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Capitol Comment
by Senator Kay Bailey Hutchison
Chavez: A Threat to Our National and Economic Security
May 4, 2007
Fidel Castro’s political inspiration, the philosopher Karl Marx, was right about very few things, but he was correct when he observed: “History repeats itself, first as tragedy, second as farce.” It’s a farce that Castro’s successor as leader of the Latin American socialist movement, the Venezuelan dictator Hugo Chavez, seems poised to repeat all of Castro’s mistakes – which is bad news for the people of Venezuela, and also for the people of the United States.
On May 1, President Chavez ran his latest, and most ominous, scheme out of the Castro playbook by nationalizing multi-billion dollar heavy oil fields in the Orinoco Belt. This energy-rich region southeast of Caracas has so much energy potential that some experts claim it could give the country more oil reserves than Saudi Arabia. By seizing the Orinoco Belt with armed soldiers, President Chavez is consolidating his political power within Venezuela, and increasing his ability to manipulate global oil markets.
The strongman rules an oil-rich nation that accounts for 14 percent of America’s oil imports, and he’s promised to use his “strong oil card” to “finish off the U.S. empire” – even if that means colluding with some of the most nefarious regimes on Earth.
Like Castro, who partnered with the Soviet Union during the Cold War, President Chavez is making common cause with America’s enemies - including the world’s largest state sponsor of terrorism, the government of Iran. Earlier this year, he met with Iranian President Mahmoud Ahmadinejad and revealed plans for a $2 billion joint fund, part of which will be used as a “mechanism for liberation” against American allies.
President Chavez hopes that the profits from the Orinoco Belt will flood his coffers for other foreign adventures, but by asserting government control over this coveted region, he is actually killing the golden goose that feeds his socialist-inspired revolution.
President Chavez’s national oil company, Petroleous de Venezuela, has already shown signs of stress from the dictator’s constant political interference. Despite record oil prices that should be a boon for the industry, the company has been forced to accumulate a rapid increase in debt to pay for a doubling of “social development” spending. Meanwhile, its spending on energy exploration and production badly trails its global peers.
In addition, the Orinoco Belt pronouncement has made Exxon, ConocoPhillips, and other energy companies extremely cautious about putting their employees and billions of dollars in assets under Venezuelan management, and for good reason. If those corporations decide to withhold their expertise and investment, it could further weaken the Chavez government’s pursuit of socialist dreams and redistribution of wealth. “It seems like they are going to strangle themselves with their own rope,” said a foreign oil analyst, who chose to be unidentified for fear of retaliation.
President Chavez’s gross mismanagement of the economy should be no surprise to anyone who’s followed the career of his Cuban mentor, Fidel Castro. In less than half-a-century, Castro has turned what was once the third-richest nation in Latin America to one of the poorest nations – a real life prison for 11 million people who rely on remittances from abroad to avoid starvation and collapse.
If President Chavez continues to adopt the Castro economic model, the greatest victims will be the Venezuelan people, but make no mistake, the people of America will suffer consequences too. That’s because the deterioration of Venezuela’s oil industry could spark a surge in oil prices for American consumers. The cost of this price surge won’t be cheap. According to some economists, every time oil prices rise by 10 percent, on average, 150,000 Americans lose their jobs.
So what should our response be?
This sobering scenario should recharge our efforts to adopt a comprehensive plan for American energy independence. Any realistic strategy should include more exploration for domestic energy supplies, such as oil and gas, and more research into alternative fuels, like solar and wind power.
We have the resources to achieve energy independence: the resources underneath our land and water, and the best resource of all, the ingenuity of our free, creative minds. Now, we just need the willpower to use it!
President Chavez’s authoritarianism is a tremendous challenge to America’s energy future, but if we choose to be proactive and decisive, it can be a great opportunity to create a stronger, safer America in the world. We still have time to write our own history.
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