has a menu of options that likely would meet Chávez's political and strategic requirements. The likeliest options include the Scud-B, which has a range of about 200 miles; and the Hwasong-6/Scud-C, with a range of about 300 miles. However, Pyongyang also produces the Nodong-1, with a range of about 800 miles, and the Nodong-B missile, with a range between about 1,700 miles and about 2,500 miles.

Pyongyang's price list for these systems is highly classified. However, in July 2000 during missile talks between the United States and North Korea, Pyongyang offered to suspend its export of missile technology in exchange for $1 billion a year to compensate for the loss of export revenues; the United States reportedly counter offered with indirect food and humanitarian aid.

The acquisition of North Korean missiles would significantly increase Venezuela's political leverage regionally. During his March trip to France, India, Qatar and Uruguay, Chávez said -- in one of many speeches accusing the U.S. government of aggression -- that his enemies would soon be claiming that Chávez is expanding ties with North Korea. In fact, political ties between Caracas and Pyongyang are already being strengthened, and the impetus for closer relations is coming mainly from the Chávez government, a source in the Venezuelan Foreign Ministry reports.

For a force of 2.3 million volunteer reservists, meanwhile, the small-arms and other infantry equipment requirements would be immense. Russian arms suppliers would be first in line to sell more weapons to Venezuela since they already have sold 100,000 AK-103 and AK-104 assault rifles and 40 helicopters to the government. However, the Chávez government also probably will purchase small-arms and infantry equipment from South Africa in coming months.

South Africa is an important strategic ally among the multipolar relationships that Chávez seeks to build. South Africa also has a large and diversified arms export industry that is hungry for new markets abroad, and a government that is desperate to grow the country's economy more robustly. With arms suppliers in Russia, Spain, Brazil and China rushing to close deals with Caracas, South Africa's arms exporters will jump into the action as soon as they get a chance.

The Chávez government's actions belie its claims that it is not entangled in a regional arms race. As originally envisioned, the military reserve under the president's direct command was to have totaled 100,000 volunteers deployed mainly in poor neighborhoods, or barrios. A force of that size clearly had two objectives. One was to serve as an instrument of internal repression if the government's oil wealth vanished and popular support turned to angry rejection. The other purpose was to defend the government if the FAN ever revolted against Chávez.

However, a greatly expanded military reserve of 2.3 million members is not a force for internal repression. Strategically, it could be conceived by the Chávez government as the foundation of a people's guerrilla war against invading conventional U.S. forces, but a force of even 600,000 armed reservists could be utilized for offensive purposes. This would seriously destabilize the balance of military power in South America, where the largest army until now has been Brazil's with a total force of 189,000 personnel. Moreover, it would flood Venezuela with hundreds of thousands of new infantry weapons, some of which likely would leak to militant groups in neighboring countries given the high level of corruption in the FAN.

The only things potentially standing in Chávez's way are money constraints and possible internal resistance to major arms buys within the Chávez government. Military and civilian leaders are locked in a power struggle over who will have the greatest political influence -- and thus the greatest access to the fiscal resources flooding into the Bolivarian revolution's treasury. External pressures, on the other hand -- like U.S. disapproval -- will not deter Chávez.

That said, the Chávez government's small-arms and conventional-weapons purchases probably will advance more rapidly in coming years than its acquisitions of more sophisticated weapons like Russian MiGs and North Korean missiles. Transactions involving small arms, armored vehicles, helicopters and similar items involve many contracts with many foreign suppliers. These contracts are subject to little public scrutiny. However, the purchase of larger and costlier weapons systems like advanced fighter aircraft and missiles invite more public scrutiny, bring greater international pressure, and take longer to negotiate because of the complex technological issues and large sums of money involved.

Posted Saturday, March 26, 2005

Emma Brossard: Selling off Venezuela´s Jewels

March 17, 2005

Recent articles on Hugo Chávez’s proposed sale of Citgo ignore the growth in its value since PDVSA acquired Louisiana’s second largest refinery. The Citgo of the 21st Century is a creation of Petroleos de Venezuela (PDVSA). When PDVSA bought half of Citgo Petroleum Corp. in September 1985, from the Thompson brothers of Southland Corp., they paid $290 million for half of the Lake Charles 300,000 b/d refinery. PDVSA agreed to provide 130,000 to 200,000 barrels per day (b/d) of crude and feedstock for the Lake Charles refinery for 20 years. Included in the sale were a percentage of two important pipelines, Colonial and Explorer; a lube plant; and over 30 terminals; and an established gasoline market of branded outlets (then 6,900, now 13,800 franchised).

By the time PDVSA announced in November 1989, that it would buy the other half of Citgo for $675 million, crude runs in the refinery were averaging 284,000 b/d, and because of many mothballed refineries after the U.S. decontrol of oil, it was now a buyer’s market for refineries. The Citgo refinery had been upgraded between 1982 and 1984 (by Cities Service and then Southland) at a cost of $500 million, making it one of the most advanced in the industry. And PDVSA continued to upgrade Citgo to process Venezuela’s heavy crudes into cleaner burning gasoline. Citgo announced in 1992, that it would spend $1.7 billion over the next five years to comply with the Clean Air Amendments for the new reformulated gasoline requirements passed by Congress in 1991.

Citgo continued to grow in size. Champlin Petroleum Company with its 160,000 b/d Corpus Christi refinery, including a petrochemical facility, and distribution system was added to Citgo, in September 1990. Citgo also acquired Seaview Petroleum Co., an asphalt refinery in Paulsboro, New Jersey, refining 84,000 b/d of Venezuela’s heavy crude; and a fourth refinery was added in Savannah, Georgia.

Until 2001, PDVSA sold its oil to Citgo at an arms length price, and for tax reasons, Citgo did not pay dividends to PDVSA. Thus, PDVSA reinvested most of Citgo’s profits in U.S.-based operations and acquired other U.S. refineries. Under a treaty in 1999, Citgo’s U.S. tax burden dropped from 30% to 5%, and in 2001 PDVSA received $213.75 million in dividends from Citgo, from its 2000 earnings. Chávez continues to receive annual Citgo dividends.

Hugo Chávez not only became President of Venezuela in February 1999, but also took over PDVSA, changing its president and board at a whim, and finally in January 2005 naming the Minister of Energy also President of “Petroleos de Chávez” The former PDVSA is effectively Chávez’s own company, and he can sell any part of it! Well, maybe not.

Chávez’s PDVSA, in December 2003, announced that they would sell its 50% stake in Ruhr Oel (four refineries in Germany) to Russia’s Alfa Group. In 1983, the Ruhr Oil joint venture with Veba Oel was the beginning of PDVSA’s “internationalization.” Twenty years later, Ruhr Oel was also the beginning of Chávez’s efforts to sell PDVSA’s overseas refineries. However, in June 2004, the sale to the Alfa Group was suddenly dropped. Why? There was no explanation. Chávez had planned to buy 50 Russian MiGs (with the sale of Ruhr Oel?); and Russia through the Ruhr purchase would have gained a 2,000 distribution system in Europe. Perhaps it was BP (British Petroleum) that had purchased Veba Oel, and therefore now owned the other half of Ruhr Oel, that quashed the PDVSA sale?

Chávez has a problem trying to sell Venezuela’s foreign refineries because most of them are run as joint ventures -- and their partners in these ventures, who initially sold half of their refinery to PDVSA, have a say in what company they will accept as a new partner. Since PDVSA owns all of the four Citgo refineries, and Citgo is their largest overseas affiliate, and is in the largest market, Citgo would be expected to fetch the largest amount of cash and procure a buyer.

However, if there is a sale of Citgo, only with the U.S. Government’s permission, it could be a fire sale. Chávez does not seek to realize Citgo’s $5 billion plus worth in today’s market. He wants to stop sending Venezuelan oil to the U.S. (to Citgo), and he wants to prevent the possibility of the U.S. freezing Citgo’s assets (after some foolhardy action on his part.) It appears that Hugo Chávez is considering the sale of Citgo to foreign buyers, i.e., the Russians (Lukoil), Brazilians (Petrobras), or Arabs, with the Chinese now excluded by the U.S. Homeland Security Department. Presently, there appear to be two U.S. independent refiners, Valero Energy (CEO Bill Greehey), and Premcor Inc. (formerly Clark USA) that are interested in one or two of Citgo’s refineries.

Chávez’s hatred of the United States and President Bush, and his need for funds for his corrupt regime, is the driving force behind his wish to sell Venezuela’s foreign crown jewel. Citgo is a corporation that was carefully constructed by Venezuelan oilmen under the Brigido Natera presidency, to conquer the United States downstream market where Venezuela has traditionally sold half of its oil production.

The real value of all the nine PDVSA refineries in the United States is represented by the opportunity of marketing Venezuela’s medium/heavy crude oils through PDV America (which includes refinery ownership of Citgo; Citgo-Lyondell (41%); Hovensa, St. Croix joint venture; Chalmette, Louisiana, 50% participation; Sweeney, Texas joint venture; and Lemont, Illinois now 100%). PDVSA also markets Venezuelan refined oil products through PDV America. In 1999, Hugo Chávez’s first year in power, PDV America amounted to nearly half of all PDVSA’s market, selling over 1.5 million b/d of product. However, with the decline of 500,000 b/d in Venezuelan crude production (now 2.5 million b/d or less); and around 100,000 b/d of oil exports to Cuba, and other exports to new markets, like China and Argentina, PDVSA has to purchase increasing amounts of oil on the open market, in order to supply their foreign refineries. The Chávez solution: sell the Crown Jewels!

Emma Brossard grew up and worked in the oil industry in Venezuela. Her first book, Petroleum Politics and Power was published in 1983; followed in 1993 by Petroleum Research and Venezuela's INTEVEP. For 18 years, Prof Brossard taught political philosophy, Latin American politics, and energy politics, in several Midwestern and Southern univerisities. She has a BA from the Univ. of Wisconsin, MA and Ph.D. from Claremont Graduate University. An energy consultant for many years. Petroleumworld not necessarily share these views.

Editor's Note: Petroleumworld encourages persons to reproduce, reprint, or broadcast Petroleumworld Editorial articles provided that any such reproduction identify the original source, http://www.petroleumworld.com and it is done within the fair use as provided for in section 107 of the US Copyright Law.

Internet web links to http://www.petroleumworld.com are appreciated.
Petroleumworld News 03 17 05

Copyright © Emma Brossard 2005, All rights reserved

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Posted Tuesday, March 15, 2005

Chávez Casts Himself as the Anti-Bush

By Kevin Sullivan

March 14, 2005

CARACAS, Venezuela -- President Hugo Chávez has recently accused President Bush of plotting to assassinate him, made suggestive comments about Secretary of State Condoleezza Rice, visited Fidel Castro in Cuba, bashed the United States on the al-Jazeera television network and traveled to Libya to receive an award from Moammar Gaddafi.

Such bluster and anti-American showmanship are nothing new from the fiery former paratrooper. But concern in Washington has been rising as Chávez has worked feverishly in recent months to match his words with deeds.

Since threatening to cut off oil shipments to the United States, which buys 1.5 million barrels a day from Venezuela, Chávez has been traveling the globe looking for new markets and allies to unite against "the imperialist power." He recently signed energy deals with France, India and China, which is searching for new sources of oil to power its industrial expansion. Chávez also has made a series of arms purchases, including one for military helicopters from Russia.

And on Friday, Chávez hosted President Mohammad Khatami of Iran, a nation that has a secretive nuclear program and has been labeled by Bush as part of an "axis of evil."

"Iran has every right . . . to develop atomic energy and to continue its research in that area," Chávez said at a joint appearance with Khatami. "All over the world, there is a clamor for equality . . . and profound rejection of the imperialist desires of the U.S. government. Faced with the threat of the U.S. government against our brother people in Iran, count on us for all our support."

Gerver Torres, a former Venezuelan government minister who now runs a private development agency, said such statements illustrate one of Chávez's key goals. "His main motivation now is to do everything he possibly can to negatively affect the United States, Bush in particular," Torres said. "He is trying to bring together all the enemies of the United States. He believes the United States is the devil."

While U.S. analysts said they doubt Chávez could afford to severely cut shipments to the United States, which buys 60 percent of Venezuela's oil exports, they are still paying careful attention to his statements. Sen. Richard G. Lugar (R-Ind.) has asked the Government Accountability Office to study how a sharp decrease in Venezuelan oil imports might affect the U.S. economy.

Although Chávez has suggested he would "use oil" to fight American power, other Venezuelan officials have expressed a far more businesslike view of the relationship. In an interview, Andres Izarra, Chávez's information minister, said Venezuela had no plans to stop selling oil to the United States, which he called "our natural energy market."

The government says it produces 3.1 million barrels a day of oil, but independent analysts put the figure closer to 2.6 million. Izarra said the country aimed to boost its oil production to about 5 million barrels a day in the next five years, so there would be plenty of oil to serve both the United States and new customers, such as China and India.

Still, Chávez's comments and actions, including the purchase of a substantial amount of foreign arms, have drawn sharp criticism from U.S. officials. In her Senate confirmation hearings in January, Rice called Chávez a "negative force in the region."

Chávez's arms purchases from Russia, including 100,000 Kalashnikov rifles, have also drawn protests from the State Department. He has bought military aircraft from Brazil and announced plans to buy radar equipment from China.

In a recent televised speech, Chávez described the arms purchases and a plan to increase army reserve troops as "an honorable answer to President Bush's intention of being the master of the world."

Chávez is the most vocal and visible symbol of a rising tide of anti-American sentiment in Latin America. Leaders in the region are increasingly disillusioned because a decade or more of the Washington prescription -- democracy and free-market economics -- has failed to alleviate poverty and economic inequality.

Six Latin American nations, most recently Uruguay, now have presidents whose views clash, in varying degrees, with Washington's. Another politician with sharp anti-Washington views, Mexico City Mayor Andres Manuel Lopez Obrador, is the early favorite in next year's presidential election, which could bring the trend to the banks of the Rio Grande.

After soundly defeating his domestic opposition in a recall referendum last August, and flush with soaring profits from record-high global oil prices, Chávez has increasingly been making deals with countries in Latin America, Europe, the Middle East and Asia, positioning himself as something of an anti-Bush.

In a recent interview on al-Jazeera, Chávez called for developing nations to unite against U.S. political and economic policies. "What can we do regarding the imperialist power of the United States? We have no choice but to unite," he said. Venezuela's energy alliances with nations such as Cuba, which receives cheap oil, are an example of how "we use oil in our war against neoliberalism," he said.

Or, as he put it on another occasion, "We have invaded the United States, but with our oil."

Izarra, in the interview, accused the United States of "systematic attacks and aggressions" against Chávez, repeating allegations that the United States was involved in a failed 2002 coup against Chávez and a crippling 2002-03 oil strike. Rice and other U.S. officials have repeatedly denied those allegations.

Chávez has saved some of his most biting sarcasm for Rice, whom he refers to as "Condolencia," which means "condolence." In speeches, he has called her "pathetic" and illiterate and made oblique sexual references to her. "I cannot marry Condolencia, because I am much too busy," he said in a recent speech. "I have been told that she dreams about me," he said on another occasion.

Chávez asserted on television last month that Castro had warned him that Bush was planning an assassination attempt. U.S. officials called this ridiculous. But Chávez said that if he were killed, the United States "can forget Venezuelan oil," threatening to cut off the fourth-largest source of U.S. oil imports. Chávez's government has begun exploring the sale of parts of Citgo, the Venezuela-owned retailer in the United States.

Many here say they believe Chávez dreams of the day he can cut off the United States and sell to countries he considers more friendly. Chávez visited Beijing in December and signed trade deals for oil and gas exploration, farm support and construction. He even reached agreement with Chinese leaders to launch a telecommunications satellite.

When Chávez visited India last week, the two countries signed an energy cooperation agreement and Chávez said Venezuela wanted to become a "secure, long-term" petroleum supplier to India. On his way home, Chávez stopped in Paris and reached agreement with President Jacques Chirac for more French investment in the Venezuelan oil industry.

Some of the gasoline that Venezuela ships to the United States comes from El Palito, a refinery about 200 miles west of Caracas. People who live next to the refinery in a little cluster of brightly colored beachfront homes said they did not believe Chávez would ever cut off exports to the United States. But in a country bitterly divided over Chávez's rule, they agreed on little else.

"He's destroying the country," said Carlos Rodriguez, a shopkeeper. "Oil prices are higher than ever, but there's more poverty and more crime. Then he flies off to other countries and offers them things he doesn't offer to us."

But a few yards away on the beach, Jaime Mendez, a fisherman, said: "We are all with Chávez because he helps the humble people. He doesn't want problems with the United States. He is just trying to do things, but they won't let him work."

Posted Tuesday, February 8, 2005

VENEZUELANS AID CANADIAN OIL SECTOR

Wednesday, February 2, 2005

Posted Thursday, February 2, 2005

FOX NEWS Exposé on the Chávez Administration

It was refreshing to finally see American media pay some attention to the threat the Chávez administration poses to the Americas. FOX NEWS presented three news shorts on the Chávez administration, and they were by no means flattering. If you missed them, these videos can be seen here:

Tuesday, February 1, 1995

Wednesday, February 2, 1995

Thursday, February 3, 1995

Posted Friday, October 1, 2004

Jimmy Carter, Observed

By A. M. Mora y Leon, The American Thinker

September 30th, 2004 - Jimmy Carter has been acting like a grumpy old man this week, casting somewhat shocking aspersions on the fairness and legitimacy of the forthcoming Presidential election in Florida. Maybe his nasty streak has something to do with a quiet but very significant affront dealt him by the United States Department of State, an insult which has completely escaped the notice of the legacy media, but which is loudly reverberating in the clubby universe of high level diplomacy and elite NGOs.

The Man from Plains, who has so assiduously cultivated a good-guy image, has taken to disparaging the possibility of a fair democratic process in his own country, in a fit of pique.

Carter's been making a nice little side business out of observing foreign elections for years, through the vehicle of his nonprofit Carter Center. In the same op-ed article that he used to disparage in advance Florida's election, he touted his role in the Aug. 15 Venezuelan recall referendum as proof of his success. The only problem is that evidence is mounting of massive electoral fraud in Venezuela in the counting of votes, in the machines themselves, in the post-referendum statistical studies showing improbable results, in the voter rolls, and in the auditing. And that s just for starters.

Thus, the United States Department of State has suspended its plan to endorse former President James Earl Carter's final report on the Venezuelan election. Carter's report was to have been the basis for further diplomacy with a certifiably legitimate government there. Instead, State has only acknowledged the preliminary findings, leaving Carter's status as a recognized authoritative certifier of elections hanging out to dry.

This may not sound like much to you, but it effectively disconnects Jimmy Carter's claim to be a momentous election-certifier from its power source: the ability to get the United States Government to accept the word of its 39th President as dispositive. Carter has been quietly but publicly dissed, and he is dissing back. As they might put it in Carter's rural South, we ve got us a dissing match!

This morning, Carter posted a 14-page executive summary of his election certification of Venezuela on the Carter Center website. It is a piece of work.

In the short summary, Carter bureaucratically repeats his claim that he matched paper ballots from 150 or 200 voting stations to a few sheets of transmission data, as if that were the only way to commit fraud in a place like Venezuela. Carter continues to muddle the issue of whether there was a problem with the choice of audit boxes picked by the five-member election commission, that even he admitted was stacked for Chávez.

In an earlier report on his Aug. 26 second audit, he admitted disregarding auditing any boxes that had been obviously tampered with. That s certainly one way to simplify the process and get right to the business of approving the results.

Carter also ignores the problem of server communications with the electronic voting machines before transmitting final tallies, and dismisses post-referendum statistical studies by scientists from MIT and elsewhere, showing highly improbable coincidences. On that, Carter's simple rebuttal reads: these patterns were not found a basis to assert fraud.

Meanwhile, Carter skips over discrepancies in areas showing that the number of votes cast exceeded the number of registered voters. And his statement on the auditing process in particular is a beauty: Carter said everything was observed free and clear, except for what went on in the central totalization room, and concluded that, except for that minor matter, all was free and fair. It would be like an Olympic judge declaring a last-place finisher a winner - with the exception of what went on at the finish line. For good measure, Carter's executive summary blames Venezuela s free press for voter disillusion and recommends more government oversight on it, as well as more public funding for campaigns of this kind. No wonder the Bush Administration has decided to not touch it. The State Department had trusted Carter to give an honest, or let's say competent, assessment of that mess that has real potential to blow into a crisis for the U.S. Make no mistake about the depth of anger of the Venezuelan people and what they are likely to do. Venezuela s crucial role as a major oil-supplier role for the U.S. makes anything happening there to destabilize the country and its economy and matter of major immediate concern.

It s not really an election, so we haven't said anything more than that and we re not going to say any more, a State Department official admitted. Since then, the Bush Administration s position has hardened. Carter's claims of free and fair elections in Venezuela are being shunted aside as a failure. That has denied Chávez the recognition he had been expecting from Carter, which he had hoped would extend into the White House. Bush is much too savvy for that and Chávez's plan failed. U.S. officials have pointedly refused to congratulate Chávez on his victory, and haven t bothered to invite him to the White House or a key United Nations reception as Chávez had hoped, prompting him to cancel his U.S. trip earlier this month. And the result for Carter? No kudos are coming his way after his rush to declare the recall referendum free and fair. That s why he must toot his own horn now, if he wants credit, in attack editorials denigrating Bush s brother running Florida. His vindictive streak is by now well-known. He can only try to tear down others, now that no one is listening to his observations after the Venezuela fiasco. And Chávez has been denied the imprimatur of international legitimacy he desperately craves since the reality is, he isn t going to get it at home. Score another point for President Bush's good judgment on affairs abroad.

Posted Tuesday, September 21, 2004

The Worst Ex-President in History

Commentary on the News
Saturday, August 28, 2004
Jack Kinsella - Omega Letter Editor

During his four years in the White House, he presided over the worst economic downturn since World War II, allowed a bunch of thugs to seize our embassy and our citizens, and supported Philippine dictator Fernando Marcos, Pakistani General Zia al Huq, Saudi King Faud and many other dictators. But Jimmy Carter was a much better president than he is an ex-president.

In fact, Jimmy Carter holds the hands-down record for being the worst ex-president the United States has ever known. His post-presidential meddling in foreign affairs has cost America dearly, both in terms of international credibility and international prestige.

He defied US law by visiting Cuba, even addressing the Cuban public and handing Castro a huge propaganda victory. He oversaw the elections in Haiti, against the expressed wishes of the Clinton administration. A coup followed.

Carter once described Yugoslav strongman Marshal Josef Tito as "a man who believes in human rights." Regarding North Korea's dearly departed Kim Il-Sung, Carter found him "vigorous, intelligent, surprisingly well-informed about the technical issues, and in charge of the decisions about this country," adding "I don't see that [North Koreans] are an outlaw nation."

He was similarly generous regarding Manuel Noriega, Romanian dictator Nicolai Ceaucescu and, of course, Yasser Arafat. He said of Ceausescu and himself, "Our goals are the same: to have a just system of economics and politics . . . We believe in enhancing human rights."

Virtually all of the humanitarian activities of the Carter Foundation abroad have been in direct opposition to US foreign policy. Carter called Bush's description of Iran, Iraq and North Korea as an "axis of evil" was "overly simplistic and counterproductive."

Added the man who was once attacked by a rabbit, "I think it will take years before we can repair the damage done by that statement."

His most recent adventure may be partly behind the predicted $3.00 per gallon analysts say we'll be paying for gas by year's end. Jimmy Carter went to Venezuela to 'monitor' that country's effort to recall President Hugo Chávez.

In 1992, a band of army officers led by Lt. Col. Hugo Chávez Frías attempted to overthrow President Carlos Andrés Pérez. Although court-martialed and jailed, Chávez emerged a hero.

In 1998, he was elected president on promises to clean out corruption and reduce poverty. Once in office, Chávez promoted a new consitution to consolidate his powers and began to constrain the business community, civil society, and rival politicians.

As a presidential candidate, Hugo Chávez campaigned against the "savage capitalism" of the United States. On August 10, 2000, he became the first foreign leader to visit Saddam Hussein since the Gulf War, and he allegedly aided Afghanistan's Taliban government following the September 11, 2001, attack on the United States.

At the same time, Chávez said that Cuba and Venezuela were "called upon to be a spearhead and summon other nations and governments" to fight free market capitalism.

Venezuela is also one of the countries upon which the United States is dependent for oil, and has been since the US first began relying on imported oil supplies back in 1948.

Besides supplying the United States with 1.5 million barrels of oil a day, Venezuela provides most of the petroleum consumed by U.S. allies in the Caribbean and Central America.

Regional leaders know that opposing Chávez in any significant fashion could result in less favorable sales terms or cuts in deliveries.

In September 2003, President Chávez accused the Dominican Republic of harboring Venezuelans--like former President Carlos Andrés Pérez--who allegedly might conspire against his government. Chávez then stopped oil deliveries, prompting a temporary energy crisis while Dominican officials scrambled for new suppliers.

>From the perspective of American economic interests, not to mention homeland security issues, Hugo Chávez is a very bad man to have in the neighborhood. And, thanks to Jimmy Carter, Chávez isn't going away anytime soon.

Venezuela's opposition party finally forced a recall election, with opinion polls showing that voters favored his recall by a margin of more than 2 to 1.

When there were questions about possible vote tampering by the Chávez side, the opposition called for election monitors. Chávez agreed to let Jimmy Carter oversee the election, and the Carter Center headed for Caracas.

Under Jimmy Carter's watchful eye, Hugo Chávez defeated the recall attempt by a wide margin -- reflecting almost a mirror-image of the opinion polls.

While two out of three Venzuelans polled before the election wanted Chávez out, when the ballots were counted, Chávez was declared the winner by an almost exact opposite margin. "About 58 percent said 'no' to a recall, while 42 percent said 'yes,'" wrote the Washington Post.

Carter ignored a press release from the polling firm Penn, Schoen & Berland Assoc. that reported, "Exit Poll Results Show Major Defeat for Chávez." The release, dated 7:30 p.m. on election day, said, "With Venezuela's voting set to end at 8 p.m. EST according to election officials, final exit poll results from Penn, Schoen & Berland Associates, an independent New York-based polling firm, show a major victory for the 'Yes' movement, defeating Chávez in the Venezuela presidential recall referendum."

One of the most effective ways to monitor the fairness of an election is to employ the use of exit polls. In a nutshell, here's how exit polls work. After somebody has finished voting, a pollster will ask them how they voted. In emerging democracies, about 90% of voters participate.

By contrast, in America, where exit polls are widely used to call elections before the votes are all counted, less than 40% of voters participate.

Statistically, exit polls should mirror the actual vote, within a relatively thin margin of error.

The margin of error between Carter's certified fair-and-square ballots and the independent exit poll results constituted a swing of almost forty points -- a statistical impossibility. Chávez counted on Carter leaning his way -- Carter's history of promoting anti-American dictators is no secret.

As Stephen Hayward noted in a column at Front Page, "among his complex motivations is his determination to override American foreign policy when it suits him."

Indeed, Carter's penchant for interfering in US foreign policy is so well known it won him a Nobel Prize. Jimmy Carter will go down in history as the first US ex-president ever to be awarded a Nobel Prize for the sole purpose of conveying an insult to his country from the Nobel committee.

Gunnar Berge, chairman of the five-member committee, told reporters that giving the Peace Prize to Carter "must also be seen as criticism of the line the current U.S. administration has taken on Iraq ... It's a kick in the leg to all that follow the same line as the United States."

("How can we REALLY show how much we hate the Americans? I know! Let's give a Nobel Prize to Jimmy Carter!")

Once Chávez had stolen the election and Jimmy Carter certified the results, certain American critics (pretty much anybody with a brain) started questioning whether or not Jimmy Carter had just sold American interests down the river -- again.

Carter hit back in a Wall Street Journal Opinion piece, writing;

"We are familiar with potential fraudulent techniques and how to obtain a close approximation to the actual results to assure accuracy."

Having established that Jimmy Carter is far too savvy to be conned by a mere thug like Chávez, Carter then dismissed the results of the exit polls, writing;

"During the voting day, opposition leaders claimed to have exit-poll data showing the government losing by 20 percentage points, and this erroneous information was distributed widely."

Well, that's that! The New York pollsters 'widely distributed erroneous information' -- Hugo Chávez won fair and square. Jimmy Carter says so.

Penn Schoen evidently must have cheated, although it is a reputable New York polling firm with a 20 year track record, including working for Bill Clinton in 1996, Hillary Rodham Clinton in 2001, Michael Bloomberg in 2001 and many other national political campaigns.

Why would it risk its hard-won professional reputation over an election in Venezuela? Carter doesn't explain.

Hugo Chávez is bad news from the perspective of US national security. He is bad news from the perspective of homeland security. He is bad news from the perspective of US dependence of foreign oil. And he is bad news for America's economic security.

Which makes Hugo Chávez good news from the perspective of the worst ex-president in US history.

Excerpted from the Omega Letter Daily Intelligence Digest, Volume:35: Issue 26

Posted Wednesday, September 15, 2004

Analysis: Venezuela Eyes Russian MiGs
UPI International

Posted Sunday, September 12, 2004

China Filling U.S. Vacuum in Latin America
Phil Brennan

Posted Wednesday, May 26, 2004