Venezuelan Oil NEG --- UMich
7wk GJP
Venezuela Adv
Venezuelan Econ Growing
Venezuelan economy growing
El Universal 13 – (“Venezuela’s GDP Up 0.7% In The First Quarter”, El Universal,
5/31, http://www.eluniversal.com/economia/130531/venezuelas-gdp-up-07-in-the-firstquarter)//mm
The Central Bank of Venezuela (BCV) reported on Friday that the gross domestic product
climbed 0.7% in the first quarter of 2013, compared to the same period last year. The bank attributed
the result to the increases of 2.0% and 0.3% in the gross value added (GVA) of the public and
private sectors, respectively. "With the rise in GDP at the beginning of year, we have recorded
10 consecutive quarters of growth in the productive activity," the bank said in a statement. Some of
the causes behind the behavior of the economic activity in the first quarter are the strengthening of social
policies and the expansion of general government services. Other factors include the slowdown
in the growth rate of aggregate domestic demand; reduced imports of intermediate and final
goods, given the adjustment of the foreign exchange amidst a complex domestic and international environment and a
lower number of working days in the quarter. The BCV said economic growth in the first three months of
the year was determined by a 0.9% growth in the value added of the non-oil sector and
the oil sector, compared to the same period last year.
Status Quo Solves
Status quo solves – China & Russia providing funding – output projected to
increase
Iwata 13 – (Mari, “Venezuela Secures $4 Billion Funding from China,” Wall Street Journal,
6/6/13,
http://online.wsj.com/article/SB10001424127887324798904578528922435217366.html)//SR
Venezuela has secured $4 billion in funds from China to be used for oil field
development, Oil Minister Rafael Ramirez said Thursday. The minister didn't give details of the new funding from
China, which will add to at least $35 billion of credit Beijing has provided to Venezuela,
mostly in return for future oil deliveries. The South American country's state energy company Petroleos de
Venezuela SA, or PDVSA, said Wednesday that Venezuela was negotiating a $4 billion credit line
from Export-Import Bank of China. Mr. Ramirez was speaking in Tokyo following a trip to Beijing for talks
with Exim Bank President Li Ruogu and other officials. Venezuela has also secured a number of
financing agreements with its partners, ranging from Russia's Rosneft to U.S. oil major
Chevron Corp., CVX -0.06% during the past few weeks as it looks for funding for its plans to rapidly
boost oil production. The new Chinese funds add to a separate $4 billion loan that PDVSA will receive from the
Chinese government to boost oil production at Petrolera Sinovensa, a joint venture in Venezuela's between PDVSA and
China National Petroleum Corp. in Venezuela's rich Orinoco heavy oil belt. "We plan to increase output to
four million barrels a day by 2014 and six million barrels a day by 2016. Only Asia can absorb these
increases," Mr. Ramirez told reporters. Venezuela currently produces about three million barrels a day of crude oil. Mr.
Ramirez met Japanese Industry Minister Toshimitsu Motegi and was later due to meet officials of Inpex Corp. 1605.TO
+2.48% and state-funded Japan Oil, Gas and Metals National Corp.
Market pressures will solve the case - will push Venezuela to change
González and Vyas 13 (4/4/2013, Angel González and Kejal Vyas, “Unlocking
Venezuela’s vast energy potential; Revival of the country’s oil sector post-Chávez on
standby,” http://www.businesswithoutborders.com/topics/opportunities/unlockingvenezuelas-vast-energy-potential/, JMP)
But declining oil output and rising shale-oil production in the U.S.,
Venezuela’s main market, may force a redirection. Barring any new political or military
shocks in the Middle East, global oil prices look like “a balloon with a slow leak ,” said Amy
Myers Jaffe, executive director for energy and sustainability at the University of California-Davis. The Venezuelan
government can’t count on high oil prices to match rising public spending, she added. Anticapitalist rhetoric heated up in
the days leading to Mr. Chávez’s death. Venezuelan Acting President Nicolás Maduro accused Chevron Corp., the No. 2
U.S. oil company by market value behind Exxon, of aggression against Ecuador in a multibillion-dollar environmental
lawsuit pitting the company against Ecuadorean plaintiffs. Analysts said they were surprised by the comments, as
Chevron, the only major U.S. oil company to remain in Venezuela, was considered by Mr. Chávez as a key investor, and is
lending Venezuela $2 billion to increase output at a joint-venture oil development. A spokesman for Chevron declined to
comment on Mr. Maduro’s assertion. Despite the posturing, Mr. Chávez’s death presents an opportunity for a new
administration to lift some of the burdens heaped on PDVSA, which has supplied billions of dollars in cheap oil to Cuba
and other friendly foreign governments, said Carlos Jordá, a Houston-based oil consultant who was once a senior manager
at the oil company. To reach its full potential, Venezuela´s entire oil industry sector needs to be reinvented, something
that is unlikely, said Luis Pacheco, a former PDVSA executive fired during the oil strike of 2003 along with 20,000 other
employees who opposed Mr. Chávez. In 2000, Mr. Chávez signed its first oil deal with Cuba, providing the communist
island with 53,000 barrels a day of cut-rate oil, a sum that has risen to 110,000 barrels now. In return, the Cuban
government has sent some 40,000 doctors and experts to support the popular social programs developed by Mr. Chávez.
Mr. Jordá, who called those oil deals unsustainable, said that domestic fuel prices, the world’s lowest at around 6 cents a
gallon, will also have to rise at some point. The cost to the country of the domestic fuel subsidies has also increased
because refinery accidents forced the government to import growing quantities of gasoline, according to the EIA. The
Venezuelan government denies it imports fuel. Worsening fiscal conditions will also prompt Mr.
Chávez’s successors to improve relations with foreign investors—and
eliminate bottlenecks created by the deceased leader’s highly-personal, hands-on management style, said
Jim Loftis, a partner with Vinson & Elkins LLC’s international arbitration
practice. The country also needs to increase oil production to pay for tens of
billions of dollars in Chinese loans it undertook to finance large social projects and a big boost in
election spending last year. “Venezuelans see their relationship with oil as if the nation’s virility is at stake,” Mr. Pacheco
said. Until that perception changes, the oil industry will “keep dancing in a circle around the fire, waiting for it to rain.”
SQ solves the aff – Maduro will liberalize the energy sector
Daly 12 --- CEO of U.S.-Central Asia Biofuels Ltd (12/19/2012, John, “If Chavez Dies,
What Next for U.S. - Venezuelan Energy Relations?”
http://oilprice.com/Geopolitics/South-America/If-Chavez-Dies-What-Next-for-U.S.Venezuelan-Energy-Relations.html, JMP)
So, if illness does sideline President Chavez, what might happen?¶ First, given the enormity of the nation’s energy
reserves, it is most unlikely that foreign countries, starting with the U.S. will sit on their hands, but instead begin to
manoeuvre behind the scenes to find and promote a pliable candidate and administration willing to work with them. As
Maduro is largely unknown, in the event of Chavez being incapacitated, it is likely that he will
come under enormous foreign pressure, little of which is likely to be made
public.¶ Washington’s wish list would include two primary elements – an end
to Venezuelan radical rhetoric and ties to such states as Cuba and Iran, and
increased U.S. access to those oil reserves. In May 2011 the U.S. imposed sanctions on
Venezuela’s state oil company Petroleos de Venezuela, S.A. (PVDSA), and the country’s fiscal crown jewel. President
Chavez has used PVDSA as a cash cow for his social reform plans - between 2004 and 2010 PDVSA contributed $61.4
billion to social development funds. According to PDVSA figures, Venezuela currently has 77.5 billion barrels of oil
reserves, the largest in the Western Hemisphere. PDVSA has a production capacity, including its strategic associations and
operating agreements, of 4 million barrels per day, the highest production capacity in the Western Hemisphere. ¶ Related
Article: Mexico to Privatize State Oil Company Pemex?¶ But it is President Chavez’s nationalist approach to the country’s
energy assets that is likely to be the first target of foreign governments in a post-Chavez Venezuela. In February 2007
President Chavez announced a new decree to nationalize the last remaining oil production sites that were under foreign
majority company control, to take effect on 1 May, allowing the foreign companies to negotiate the nationalization terms.
Under the new regulations, the earlier joint ventures, involving ExxonMobil, ChevronTexaco, Statoil, ConocoPhillips and
BP, were transformed to give PDVSA a minimum 60 percent stake. The process completed a government initiative begun
in 2005, when the Chavez administration transformed earlier “operating agreements” in Venezuela’s older oil fields into
joint ventures with a wide variety of foreign companies. Thirty out of 32 such operating agreements were transformed,
with only two being challenged in court. Most foreign companies accepted the new arrangements, including Chevron,
Statoil, Total and BP, but America’s ExxonMobil and ConocoPhillips refused. It therefore seems likely that a
new Maduro administration would hear about compensation issues during
any first meeting with the U.S. ambassador.¶ Given relative inefficiency and
capital starved nature of PDVSA for major expansion projects, calls to
loosen up the country’s energy sector may be hard for Maduro to resist.
No Internal Link
Economic decline doesn’t cause instability in LA
World Economic Forum 08 – is an independent international organization committed to
improving the state of the world by engaging business, political, academic and other leaders of society to
shape global, regional and industry agendas. (“Uncertain political landscape ahead for Latin America,” News
Release, April 15, 2008, http://www.weforum.org/news/uncertain-political-landscape-ahead-latinamerica)//SS
The political future of Latin America seems uncertain agreed panelists in a
session on the political state of the region, especially given the recent spat
between Ecuador and Colombia, rumblings in Venezuela, and the
presidential elections and economic downturn in the United States.¶ Moisés
Naím, Editor-in-Chief, Foreign Policy Magazine, USA, expressed surprise at how good the economy has been in Latin
America, even though there had been political instability. “The last four years have been the best economically since 1492,”
he said.¶ Latin America nears the end of the first decade of the 21st century in the midst of an unprecedented run of
economic growth, peace and political stability, participants in the World Economic Forum on Latin America 2008 agreed.¶
Yet the geopolitical landscape seems uncertain given the recent spat between Ecuador and Colombia, rumblings in
Venezuela, and the presidential elections and economic downturn in the United States.¶ Mr Naím offered what he called
two surprises and one prediction. Surprise number one: “how good the economy has
been in Latin America and how bad the politics have been,” he said. “The last four years
have been the best [economically] since 1492.Ӧ Hyperbole aside, economic performance is
indeed about as good as ever since the dawn of systematic statistical
analysis. Yet political unrest, involving sometimes violent street protests, is
growing in many countries.¶ “If the politics have been bad when the economy has
been good, it is interesting to imagine – if you think there will be a slowdown – what the
politics will be like when the economy is bad.”
Alt Caus - Fracking
Alt caus – fracking
Nagel 5-16 (Juan Nagel, Writer for Foreign Policy, May 16, 2013. “Is Venezuela
Becoming a Failed
State?”http://transitions.foreignpolicy.com/posts/2013/05/16/is_venezuela_becoming_a_failed_state)
A recent report by the International Energy Agency underscores the challenges the
country faces in the short term. The United States has made huge progress in oil
extraction thanks to fracking technology. It is set to become the world's
largest oil producer by the year 2020, and the global spread of fracking is
bound to significantly increase international recoverable oil reserves in the
near future. The agency crows that fracking is creating a "supply shock that is
sending ripples around the world." This obviously matters to Venezuela, a
country that exports large amounts of oil and little else. Venezuela is
increasingly reliant on high oil prices to maintain some semblance of stability.
A prolonged drop in oil prices will undoubtedly shake the foundations of the
petro-state to its core. Being an oil producer, Venezuela can earn money in
two ways: by sustaining high prices, or by increasing production. (Obviously, if
it can do both things, it has hit the jackpot). Fracking threatens the first, and the
country has seriously failed on the latter.
Alt Caus to Econ
Multiple alt causes to econ
Gross 5/16 – a columnist and global business editor at Newsweek Daily Beast (Daniel,
“The Crappiest Economy?” The Daily Beast, May 16, 2013,
http://www.thedailybeast.com/articles/2013/05/16/the-crappiest-economy.html)//SS
How does a country—an entire country of 28 million people—run short of toilet paper? Absent a sudden, um, run on the
product, it shouldn’t happen. Grocery stores and retailers know how to manage supply. When stashes run low, they order
more. In places with a halfway functional logistics system, it shouldn’t happen. But that’s what is happening in Venezuela
right now.¶ President Nicolas Maduro and his regime have blamed opposition forces and the media for sparking “excessive
demand” for toilet paper. But it is the country’s economic policies that are really
clogging up the works. Although it has become economically constipated after
years of Bolivarian-socialist rule by Hugo Chávez and his successor,
Maduro, Venezuela is actually a reasonably advanced economy. Thanks to the huge oil reserves, it is a densely
populated nation, ranking 34th in the world in gross domestic product, with a GDP per capita of about $13,200. That’s
roughly equal to Romania or Bulgaria, neither of which is experiencing a shortage of toilet paper.¶ But in many ways,
Venezuela simply isn’t a functioning economy. The Chávez regime’s economic policies could kindly be referred to as
unorthodox. Chávez routinely picked fights with trading partners. In an effort to stop the
flight of capital, Venezuela
enacted and enforced strict currency controls—
meaning it’s difficult to use the local currency to buy foreign goods or to line
up foreign lines of credit. Inflation is running at an annual clip of at least 20
percent. Worse, as part of Chávez’s efforts to improve the lot of the poor,
Venezuela for years has imposed and enforced strict price controls on
consumer staples—from cooking oil to paper products.¶ The combination of price controls
and currency controls spells trouble. While they can be good for consumers
in the short run, they can be bad in the long run. If the government sets the price of any
good—shoes, oil, wheat, or paper products—at a price below what it costs someone to make and distribute it, there’s no
incentive for local suppliers to meet the demand. Say government policy stipulates that a roll of toilet paper must cost 50
cents, but the supplies and labor used to make a roll cost 52 cents. Local producers would simply stop producing, or find
ways to export their products to neighboring countries where they might bring a higher price, or sell them on the black
market. The result: scarcity for domestic consumers. In theory, when domestic suppliers reduce capacity and production,
imported products could pick up the slack. But currency controls make it difficult for
companies in Venezuela to import goods freely.¶ You don’t have to be an Ayn Rand devotee to
understand that when there’s little or no possibility of profit from an economic activity, the market will stop providing it.
Alt Caus to Instability
Too many alt causes to Venezuelan instability – they can’t solve
Mahler 11 (Anneget, ‘Oil in Venezuela: Triggering Violence or Ensuring Stability”,
GIGA Research Program: Violence and Security, October 2009, http://www.gigahamburg.de/dl/download.php?d=/content/publikationen/pdf/wp112_maehler.pdf)
The diachronic comparative analysis has revealed that oil, in interaction¶ with shifting non-resourcespecific contextual conditions, has both stabilized¶ political rule and triggered partially
violent conflict in Venezuela. Mainly by¶ means of multidimensional distribution systems, oil contributed to
the¶ successful democratization and internal pacification processes in the 1960s; in ¶ addition, increasing oil abundance
per capita and redistribution politics have¶ also helped consolidate the legitimacy and power of President Chávez in
recent¶ years. Nonetheless, oil—in interplay with other major factors—has also been¶ one
of the causes of a moderate increase in violence in the country. The impact¶ of oil on violent conflict
in Venezuela operates principally through¶ socioeconomic causal mechanisms: on one hand, indirect mechanisms
resultant¶ from the decline of oil abundance, deficient resource sector management, and¶ consequent economic distortions
have been at work; on the other, more recent¶ conflicts have been intensified by the motive of gaining control over
resource¶ revenues, demonstrating that oil by itself, even in times of growing abundance¶ per capita, is no
guarantee of stability. Of additional, but rather¶ complementary, importance appears to be the indirect
impact of oil through the¶ long-term degradation of political institutions due to its fostering of clientelism¶ and corruption.
These two forces initially had a politically stabilizing effect, but¶ once the established system was in crisis, they deepened
the delegitimization of¶ the traditional political elite and thereby actually triggered conflict. Hence the¶ assumption of the
rentier state theory that oil rents foster patronage networks,¶ clientelism, and assistentialist distribution policies clearly
has validity in case of¶ However, the consequences with reference to internal stability versus¶
conflict are not as unambiguous as predicted by the rentier state literature: the¶
respective impact of corruption depends on additional institutional and,
most¶ notably, societal conditions.
No Solvency
No solvency—reform for the oil sector will take years and there are many
structural alt causes to the industry’s decline
Ladislaw and Verrastro 3/6 – Ladislaw is co-director and senior fellow with the Energy
and National Security Program at the CSIS and Verrastro is senior vice president and
James R. Schlesinger Chair for Energy & Geopolitics at CSIS (Sarah and Frank, “Post-Chavez
Outlook for Venezuelan Oil Production,” Center for Strategic and International Studies, http://csis.org/publication/postchavez-outlook-venezuelan-oil-production)
Even under the best of circumstances, reform
in the energy sector will take a long time to emerge. The
damage that has been done to not only PDVSA but to the institutions of the state and
civil society could take years to rehabilitate. A few key reasons for this include: revenue
from the oil and gas sector that is diverted for political purposes and not reinvested in a way
that will drive new production will be hard to direct back to useful investment in the sector, much of the
private sector has been driven away from investment in Venezuela and may be reluctant
to return, or for the companies in country to re-invest in the short-term given their experience in
the 2000s, oil field mismanagement and damage may have likely occurred over the last decade and it
will take time and investment to revitalize, many of Venezuela’s core assets are in technologically
complex and capital-intensive heavy oil projects that take time and resources to develop
and must now be viewed in light of the global array of upstream options that are now on the table for international oil investors as
compared to a decade ago, some of Venezuela’s current commercial relationships on the upstream or export side may have to be revisited in
light of a more commercially-based hydrocarbon policy, Venezuela’s
energy sector is dominated by the state’s
decisions and management and it will take time to replace the managerial competency that
once existed, highly subsidized oil is a key feature of Venezuelan society and the political will
to reform the entire energy sector into one that is more market-based and open to
private investment will necessarily have to feed into the domestic demand-side of that equation.
Can’t solve – structural and legal barriers to economic growth and openness
VenEconomy 13 – a leading provider of consultancy on financial, political and economic data in
Venezuela since 1982 (“Venezuela’s Economy Goes from Bad to Worse,” Latin American Herald Tribune,
2013, http://www.laht.com/article.asp?ArticleId=773892&CategoryId=13303)//SS
Venezuela’s economy is about to hit the bottom: An accumulated inflation of 7.9% in the three first months of 2013, more
than double than the same period a year ago; a shortage of staple products around 17.7%, according to figures by the
Central Bank of Venezuela (BCV); a strong devaluation of the bolivar currency; international reserves stand at a scant $4
billion, which cover a little more than 3 months of imports (Venezuela imports 80% of the products it consumes); a
balance of payments constantly in the red; a fiscal deficit around 19% of the GDP; the nation’s indebtedness almost
reaches $200 billion, or 80% of the GDP; and the main source of income, the state-run oil company PDVSA, is every time
more committed to generate the resources needed by the Republic. All this is seasoned with a productive
sector that has been surrounded for years by excessive punitive laws, price
controls of every kind, which in many case leads to produce below real costs.
A sector that is now battered by an increase in costs and a compliance with labor
demands that can stall production even further, as well as a decrease in the
flow of foreign exchange due to the disappearance of SITME, a dollar acquisition method
through public debt, and a delay in the allocation of dollars on the part of
Cadivi, the foreign exchange regulating body, which in most cases reaches
200 days and a debt that stands between $8 billion-$12 billion. The result is an
increasing strain that starts to be felt by the population, whose income is insufficient to buy basic food products and
medications that are hard to find on shelves at major grocery stores or pharmacies nowadays.¶ One of these signals was a
meeting held on May 3 by the newly appointed Finance Minister Nelson Merentes, BCV president Edmée Betancourt,
Food Minister Félix Osorio and officials from Cadivi, Fonden (a state fund that manages resources from oil revenues) and
a Chinese fund with representatives from 22 areas of the private sector.¶ From this meeting came out three “temporary
solutions”:¶ The announcement of a new plan to solve the delays in the allocation of foreign currency in the short term,
starting with the approval of $2.6 billion, or 85% of delayed applications.¶ The setup of working groups with
businesspeople.¶ The reopening of SICAD, a newly-devised alternate method for companies handpicked by the
Government to get dollars through auctions, and a vague mention on the possible participation of small and mid-sized
businesses and natural persons in these auctions.¶ We get a bitter feeling that nothing will ever change,
because those persisting in running this “socialist-revolutionary” economy
won’t make any decisions to correct all the structural and legal deviations
produced by a communist regime, which leads to misery and to a retrogression in the population’s
welfare.
Stability Turn
Turn - U.S. influence causes instability in Latin America – Venezuela and
Columbia prove
Avilés 05 – assistant professor of political science at the University of Nebraska
(William, “The Democratic-Peace Thesis and U.S. Relations with Colombia and
Venezuela,” LATIN AMERICAN PERSPECTIVES, Issue 142, Vol. 32 No. 3, May 2005,
http://faculty.unlv.edu/kfernandez/articles/aviles.pdf)//SS
The cases of the Samper and Chávez administrations raise important¶ questions about the nature of relations between
democracies. Proponents of¶ the democratic-peace argument view the spread of democracy in Latin¶ America as a
welcome change in the international system in that democracies¶ do not war with each other. Less sanguine
observers have concluded that they¶ do fight each other in less dramatic
ways.¶ The explanations given for various U.S. interventions into the politics of¶ other
democracies have stressed the “weakness” and “fragility” of the¶
democracies involved and/or pointed to evidence that intervention was¶
required to save them. Venezuela and Colombia were cited as models by
different U.S. governments as a democratic alternative to communist revolution¶ or right-wing authoritarianism during
the cold war and were viewed as¶ democracies by the U.S. government well into the 1990s. Finally, both countries enjoyed
substantial trade relations with the United States, with neoliberal economic reforms only strengthening those relations.
Throughout the¶ Samper and Chávez administrations democracy was under assault. In both¶ cases the
response of the U.S. government to threats to democratic control¶ was
conditioned by their impact upon competing policy objectives such¶ as the
maintenance of the drug war, the security of transnational capital’s¶ investments, and an oil policy consistent with the
interests of transnational¶ corporations.¶ In the case of Venezuela, the United States stood
almost alone among the¶ countries in the Western Hemisphere in
supporting a military coup against a¶ democratic government. Both before and after
the coup it financially supported the actors who directly challenged democratic control. In this case, the¶ OPEC politics of
the Chávez administration, its open criticism of the U.S.¶ drug war and antiterrorism policies, and its opposition to
neoliberalism all¶ ran counter to U.S. national interests and/or the interests of transnational corporations. In contrast, its
support of the coup leader Pedro Carmona, who¶ immediately implemented policies consistent with the neoliberal
agenda,¶ suggests that relations based on mutual trust and cooperation are contingent¶ upon similar policies.¶ In the
Colombian case, the United States pursued a policy agenda that¶ contributed
to destabilizing an elected leader in the hope of achieving gains¶ in the drug
war, despite the threat to democratic institutions. However, U.S.¶ pressure stopped short of
creating conditions that might have led to the overthrow of Samper because U.S.-based transnational corporations,
Colombian¶ economic conglomerates, and representatives of Colombia’s export sector¶ played crucial roles in lessening
the effect of U.S. policy.¶ In neither case did the U.S. engage in military intervention
or war with¶ these two democracies, but the lack of military conflict between
the two¶ states had little to do with shared norms or institutional checks
upon executive power. The United States accomplished its goals in the Colombian case;¶ its government
intensified the war on drugs while maintaining an economic¶ environment consistent with the needs of capitalist
globalization. The future¶ of the Venezuelan case is less clear, because the Chávez administration¶ remains in place. It has
not, however, eliminated all foreign investment in¶ Venezuela’s oil industry or made a complete break with neoliberalism.
Further radicalization of Venezuela’s government may lead to an escalation of¶ U.S.
efforts to isolate it and support a political opposition working for its¶
downfall, whether the country remains democratic or not.
Relations Adv
Relations High Now/Will Improve
Relations have already been reset – recent actions and rhetoric prove
De Cordoba and Vyas 6/25 – staff writers (Jose and Kejal “Venezuela, U.S. Try to
Boost Ties” Wall Street Journal June 6 2013 ProQuest 6/25/13)//AH
Venezuela freed a U.S. filmmaker it had accused of plotting against the
government as top officials from both countries agreed on Wednesday to work to
improve strained relations and restore full diplomatic ties. Timothy Tracy, a U.S.
documentary filmmaker, was released from a Venezuelan prison and kicked out of the country, local officials said Wednesday, more than a
month after he was arrested on charges he was a U.S. spy. His lawyer and family have denied those charges. "The gringo, Timothy Tracy,
caught spying in our country, has been expelled from national territory," Interior Minister Miguel Rodríguez wrote in a message on his
Twitter account confirmed by his spokesman. U.S. and Venezuelan officials said Mr. Tracy's
liberation helped set a
warmer tone for a meeting later Wednesday between Secretary of State John Kerry and Venezuelan Foreign Minister Elías
Jaua in Antigua, Guatemala, where both men were attending an Organization of American States conference. The officials said
Venezuela requested the meeting. In recent months, both countries have sought to
restore full diplomatic ties, including the return of ambassadors that were
removed after a 2010 dispute following years of tense relations. But those efforts were sidelined last year amid
former President Hugo Chávez's deteriorating health, his death in March and elections in April. " This clears the
underbrush," said a U.S. official. "We have faith and confidence that this meeting marks the
beginning of a relationship of respect and good relations ," Mr. Jaua said. He added he
would seek to ensure that the U.S. avoids "meddling in internal affairs" in Venezuela. Mr. Kerry thanked Mr. Jaua for Mr. Tracy's
release and said the two countries agreed to find "a new way forward." A U.S. official added
the U.S. wouldn't stop pressing Venezuela to ensure democracy and individual freedoms. Calixto Ortega, Venezuela's newly
named chargé d'affaires in Washington, who attended the Guatemala meeting, said in a telephone interview
that the two countries agreed on a plan to normalize ties and resume
cooperation on antiterrorism, antinarcotics operations and energy. He said he
would be in "permanent contact" with Roberta Jacobson, the U.S.'s top diplomat for Latin America. Mr. Ortega didn't specify why the
filmmaker was released. "If someone wants to interpret that as an action that will have an impact on improving relations with the U.S., they
are free to do so," he said. "It's a gesture from Venezuela but it's not an event that will influence greatly to advance our goal to improve
relations." Analysts cautioned that improving relations could prove difficult. "Venezuela is in such terrible shape that it needs the U.S., but
at the same time the government has to keep up its anti-U.S. rhetoric" to please some segments of his supporters, said Michael Shifter,
president of the Washington-based Inter-American Dialogue think tank. "The big question is whether [President Nicolás] Maduro is
politically strong enough to carry it off."
Recent talks prove that U.S.-Venezuelan relations have already been reset
EFE 13 – (“Venezuela to Pursue “More Positive Relations”, Latino FOX News, 6/5,
http://latino.foxnews.com/latino/politics/2013/06/05/us-venezuela-to-pursue-morepositive-relations/)//mm
The United States and Venezuela want to "establish a more constructive and positive
relationship" after years of strained ties, U.S. Secretary of State John Kerry said here
Wednesday following talks with Venezuelan Foreign Minister Elias Jaua.¶ "We agreed today,
both of us, that we would like to see our countries find a new way forward," Kerry told reporters
in Guatemala's old colonial capital.¶ "To that end, we agreed today there will be an ongoing, continuing dialogue
between the State Department and the Foreign Ministry, and we will try to set out an
agenda by which we agree on things we can work together," the secretary said.¶ The two
officials met on the sidelines of the Organization of American States General Assembly. ¶ A priority of the bilateral
dialogue will be reaching an accord to exchange ambassadors, Kerry said.¶ Diplomatic relations between
Washington and Caracas have been conducted at the level of charge d'affaires since late 2010.¶ The secretary took the
opportunity to thank the Venezuelan government for sending home a U.S. independent
filmmaker who was arrested in Caracas in April and accused of espionage.¶ Timothy Hallet Tracy
was taken early Wednesday to Caracas' international airport, where he boarded a commercial flight bound for Miami. ¶ The meeting with
Kerry was "cordial, frank," Jaua told Caracas-based cable news channel Telesur, expressing confidence the
discussions would
"mark the start of a relationship of respect."¶ "A good relationship between the
government of President Nicolas Maduro and the government of President Barack
Obama is what suits both peoples, it's the guarantee of peace and stability for our
peoples," the Venezuelan said.¶ Mutual respect, non-interference in each other's domestic affairs
and the appropriate handling of disagreements are the foundations of a good bilateral
relationship, Jaua said.¶ The foreign minister said he gave Kerry a report on the violence that followed Venezuela's April 14 special
election to choose a successor to leftist President Hugo Chavez, who died March 5 after a long battle with cancer. ¶ The disturbances left 11
people dead and 80 others injured. Most of the casualties were supporters of Maduro, Chavez's designated successor.¶ Opposition candidate
Henrique Capriles said he would not recognize Maduro's narrow win until the CNE electoral council carried out a full audit of the results.¶
That audit is now in progress, but Capriles is boycotting the process, even as he continues to cry fraud. ¶ Unlike the vast majority of the
world's governments, the United States has yet to recognize Maduro's victory.
Relations are on the upswing – multiple reasons
Smilde 13 – WOLA senior fellow and professor of sociology at the University of Georgia, expert
on Venezuela (David, “Breakthroughs in US Venezuela Relations,” Washington Office on Latin
America Venezuelan Politics and Human Rights blog, 6/3/13,
http://venezuelablog.tumblr.com/post/52310436992/breakthrough-in-us-venezuelarelations#notes)//SR
Few of us believed the rumors last week that a breakthrough in US-Venezuela relations was in the works.
The obstacles seemed too large as the US still had not recognized Nicolas Maduro as the winner of the April 14 election. And Venezuelan
officials at all levels had accused the US of multiple conspiracies, including one in which filmmaker Tim Tracy was supposedly financing
opposition protesters. Tracy was jailed at the end of April. But Tuesday’s
news of a scheduled meeting between
Venezuelan Foreign Minister Elias Jaua and US Secretary of State John Kerry, and
Wednesday morning’s news that Tracy had been released and expelled from Venezuela made clear that
something significant could happen. Indeed it was the highest level meeting between the
two countries since Obama and Chávez shook hands at the Summit of the Americas in 2009, and represented an
important breakthrough (See AP coverage here and Spanish language coverage here and here). The meeting
lasted 40 minutes and ended with a photo op and brief press conference with each leader expressing the desire
for improved relations, announcing a working plan to resolve differences, and the desire
to reestablish diplomatic relations including the exchange of ambassadors. The events of the past
month and a half have made it hard to remember that rapprochement was in the air shortly before the April elections.
The US does not have a big interest in conflict with Venezuela—a major oil supplier and consumer of US
goods and services. Conflict with Venezuela does not facilitate relations with regional heavyweights like Brazil and Argentina that value
their relationship with Venezuela. It also puts the US in an awkward “friend of my enemy is my friend" position with its main ally in the
region, Colombia. Venezuela has complex interests with respect to the US . On the one hand, denunciations
of the US as an imperialist power trying to undermine the Bolivarian government was a key rhetorical tool for Chávez and Maduro appeals
to it frequently—something the US generally makes quite easy. However, Venezuela also has
an interest in good relations
with US as its number one commercial partner in tough economic times. Furthermore, with a tough political
scene at home, international relations are Maduro’s primary source of strength. While polls within Venezuela
show a steady decline in Maduro’s popularity versus a steady increase for rival Henrique Capriles, he has been recognized and warmly
embraced by all countries in the hemisphere except for the US. Indeed not only did Jaua meet with Kerry yesterday, Maduro
softened his approach to tensions with Colombia.
Relations will improve - Chavez gave the order to improve ties before dying
Business Recorder 13 (6/18/2013, “US, Venezuela take steps towards mending ties,”
http://www.brecorder.com/general-news/172/1197252/, JMP)
***Note --- Elias Jaua is Venezuela's foreign minister
US and Venezuelan officials will meet soon for talks that could lead to the
countries exchanging ambassadors for the first time since 2010, Venezuela's foreign
minister said late Thursday. The meeting will be "in the next days, probably in Washington," said Foreign Minister Elias
Jaua, speaking on the sidelines of the Organisation of American States general assembly meeting here.¶ Washington and
Caracas have had a stormy relationship for years, even as Venezuela exports 900,000 barrels of oil per day to the United
States. Caracas and Washington have been operating embassies in each other's country without an ambassador since a
diplomatic spat in 2010. In one sign of the difficult ties, President Barack Obama has yet to acknowledge the victory of
Venezuelan leader Nicolas Maduro - the hand-picked successor of the late leftist icon Hugo Chavez - in the April 14
presidential election.¶ Maduro won the controversial vote by a razor-thin margin in an election that his rival, centrist
Henrique Capriles, has refused to concede. Jaua did not give a date for the meeting, but told reporters that Venezuela will
be represented by its charge d'affairs in Washington, Calixto Ortega. "I believe there is good will on
both sides," Jaua said about the upcoming meeting.¶ Jaua also downplayed Obama's failure
to recognise Maduro's victory. It is "not an issue that matters," he said. During his lengthy presidency Chavez regularly
criticised US "imperialism" and courted US foes like Iran and Syria. Jaua however said
it was the late
leader who told Venezuelan officials "that we had to work towards
normalising these relations" with Washington. On Wednesday Jaua met with US Secretary of
State John Kerry in Antigua in a first step to mend ties.
U.S. Leadership Resilient
U.S. leadership in Latin America, and Venezuela specifically, is resilient
Duddy and Mora 13
(Patrick and Frank, “Latin America: Is US Influence in Latin America Waning?,”
http://www.miamiherald.com/2013/05/01/3375160/latin-america-is-us-influence.html#storylink=cpy, 5/1/13)//SR
While it is true that other countries are important to the economies of Latin America and the Caribbean, it is also still true that the
United States is by far the largest and most important economic partner of
the region and trade is growing even with those countries with which we do
not have free trade agreements. An area of immense importance to regional economies that we often overlook is
the exponential growth in travel, tourism and migration. It is commonplace to note the enormous presence of foreign students in the United
States but in 2011, according to the Institute of International Education, after Europe, Latin
America was the
second most popular destination for U.S. university students. Hundreds of thousands of
U.S. tourists travel every year to Latin America and the Caribbean helping to support thousands of jobs. From 2006-2011 U.S. nongovernment organizations, such as churches, think tanks and universities increased the number of partnerships with their regional cohorts
by a factor of four. Remittances to Latin America and the Caribbean from the United States totaled $64 billion in 2012. Particularly for the
smaller economies of Central America and the Caribbean these flows can sometimes constitute more than 10 percent of gross domestic
product. Finally, one
should not underestimate the resiliency of U.S. soft power in
the region. The power of national reputation, popular culture, values and
institutions continues to contribute to U.S. influence in ways that are
difficult to measure and impossible to quantify. Example: Despite 14 years of
strident anti-American rhetoric during the Chávez government, tens of
thousand of Venezuelans apply for U.S. nonimmigrant visas every year,
including many thousands of Chávez loyalists.
The U.S. is still the dominant power in Latin America
Sabatini 13 - senior director of policy at the Americas’ Society and Council of the Americas, a research organization
for the study of the Americas partnered with a council of international business leaders (Christopher. “Will Latin America
Miss U.S. Hegemony?” Journal of International Affairs Spring/Summer 2013 EbscoHost 6/25/13)//AH
If the economic influence of the United States has declined in the region,
however, its
long-term power—economic and political—remains. The attention on China's
historic economic
presence in the hemisphere has overlooked the United
States' continued economic dominance in the region , both in terms of its trade and the
value of its market In 2011, trade between the United States, Latin America, and the Caribbean totaled $800 billion, and
the volume of overall Latin American trade with the United States is still
greater than with China—and much of that is in manufactured goods.'^ The goods China consumes from
Latin America are primarily commodities—^with little value added. At the same time, Chinese
manufactured exports—many of them made with the commodities produced
by the region—compete directly on the global market with higher end goods
produced by Brazil and other emerging economies in the region.'
Influence/Relations Inevitable
U.S. influence and relations in Latin America are inevitable
Alvarado 13 --- former diplomat in the Mission of Venezuela to the Organization of
American States (5/31/2013, Liza Torres Alvarado, “The U.S. Must Re-evaluate its
Foreign Policy in Latin America,” http://www.isn.ethz.ch/isn/DigitalLibrary/Articles/Detail/?lng=en&id=164370, JMP)
Although there has been a decline in U.S. influence in the region, its
presence is still there. In Venezuela, for example, U.S. oil companies have
seen their actions limited, yet they still operate there. The U nited S tates is
Venezuela’s top commercial partner, as Venezuela supplies 12 percent of U.S. oil
imports.¶ Relations between the U nited S tates and Latin America have
experienced cyclical ups and downs. Geographically, the U nited S tates and
Latin America are linked and have a natural shared market, so there will
always be a relationship of one sort or another . The U nited S tates will
continue to seek to exert its influence over the region, whether through
future plans for the placement of military bases or the promotion of
bilateral trade agreements.
Poor Relations Inevitable
Poor relations inevitable
Meacham 6/21 – director of the CSIS Americas Program (Carl, “The Kerry-Jaua
Meeting: Resetting U.S.-Venezuela Relations?” Center for Strategic & International
Studies, June 21, 2013, http://csis.org/publication/kerry-jaua-meeting-resetting-usvenezuela-relations)//SS
Q2: Does the Venezuelan government want good relations?¶ A2: Despite recent
discussions with the United States, it doesn’t seem to be the case. Earlier this year,
the Venezuelan government suspended talks between the U.S. State
Department and Venezuelan Foreign Ministry that had begun in late 2012, citing
alleged U.S. meddling in Venezuela’s April election. The Maduro
government has also largely followed the Chávez playbook, constantly
accusing the United States of assassination plots, spying, and economic and
political sabotage. While the Kerry-Jaua meeting may have made for nice headlines, it’s difficult to
imagine that the Venezuelan government will not play the anti-U.S. card
again, if needed.¶ This week, Calixto Ortega—appointed to handle matters with the United States—will meet with
Assistant Secretary of State for Western Hemisphere Affairs Roberta Jacobson to continue discussions and establish a new
set of concrete goals to guide the relationship forward.¶ These good-faith gestures made by the
Venezuelan government are neither new nor unheard of. Despite recent
efforts, U.S. policymakers should temper any positive expectations, as a
core basis of Chavismo is its anti-U.S. ideology. It’s of course difficult to
improve relations with a government that consistently defines itself as
vehemently against your foreign policy agenda. This suggests that Venezuela may be looking
to reestablish a purely economic relationship—one that will eliminate U.S. sanctions.¶ Still, even if certain
positive steps are taken, history suggests that the Venezuelan government
could quickly scuttle progress made, likely with the goal of Maduro shoring
up support within his own ranks.
Some tensions are inevitable
Duddy 13 --- served as the U.S. ambassador to Venezuela from 2007 until 2010 (May
2013, Ambassador (ret.) Patrick Duddy, “Venezuela after Chavez,”
http://www.unc.edu/depts/diplomat/item/2013/0105/ca/duddy_venezuela.html, JMP)
In such circumstances, would the Chavistas risk making the bilateral relationship worse? It is hard to imagine but
probably not impossible. That said, for the foreseeable future, Venezuela will depend on oil receipts from the U.S. to keep
the ship of state afloat. Until other markets are able to absorb a greater percentage of Venezuela’s heavy, sulfuric oil and
pay full price or Venezuela’s production increases substantially, Venezuela will continue to sell to the U.S. Just as
importantly, we will likely continue to buy what they produce. Might the relationship improve? Those who have faith in
the power of common interests believe it is possible. Moreover, during my tenure as ambassador,
both the Bush administration and the Obama administration have
emphasized that the U.S.
would like to have a more productive, a more functional relationship with
Venezuela. I think this will be tough to achieve with a Chavista government.
Anti-Americanism is a core tenet of Chavez’s Bolivarian movement.
Tensions may ease from time to time but, as we have seen since Chavez’s death, but the
antipathy of the Chavistas toward the U.S. is deeply established and never
entirely absent .
Status Quo Solves
U.S. has already offered to increase engagement with Venezuela
Mohammed 13 (1/9/2013, Arshad, “U.S. open to better Venezuela ties but it takes two
to tango,” http://www.reuters.com/article/2013/01/09/venezuela-chavez-usaidUSL1E9C9BA320130109, JMP)
WASHINGTON, Jan 9 (Reuters) - The United States said on Wednesday it would like to
improve relations with Venezuela, gripped by political uncertainty following socialist President Hugo
Chavez's fourth cancer operation, but it will "take two to tango."¶ Venezuela has said it would postpone
Thursday's scheduled inauguration for Chavez, 58, who has not been seen or heard from since surgery in Cuba on Dec. 11.
He was diagnosed with an undisclosed type of cancer in his pelvis in June 2011.¶ The unprecedented silence by the
president, a fierce U.S. critic famous for speaking for hours in meandering broadcasts, and the postponement of his
inauguration for a third six-year term has left many convinced he could be in his last days.¶ While she did not tie it to
Chavez's ill health, U.S.
State Department spokeswoman Victoria Nuland said the U nited
S tates had long been interested in improving ties with Venezuela, an OPEC member
and historically the United States' fourth-largest supplier of imported crude oil and petroleum products.¶ She also
confirmed media reports that Roberta Jacobson, the senior U.S. diplomat for Latin
America, spoke by telephone in November with Venezuelan Vice President Nicolas
Maduro, Chavez's heir apparent, about improving ties.¶ "We have for some time made
clear that we were willing and open to trying to improve our ties with
Venezuela. We've put a number of ideas forward to the government ," Nuland
said at her daily briefing, without detailing the U.S. proposals.¶ "Regardless of what happens politically in Venezuela, if
the Venezuelan government and if the Venezuelan people want to move
forward with us, we think there is a path that's possible," she added. "It's just going to
take two to tango."¶ The spokeswoman declined to comment on the constitutionality of the Venezuelan government's
decision to postpone Chavez' inauguration, a move that was endorsed by the country's Supreme Court on Wednesday,
saying this was for Venezuelans to decide.¶ Ties between the two countries have been tense for years for many reasons,
including Chavez's fiery criticism of the United States and Washington's misgivings about his nationalizations of industry
and what it regards as his authoritarian tendencies.¶ The countries do not have ambassadors accredited to one another.¶
In 2010 the U.S. government revoked the visa of Venezuela's ambassador to the United States in retaliation for Chavez's
rejection of a nominated U.S. envoy critical of his government.¶ Despite the tensions, Venezuelan oil has continued to flow
to the United States.¶ In a background note posted on its website in April 2012, the State Department
said the U nited S tates continued to seek constructive engagement with
Venezuela's government, focusing on areas where cooperation was in both
countries' interest.¶ "Examples of such overlapping interests include cooperation in confronting narcotics
trafficking and terrorism, as well as the commercial relationship," the note added.
U.S. committed to constructive engagement now --- focused on anti-drug
and counter terror
Sullivan 13 --- Specialist in Latin American Affairs at Congressional Research Service
(1/10/2013, Mark P., “Venezuela: Issues for Congress,”
http://www.fas.org/sgp/crs/row/R40938.pdf, JMP)
U.S. Policy
The United States traditionally has had close relations with Venezuela, a major supplier
of foreign oil, but there has been friction in relations under the Chávez
government. Over the years, U.S. officials have expressed concerns about human
rights, Venezuela’s military arms purchases, its relations with Iran, and its efforts to
export its brand of populism to other Latin American countries. Declining cooperation
on anti-drug and anti-terrorism efforts has been a major concern. The United States has
imposed sanctions: on several Venezuelan government and military officials for allegedly
helping the Revolutionary Armed Forces of Colombia (FARC) with drug and weapons
trafficking; on three Venezuelan companies for providing support to Iran; and on several
Venezuelan individuals for providing support to Hezbollah. Despite tensions in
relations, the Obama Administration remains committed to seeking
constructive engagement with Venezuela, focusing on such areas as antidrug and counter-terrorism efforts. In the aftermath of President Chávez’s
reelection, the White House, while acknowledging differences with President
Chávez, congratulated the Venezuelan people on the high level of
participation and the relatively peaceful election process.
Both countries are working to find common ground now on drugs – that
solves relations
New York Daily Sun 13 (1/29/2013, “Venezuela Open To Discussion On Improving
Ties With The US,” http://www.newyorkdailysun.com/venezuela-open-to-discussionon-improving-ties-with-the-us/, JMP)
The two countries ties used to be strong. However, after taking office, President Hugo Chávez accused the Bush
administration of attempting a coup to oust him from his position and broke off diplomatic ties with the U.S.
Furthermore, Chavez reasserted sovereignty over Venezuela’s oil reserves and raised royalties for foreign firms, which
challenged the US’ economic position. More than that, Chavez made his friendship with Fidel Castro public and made
significant trade with Cuba which undermined the U.S. policy of isolating the said nation. Their relation was only
reestablished in 2009 when Barack Obama was elected President of the United States, though their ties has been strained
since then.¶ But the tide has once again turned. With Chavez out of the picture due to his illness,
Venezuelan officials are trying to ally themselves with the US.¶ To amend
their ties, the Venezuelan government is reported to be considering US’
proposal for the return of anti-drug agents chased out of the Venezuela eight years
ago by President Chavez.¶ On this issue, Venezuela’s ambassador to the Organization of
American States (OAS), Roy Chaderton said that both countries are trying to find a
common ground .¶ He said: “There are things that are being done with a great deal of seriousness and a lot of
caution,” and added, “We are not obliged to have bad ties with governments which have different visions to ours … I hope
pragmatism prevails and we reach a fair place of mutual interest.”
Alt Caus - Maduro
Alt caus – U.S. hasn’t recognized Maduro election as legitimate
Baverstock 5/13 (Alasdair, “Venezuela’s Maduro Still Waiting on Washington’s Recognition”,
http://www.csmonitor.com/World/Americas/2013/0517/Venezuela-s-Maduro-still-waiting-onWashington-s-recognition, 5/17/2013)//SR
More than a month after Venezuela’s contested presidential election,
President Nicolás Maduro’s narrow victory has yet to be recognized by the
United States. Refusing to legitimize the new premier while a partial
recount of the vote is underway, the US position has led to further political
tensions in a relationship historically stressed under the leadership of former President Hugo
Chávez. Venezuela's Maduro victory upheld in audit - but opposition says fight not A handful of countries, including Chile,
Peru, and the US, have expressed concern over the democratic standards of the election, which Maduro won by a little
more than 1 percent of the vote. Venezuela’s opposition party is calling for the results to be annulled, citing over 3,000
instances of election fraud, ranging from alleged multiple-voting in chavista-strongholds to polling booth intimidation.
“Obviously, if there are huge irregularities we are going to have serious questions about the viability of that government,”
said Secretary of State John Kerry during a hearing of the US Foreign Affairs Committee following the announcement of
President Maduro’s victory in April. While the US has pledged not to interfere with
Venezuelan politics, the refusal to recognize Maduro's presidency has left
many to question what message the US is trying to send, and how – if at all –
it will impact Venezuela post-Chávez. “[The US isn’t] recognizing or failing to
recognize,” says David Smilde, professor of sociology at the University of Georgia.
“They’re just waiting. But here in Venezuela that’s seen as an act of belligerence.”
Alt caus – U.S. refusal to recognize Maduro election has escalated tensions
between the U.S. and Venezuela
Weisbrot 4/23 (Mark, “The United States Shows its Contempt for Venezuelan
Democracy,” Venezuelan Analysis, http://venezuelanalysis.com/analysis/8779)
While most of the news on Venezuela in the week since the 14 April presidential election focused on the
efforts of losing candidate Henrique Capriles to challenge the results, another campaign,
based in Washington, was quite revealing – and the two were most definitely related.
Without Washington's strong support – the first time it had refused to recognise a
Venezuelan election result – it is unlikely that Capriles would have joined the hardcore
elements of his camp in pretending that the election was stolen. Washington's efforts to
de-legitimise the election mark a significant escalation of US efforts at regime change in
Venezuela. Not since its involvement in the 2002 military coup has the US government
done this much to promote open conflict in Venezuela. When the White House first
announced on Monday that a 100% audit of the votes was "an important, prudent and
necessary step", this was not a genuine effort to promote a recount. It amounted to
telling the government of Venezuela what was necessary to make their elections
legitimate. They also had to know that it would not make such a recount more likely. And this was also their
quick reply to Nicolás Maduro's efforts, according to the New York Times of 15 April, to reach out to
the Obama administration for better relations through former Clinton energy secretary, Bill Richardson.
Alt Caus – Cuba Embargo
Alt caus – U.S. must end Cuba embargo to improve relations with Venezuela
Pagano 13 - contributing writer to the Truman National Security Project, a national
community of issue experts (James, ‘Moving Venezuela to the Center’, 3/18/2013,
http://trumanproject.org/doctrine-blog/moving-venezuela-to-the-center)//MJ
Chavez was infamous for his anti-American tirades. George W. Bush’s poor global standing gave Chavez an easy target.
With a more positive global image, the most important step President Obama can take is
to normalize relations with Cuba. As Venezuela’s closest ally, Cuba has
remained a persistent problem in U.S.-Latin American relations. By
normalizing relations, Obama would take a huge step in reducing antiAmericanism in Venezuela. Simultaneously, Obama would ingratiate
himself to the rest of the region by ending the dated embargo. Perhaps most
importantly, eliminating this issue would give Venezuela’s next president
the political cover necessary to mend relations with the United States. The U.S.
should push for economic reform with the help of Brazil which seeks a greater role in international and regional politics.
Former Brazilian President Lula da Silva has close ties to Venezuela, and touting the recent successes of his center-left
government in Brazil could help persuade Maduro to moderate his government.¶ Brazil has made huge societal gains
without suffering the kind of economic setbacks seen in Venezuela. Friendly cajoling, along with the promise of closer
economic ties could help lead Maduro onto a path of economic reform necessary to extend certain “Chavista” social
programs.¶ Colombia, Brazil and the U.S. also have a shared interest in improving Venezuelan security. Under Chavez,
Venezuela became on the most violent countries in Latin America, as drug related crimes skyrocketed.¶ Violence is the
number one concern of Venezuelans, and significant reductions would be a major political victory for whoever is in power.
Brazil and Colombia together should pressure Venezuela to accept sorely needed D.E.A assistance with the tacit
acceptance of modest political reforms, most importantly freer press.¶ The death of Chavez is a critical juncture in U.S.Latin American relations and it is important the United States not miss this opportunity. Having a stable trustworthy
Venezuela would allow the United States to continue to draw down operations in the ever-volatile Middle East, fight
narcotrafficking and expand trade.¶ Careful, well thought-out overtures and policy changes will help quell lingering antiAmericanism while also improving regional stability. Ending the Cuban embargo would provide
absolute economic gain for all parties, while providing cover for Maduro to
thaw relations with the United States and receive aid to stop uncontrollable violence. Strategic
engagement with regional allies could help spur the economic and institutional reforms necessary for Venezuela to
prosper moving forward.
Embargo undermines relations - outweighs the signal from the aff
Inter-American Dialogue 12 --- the leading U.S. center for policy analysis, exchange, and
communication on issues in Western Hemisphere affairs (April 2012, An Inter-American Dialogue Policy
Report, The Dialogue’s select membership of 100 distinguished citizens from throughout the Americas
includes political, business, academic, media, and other nongovernmental leaders, “Remaking the
Relationship: The United States and Latin America,”
http://www.thedialogue.org/PublicationFiles/IAD2012PolicyReportFINAL.pdf, JMP)
Cuba, too, poses a significant challenge for relations between the U nited S tates
and Latin America. The 50-year-old US embargo against Cuba is rightly criticized
throughout the hemisphere as a failed and punitive instrument. It has long been a strain
on US-Latin American relations. Although the United States has recently moved in the right direction
and taken steps to relax restrictions on travel to Cuba, Washington needs to do far more to dismantle its severe, outdated
constraints on normalized relations with Cuba. Cuba
is one of the residual issues that most
obstructs more effective US-Latin American engagement.At the same time, Cuba’s
authoritarian regime should be of utmost concern to all countries in the Americas. At present, it is the only country
without free, multi-party elections, and its government fully controls the press. Latin American and Caribbean nations
could be instrumental in supporting Cuba’s eventual transition to democratic rule. An end to the US policy of isolating
Cuba, without setting aside US concern about human rights violations, would be an important first step.
Alt Caus – Immigration
Lack of immigration reform major factor undermining relations
Inter-American Dialogue 12 --- the leading U.S. center for policy analysis, exchange,
and communication on issues in Western Hemisphere affairs (April 2012, An InterAmerican Dialogue Policy Report, The Dialogue’s select membership of 100
distinguished citizens from throughout the Americas includes political, business,
academic, media, and other nongovernmental leaders, “Remaking the Relationship: The
United States and Latin America,”
http://www.thedialogue.org/PublicationFiles/IAD2012PolicyReportFINAL.pdf, JMP)
Immigration Washington’s failure to repair the United States’ broken immigration
system is breeding resentment across the region , nowhere more so than in the principal
points of origin and transit: Mexico, Central America, and the Caribbean. Latin Americans find the idea
of building a wall on the US-Mexico border particularly offensive.¶ Despite bitter
political battles over immigration in the United States, there is general agreement about what sensible reform would
include. It combines effective border and employer enforcement, the adoption of a general worker program consistent
with labor market needs in the United States, and a path toward residence and citizenship for the estimated 12 million
unauthorized residents living in the country. This package is similar to the reform effort (unfortunately defeated in
Congress) proposed under President George W. Bush.¶ The complicated and divisive politics of the
United States, compounded
by the weakness of the US economy, have so far
blocked this comprehensive approach. But more limited measures such as the Dream Act, allowing
children brought to the United States without appropriate documentation an opportunity to qualify for citizenship, would
not only be welcomed in US Latino communities and in Latin America, but it would demonstrate that the issue is being
taken seriously and with a measure of compassion in Washington.
No Solvency
No solvency—other measures and cooperation on other issues are needed
first
Inter-American Dialogue 12 – leading US center for policy analysis, exchange, and
communication on issues in Western Hemisphere affairs (“Remaking the Relationship: the United
States and Latin America,” Inter-American Dialogue,
http://www.thedialogue.org/PublicationFiles/IAD2012PolicyReportFINAL.pdf)
The dramatic changes that have made Latin America’s countries wealthier, as well as more
confident, assertive, and independent, account in part for the diminished role and
influence of the United States in the region. So, too, have the problems confronting the
United States: the huge economic setback from which it is only gradually recovering; its large and
growing inequality of wealth, income, and education; the decline of its physical
infrastructure; and Washington’s dysfunctional politics. But the attenuated relationship between the
United States and Latin America may owe most to policy choices made both by Washington and governments in the
region. Neither the United States nor Latin America is doing enough to sustain vibrant,
productive relations. Little effort is being made by Washington, which is stymied by political
divisions at home, to address longstanding problems that separate the United States from almost every
country in the region. The first order of business for the United States has to be: (1) fixing its
broken immigration system, which affects Latin America more than any other part of the
world; (2) joining with Latin America to develop a new, more effective approach to
dealing with the drug problem, and (3) ending the US embargo against Cuba and other
restrictions on US-Cuban relations that are widely rejected in the region. Simply addressing an
unfinished agenda is not enough. Both the United States and Latin America need to do more to exploit the enormous
untapped opportunities of their relationship in economics, trade, and energy. They need to work together to deal with
global and regional problems. And they need to project common values, including peace, democracy, human rights,
expansion of equal opportunity, and social mobility. They need to breathe new life and vigor into hemispheric relations.
AFF can’t solve—too many chronic irritants undermine U.S.-Latin American
relations
Inter-American Dialogue 12 – leading US center for policy analysis, exchange, and
communication on issues in Western Hemisphere affairs (“Remaking the Relationship: the United
States and Latin America,” Inter-American Dialogue,
http://www.thedialogue.org/PublicationFiles/IAD2012PolicyReportFINAL.pdf)
Some enduring problems stand squarely in the way of partnership and effective
cooperation. The inability of Washington to reform its broken immigration system is a
constant source of friction between the United States and nearly every other country in the Americas. Yet US
officials rarely refer to immigration as a foreign policy issue. Domestic policy debates on
this issue disregard the United States’ hemispheric agenda as well as the interests of
other nations. Another chronic irritant is US drug policy, which most Latin Americans
now believe makes their drug and crime problems worse. Secretary of State Hillary Clinton, while
visiting Mexico, acknowledged that US anti-drug programs have not worked. Yet, despite growing
calls and pressure from the region, the United States has shown little interest in
exploring alternative approaches. Similarly, Washington’s more than half-century embargo on
Cuba, as well as other elements of United States’ Cuba policy, is strongly opposed by all
other countries in the hemisphere. Indeed, the US position on these troublesome issues—
immigration, drug policy, and Cuba—has set Washington against the consensus view of
the hemisphere’s other 34 governments. These issues stand as obstacles to further cooperation in the
Americas. The United States and the nations of Latin America and the Caribbean need to resolve them in order to build
more productive partnerships.
Single instances of action do not change international perceptions of the
U.S.
Fettweis 8 (Christopher – professor of political science at Tulane, Credibility and the
War on Terror, Political Science Quarterly, Winter, GDI File)
Since Vietnam, scholars have been generally unable to identify cases in which
high credibility helped the U nited S tates achieve its goals. The shortterm
aftermath of the Cuban Missile Crisis, for example, did not include a string of Soviet
reversals, or the kind of benign bandwagoning with the West that deterrence theorists would have expected. In fact,
the perceived reversal in Cuba seemed to harden Soviet resolve. As the crisis was drawing to a close, Soviet diplomat Vasily
Kuznetsov angrily told his counterpart, "You Americans will never be able to do this to us again."37 Kissinger commented
in his memoirs that "the Soviet Union thereupon launched itself on a determined, systematic, and long-term program of
expanding all categories of its military power .... The 1962 Cuban crisis was thus a historic turning point-but not for the
reason some Americans complacently supposed."38 The reassertion of the credibility of the United States, which was done
at the brink of nuclear war, had few long-lasting benefits. The Soviets seemed to learn the wrong lesson. There is
actually scant evidence that other states ever learn the right lessons. Cold
War history contains little reason to believe that the credibility of the
superpowers had very much effect on their ability to influence others . Over the
last decade, a series of major scholarly studies have cast further doubt upon the
fundamental assumption of interdependence across foreign policy actions.
Employing methods borrowed from social psychology rather than the economics-based models commonly employed by
deterrence theorists, Jonathan Mercer argued that threats are far more independent
than is commonly believed and, therefore, that reputations are not likely to be
formed on the basis of individual actions .39 While policymakers may feel that their decisions
send messages about their basic dispositions to others, most of the evidence from social psychology suggests otherwise.
Groups tend to interpret the actions of their rivals as situational, dependent
upon the constraints of place and time . Therefore, they are not likely to form
lasting impressions of irresolution from single, independent events . Mercer argued that
the interdependence assumption had been accepted on faith, and rarely put to a coherent test; when it was, it almost
inevitably failed.40
No Impact
No impact to loss of influence – allies won’t abandon us
Walt 11 (Stephen, Professor of International Relations – Harvard University, “Does the
U.S. still need to reassure its allies?” Foreign Policy, 12-5,
http://walt.foreignpolicy.com/posts/2011/12/05/us_credibility_is_not_our_problem,
GDI File)
A perennial preoccupation of U.S. diplomacy has been the perceived need to reassure allies of our
reliability. Throughout the Cold War, U.S. leaders worried that any loss of credibility might cause
dominoes to fall, lead key allies to "bandwagon" with the Soviet Union , or result in some form of
"Finlandization." Such concerns justified fighting so-called "credibility wars" (including Vietnam), where the main
concern was not the direct stakes of the contest but rather the need to retain a reputation for resolve and capability.
Similar fears also led the United States to deploy thousands of nuclear weapons in Europe, as a supposed counter to Soviet
missiles targeted against our NATO allies. The possibility that key allies would abandon us was almost
always exaggerated, but U.S. leaders remain overly sensitive to the possibility . So Vice President
Joe Biden has been out on the road this past week, telling various U.S. allies that "the United States isn't going
anywhere." (He wasn't suggesting we're stuck in a rut, of course, but saying that the imminent withdrawal from Iraq
doesn't mean a retreat to isolationism or anything like that.) There's nothing really wrong with offering up this sort of
comforting rhetoric, but I've never really understood whyleaders were so worried about the credibility
of our commitments to others. For starters, given our remarkably secure geopolitical position,
whether U.S. pledges are credible is first and foremost a problem for those who are dependent
on U.S. help. We should therefore take our allies' occasional hints about realignment or neutrality with
some skepticism; they have every incentive to try to make us worry about it, but in most cases little
incentive to actually do it .
Relations Turn
Turn – U.S. resource investment in Latin America hurts relations – broad
protests prove
Grandin 10 – American historian, and professor of history at New York University
(Greg, “Muscling Latin America,” The Nation, January 21, 2010,
http://www.thenation.com/article/muscling-latin-america#axzz2XLnn95pN)//SS
Responding to criticism from South America on the Colombian deal, the White House insists it merely formalizes existing
¶ military cooperation between the two countries under Plan ¶ Colombia and will not increase the offensive capabilities of
the ¶ US Southern Command (Southcom). The Pentagon says otherwise, writing in its 2009 budget request that it needed
funds ¶ to upgrade one of the bases to conduct “full spectrum operations throughout South America” to counter, among
other ¶ threats, “anti-U.S. governments” and to “expand expeditionary ¶ war fare capability.” That ominous language,
since scrubbed ¶ from the budget document, might be a case of hyping the threat ¶ to justify spending
during austere times. But the Obama administration’s decision to go forward with the bases does accelerate ¶ a
dangerous trend in US hemispheric policy. ¶ In recent years, Washington has experienced a
fast erosion of ¶ its influence in South America, driven by the rise of Brazil,
the ¶ region’s left turn, the growing influence of China and Venezuela’s ¶ use
of oil revenue to promote a multipolar diplomacy. Broad ¶ so cial movements
have challenged efforts by US- and Canadianbased companies to expand
extractive industries like mining, ¶ bio fuels, petroleum and logging. Last
year in Peru, massive ¶ in digenous protests forced the repeal of laws aimed
at opening ¶ large swaths of the Amazon to foreign timber, mining and oil ¶
corporations, and throughout the region similar activism continues to place
Latin America in the vanguard of the anticorporate and anti-militarist
global democracy movement.
Dutch Disease Turn
Venezuela’s overreliance on oil makes instability and economic collapse
inevitable – must diversify
GIS 13 (Geopolitical Information Service, May 28, 2013. The Dangers of ‘Dutch Disease’ in Latin America.”
http://www.geopolitical-info.com/en/economics/the-dangers-of-dutch-disease-in-latin-america)
where governments
are heavily reliant on one or two commodities and have not prepared for
prices to fall, they are at risk of what has been labelled ‘Dutch disease’. A SIX-fold
increase in oil prices in the last decade gave Venezuela an unprecedented bonanza –
almost US$1 trillion in revenues. Under the charismatic leadership of President Hugo Chavez (1999-2013), it propelled Venezuela on
to the world stage. Now Mr Chavez is dead, Venezuelan oil output is declining and
energy prices are no longer rising. Many observers believe the fate of the country [Venezuela] is
now totally linked to the price of oil and the vagaries of an extremely volatile market
Venezuela's new leader, Nicolas Maduro, is untested and without charisma. Dutch windfall The case of Venezuela is an extreme
example of what has become known as 'Dutch disease', named after the experience of the Netherlands in the 1960s when new
A number of Latin American economies have boomed as world prices of their export commodities have increased. But
discoveries of natural gas in the North Sea brought sudden and massive increases in export revenues for the Dutch government. The windfall, called ‘rents’ by
economists because they are over and above the normal profit on a market exchange, caused the real exchange rate to appreciate and produced powerful
disincentives to invest in non-tradeable goods, such as domestic manufacturing and services. The Dutch economy fell out of balance and was plunged into a severe
Venezuela is almost totally reliant on just one commodity – oil. Revenues
from the sale of oil by its national petroleum company, PDVSA, account for 80 per cent of the nation’s gross domestic
product (GDP). In the last decade, the average annual windfall has been 30 per cent of GDP. The wealth accumulated over a decade amounted to 320 per cent
of GDP. Oil price legacy The price of oil is arguably the critical variable which determines the
stability of the Venezuelan state, its economy and social cohesion. As the price of oil went up in 2010-2011, the government took an
recession.
increasing portion of the windfall to use for social policies that amounted to buying votes for Mr Chavez. As the price of oil levelled off in 2012-2013 to around
US$90 per barrel, the windfall has shrunk and the newly-elected government of President Maduro has had less to spend. Even since his narrow election victory on
April 14, 2013, crime has increased and there have been numerous social protests. The government is also having to renegotiate the generous deals on oil it had
offered friendly governments, such as Nicaragua and Cuba. Dutch disease The title of an article in The Economist in 1977 about the impact on the Dutch economy
of the discovery of natural gas in the North Sea Large foreign exchange earnings from export of the gas led to a shift in prices and in the exchange rate, so that
previously competitive exporters lost market share, and production of those exports fell Precipitated economic crisis and plunged the Dutch economy into severe
recession It was the second time the Dutch government had experienced the phenomenon - the export of tulips created a commodity bubble in 17th century
Holland Failure to deal with the bubble brought the Dutch economy to its knees Economists now use the term 'Dutch disease' to describe a reduction in a country’s
export performance as a result of an appreciation of the exchange rate after a natural resource such as oil has been discovered Potential
symptoms of
Dutch disease: Shift in investment to the commodity which further increases a rise in its price and away from previously competitive economic
sectors; rising inflation, economic stagnation and political instability But Mr Maduro has
other problems. Hugo Chavez drained off the income of PDVSA and did not invest in the industry. Deferred maintenance has
shut down the country’s only refinery. Oil production has fallen and the government has
been forced to import refined oil.
Continued overdependence on oil trades off with the development of other
sectors necessary for economic sustainability
Rossi 11 (Carlos A. Rossi, International Association for Energy Economics, “Oil Wealth and the Resource Curse in
Venezuela.” www.iaee.org/en/publications/newsletterdl.aspx?id=137)
Dutch Disease is a complex economics phenomenon that occurs to mineral rich nations when a sudden burst in the demand for its product
is recorded. It has been widely analyzed and documented from various sources. Here we will only describe the elements that explain why
the oil
wealth rent that has accrued to Venezuela has come with a double edge
sword that has contributed to moving the country into a renter and unproductive
society. 1. It has overvalued the national currency and weakened the
competitive edge in the production of other staple goods that used to be made and now are
imported. 2. Since oil related activities are much more lucrative, this has caused many
entrepreneurs to abandon their traditional areas in the rural sectors in favor of flocking to the urban cities in
search of a piece of the “oil pie’’. For example, in the 1970’s, a government decision was made to cancel all agricultural related debt in the
hopes of eliminating this financial burden and increasing agricultural production. The result was the opposite. Most landowners simply sold
or closed their latifundios and moved into the construction business or other urbanite ventures. 3. Massive
internal
migrations and foreign immigrations to the urban core of principal cities were
caused, creating the infamous poverty belts, collapsing all social services and resulting in
rampant crime. Venezuela’s population tripled since the first oil boom in 1973. 4. Lavish spending on huge
industrial projects that were ill conceived and badly managed were induced, wasting valuable resources,
creating the need for permanent subsidies and international debt. Rampant rent seeking and corruption by both state
‘technocrats’ and private contractors occurred. In 1949 Venezuela’s GDP per-capita income was higher than West Germany, Italy and
Japan. Now it ranks number 44 in the world. 5. It
made the nation more dependent on one
commodity for hard currency earnings to pay for imports, which include both final food and medical goods, as well as in parts and
inputs for industrial plants. 6. It made the country totally dependent on the Government
for all economic activity, including both public and private production since it is the state that controls foreign currency
for imports of spare parts and finished goods. 7. It has transformed the political conditions of the
country. This last effect is probably the least understood. As opposed to virtually all other developing countries, where the means of
production (land, capital, companies) is privately held, Venezuela is different for two reasons: 1) Because, by the constitution oil belongs to
the state and 2) because it is a full grown democracy. This means that the vote from the poor people count, and since the country has a lot
more poor folk that rich, they count a lot. Hugo Chavez champions the poor people because he not only comes from within their ranks but
has developed a great rapport with them. He has improved their lot and hastened their hope and dignity but he has done it charitably, not
productively nor sustainably. The phenomena arises since by Venezuelan law whomever governs the state also governs the fate of the
countries lucrative oil reserves. This dramatically hastens rent seeking but in the reverse. It is not the rich who have control of the lucrative
means of production and the poor who want access to it, but just the opposite. The real paradox in Venezuela is that it is the rich who want
access to what the poor (or some) have; the power over the oil wealth. It is a political-sociological pyramid turned on its head. Today oil
accounts for over 95% of Venezuela’s exports, 50% of government revenues
and 30% of GDP directly. According to official figures, imports tripled between 2000 and 2008 to the unheard of level of US$
49.4 billion, before they collapsed 22.3% the following year due to policy instigated recessions6. Venezuela’s populist president, Hugo
Chavez, has presided over untold oil wealth and a recognizable reduction in Venezuela’s worst poverty levels (through ‘missions’ geared
towards extreme hunger alleviation by handouts, free education and health care) has also presided over a collapse in the production of all of
Venezuela’s agriculture and much of the industrial apparatus, including crude oil production and even some energy intensive sectors like
steel and aluminium. In contrast to other socialist nations that focus on socialist distribution while leaving production issues to private
enterprise, Venezuela
has opted for the ill defined “productive socialism’’ were the state
This socialist production model has
exacerbated rent seeking and Dutch disease, and the constant “expropriations’’ have scared off would
be investors in virtually all economic sectors. It is not that his socialist production model is not working,
interferes with basic production decisions of key industries.
but that it can’t work; it is socially-physically impossible for it to work (100 years of productive capitalism is enough time to teach us how
companies must be managed to produce.
A limited oil sector forces innovation and diversification
Moscona-Skolnik 13 (Jacob, “A New Doctrine for Sustainable Development: Case Study in
Venezuela”, Harvard International Review, 6/12, http://hir.harvard.edu/blog/jacob-mosconaskolnik/a-new-doctrine-for-sustainable-development-case-study-in-venezuela)//mm
The International Energy Agency avers that the international community must not use more than 1/3 of confirmed oil deposits by 2050 if
we are to achieve the goal of preventing in increase in global temperature of more than 2°C. Is
it fair to require
Venezuela—or any Venezuelan government campaigning for popular support—to limit this crucial sector of
its economy in order to follow international standards? Should it be the responsibility of oil-exporting or oil-importing countries
to limit the global oil market? At what point is Venezuela no longer developing “within planetary boundaries” and at what point does the
threat of environmental impact trump each individual country’s right to economic and social betterment? The
death of Hugo
Chavez represents a turning point in Venezuela and an opportunity for
Maduro and others to reevaluate and refocus. Yet the most practical or even the most moral path is
not obvious. Venezuela itself contributes only 0.56% of the world’s total carbon emissions; although, per capita, Venezuela emits more than
most other developing countries, this figure pales in comparison to the global North and the already developed countries that neglected
environmental and global concerns on their paths to industrialization, urbanization, and development. The SDSN report also nobly calls
upon high-income countries to provide both economic and technological aid for still-developing regions. While the dissemination of
technology and information is crucial, it must be coupled with technological advances and the use of existing green technologies in the
global North (despite potential short term losses). In
the case of Venezuelan oil, these measures might
reduce global demand for oil, spurring homegrown innovation in Venezuela and necessary
reform to the economic structure. These steps could revitalize the weakened
private sector that, following Chavez’s nationalization of many industries, is
reluctant to invest in new technologies or unexplored sectors of the
economy.
---XT: Dutch Disease
Over-reliance on oil makes Venezuela vulnerable to Dutch disease and
instability
The Economist 10 (“It's only natural” The Economist 9/9/10 <http://www.economist.com/node/16964094>
6/28/13)//AH
Latin America is uncomfortably dependent on commodities. In the past decade they
accounted for 52% of the region's exports, according to the World Bank. That is down from 86% in the 1970s, but over the
same period the figure in East Asia and the Pacific fell from 94% to 30%. Chile, Peru and Venezuela still rely
on raw materials for more than three-quarters of their total exports. In all, as the
World Bank notes in a report published this month, more than 90% of Latin Americans live in countries that are net
exporters of commodities, the exceptions being in Central America and the Caribbean. Governments have
also become more reliant on raw materials for their tax revenues (see chart 1).
There is nothing wrong with producing raw materials. The rise in world prices for Latin America's commodities, and the
related increase in their output, may have accounted for between one-third and half of the region's growth over the past
decade. And thanks to Asia's economic vigour, commodity prices fell only briefly during the recession and remain at
historically high levels. Over the past decade a region that has habitually suffered from balance-of-payments troubles has
benefited from the foreign exchange that commodities bring in. This bonanza seems to refute the thesis put forward by
Raúl Prebisch, the founding director of ECLAC, that the price of commodities is bound to decline in relation to the price of
manufactured goods. Even so, relying on raw materials carries a series of risks. One is
volatility: their prices are more variable than those of manufactures.
Second, many economists worry about “Dutch disease”, a term coined by this newspaper
in 1977 to describe the impact of a North Sea gas bonanza on the economy of the Netherlands. This malady
involves commodity exports driving up the value of the currency, making
other parts of the economy less competitive, leading to a current-account
deficit and even greater dependence on commodities. This matters all the more because
mining and hydrocarbons are capital-intensive businesses, generating
relatively few jobs. The commodity boom, together with capital inflows attracted by better economic prospects,
has already pushed up the value of some of the region's currencies. For example, São Paulo seems extraordinarily
expensive to any visitor. The strength of the Brazilian currency, the real, worries officials and industrialists. A third
concern is that many non-agricultural commodities are not renewable
(although high prices encourage new discoveries), so governments should invest the tax
revenues they generate in infrastructure and training to diversify the
economy. Producing commodities may also involve local environmental damage. In parts of Latin America mines
and oilfields are in areas inhabited by people of indigenous descent and have caused cultural clashes. A fourth
problem is the potentially corrosive effect of commodity production on
political institutions. Many commodities incorporate rents (ie, excess profits
derived from the fact that supply is usually limited in the short term). It is in
the state's interest to capture those rents, but corruption often follows when it
does. Mines and oil- and gasfields often involve high sunk costs and low variable
costs, making them a tempting target for expropriation. Venezuela provides
the clearest evidence of these ills.
Oil dependency makes economic instability inevitable
Paiva 10-Phd in Economics, IMF country economist
(Claudio , “Economic Growth in Venezuela Policies vs Oil Wealth,” WORLD
ECONOMICS • Vol. 11 • no. 3 • July–September 2010,
http://www.relooney.fatcow.com/0_NS4053_1128.pdf )//SR
Oil dependency, macroeconomic instability and inefficient economic
policies have been important determinants of economic growth in
Venezuela. Several studies have linked Venezuela’s lacklustre long-term growth
performance to oil dependency and largely inefficient public policies that
distorted market signals (price, interest and exchange rate controls),
exacerbated macroeconomic uncertainty (persistent non-oil fiscal deficits
and high inflation) and, at times, promoted over-investment in physical
capital in detriment to investments in human capital.3 The empirical analyses
in this paper support and confirm many of these conclusions. Specifically, econometric estimates suggest that oil
dependency has increased in the last two decades, and that growth has been negatively affected by
(non-oil) fiscal deficits, inflation, and price and exchange rate volatility.
Oil dependence makes economic collapse and debt crises inevitable
Kott 12
(Adam, “Assessing Whether Oil Dependency in Venezuela Contributes to National Instability”, Journal of
Strategic Security, Volume 5
Number 3 Fall 2012: Energy Security,
http://scholarcommons.usf.edu/cgi/viewcontent.cgi?article=1176&context=jss&seiredir=1&referer=http%3A%2F%2Fscholar.google.com.proxy.lib.umich.edu%2Fscholar%3Fstart%3D30%26
q%3DVenezuela%2Bdutch%2Bdisease%26hl%3Den%26as_sdt%3D1%2C23%26as_ylo%3D2000#search=%
22Venezuela%20dutch%20disease%22) //SR
The world is experiencing an unprecedented demand for energy as economic development begets rising incomes as well as
increased stresses on the international marketplace. While petroleum has the potential to help meet the challenges of
economic development, the international oil market is volatile and fragile, and
seemingly insignificant changes in oil production can have a
disproportionately large impact on global prices. Many states that are
reliant on oil and other nonrenewable resources have fallen victim to the
resource curse. Venezuela faces the various attributes of the resource curse,
including an unstable economy, the rise of an authoritarian government,
Dutch Disease, and corruption. The Economic Perspective Volatility and the Boom-Bust Cycle Overreliance on a single commodity for a majority of a nation's export revenue is an especially precarious prospect. Overreliant countries put their fate in the hands of a capricious global
commodity market that regularly cycles through booms and busts. In the
case of oil, prices have shifted as much as 70 percent in a year's time. The
boom-bust culture presents many problems to countries reliant on a single
export or two for a majority of their revenue. When prices are high, the opportunity cost of
investing in another good for export becomes extremely great. Capital and labor shifts toward one
product may have short-term benefits, but this creates an economic
monoculture. A country with an economic monoculture, such the case of
Venezuela and oil, will experience considerable economic hardships when
the price of the commodity falls. For instance, the price of oil decreased from $140/barrel to
$40/barrel between 2008 and 2009. During this same time period, Venezuela experienced a negative 3.2 percent GDP
growth rate due largely to the sudden shortage of export revenues, which declined from $93.5 billion to $57.6 billion.
Boom-bust cycles also lead to poor governmental expenditure decisions.
Overspending during good years and deep budget cuts during bad years
have far reaching impacts. Renowned economist Jeffrey Sachs notes, "the
benefits in the good years are transitory while the problems generated
during the bad years endure." For instance, in 2009 Hugo Chavez slashed 33 percent of the national
budget after oil traded well below what the Venezuelan Government initially projected. Poor financial
decisions can often have international repercussions. During commodity booms,
countries often borrow against future earnings from various international lenders. A prolonged drop in
prices, however, may make it impossible for these countries to pay loans
back, subsequently forcing the borrower to default or become mired in a
deep debt crisis. Dutch Disease Dutch Disease is another common trait seen in countries reliant on natural
resource exports. The term "Dutch Disease" was first coined in 1977 by the Economist to describe the economic impact of
natural gas exports in the Netherlands. Following the discovery of natural gas in the Black Sea in the 1970s, the Dutch
manufacturing sector began to experience a significant decline. Essentially, local currency appreciates as a result of high
demands for a given commodity. The influx of money into the local economy due to high-value exports causes demand
and, consequently, prices to increase. As a result, local currency appreciates and there is an increase of the real exchange
rate. With such an overvalued domestic currency, other domestic products such as manufactured and agricultural goods
become overpriced and uncompetitive in the global market. This in turn also contributes to what is often called the
"resource pull effect." A dominant natural resource sector attracts a
majority of the domestic capital and often becomes the wage-setter, with
wages higher than the struggling domestic industries. While some labor
shifts towards this natural resource sector cause layoffs in the now less
competitive manufacturing and agricultural sectors, many nonrenewable
resource industries are not labor intensive. For instance, mining rare minerals may require a
large employee base, but oil and natural gas production is primarily a technology and
capital-intensive process needing fewer workers. This results in high
unemployment rates in petroleum dependent economies that do not have a
viable manufacturing or agricultural base. In addition to a shifting work force, natural resource
domination threatens to crowd- out entrepreneurial activity and innovation, especially if this industry is the wage-setter,
as workers may be more inclined to work in the resource sector rather than create their own businesses. Overall, Dutch
Disease creates a vicious cycle that gives primacy to a single sector and helps
rein- force the natural resource monoculture.
China Adv
China Won’t Invest
China won’t make any new investments in the Venezuelan oil industry with
political uncertainty
Katakey and Guo ’13 – (Rakteem and Aibing, “Chavez’ Death Could Dim China’s
Venezuelan Energy Prospects”, Bloomberg, 3/6,
http://www.bloomberg.com/news/2013-03-06/chavez-s-death-could-dim-china-svenezuelan-energy-prospects.html)//mm
China, the world’s second-biggest consumer of crude oil, is likely to delay deciding on
new investments in Venezuela’s energy industry to assess any change of political
direction after President Hugo Chavez’s death.¶ “The death of Chavez could lead to oil
supply uncertainties from Venezuela and could jeopardize Venezuela’s oil exports to
China in the short term,” Gordon Kwan, a Hong Kong-based analyst with Mirae Asset Securities Ltd., said today
in an e-mail. His death in the long-term may affect investment in the industry by China, he
said.¶ State-run China Development Bank Corp. has agreed to lend Venezuela $46.5 billion since 2008, representing half
of the loans the country received in the period, according to a Jan. 13 report from Massachusetts-based Tufts University.
About 95 percent of the debt is backed by sales contracts for crude, the report shows. Chavez, who transformed
Venezuelan politics by channeling record oil revenue to the poor, died at 58 after a struggle with cancer, raising the risk of
unrest and political infighting.¶ Yao Zhongmin, head of China Development Bank’s supervisory board, said in Beijing
today the Venezuelan loans carried risks, for which the bank has a contingency plan. He didn’t
give any details.¶ Shipments to China by Petroleos de Venezuela SA, the state producer known as PDVSA, are up nearly
tenfold since 2006 to an average 518,000 barrels a day and will surpass 1 million barrels a day before the end of 2015,
Venezuela’s Oil Minister Rafael Ramirez said Sept. 25. The country sells China about 19 percent of its output, based on
Ramirez’s statement.¶ Top 10¶ “China’s current investment in the country should be safe,
especially as a large chunk of the investment was in the form of ’loans for oil’,” said Laban
Yu, a Hong Kong-based analyst at Jefferies Group Inc. “What’s uncertain at the moment is whether a
new government will maintain its anti-U.S. stance or shift to the opposite. A shift of
political atmosphere could dim Chinese companies’ investment perspective in the
country very quickly.”¶ Venezuela, South America’s largest oil exporter, ranked as China’s seventh-biggest supplier
last year, with 15 million tons, posting the highest expansion among China’s top 10 providers at 33 percent. Chavez led a
government that kept many of the biggest western oil companies out of Venezuela, helping China secure supplies.¶ Since
Chavez announced he had cancer in June 2011, investors have speculated that his departure could pave the way for the
opposition to win power and introduce more market- friendly policies. Venezuela’s dollar bonds returned 46 percent last
year, the best of any emerging market after the Ivory Coast, according to JPMorgan Chase & Co.’s EMBI Global index.¶
Citic, CNPC¶ China’s Citic Group, which is constructing residential homes in Venezuela with total contracts of as much as
$3 billion, is assessing the impact of Chavez’s death, Chairman Chang Zhenming said today.¶ China Development Bank
money has gone toward joint projects with state-owned China National Petroleum Corp. in the Orinoco heavy oil belt.¶ Fu
Chengyu, chairman of China Petrochemical Corp., the parent of China Petroleum & Chemical Corp. (600028) or Sinopec,
said Chavez’s death won’t affect the company. Sinopec isAsia’s biggest refiner.¶ “Long term, the political
uncertainties will discourage further China oil M&As in Venezuela’s Orinoco Delta, rich in
heavy oils that are highly sought after by Sinopec’s coastal refineries,” said Mirae Asset Securities’ Kwan. Chinese
companies will wait until at least the end of elections, which must be held within 30 days of the president’s death, before
assessing investments, he said.¶ New Head¶ Venezuelan Vice President Nicolas Maduro, a former bus driver and union
leader, will take over as interim president of the country while elections are organized, according to Foreign Minister Elias
Jaua.¶ Russian and Indian companies are withholding planned investments in Venezuelan oilfields, according to eight oil
company executives and consultants earlier this year, who declined to be identified because they weren’t authorized to talk
about the matter publicly.¶ “We’ll have to wait for the new head of state to be named and look at the statements he makes
about the country’s future directions,” T.K. Ananthkumar, finance director at Oil India Ltd. (OINL), said today in a phone
interview. Oil India is a partner with five other companies in a field that’s producing about 1,000 barrels a day of crude in
Venezuela. “Hopefully, things will not turn for the worse,” he said.¶ Reliance, Gazprom¶ India’s Reliance Industries Ltd.
(RIL) postponed by a few months an estimated $2 billion investment decision for four Venezuelan oilfields beyond a Jan.
31 deadline because it has not received geological data from PDVSA, a person directly involved in the deal said this year,
asking not to be identified citing confidentiality terms.¶ OAO Rosneft (ROSN) agreed to spend $36 billion with PDVSA,
which oversees the world’s largest oil reserves, and fellow Russian partners on Orinoco projects in the last three years. It
also agreed to lend Venezuela $6 billion together with state-run OAO Gazprom (GAZP) in 2011. While Russian energy
projects will advance as long as Chavez’s party remains in charge, they won’t be supported by the opposition, a Gazprom
Latin American manager, who asked not to be named citing company policy, said Jan. 12.¶ Oil output in the country
declined 13 percent to 2.7 billion barrels per day in 2011 from 1999 when Chavez came to power, according to the BP
Statistical Review of World Energy. PDVSA hasn’t published any operational data beyond 2011.
Maduro Won’t Cut Ties With China
Maduro won’t cut ties with China
Alic 13 --- geopolitical analyst, co-founder of ISA Intel in Sarajevo (4/15/2013, Jen,
“Foreign Oil & Gas Companies Look to Status Quo in Venezuela,”
http://oilprice.com/Geopolitics/South-America/Foreign-Oil-Gas-Companies-Look-toStatus-Quo-in-Venezuela.html, JMP)
In the meantime, China’s foothold in Venezuela remains on solid ground.
China is already privy to 600,000 bpd from Venezuela in return for $42
billion in loans. Maduro is not likely to rock this boat with Beijing, and
according to the terms already in place, Venezuelan exports are set to
increase to one million bpd by 2015, though most of the loan money has already
been spent. According to Southern Pulse, Maduro will likely seek new loans from China,
but this will depend on the terms and stability in Venezuela.
Trade Not Zero Sum
Geopolitics is zero sum but economic engagement isn’t
Feldman 13 – law professor at Harvard, author of “Cool War: the Future of Global
Competition,” (Noah, China’s Rise Doesn’t have to Mean U.S. Decline,” Japan Times, 6/5/13,
http://www.japantimes.co.jp/opinion/2013/06/05/commentary/chinas-rise-doesnt-have-tomean-u-s-decline/#.Uc3naPmmiAg)//SR
Someone steals your most sensitive secrets. Then, planning a face-to-face meeting, he says he wants to develop “a new type” of relationship
with you. At what point, exactly, would you start thinking he was planning to drink your milkshake? Ahead of the first summit between U.S.
President Barack Obama and President Xi Jinping of China on June 7, the two nations are on the brink of geopolitical conflict. As officials
acknowledge, China is a classic rising power, poised to challenge U.S. dominance. Historically, the sole global superpower never gives up
without a fight. “China’s peaceful rise” was a useful slogan, while it lasted, for China’s leaders. “America’s peaceful decline” will get no one
elected, whether Democrat or Republican. Geopolitics
is almost always a zero-sum game. If China can copy or
work around U.S. missile defenses, fighter jets and drones, the U.S.’ global position will be eroded — and the gains will go to China. At
the same time, trade between the two rivals remains robust. Last week, Henan-based Shuanghui
International Holdings Ltd. agreed to buy the U.S. pork-processing giant Smithfield Foods Inc. for $4.7 billion. This could be the
single-largest Chinese acquisition of a U.S. company, and it is reason for enthusiasm.
Mutual ownership of significant corporate assets across borders doesn’t miraculously guarantee peace, nor can it make
conflict disappear overnight. But it gives both sides the incentive to manage geopolitical conflict, and
not let it overtake the tremendous mutual benefits created by trade. The juxtaposition of
rising tensions over cyber-attacks and the pork cooperation perfectly captures the paradoxical
state of Chinese-U.S. relations — and explains why officials on both sides are struggling to come up with a new conceptual
framework to understand the change. Never before has a rising power been so economically
interdependent with the nation challenging it. The ties go beyond the U.S.’ 25 percent
market share for Chinese exports or China’s holdings of 8 percent of the outstanding U.S.
national debt. They include about 200,000 Chinese studying in the U.S. and perhaps 80,000 Americans living and working in
China. The combination of geopolitical competition and economic interdependence sets the terms for the
struggle that won’t be a new Cold War so much as a Cool War. If the Soviet Union and the U.S. avoided all-out conflict because of
mutually assured nuclear destruction, the relations between China and the U.S. today could be defined by the threat
of mutually assured economic destruction. The economic costs of violent conflict would
be incalculably large. As a practical matter, however, we mustn’t assume that economic interdependence precludes the
possibility of old-fashioned violence. On the positive side, China is urging North Korea to re-engage with the six-party talks and
denuclearize the Korean Peninsula — a sign that the government in Beijing realizes that its unruly ally could do significant damage to
regional stability. On the negative side, North Korea seems perfectly content to ignore its mentor’s directives. As we learned during the Cold
War, proxies don’t always behave the way their would-be masters want them to. It is far from clear that the Americans and the Soviets
wanted their allies in the Middle East to go to war in 1967, 1973 or 1981. What steps, then, should Obama take in preparation for a summit
at which he will confront an adversary who wants a much greater role in their mutual relationship? How should we think about keeping the
Cool War from getting hot? The first is to understand the structure of motivation on the other side. A nationalist Chinese public will expect a
rising China to be treated as a counterpart by the U.S. — and Xi, who has spoken of achieving the “Chinese dream,” must be attuned to this
public expectation over the medium term. In the immediate future, however, the legitimacy of the Chinese Communist Party still depends
upon continued high rates of export-driven growth. And Xi’s most important job — today, tomorrow and forever — is keeping the party in
power. Understanding this motivation reveals the
main U.S. levers against a rival bent on narrowing the military-technology
continuing dependence on the U.S. export market, and more broadly, China’s need to
integrate into the global economy to maintain economic vitality. Of course, it would be precipitous for Obama to draw
gap: China’s
any direct links between U.S. security interests and America’s willingness to keep its borders open to Chinese companies. But the message
should nevertheless be communicated clearly: The U.S. won’t tolerate being subject to cyber-attacks designed to change the militarystrategic balance. A country that steals your trade secrets can become your economic enemy; one that steals your national-security secrets is
signaling that it may become an actual security enemy. The
long-term strategy for managing the Cool War is the same: Keep
the pork foremost. The positive gains from trade can and must be leveraged to move both
sides’ incentives away from force and toward cooperation. We shouldn’t be seeking to create a utopia. But
we can and should use the magic of trade and economic cooperation to shift the incentives that push great powers to fight each other. The
iron laws of history, like the iron laws of economics, are malleable.
No tradeoff - China and US interests in Latin America aren’t mutually
exclusive
Meachem 13 – director of the Americas program at the Center for Strategic and International
Studies (Carl, “Chinese President Xi Jinping Tours the Americas: Why does it Matter?” CSIS,
6/10/13, http://csis.org/publication/chinese-president-xi-jinping-tours-americas-why-does-itmatter)//SR
Q3: Are
U.S. and Chinese interests in Latin America parallel? Can both
interests be pursued without friction? A3: Though the U.S. and Chinese
governments are both seeking to forge deeper economic ties with Latin
America, each has distinct political motives as well. For its part, the Obama administration's engagement largely
focuses on improving Latin Americans' perceptions of the United States. The administration has shifted away from the
historically paternalistic U.S. attitude toward Latin America in favor of one based on equal partnerships. To date, Chinese
interest in Latin America has been primarily economic, focusing on infrastructure projects, gaining access to the region's
abundant natural resources and expanding its economic support to the region. But recent developments reveal that
China's intentions are beyond the purely commercial, extending toward efforts to balance against U.S. involvement in
Asia. U.S. leadership in the Trans-Pacific Partnership (TPP) and Obama's "pivot to Asia" have likely been influential in
increasing Chinese interest in Latin America—including the recent announcement that a Chinese company will work with
the Nicaraguan government to build a trans-oceanic canal to compete with the Panama Canal. While U.S. and Chinese
interests are not necessarily in opposition, the United States must continue to prioritize its relationships with Latin
American countries if it is to remain the more attractive alternative to Chinese investment in the region. Conclusion:
Chinese overtures to Latin America are not to be ignored nor rejected. It may be worthwhile to balance against China's
involvement by adding Colombia to the TPP, for instance, or for the United States to accept the Pacific Alliance's invitation
for membership, or maybe including Mexico in the U.S. -EU free trade agreement negotiations. But rather than
turning this into an all-out mercantilist fight for the region with winners
and losers, maybe in addition to pursuing regional initiatives, such as those
mentioned above, forging a path based on cooperation and inclusion
between the United States and China, one which could include efforts to bring China into the TPP,
for instance, could provide an effective way of enhancing commercial
opportunity for the United States, involved Latin American countries, and
China.
Ven Won’t Cut Off Oil
Venezuela won’t cut imports and the impact would be quickly remedied
Arias 09 --- M.A. Strategic Intelligence, B.A. Political Science (2/9/2009, Frances,
“Venezuela’s Threats to U.S. Economic Security,” http://www.eir.info/2009/02/09/venezuela%E2%80%99s-threats-to-us-economic-security/, JMP)
The likelihood of Venezuela cutting oil exports is highly unlikely . “Venezuela
beleaguered by food shortages, depends heavily on oil exports for about 90 percent of its
export earnings and about half of the government revenue” (Mufson 2008, 1). The
United States is Venezuela’s biggest customer. Halting crude sales would affect CITGO.
“Halting crude sales to the U.S. would divert heavy feed from CITGO, which
PDVSA owns and which has a total of 756,000 b/cd of deep-conversion capacity in
three wholly owned U.S. refineries – 597,000 b/d of it on the Gulf Coast” (Oil & Gas
Journal 2008, 21). According to Oil & Gas Journal, “If Chavez did lose his senses
and halts sales of Venezuelan oil in the U.S., crude prices might jump in a
trading panic but would quickly resettle as U.S. refineries found new sellers
– probably the traders moving in to buy from PDSA” (Oil & Gas 2006, 21). Also,
Venezuelans are importing more U.S. products such as construction
machinery, cars, and computers. “Although it may be Chavez’s ultimate
desire to end U.S.-Venezuelan interdependence, such close economic
linkages cannot be easily dismantled ” (Lapper 2006, 17).
Not only would the stopping of oil exports hurt Venezuela’s economy, it
would affect U.S. foreign aid being sent there. “According to the State
Department’s fiscal year 2007 budget, Venezuela will receive $1 million in Andean
Counter Drug Initiative funds this year – a decrease of nearly $2 million since 2005 –
and $1.5 million in Economic Support Funds to strengthen civil society and the rule of
law” (Lapper 2006, 23).
Venezuela won’t cut off the U.S. - leverage is declining and it is importing
U.S. gasoline
Blas 12 (12/13/2012, Javier, “US net imports of Venezuelan oil hit 30-year low,”
http://www.ft.com/intl/cms/s/0/5ef9e0fa-44f8-11e2-858f-00144feabdc0.html, JMP)
Not so long ago, Hugo Chávez, the leftist Venezuelan leader, almost every month would threaten
the US that he would shut down his country’s oil exports. Each time,
Washington took the threats seriously because of the importance of Caracas for US energy
supplies.¶ Not any longer. The US dependence of Venezuelan net crude and oil
products exports (including the US Virgin Islands, which largely refined Venezuelan crude to export into the
US) has dropped to levels last seen nearly 30 years ago.¶ The sharp drop is due to three
factors. Overall US oil imports are down on the back of the shale boom. In addition, the closure of a large refinery in the
US Virgin Islands co-owned by Petróleos de Venezuela (Pdvsa) has further reduced imports of Venezuelan-origin oil
products. And more recently, Venezuela has started to import large amounts of US-made gasoline to offset a local
shortage.¶ The reduction in US imports of Venezuelan-origin crude and oil
products has been going on for the last five years. The new factor is the
surge in US exports of oil products into Venezuela. In September, US refiners shipped a
record of 196,000 b/d of gasoline and other oil products to Caracas.¶ The International Energy Agency, the western
countries’ oil watchdog, associates the surge in US exports to outages in Amuay and El Palito refineries in Venezuela.¶ The
Amuay plant, part of the 955,000 b/d giant Paraguana Refining Center – the world’s second largest after the Jamnagar
refinery in India – suffered an explosion and fire in August that killed nearly 50 people and injured more than 150.
Although Caracas has said several times the refinery is returning to full production, the surge in oil products from the US
suggests the contrary.¶ The jump in US gasoline exports to Venezuela means that for
each 10 barrels of crude that Caracas ships to the US, two return to
Venezuela as products. The US oil product exports accounted in September
for roughly 20 per cent of Venezuelan domestic oil consumption of about 1m b/d.¶
The combination of lower Venezuelan oil exports – both from the country itself and the US Virgin Islands – and higher US
gasoline exports reduced in June US net imports of Venezuelan-origin oil to 685,000 barrels a day, the lowest since March
1984, according to Financial Times’ estimates based on data from the US Energy Information Administration. US net
imports of Venezuelan-origin oil recovered a bit in September – the last data available –, reaching 839,000 b/d.¶ Mr
Chávez, who is undergoing cancer treatment in Cuba, may threaten an oil embargo in the future, as he did during the
recent presidential elections. But his menace will no longer worry Washington.
Venezuela can’t cut exports to U.S. --would hurt its country far more
Laten 10 (8/3/2010, Grant, “Venezuelan Oil Embargo Wouldn’t Impact American
Energy Security,” http://csis.org/blog/venezuelan-oil-embargo-wouldn%E2%80%99timpact-american-energy-security, JMP)
With Hugo Chávez’s July 25 announcement that he would cease oil shipments to the United States in the event that
Colombia and Venezuela go to war, the potential implications for American energy security seem daunting. In 2009,
Venezuela supplied 11.5 percent of the crude oil consumed in the United States, and with Colombia and Venezuela’s recent
break of diplomatic and economic ties, the notion of armed confrontation in South America can’t be entirely overlooked.
So what, then, would happen if Venezuela were to suddenly institute a
petroleum embargo on the U nited S tates? Would the ensuing chaos be politically worthwhile for the
Chávez administration, or would it merely compound Venezuelan economic woes?¶ Venezuela exports just over one
million barrels of crude oil to the United States per day, most of which goes to refineries owned by Citgo, the American
arm of Venezuela’s state-owned oil company, Petróleos de Venezuela, S.A. (PDVSA). Shipments of oil and refined
petroleum products to the United States constitute roughly 60 percent of Venezuela’s total petroleum exports, and largely
sustain Citgo’s operations. Over the past few years, Chávez has been gradually
diversifying Venezuela’s petroleum customers, but the U nited S tates remains
its most important market. An oil embargo implemented within the next few months would
impact the Venezuelan economy much more acutely than it would that of the
US because of Venezuela’s structural reliance on exports to the American
market, coupled with current supply and demand conditions.¶ The sudden
cessation of oil exports to the United States would wreak havoc on several
Venezuelan systems. First, because Venezuela would have to modify its production for another market –
probably China – PDVSA would be forced to drastically revamp its domestic production and transportation
infrastructures. Different demand proportions, chemistry, and regulatory constraints would tie up PDVSA assets, expose
gross deficiencies in export refining capacity, and slash oil shipments for months, if not years. Meanwhile, Citgo refineries
and distribution networks in the United States would sit dormant, leading to enormous investment losses for PDVSA and
reductions in future operational capacity due to the loss of experienced employees.¶ With PDVSA feeling the financial
brunt of an embargo, the availability of government-backed social services in
Venezuela would plummet. Recent structural reforms have placed responsibility for administrating many
aspects of the government’s programs on PDVSA directly because it generates the majority of government revenue. If that
revenue disappeared, so would a large portion of PDVSA’s ability to subsidize groceries, provide healthcare, and maintain
services for millions of people. Venezuelan citizens would be severely impacted by a
measure meant to punish the U nited S tates.
Won’t cut off oil and would only raise world prices $11 a barrel
Sullivan 13 --- Specialist in Latin American Affairs at Congressional Research Service
(1/10/2013, Mark P., “Venezuela: Issues for Congress,”
http://www.fas.org/sgp/crs/row/R40938.pdf)
Despite notable frictions in bilateral relations, Venezuela has continued to
be a major supplier of oil to the U nited S tates. On numerous past occasions,
however, Chávez threatened to stop selling oil to the U nited S tates, although
Venezuelan officials maintained that Venezuela would only stop sending oil
to the United States if attacked by the U nited S tates. Because of Chávez’s strong rhetoric, however, some
observers raised questions about the security of Venezuela as a major supplier of foreign oil. In June 2006, the
Government Accountability Office (GAO) issued a report, requested by then-Senate Foreign Relations Committee
Chairman Richard Lugar, on the issue of potential Venezuelan oil supply disruption. At the time, the GAO report
concluded that a sudden loss of all or most Venezuelan oil from the world
market could raise world prices up to $11 per barrel and decrease U.S. gross
domestic product by about $23 billion.116¶ On August 25, 2012, an explosion at a Venezuelan oil
refinery killed more than 40 people, and raised questions about whether the government has neglected maintenance and
safety in its management of PdVSA. Venezuela’s largest oil union has called for the resignation of the head of PdVSA,
Rafael Ramirez, who also serves as minister of oil and mining. The issue became a campaign issue, with critics of
President Chávez maintaining that his government has used PdVSA to fund social programs, with not enough slated for
maintenance and investment for the oil company’s infrastructure.117
Venezuela uses oil to U.S. as leverage with China
Elton 10 (8/19/2010, Doug, “What would happen if Chavez cut off the US from
Venezuelan oil?” http://www.helium.com/items/1926791-chavez-cut-off-the-us-fromvenezuelan-oil-china-benefits, JMP)
The international game of politics often plays like dominos. Columbia recently accused
Venezuela of harboring rebels and this in turn lead Chavez to comment on oil exports to
the U.S. If the dominos had fallen, a fourth country would have been the most likely to
benefit in the long-term.
China is predicted to overcome the U.S. economy one day. Its rapid
industrialization equals a need for oil. Venezuela is aware of this and has been
keen to advance the relationship between the two countries. At present,
exporting oil to the U.S. allows Venezuela leverage when dealing with the
Chinese. The greater the demand, the more control favors the distributor.
Take the U.S. out of the equation and Venezuela will be desperate to sell oil
to the Chinese. It’s the difference of coming to the feast a beggar or a king for
Venezuela, but for the U.S. it has a far greater consequence.
Venezuela cut off unlikely
Arias 09 --- M.A. Strategic Intelligence, B.A. Political Science (2/9/2009, Frances,
“Venezuela’s Threats to U.S. Economic Security,” http://www.eir.info/2009/02/09/venezuela%E2%80%99s-threats-to-us-economic-security/, JMP)
Conclusion
Global consumption of oil will continue to grow as the years pass. The United States is
overly dependent on oil imports to meet its demand to supply its industries. The U.S.
must look to find alternatives should Venezuela decide to halt all oil imports
to the U nited S tates. This threat is a weak threat considering the possible
outcomes that would hamper Venezuela. If the U.S. plans to bounce back from the
economic hit that would come with Venezuela pulling oil exports, then it must begin to
create a strategy that will cushion the blow.
China Not A Threat
China involvement in Venezuela not a threat
Salameh 11 --- international oil economist, a consultant to the World Bank in Washington, DC on
energy affairs and a technical expert of the United Nations Industrial Development Organization in Vienna
(Second Quarter 2011, Mamdouh G., International Association for Energy Economics, “China’s Oil
“Adventure” into Venezuela,” www.iaee.org, JMP)
For China, its growing involvement in Venezuela is an integral part of its global oil
diplomacy. China is very aware that its robust economic growth would falter without
secure oil supplies. China’s global oil diplomacy is, therefore, geared towards ensuring
that this never happens. Though China’s involvement in Venezuela could be
construed by some political analysts as an intrusion into the U.S. back yard,
China has no interest in supplanting U.S. influence in Venezuela . Its only
interest is oil supply security and the diversification of its oil supply
sources.¶ Historically, Venezuela has been one of the most important
suppliers of foreign oil to the United States and the U.S. government would
have liked to keep its relationship with Venezuela on an even keel. If this is
not going to be, it is not a great loss to the U.S. oil market since Canada with
as great oil reserves as Venezuela could easily fill the gap.¶ China’s presence
in Venezuela should not, therefore, be treated as a threat to U.S. national
interests but a purely commercial venture by a country seeking to quench
its thirst for oil.
China not a threat to U.S. hegemony - won’t risk conflict
Jiang 07 --- Deputy Director of the Institute of Latin American Studies (ILAS) of the
Chinese Academy of Social Sciences (Shixue, “Three Factors in Recent Development of
Sino-Latin American Relations,” in ENTER THE DRAGON? China’s Presence in Latin
America, http://www.wilsoncenter.org/sites/default/files/EnterDragonFinal.pdf, JMP)
THE U.S. FACTOR IN SINO-LATIN AMERICAN RELATIONS¶ A closer relationship between China
and Latin America has caused concern in the U nited S tates. At a hearing of the Western
Hemisphere Subcommittee of the House International Relations Committee on April 6, 2005, U.S. Congressman Dan
Burton (R-IN) said, “The traditional goals of U.S. policy in Latin America have always included promoting political
stability, promoting democracy, increasing access to markets, and preventing the rise of hegemonic power. Until we know
the definitive answer to this question of whether China will play by the rules of fair trade and engage responsibly on
transnational issues, I believe we should be cautious and view the rise of Chinese power as something to be
counterbalanced or contained, and perhaps go so far as to consider China’s actions in Latin America as the movement of a
hegemonic power into our hemisphere.”4¶ Burton mistakenly considered the development
of Sino-Latin American relations as a danger to the U nited S tates. He said at the
hearing, “I believe China’s rising economic, political and military influence in the Western hemisphere poses serious
challenges to the United States in the years ahead. And if we are not careful, Beijing’s influence could easily unravel the
region’s hard-won, U.S.-backed reforms to fight against corruption, human rights abuses, increase government
transparency and combat intellectual property violations, and the democracies that we see as fledgling democracies could
be in real jeopardy. We must work in earnest to prevent this from happening.Ӧ At the hearing, the U.S. Congressman even
said, “I would also caution our friends throughout Latin America about granting China full market economy status. I think
it is clear that China’s state subsidies, its currency peg, and poor labor rights conditions disqualify China from truly
deserving ‘market economy status.’ Consequently, granting China full market economy status would be, in my view, a
grave error in judgment.Ӧ The
news media in the U nited S ates have been portraying a
wrong perception of the development of Chinese relations with Latin
America. One editorial in the Wall Street Journal, for instance, says, “The rise of China in the region could
complicate U.S. efforts to control illegal immigration, weapons shipments, the drug trade and money laundering because
China is cooperating with Latin countries that are not especially friendly toward those efforts. Some of these nations
may try to use the Chinese alternative to challenge U.S. hegemony.”5¶ The
United States’ concern
over the closer relationship between China and Latin
America is misplaced and unnecessary. It is well-known that Latin America has been on the path of
reform and opening to the outside world for almost two decades. It endeavors to attract more foreign investment and
liberalize the market so as to stimulate growth. As a result, China
is only one of the economic
partners with whom Latin America has been trying to cooperate.¶ China
understands well that Latin America is the backyard of the U nited S tates, so
China has no intention whatsoever to challenge the American hegemony in
Latin America. Both China and Latin America have been opening to the outside world. In the age of
globalization both of them should cooperate to push forward South-South
cooperation. As a matter of fact, further cooperation between China and Latin
America will benefit regional peace and development in the Asia-Pacific
region and in Latin America. Such an outcome would also certainly favor of
the U nited S tates.
Sino-Latin American cooperation benefits world peace and there is no
threat to U.S.
Jiang 07 --- Deputy Director of the Institute of Latin American Studies (ILAS) of the
Chinese Academy of Social Sciences (Shixue, “Three Factors in Recent Development of
Sino-Latin American Relations,” in ENTER THE DRAGON? China’s Presence in Latin
America, http://www.wilsoncenter.org/sites/default/files/EnterDragonFinal.pdf, JMP)
In the age of globalization, there is a high priority on promoting SouthSouth cooperation in all fields. China’s relations with Latin American
countries are part of this cooperation. The strengthened cooperation
between China and Latin America should benefit world peace and
development. No less important is the fact that the development of Sino-Latin
American relations will not harm the interests of the U nited S tates.
China’s presence in Latin America is not a threat
Heine 08 – Rothman Scholar, USC Law, COHA (Jamie, “China’s Claim in Latin
America: So Far A Partner Not A Threat”, Council on Hemispheric Affairs, 7/25,
http://www.coha.org/china%E2%80%99s-claim-in-latin-america-so-far-a-partner-nota-threat/)//mm
By light years, Washington traditionally has held the upper hand when it comes to foreign influence on Latin America. Its
hemispheric power-advantage rests on decades of security, trade, investment, and ideological connections. However,
the era of globalization is now tearing down many of the world’s hemispheric divides.
Latin America is rapidly diversifying its international relations as major regional
powerhouses, such as China, increase their presence in the region. Many view China’s growing
influence in the western hemisphere as a challenge to the U.S.’s historic regional supremacy. However, the
struggle for power and influence need not automatically reflect a winner-take-all
competition, as both outside megaliths can benefit from China’s presence in Latin
America.¶ China’s Economic Expansion China’s phenomenal economic growth in the past quarter
century has helped motivate Beijing to globalize its industries. From 1990-1998, China’s average
annual economic growth rate was 11.2 percent, compared to the world’s average rate of 2.4 percent during the same time
frame (China’s Average Economic Growth Rate in the 90s Ranked 1st in the World 2000) and the country’s growth rate is
projected to remain above 8.5 percent for the next five years (Erikson 2008). Beijing’s economic ties to Latin
America have witnessed comparable growth: from 1993 to 2003, China’s trade with Latin America
increased by 600 percent (Xinhua News Agency 2004). Chinese president Hu Jintao set the mark for increasing trade with
Latin America to $100 billion by 2010, a goal easily met when trade surged to $102.6 billion in 2007, which represents a
42.6 percent increase from 2006 (Erikson 2008).¶ Magnitude of Trade Much of China’s increased trade in
the region is stimulated by its desire to expose its economy to new markets in order to
satisfy its relentless demand for resources to fuel the economy’s enormous
manufacturing capacity. The rapid increase in trade between China and Latin America
proves that the region can offer China a series of profitable markets. The largest market thus far
has been Brazil, whose 2007 bilateral trade with China amounted to $29.7 billion, followed by Mexico with $14.9 billion
(Erikson 2008). Interestingly, Mexico and Brazil are also the U.S.’s two largest regional trading partners (Hornbeck
2008). Comparatively, however, China’s economic activity is mightily eclipsed by that of the U.S., which carried on $560
billion of trade with Latin America in 2007 (Erikson 2008). Nevertheless, China has every intention of
increasing its economic ties to Latin America across the board. Chinese President Hu Jintao
remarked in a 2004 visit to Latin America that “Sino-Latin American co-operation is facing an
unprecedented historical opportunity. We should seize it and work side-by-side to push
this friendly co-operation towards continuous progress” (China Daily 2004).¶ On the other hand,
China’s eagerness to engage economically with Latin America is not particularly reflected in its foreign direct investment
(FDI) in the region, a sector in which the U.S. has an even stronger advantage. Although nearly a quarter of China’s FDI
goes to Latin America, the amount only totaled $22 billion in 2007, which is almost insignificant when compared to the
U.S.’s $350 billion invested in the region (Erikson 2008). The U.S. maintains a far higher capacity to
invest in Latin America than China and its resulting regional influence is indicated by the magnitude of its
investments.¶ Ramifications for the U.S. China’s expanding economic relations with Latin America
could potentially have an important impact on U.S. economic interests in the region.
Primarily, China’s expanding economic presence should increase the economic strength
of its Latin American partners. “The expanding relationship with China is transforming Latin America. Major
infrastructure projects, including contemplated rail, road and pipeline projects, are focused on getting goods to and from
Pacific ports” (China-Latin America Task Force 2006). Growth in Latin American economies generated
by increased trade with China would significantly increase opportunities for the U.S. to
engage in mutually beneficial trade with Latin America. In fact, researcher Daniel Erikson has
argued, “To the extent that China’s involvement is sparking economic growth in Latin
America, it may contribute to economic stability and well-being in a manner that suits
the U.S. desire to see a prosperous and healthy neighborhood” (Erikson 2008). Therefore, China
is unlikely to automatically encroach on potential U.S. markets in Latin America because
its enhanced presence will help spur the development of entirely new markets in Latin
America to which the U.S. will have access.¶ Furthermore, Chinese competition in the manufacturing
sector is worrying many Latin Americans. “On average, [Chinese] light-manufactured goods, such as textiles and footwear,
are three times cheaper than those produced in Latin America” and Latin American light-manufacturers have been largely
removed from a number of export markets, with many manufacturing jobs being outsourced to China (China-Latin
America Task Force 2006). China also holds intrinsic production advantages due to cheap fixed capital costs and low
environmental and labor standards. Many Latin American manufacturers have responded to increased competition by
focusing on goods in which they hold shipping cost or time advantages, which has allowed them to retain much of their
industry (China-Latin America Task Force 2006).¶ China’s Political Involvement Aside from increased diplomacy and
presidential visits, China’s political initiatives in the region are hardly comparable to its economic ones. Despite
claims that China is trying to diffuse U.S. unilateral authority in the region, it is more
likely that at least part of China’s Latin American policy is focused on switching official
diplomatic recognition of Taipei to Beijing. In fact, Latin America is home to twelve of the remaining
twenty-three countries that still recognize Taiwan diplomatically (Erikson 2008). China hopes that its increased economic
presence in Latin America will prompt those countries to rescind their official recognition of Taiwan. These hopes are not
so far-fetched given that in 2004, Dominica abruptly abolished its ties to Taiwan when China pledged $122 million to the
country (BBC Caribbean 2004) and Costa Rica followed suit in 2007 (BBC Asia-Pacific 2007). Taiwan’s president is
planning a visit to Latin America in a desperate attempt to hold down its Latin American alliances.¶ Many in Washington
worry that U.S. authority in Latin America is threatened by China’s intricate involvement with Venezuela, a Latin
American nation with which the U.S. has an increasingly hostile relationship. These fears appear plausible given the U.S.’s
increasing concern with the Middle East and its concomitant waning involvement with Latin America. However,
China’s relations with Venezuela reflect its increasing need for energy, not necessarily a
decision to antagonize the U.S. Chinese Vice Premier Hui Liangyu visited Venezuela in May of 2008, where the
two governments agreed to joint ventures for oil development in Venezuela and the construction of a refinery in China, in
cooperation with the China National Petroleum Corporation and Petroleos de Venezuela (Xinhua 2008). Venezuela
currently ships 350,000 barrels per day of crude oil to China, which it aims to raise to one million barrels per day by 2012
(Xinhua 2008). Although Venezuela seeks to diversify its U.S.-dominated oil market, short-
term U.S. energy interests in the region are hardly threatened since the U.S. already
imports over one million barrels per day from Venezuela (Energy Information Administration 2008).
Venezuela is not among the U.S.’s top three sources of oil, but the U.S. should consider negotiating oil development
ventures with Venezuela to ensure the country remains a long-term energy source.¶ Similarly, China’s relationship with
Cuba is far less of a threat to the U.S. than some U.S. analysts are prepared to believe. Although Cuba’s geographic
proximity to the U.S. calls to mind the Soviet Union’s strategic use of Cuba during the Cold War, China’s interest in Cuba
is largely an economic effort to secure access to even more raw materials. In fact, China is now Cuba’s second largest
trading partner (Caribbean Net News 2008).¶ China poses no significant political threat to the U.S.’s
historic role in Latin America. “China is not, in the near term, seeking to develop client
states in the region with foreign policies or political structures aligned with its own”
(China-Latin America Task Force 2006) and has remained neutral toward a wide variety of governments. Politically,
China’s role in Latin America serves only to diversify Latin America’s partners, but does
not threaten the U.S.’s ability to pursue its own geopolitical interests in the region.¶ Don’t
Cry Wolf Just Yet The U.S. is still the prevailing influence in Latin America. The geographic
proximity of the U.S. to Latin America, as well as the cultural and historic ties of the
western hemispheric nations, are just a few of the natural advantages the U.S. has over
such relatively distant countries as China. At least economically, it is clear that China still
prioritizes its relations with the U.S. over those with Latin America. For instance, in 2007, the
U.S. was ranked as China’s top trading partner, at $302.1 billion in trade; meanwhile, no Latin American country made
China’s top ten list (The U.S.-China Business Council 2008). Nor is China’s interest in Latin America an exceptional
development; rather, it corresponds to China’s burgeoning relations in Africa, the Middle East, and Central Asia. ¶
Overall, China’s increased footprint in Latin America is not indicative of a new rivalry
with the U.S. Instead, it more likely reveals the globalizing trend that helps to define
modern international relations. China is merely taking advantage of the disintegration of political and spatial
boundaries brought on by globalization, in order to expand its own economic and political interests. “…
[I]t has demonstrated flexibility in relationships with Latin American regimes on both the right and left of the political
spectrum. In addition, [China] has sought to maintain a low profile in Latin America that
avoids provoking the United States” (China-Latin America Task Force 2006). Therefore, the U.S.
should take a cooperative rather than competitive stance towards China’s western
advancement in order to minimize any complication of its economic and political
interests, as well as capitalize on the opportunities a new hemispheric player can
provide. U.S. policymakers would be wise to continue to encourage China to adopt human rights and environmental
protections to ensure Beijing’s responsible involvement in Latin America. At the same time, the U.S. should
recognize China’s ability to contribute to an increasingly prosperous western hemisphere
which is now seeking autonomy from Washington’s sometimes harsh manifestations.
Chinas rise in oil consumption will be peaceful
Lai 7 - Associate Professor, PhD Programme Director, Contemporary Chinese Studies, Faculty of Social Sciences at the
University of Nottingham (Hongyi “China's Oil Diplomacy: Is It a Global Security Threat?” Third World Quarterly 2007
JStor 7/2/13)//AH
Two reasons help to account for China's peaceful oil diplomacy. First, China's dependence
on imported oil for meeting its consumption need is still limited. In 2004 over twothirds (67.7% to be exact) of China's energy consumption came from coal, 22.7% from oil, 7% from
hydro-power and 2.6% from natural gas. In that year 40% of China's oil had to be imported, accounting for only 9.1 % of
China's energy consumption.70 Therefore, imported oil plays only a minor role in China's energy
consumption. Domestically produced coal plays a crucial role and domestically produced
oil and hydro-power a secondary role. Large oil-producing nations merely provided a small fraction of
China's energy consumption. Iran, for example, supplied only 1% of China's energy consumption in 2003. Much of the
fear and suspicion of China's potentially aggressive and destabilising oil diplomacy has
thus not been based on a realistic appreciation of the country's domestically based
energy source. Even though China's oil dependence is slated to increase, China has taken
measures to curb this trend. In late 2005 China's top economic officials stated that the
country would develop renewable energy to minimise dependence on oil and oil imports.71 For this
purpose China will also make alternative energy sources a guideline in its energy policy in the Eleventh Five Year Plan
covering 2006- 10.72 This policy has apparently started to reduce China's reliance on oil and
oil imports. According to the National Development and Reform Commission (NDRC), China's dependence on oil
imports in 2005 was 42.9%, 2.2 percentage points lower than in 2004; China consumed 318 million tons of oil in 2005,
1.08 million tons less than in 2004.73 Second, China's leadership has been taking great care to ease
external fears about its economic and political rise. Under President Jiang Zemin China has striven to
portray itself as 'a responsible great power' which has enhanced peace, prosperity and stability in the world. Under the
current president, Hu Jintao, China has proclaimed that it is pursuing a peaceful rise. China later
rephrased this as 'peaceful development' in order to allay sensitive concerns with a rising China around the world. Thus
the Chinese leadership is aware of and sensitive to the international reaction to China's oil
diplomacy and is trying to minimise negative repercussions. China's eventual
acquiescence to the US stance over Iraq and Iran and its compromise with the USA over Sudan's human
dislocation illustrate its pragmatic and low-key approach in securing imported oil and
managing issues of vital concern to the USA. In addition, China has also displayed considerable interest
and enthusiasm for peaceful resolution of conflict and for constructive co-operation over
oil with its Asian neighbours. China's co-operation with India in joint oil development and with claimant states
in the South China Sea offers the best, albeit very surprising, examples.
Chinese oil expansion is not a threat to the U.S. - empirics
Lai 7 - Associate Professor, PhD Programme Director, Contemporary Chinese Studies, Faculty of Social Sciences at the
University of Nottingham (Hongyi “China's Oil Diplomacy: Is It a Global Security Threat?” Third World Quarterly 2007
JStor 7/2/13)//AH
It is tempting, given the above analysis, to assume that China, out of its own need to get oil from these
nations, will
undermine US oil security or contravene US policies towards these oil-producing nations. The
most noticeable areas that critics and pessimists have suggested include Iraq, Iran,
Sudan, sea-lanes, and US oil security. However, China's stances in these cases have so far
indicated that these fears have been greatly exaggerated. First, Iraq. Before the US invasion
of Iraq, many believed that, in order to secure oil from the region and show solidarity
with Saddam Hussein, China might block the US-backed initiatives over Iraq at the UN.
However, China actually voted in favour of UN Security Council Resolution 1441 in 2002 that held Iraq in
'material breach' of disarmament obligations, which opened the way for the US-led war against Saddam Hussein.
Second, Iran. In 2004 and 2005, when Iranian -US tension was escalating over Iran's nuclear
programme, many observers predicted that China would fully back Iran in the crisis and oppose
the US efforts to refer the issue to the UN. One comment sums up popular sentiment about a China - Iran oil deal in 2004:
'For a United States increasingly pointing at China as the next biggest challenge to Pax Americana, the Iran - China energy
cooperation cannot but be interpreted as an ominous sign of emerging new trends in an area considered vital to US
national interests'.50 However, in early 2006 China backed a proposal initiated by the USA and
Europe to refer Iran's nuclear programme to the UN Security Council should Iran fail to co-
operate. China also agreed with the principle that Iran should not develop nuclear weapons.5' Third, Sudan. In September
2004 the UN Security Council was deliberating a resolution which threatened to halt Sudan's oil exports if it did not stop
the atrocities by pro-government militias in the Darfur region that have led to the deaths of tens of thousands through
starvation or illness. In this case China distanced itself from the stance led by the EU, which used sanctions to force Sudan
to take action. However, China was not alone. Russia, Pakistan and Algeria abstained from voting on the resolution. China
did try to find a compromise by talking the USA into watering down the UN resolution before allowing it to pass, instead
of vetoing it. Many observers attributed the Chinese action to the fact that China obtained 6.9% of its oil imports from the
African country. A stronger reason, however, might be China's $3 billion investment in the country, the largest it had
made in any single country at that time.52 China's position on Darfur raises concerns among advocates of human rights.
But the Darfur issue is extremely complex. Darfur is a battle field where rebels fight Sudanese troops, aiming to topple the
government. Fighting, lawlessness, and poorly paid and equipped and corrupt police permit crimes to proliferate. A
practical solution, which the USA and the UN are promoting, is to send in peacekeeping troops to enforce a ceasefire as
well as maintain law and order. China seems open to this solution.53 Fourth, the security of sea-lanes. It has been
feared that China might rapidly develop its capability to safeguard its sea-lanes from the
Persian Gulf through the Straits of Malacca and the South China Sea to China and that it could disrupt US and
Japanese sea-lanes in the case of war. However, so far China's naval capability mainly
covers the Taiwan Strait and copes with a possible Taiwanese provocative declaration of
independence. Its blue-water navy is still more of a concept than a reality. Its ability to
safeguard and/or disrupt sea-lanes from the Persian Gulf to the South China Sea have been rather
limited. Any disruption of sea-lanes by China would invite strong counter-moves by the other parties and could be
highly counterproductive. Therefore most of China's efforts at securing its oil routes have been to
find alternative land pipelines or railway links. China also apparently falls back on US
protection to ensure the safety of its sea-lanes for oil.54 Fifth, US oil security. Intensified concern in
the media with China's oil diplomacy leaves an impression that China's quest for oil in the
Middle East could reduce the oil available to the USA and undermine US oil security.55
This worry is not based on fact. USA imports from Arab OPEC nations (presumably the
Middle East) only accounted for 14.8% of its oil consumption in 2005. The top two
importing sources for the USA are Canada and Mexico. US annual oil consumption in 2004
amounted to 101 1.6 million tons and its imports to 590.3 million tons.56 China's oil imports from the
Middle East totalled 51.7 million tons, taking up 51.3% of its oil imports in 2003. However, this accounted for 20.5%
of its oil consumption and only 4.7% of its total energy consumption.57 It was equivalent to 8.8% of the US
total imports and 5.1 % of its oil consumption. China's imports are thus not large enough to upset
US oil imports.
No U.S.-China War
No US-China war – economics
Shor 12 (Francis, Professor of History – Wayne State, “Declining US Hegemony and
Rising Chinese Power: A Formula for Conflict?”, Perspectives on Global Development
and Technology, 11(1), pp. 157-167, GDI File)
While the United States no longer dominates the global economy as it did during the first
two decades after WWII, it still is the leading economic power in the world.
However, over the last few decades China, with all its internal contradictions, has made
enormous leaps until it now occupies the number two spot. In fact, the IMF
recently projected that the Chinese economy would become the world's largest in 2016. In manufacturing China has
displaced the US in so many areas, including becoming the number one producer of steel and exporter of four-fifths
of all of the textile products in the world and two-thirds of the world's copy machines, DVD players, and microwaves
ovens. Yet, a significant portion of this manufacturing is still owned by
foreign companies, including U.S. firms like General Motors. [5] On the other
hand, China is also the largest holder of U.S. foreign reserves , e.g.
treasury bonds . This may be one of the reasons mitigating full-blown
conflict with the U.S. now, since China has such a large stake in the U.S. economy, both as a holder of
bonds and as the leading exporter of goods to the U.S. Nonetheless, "the U.S. has blocked several large scale Chinese
investments and buyouts of oil companies, technology firms, and other enterprises." [6] In effect, there are still clear
nation-centric responses to China's rising economic power, especially as an expression of the U.S. governing elite's
ideological commitment to national security.
No China conflict – no military use
Alison & Blackwill 13 --- *director of the Belfer Center for Science and International
Affairs and Douglas Dillon Professor at Harvard's John F. Kennedy School of
Government AND **Henry A. Kissinger Senior Fellow for U.S. foreign policy at the
Council on Foreign Relations (Graham and Robert, 1/28/2013, "Beijing Still Prefers
Diplomacy Over Force," http://www.cfr.org/china/beijing-still-prefers-diplomacy-overforce/p29892, GDI File)
As China has become a leading export market for its neighbours, it expects them to
be " more respectful ", in Mr Lee's words. In public statements, China usually downplays the advantages its
size begets, but in a heated moment at a 2010 regional security meeting, its foreign minister had a different message:
"China is a big country and other countries are small countries and that is just a fact." Mr Lee has a phrase for this
message: "Please know your place." Unlike free-market democracies, in which governments are unable or unwilling to
squeeze imports of bananas from the Philippines or cars from Japan, China's government can use its economic muscle.
As tensions mount over competing claims for contested territories, should we expect Beijing to
use military force to advance its claims? From the perspective of the grand strategist, the answer is
no – unless it is provoked by others. "China understands that its growth depends on
imports, including energy, and that it needs open sea lanes. They are determined to avoid the
mistakes made by Germany and Japan," Mr Lee says. In his view, it is highly unlikely
that China would choose to confront the US military at this point, since it is still
at a clear technological and military disadvantage. This means that, in the near term, it
will be more concerned with using diplomacy, not force, in foreign policy. Henry
Kissinger, the western statesman who has spent most quality time with Chinese leaders in the past four decades, offers a
complementary perspective. As he has written, their approach to the outside world is best
understood through the lens of Sun Tzu, the ancient strategist who focused on the psychological
weaknesses of the adversary. "China seeks its objectives," Mr Kissinger says, "by careful study,
patience and the accumulation of nuances – only rarely does China risk a winner-take-all
showdown." In Mr Lee's view, China is playing a long game driven by a compelling vision. "It is China's intention,"
Mr Lee says, "to be the greatest power in the world." Success in that quest will require not only sustaining
historically unsustainable economic growth rates but also exercising
greater caution and subtlety
than it has shown recently, in order to avoid an accident or blunder that
sparks military conflict over the Senkakus, which would serve no one's interests.
Chinese leadership will pull back
Ross 1 (Robert S., Professor of Political Science – Boston College, The National Interest,
Fall, Lexis, GDI File)
The strategic costs to China of a war with the United States are only part of the
deterrence equation. China also possesses vital economic interests in stable relations
with the United States. War would end China's quest for modernization by severely
constraining its access to U.S. markets, capital and technology, and by requiring China to
place its economy on permanent war-time footing. The resultant economic reversal
would derail China's quest for "comprehensive national power" and great power status.
Serious economic instability would also destabilize China's political system on account of
the resulting unemployment in key sectors of the economy and the breakdown of social
order. Both would probably impose insurmountable challenges to party leadership.
Moreover, defeat in a war with the United States over Taiwan would impose devastating
nationalist humiliation on the Chinese Communist Party. In all, the survival of the party
depends on preventing a Sino-American war.
No Solvency
Aff doesn’t solve - China is developing vast economic relations with several
Latin American countries
Jiang 07 --- Deputy Director of the Institute of Latin American Studies (ILAS) of the
Chinese Academy of Social Sciences (Shixue, “Three Factors in Recent Development of
Sino-Latin American Relations,” in ENTER THE DRAGON? China’s Presence in Latin
America, http://www.wilsoncenter.org/sites/default/files/EnterDragonFinal.pdf, JMP)
In recent years China’s relations with Latin America have been developing
very rapidly, attracting attention from around the world. There are three specific
areas of rapid growth.¶ First, high-level visits between the two sides are
frequent. In the past decade, for instance, 74 Latin American heads of state ,
members of the legislature and government leaders have visited China; and
Chinese leaders have visited 19 Latin American countries . From November 11
to 23, 2004, Chinese President Hu Jintao paid an official visit to Brazil, Argentina, Chile
and Cuba. From January 23 to February 3, 2005, Chinese Vice President Zeng Qinghong
visited Mexico, Peru, Venezuela, Trinidad and Tobago and Jamaica. Thus, in a time span
of just two months, the country’s president and vice president both paid visits to Latin
America. This was unprecedented in China’s international relations. Then in May 2005,
Jia Qinglin, Chairman of the National Committee of the Chinese People’s Political
Consultative Conference (CPPCC), visited Mexico, Cuba, Colombia and Uruguay. In
September 2005, Chinese President Hu Jintao visited Mexico during his tour of North
America and the United Nations. This was Hu’s second trip to the Latin American region
in less than one year.¶ The second area of rapid growth is in economic
exchanges, particularly bilateral trade with the region. In 2000, China’s trade
with Latin America was only $12.6 billion. It reached $40 billion in 2004, $50 billion in
2005, and surpassed $70 billion in 2006. In addition, bilateral investment has also been
increasing, though at a much slower pace compared with that of trade.¶ Third,
cooperation and exchanges in other areas are growing. The Communist
Party of China has established relations with most of the political parties in
Latin America . Since 1990, China has had 15 dialogues with the Rio Group at the
ministerial level. Since 1997, China and Mercosur, the South American Common Market,
have held five dialogues. On May 26, 2004, the Organization of American States (OAS)
accepted China as a permanent observer. Before obtaining OAS status, China had
already become an observer in the United Nations Economic Commission for Latin
America and the Caribbean, the Latin American Integration Association, the InterAmerican Development Bank, and the Latin American Parliament.¶ People-to-people
contacts have also been growing. Almost one hundred sister-city relationships have been
established between Chinese cities or provinces and their counterparts in 15 countries in
Latin America, including Panama, a Central American country that has no diplomatic tie
with the People’s Republic. Moreover, 17 Latin American countries have become tourist
destinations for Chinese citizens.¶ In the area of science and technology, the most
notable example of cooperation was the joint launching of two satellites by
China and Brazil. This has been considered one of the best success stories of SouthSouth cooperation in science and technology. Other Sino-Latin American cooperation
has included such areas as agriculture, forestry, fishery, husbandry, medicine,
earthquake prediction, manufacturing, information technology, biology, geology and
space.¶ In discussing Sino-Latin American relations, it is necessary to take into
consideration three factors: 1) the Latin American factor in China’s development; 2) the
China factor in Latin American development; and 3) the U.S. factor in Sino-Latin
American relations.
Canadian Oil Sands Add-On
Investment and production in Canadian Oil Sands already
declining
Jones, 13 (5/24/2013, Jeffrey, “Oil sands deals lose traction,”
http://www.theglobeandmail.com/report-on-business/industry-news/energy-andresources/oil-sands-deals-lose-traction/article12115969/, JMP)
There’s a buyers’ strike in the oil sands.
At least a half dozen energy companies have come up dry in efforts to attract
the rich bids they envisaged when they put oil sands assets on the auction
block in the past year, showing downward pricing pressure on a sector
touted as the cornerstone of Canada’s economic growth.
Would-be buyers and joint venture partners are balking at deals amid a
combination of wildly volatile Canadian crude prices, rising development
costs and weakening returns, a situation that could force the industry to
temper heady expectations for long-term oil sands production growth .
Marathon Oil Corp., Murphy Oil Corp. and Athabasca Oil Corp. had sought buyers and
partners in the Northern Alberta oil sands, but now have changed their minds – or in
Athabasca’s case, have told investors to hang tight after the company failed to clinch
deals that had once appeared imminent.
Those companies join ConocoPhillips Co., Koch Industries Inc. and Royal Dutch Shell
PLC in being disappointed after putting properties up for sale that may have once
attracted bids totalling in the billions of dollars. Those three say they have rethought
their plans after offers failed to meet expectations.
Unsold assets are another indication that oil price uncertainty, competition
for limited pipeline capacity and high industry costs are turning away
investment in the world’s third-largest crude reserves after those in Saudi Arabia and
Venezuela.
The deals slowdown may also add to a pullback in the sector’s spending and
development frenzy.
Developing countries, lax regulation, and profit
maximization means warming is inevitable
Porter, 13 - writes the Economic Scene column for the Wednesday Business section
(March 19, Eduardo, “A Model for Reducing Emissions”
http://www.nytimes.com/2013/03/20/business/us-example-offers-hope-for-cuttingcarbon-emissions.html?_r=1&)
Even if every American coal-fired power plant were to close , that would not
make up for the coal-based generators being built in developing countries
like India and China. “Since 2000, the growth in coal has been 10 times that of
renewables,” said Daniel Yergin, chairman of IHS Cambridge Energy Research
Associates.¶ Fatih Birol, chief economist of the International Energy Agency in Paris,
points out that if civilization is to avoid catastrophic climate change, only
about one third of the 3,000 gigatons of CO2 contained in the world’s known
reserves of oil, gas and coal can be released into the atmosphere.¶ But the
world economy does not work as if this were the case — not governments, nor
businesses, nor consumers.¶ “In all my experience as an oil company manager,
not a single oil company took into the picture the problem of CO2,” said
Leonardo Maugeri, an energy expert at Harvard who until 2010 was head of
strategy and development for Italy’s state-owned oil company, Eni. “They are all
totally devoted to replacing the reserves they consume every year.”
Declining U.S. demand will also undermine production
Cushman, 13 (5/23/2013, John H. Cushman Jr., “With U.S. Awash in Oil, Keystone
Argument Weakens,” http://www.bloomberg.com/news/2013-05-23/with-u-s-awashin-oil-keystone-argument-weakens.html, JMP)
Estimates of U.S. Oil Reserves Also Rise
The U.S. government's striking new estimate of domestic oil production is
just one of the new developments that undermines the appeal of Canada's
crude oil.
The U nited S tates Geological Survey in April doubled its official estimate of
recoverable oil reserves from the Bakken field and related deposits in North
Dakota, South Dakota and Montana, suggesting that the region's oil boom
won't fall off as quickly as previously assumed.
"The finding could have major implications for future oil and gas industrial activity in
the region, particularly for pipeline companies," wrote Nathanial Gronewold, Houston
bureau chief for Environment & Energy Publishing.
Advocates of domestic oil production say more untapped oil is available on public lands.
Responding to the USGS's new estimates, Thomas Pyle, president of the pro-drilling
Institute for Energy Research said: "America's true energy supply is undoubtedly even
more robust, providing further certainty that domestic resources can meet America's
energy needs for years to come."
That bullish tone ran through the EIA's latest short-term energy outlook, released on
May 7. It said it had revised upward its production forecast by 120,000 barrels a day this
year and by 310,000 barrels a day next year compared to the estimate it had made just a
month earlier.
"Production will rise from an average of 7.1 million barrels a day in the first quarter of
2013 to 8.5 million barrels a day in the fourth quarter of 2014," it said. All that growth
would come before the Keystone could be completed, which TransCanada now says
won't be until late 2015.
Another sign of the market's upheaval is the possibility that refineries along
the Gulf Coast might consider switching from Canadian heavy sour crude to
the light, sweet U.S. grades.
In its market analysis, the State Department assumed that refineries wouldn't willingly
make that switch and would continue importing heavy sour crude like Canada's. The
Gulf refineries have invested in plants that are tailored for that type of oil.
But the EIA, in its May 1 issue of "This Week in Petroleum," said swollen supplies of
domestic oil could hold down prices so much that it would be attractive for
refineries to switch. They could adjust the mix of fuels they produce, or
spend some of their profits to switch over to the lighter U.S. crude.
Oil Change International, an advocacy group that campaigns for shifting from oil to clean
energy, argues that the State Department's theory is already proving wrong because the
leading Gulf coast refiner, Valero, is looking for opportunities to increase its use of light
crude. Valero buys oil sands crude and is a big backer of the Keystone.
"The world has changed dramatically with all this light sweet oil," Valero's
chief executive, William Klesse, told a group of analysts at a conference last week.
"If you were going to build a grassroots refinery today," he said, "you would build a lightsweet refinery."
Ecosystems will adapt – no impact
Center for the Study of Carbon Dioxide and Global Change Archived 8 March ’11, Surviving the Unprecedented Climate Change of the IPCC,
http://www.nipccreport.org/articles/2011/mar/8mar2011a5.html
(Citing: Willis, K.J., Bennett, K.D., Bhagwat, S.A. and Birks, H.J.B. 2010. 4°C and
beyond: what did this mean for biodiversity in the past? Systematics and Biodiversity 8:
3-9.)
In a paper published in Systematics and Biodiversity, Willis et al. (2010) consider the
IPCC (2007) "predicted climatic changes for the next century" -- i.e., their contentions
that "global temperatures will increase by 2-4°C and possibly beyond, sea levels will rise
(~1 m ± 0.5 m), and atmospheric CO2 will increase by up to 1000 ppm" -- noting that it
is "widely suggested that the magnitude and rate of these changes will result in many
plants and animals going extinct," citing studies that suggest that "within the next
century, over 35% of some biota will have gone extinct (Thomas et al., 2004; Solomon et
al., 2007) and there will be extensive die-back of the tropical rainforest due to climate
change (e.g. Huntingford et al., 2008)." On the other hand, they indicate that some
biologists and climatologists have pointed out that "many of the predicted
increases in climate have happened before, in terms of both magnitude and
rate of change (e.g. Royer, 2008; Zachos et al., 2008), and yet biotic communities
have remained remarkably resilient (Mayle and Power, 2008) and in some
cases thrived (Svenning and Condit, 2008)." But they report that those who mention
these things are often "placed in the 'climate-change denier' category," although the
purpose for pointing out these facts is simply to present "a sound scientific basis for
understanding biotic responses to the magnitudes and rates of climate change predicted
for the future through using the vast data resource that we can exploit in fossil records."
Going on to do just that, Willis et al. focus on "intervals in time in the fossil
record when atmospheric CO2 concentrations increased up to 1200 ppm,
temperatures in mid- to high-latitudes increased by greater than 4°C within
60 years, and sea levels rose by up to 3 m higher than present," describing
studies of past biotic responses that indicate "the scale and impact of the magnitude and
rate of such climate changes on biodiversity." And what emerges from those
studies, as they describe it, "is evidence for rapid community turnover,
migrations, development of novel ecosystems and thresholds from one
stable ecosystem state to another." And, most importantly in this regard, they
report "there is very little evidence for broad-scale extinctions due to a
warming world." In concluding, the Norwegian, Swedish and UK researchers
say that "based on such evidence we urge some caution in assuming broadscale extinctions of species will occur due solely to climate changes of the
magnitude and rate predicted for the next century," reiterating that "the fossil
record indicates remarkable biotic resilience to wide amplitude fluctuations
in climate."
--- XT: Oil Sands Declining
Oil sands investment and production declining --- costs
outpacing returns
Jones, 13 (5/24/2013, Jeffrey, “Oil sands deals lose traction,”
http://www.theglobeandmail.com/report-on-business/industry-news/energy-andresources/oil-sands-deals-lose-traction/article12115969/, JMP)
Suncor Energy Inc., Canada’s largest oil company, is spending about $1billion less on its oil sands projects this year compared with early expectations for
2012, while reviewing costs.
“We as a shop haven’t been bullish on oil sands for over a year . Part of the
reason for that is that costs keep going up and the revenue is not following .
This is an unusual situation from over the last 10 years,” said Samir Kayande,
an analyst and oil sands evaluation expert with research firm ITG Inc. “Over
the last 10 years, you would make investments in marginal projects and the
commodity price would always bail you out.”
That seems like a distant memory. In the past half year, the discount on Western
Canada Select heavy blend crude versus benchmark West Texas intermediate (WTI)
widened beyond $40 a barrel, boomeranged back to as little as $12, and is now about
$20.50, according to Net Energy Inc.
For new steam-driven oil sands projects, the break-even WTI price is around $83,
compared with $60 to $70 a barrel for light oil production in the fast-growing Permian
Basin region of West Texas, Mr. Kayande said. The heavy oil spread has to be layered on
to the benchmark oil calculation, showing just how efficient a project has to be in terms
of the amount of steam companies must pump into the ground to get a barrel of bitumen
out.
Even interests in producing mining projects have proven to be a tough sell, especially
after Ottawa restricted the ability of foreign state-owned enterprises to acquire oil sands
assets in the wake of Chinese state-owned CNOOC Ltd.’s $15.1-billion bid for Nexen Inc.
That essentially took away a category of customer.
Without Keystone oil sands won’t be economically viable
Johnson, 13 (6/7/2013, Keith, “Pipeline Called Key to Canada Oil Sands,”
http://online.wsj.com/article/SB10001424127887324069104578531713102125222.html
, JMP)
Extracting Canada's huge deposits of oil sands in the next few years might
not be economically viable without building the hotly contested Keystone XL
pipeline into the U.S., according to new research that environmentalists said bolsters
their view that blocking the project would shut off development of the energy source.
Environmentalists say producing Canadian oil sands releases more carbon dioxide than
other kinds of oil and are pressing President Barack Obama to block the pipeline, which
would carry oil from Alberta and help it get to Gulf Coast refineries. The U.S. State
Department, industry officials and some analysts counter that burgeoning railroad
capacity will eventually give Canadian crude a way to reach global markets even if
Keystone is blocked.
"The potential for Canadian heavy crude oil supply to remain trapped in the province of
Alberta is a growing risk for the 2014-2017 period depending on the timing of new
pipeline start-ups," analysts at Goldman Sachs Group Inc. wrote in a research report this
past week.
Without adequate pipeline capacity, Canadian heavy crude will continue to
trade at a steep discount to other grades of oil for the next few years, which
could weigh on the economics of developing Canadian oil sands, according
to the Goldman Sachs report and other analysts.
Environmentalists say Mr. Obama can help curb greenhouse gases by rejecting the
pipeline, and they want the State Department, which is reviewing the pipeline, to take
into account the environmental impact.
"The evidence shows that Keystone XL is the linchpin" for oil-sands
production," said Danielle Droitsch of the Natural Resources Defense
Council, an environmental advocacy group. Hundreds of activists called on Mr. Obama
to block the project Thursday and Friday at fundraisers he held in California ahead of a
summit with Chinese President Xi Jinping.
"If that added capacity from Keystone XL isn't brought online, there's potential for a gap
between production and delivery," said Grady Semmens, a spokesman for TransCanada
Corp., which is proposing to build the pipeline. "But we don't necessarily view XL as a
linchpin in oil production. The industry will look for other ways to get to market," he
said.
In a report this past week, the Canadian Association of Petroleum Producers projected
oil-sands production capacity will more than double by 2030 to more than five million
barrels a day. If the Keystone expansion is blocked, production could exceed shipping
capacity by as early as 2016—unless rail delivery takes up the slack.
"We're very confident the market will respond," said Greg Stringham, CAPP vice
president.
Keystone is just the highest profile among a spate of pipeline projects that
would be needed to carry all of the growing Canadian oil production to
distant markets. The CAPP report says that even if all proposed pipelines
for Canadian crude are built on schedule, oil-sands production will still fall
short of the 2030 forecast by one million barrels a day.
Canada's RBC Capital Markets said blocking Keystone would likely defer
about $9 billion in oil-sands investment to the end of the decade.
--- XT: No Impact
Their studies prove the existence of warming, not the
impact – doomsday predictions are empirically denied and
ignore scientists
John Stossel, Award-winning ABC News correspondent, 2007
The Global Warming Myth?, http://abcnews.go.com/2020/Story?id=3061015&page=1
Dr. John Christy, professor of Atmospheric Science at the University of
Alabama at Huntsville said: "I remember as a college student at the first Earth Day
being told it was a certainty that by the year 2000, the world would be starving and out
of energy. Such doomsday prophecies grabbed headlines, but have proven to
be completely false." "Similar pronouncements today about catastrophes
due to human-induced climate change," he continued, "sound all too familiar
and all too exaggerated to me as someone who actually produces and
analyzes climate information." The media, of course, like the exaggerated
claims. Most are based on computer models that purport to predict future
climates. But computer models are lousy at predicting climate because
water vapor and cloud effects cause changes that computers fail to predict.
In the mid-1970s, computer models told us we should prepare for global cooling.
Scientists tell reporters that computer models should "be viewed with great
skepticism." Well, why aren't they? The fundamentalist doom mongers also ignore
scientists who say the effects of global warming may be benign. Harvard
astrophysicist Sallie Baliunas said added CO2 in the atmosphere may actually
benefit the world because more CO2 helps plants grow. Warmer winters would
give farmers a longer harvest season, and might end the droughts in the Sahara Desert.
Why don't we hear about this part of the global warming argument? "It's the
money!" said Dr. Baliunas. "Twenty-five billion dollars in government funding
has been spent since 1990 to research global warming. If scientists and
researchers were coming out releasing reports that global warming has little
to do with man, and most to do with just how the planet works, there
wouldn't be as much money to study it."
--- Oil Sands Inevitable
Oil sands inevitable
Dlouhy, 13 (6/10/2013, Jennifer A., “Canadian ambassador: Alberta’s oil sands crude
‘will get to market’” http://fuelfix.com/blog/2013/06/10/canadian-ambassadoralbertas-oil-sands-crude-will-get-to-market/, JMP)
Companies will keep harvesting bitumen from Alberta’s oil sands, even if a
pair of pipelines through North America are blocked, Canada’s U.S.
ambassador says.
That “oil will get to market,” Ambassador Gary Doer said on Platts Energy Week.
The only question is how it gets there, Doer said. “The oil isn’t staying in the
ground. It is going to get to the Gulf Coast.”
But oil sands producers are facing trouble on two fronts. Last month, British Columbia
formally opposed Enbridge’s plan to build the Northern Gateway pipeline, which would
transport oil sands crude through the province to the West Coast. In the United States,
environmentalists have been battling TransCanada Corp.’s proposal to build the
Keystone XL pipeline connecting Alberta with Gulf Coast refineries.
“We’ve got a delay in British Columbia, and controversy in D.C.,” Doer noted.
But, he said, even with the opposition, “it’s not a question of (whether this)
oil comes into the United States. It’s a matter of how.”
Other pipelines are a possibility to transport diluted bitumen from Alberta to Canadian
ports. Separately, companies are already using rail to ship the Canadian crude across the
U.S. border.
Other transportation avenues will be sought so the impact
is inevitable
Dlouhy, 13 (6/10/2013, Jennifer A., “Canadian ambassador: Alberta’s oil sands crude
‘will get to market’” http://fuelfix.com/blog/2013/06/10/canadian-ambassadoralbertas-oil-sands-crude-will-get-to-market/, JMP)
***Gary Doer is Canada’s U.S. ambassador
Doer’s assertions respond to a major argument from Keystone XL’s critics, who insist
that the pipeline is essential to sustaining energy-intensive oil sands development in
Canada that yields heavy crude that has a bigger carbon footprint — from its production
to combustion — than alternatives.
Earlier this year, the State Department concluded that the project was unlikely to
dramatically boost demand for Canada’s oil sands or the amount of heavy crude oil
processed in Gulf Coast refineries. According to the State Department analysis,
companies will turn to rail and other options to transport the product even
if the government denies a permit for Keystone XL, so there would be little
change in greenhouse gas emissions tied to oil sands development .
But the issue isn’t settled. The Environmental Protection Agency, which plays a
secondary role reviewing the pipeline, suggested that other pipelines and rail transport
may not be inevitable and pushed the State Department for a better analysis.
Keystone XL critics say British Columbia’s move is a sign at least one alternative pipeline
won’t be built, undermining the State Department’s conclusion that greenhouse
emissions will be the same with or without Keystone XL.
But supporters note that British Columbia’s opposition doesn’t put the
Northern Gateway on ice. Canada’s federal government still plays a role
evaluating the project.
And other pipelines are still in the works, Doer noted, including Kinder
Morgan’s Trans Mountain pipeline expansion. Separately, TransCanada has
proposed another project that would send oil sands crude to New
Brunswick.
Keystone isn’t key to oil sands --- can be transported other
ways
Johnson, 13 (6/7/2013, Keith, “Pipeline Called Key to Canada Oil Sands,”
http://online.wsj.com/article/SB10001424127887324069104578531713102125222.html
, JMP)
But market experts said blocking Keystone would at most temporarily
sidetrack Alberta's development plans. They said that just as rail capacity
expanded in the U.S. to handle a boom in oil output, alternative facilities
will eventually handle the expected flood of Canadian crude.
"Keystone is the preferred enabler" of Canada's oil sands, "but it isn't the
only enabler. There's more than one way to skin the cat," said Robert Johnston of the
Eurasia Group, a consultancy that has closely studied the economics of Canadian oil
production.
--- More AT Canada Oil Sands
Canadian Oil Sands are COMPARITIVELY BETTER than Venezuela’s Oil and
Keep Climate Change in Check- Their Evidence is Horrible Compared to
Ours
Frum 2010 (Linda Frum, Senator of Canada, “Speeches and Statements: Senator Frum Speaks Out On Canada’s
Oilsands.” http://www.lindafrum.ca/Senator_Frum/Oilsands.html)
Take greenhouse gases. One of the chief objections to the oilsands is that they have a slightly higher carbon footprint than
some other sources of oil. Not all other sources, mind you. Canadian
oilsands oil takes less carbon
to produce than heavy oil from Venezuela or California, and even less than oil from Nigeria and
Iraq, because of all the natural gas those countries flare. So if you subscribe to the theory of man-made
global warming, you would want to replace high-carbon oil from Venezuela ,
with lower-carbon oil from Canada’s oilsands . But even that isn’t
entire oilsands combined emit about 30 megatons of carbon dioxide each
year – or about 5% of Canada’s emissions. There are individual coal-fired power
California and other sources
the whole story. The
plants in the United States that emit 25 megatons a year each.
Such as the Scherer
plant in Juliette, Georgia. And
that’s just one single power plant. But even that big plant is barely in
world’s largest emitter of
carbon dioxide is China, with a half-dozen individual coal-fired plants bigger than that one in Georgia. And
China builds two or three new coal-fired power plants every week. So, even if we shut
down the entire oilsands, and threw hundreds of thousands of Canadians out of work, in the name of
reducing carbon dioxide, less than a week later China would replace any reductions
with CO2 growth of their own. And that’s just what the Chinese are doing on purpose. Underground coal
the top 20 coal-fired, high-emitting, power stations in the world. By far the
fires in China account for 360 megatons of carbon dioxide a year. That’s just what they burn by accident – the equivalent
of our entire oilsands, every month. But even that’s not the full story. Because if we shut down our
oilsands production – as Greenpeace and other anti-oilsands activists would have us do -- that oil
would simply be added to what’s pumped from other OPEC countries , places
with far worse environmental records . It’s the opposite of the environmentalist motto, “think
globally, act locally”. Oilsands critics are engaging in a form of pollution imperialism: they would rather any side-effects
from energy production happen in the poor third world, rather than here in Canada – even though we are
far
better at mitigating that pollution. Not exactly an enlightened viewpoint. I mention this because so few critics
of our oilsands do. They would rather point to a pound of CO2 in Canada than a ton of it in China.
And, AT THE VERY BEST- Oil from Venezuela and Canada are the EXACT
SAME- Means there is NO Trade-off
Holland 2013 (Andrew Holland, Expert on Energy and Policy connected to developments on Capitol Hill; He
Provides Strategic Analysis on national security issues, infrastructure, and economics. Christian Science Monitor. March
9, 2013. “In Venezuela, oil and idealism won’t mix forever.” http://www.csmonitor.com/Environment/EnergyVoices/2013/0309/In-Venezuela-oil-and-idealism-won-t-mix-forever)
Venezuela ranks as the country with the number one, two, or three oil reserves in
the world, depending on who's doing the counting, along with Saudi Arabia andCanada. These reserves led the
country to be a founding member of OPEC, and one of the petro monopoly's most ardent supporters. However, its oil
has more in common with the heavy tar sands oil of Canada than the
light, sweet
crude of the Persian Gulf . Future production in the country will require new investment capital and expertise in
the heavy oil of the Orinoco belt.
Solvency
Venezuela Says No
No solvency – Venezuela won’t allow U.S. investment – the U.S. will be
locked out
Epperson & Domm 13 (Sharon & Patti, ‘With Hugo Chavez gone, US oil industry eyes
Venezuela’, Christian Science Monitor, March 6, 2013,
http://www.csmonitor.com/Environment/Latest-News-Wires/2013/0306/With-HugoChavez-gone-US-oil-industry-eyes-Venezuela)//MJ
Venezuela has more oil reserves than any other country thanks to massive deposits of
asphalt-like crude in what’s called the Orinoco oil belt. Development of these deposits is
both technology- and capital-intensive.¶ Chávez’s push for more national control
over the oil sector in 2007 led Exxon Mobil Corp. and ConocoPhillips Co. to
abandon big Orinoco projects. Other international companies stayed, including
firms from Russia, China and Vietnam, and the Orinoco now accounts for about 20
percent of Venezuela’s oil production.¶ Mark McNabb, director of the Emerging
Markets Research Center at UTD’s Naveen Jindal School of Management,
said in a phone interview that he expects U.S. firms will remain on the outside
looking in.¶ “We’re kind of frozen out for the next three to five years,” he
said.¶ Venezuela’s oil sector has been in decline for a decade. In 2002, PDVSA
employees went on strike and joined in an anti-Chávez movement that
briefly ousted the president. When he regained power, Chávez fired many of
his opponents in the firm and installed thousands of supporters.¶ “PDVSA’s
been drained of its professionals,” said Eric Farnsworth, a vice president with the
Council of the Americas. “It’s now a political group that pumps oil.”¶ Venezuela’s
Energy Minister Rafael Ramirez said Wednesday that PDVSA workers would remain on
the job.¶ “The key to driving the oil industry is in the hands of the 100,000 valiant men
and women who have shown their loyalty to Commander Chavez in everything we have
been through,” he said, referring to PDVSA’s staff. “That situation will not change.”¶
Venezuela’s exports to the U.S. are under pressure from Canada, which produces a heavy
type of crude oil from Alberta’s oil sands that is similar to Venezuela’s thick oil. Many
Gulf Coast refineries prefer to use heavy oil because it can mean higher profits for
gasoline, diesel and other refined products.
Maduro will say no to the plan
Shinkman 13 --- national security reporter at U.S. News and World Report (4/24/2013,
Paul D., “Iranian-Sponsored Narco-Terrorism in Venezuela: How Will Maduro Respond?
New Venezuelan president at a crossroads for major threat to U.S.,”
http://www.usnews.com/news/articles/2013/04/24/iranian-sponsored-narcoterrorism-in-venezuela-how-will-maduro-respond, JMP)
***Doug Farah is senior fellow at International Assessment and Strategy
Center and an expert on narco-terrorism and Latin American crime
¶ U.S. officials might try to engage the new Venezuelan president first in the
hopes of improving the strained ties between the two countries.¶ But Maduro
has never been close with the senior military class in his home country, and
will likely adopt a more confrontational approach to the U nited S tates to
prove his credentials to these Bolivarian elites.¶ "Maybe if he were operating in
different circumstances, he could be a pragmatist," Farah says. "I don't think he can
be a pragmatist right now."
Venezuela will say no --- anti-Americanism is too entrenched
Drezner 13 --- professor of international politics at the Fletcher School of Law and
Diplomacy at Tufts University (3/7/2013, Daniel W., “Why post-Chavez Venezuela won't
be a U.S. ally anytime soon,”
http://drezner.foreignpolicy.com/category/wordpress_tag/venezuela, JMP)
The passing of Hugo Chavez has prompted the usual 21st century cycle of news coverage and commentary that follows the
death of a polarizing figure: the breaking news on Twitter, followed by the news obits, followed by the hosannahs from
supporters, followed by denunciations of the figure, followed by official statements, followed by mealy-mouthed op-eds,
followed by hysterical, unhinged criticism of standard diplomatic language. ¶ Now that the first news cycle has passed, we
can get to the more interesting question of assessing Venezuela's future. There was always a fundamental irony to Hugo
Chavez's foreign policy. Despite his best efforts to chart a course at odds with the United States, he could never
escape a fundamental geopolitical fact of life: Venezuela's economic engine
was based on exporting a kind of oil that could pretty much only be refined
in the U nited S tates. ¶ So, with Chavez's passing, it would seem like a no-brainer
for his successor to tamp down hostility with the U nited S tates. After all, Chavez's
"Bolivarian" foreign policy was rather expensive -- energy subsidies to Cuba alone were equal to U.S. foreign aid to Israel,
for example. With U.S. oil multinationals looking hopefully at Venezuela and
Caracas in desperate need of foreign investment, could Chavez's successor
re-align foreign relations closer to the U.S.A.? ¶ I'm not betting on it, however, for
one simple reason: Venezuela might be the most primed country in the world for
anti-American conspiracy theories . ¶ International relations theory doesn't
talk a lot about conspiracy thinking, but I've read up a bit on it, and I'd say
post-Chavez Venezuela is the perfect breeding ground. Indeed, the day of
Chavez's death his vice president/anointed successor was already accusing
the U nited S tates of giving Chavez his cancer. ¶ Besides that, here's a recipe for
creating a political climate that is just itching to believe any wild-ass theory
involving a malevolent U nited S tates:¶ 1) Pick a country that possesses very high levels of national self-
regard. ¶ 2) Make sure that the country's economic performance fails to match expectations.¶ 3) Create political
institutions within the country that are semi-authoritarian or authoritarian. ¶ 4) Select a nation with a past history of U.S.
interventions in the domestic body politic.¶ 5) Have the United States play a minor supporting role in a recent coup
attempt. ¶ 6) Make sure the United States is closely allied with the enduring rival of the country in question.¶ 7) Inculcate a
long history of accusations of nutty, American-led conspiracies from the political elite. ¶ 8) Finally, create a political
transition in which the new leader is desperate to appropriate any popular tropes used by the previous leader. ¶
Venezuela is the perfect breeding ground for populist, anti-American
conspiracy theories. And once a conspiratorial, anti-American culture is
fomented, it sets like concrete . Only genuine political reform in Venezuela
will cure it, and I don't expect that anytime soon .
Venezuela say no - historically true
Gvosdev 13 --- faculty of the U.S. Naval War College and former editor of the National
Interest (3/8/2013, Nikolas, “The Realist Prism: Washington’s Venezuela Dilemma,”
http://www.worldpoliticsreview.com/articles/12776/the-realist-prism-washington-svenezuela-dilemma, JMP)
Most of the U.S. foreign policy community assumes that relations between the United
States and Venezuela can only improve in the aftermath of Hugo Chavez's death.
Exemplifying this optimism, the Obama administration’s initial reaction was to note that
as a "new chapter" begins in Venezuela, Washington reaffirms "its interest in developing
a constructive relationship with the Venezuelan government." The U.S. response was
based on the hope that any successor to Chavez will be interested in repairing the breach
that opened up between the two nations during the almost 13 years of Chavez's tenure.
But nothing should be taken for granted. When other implacably anti-American
leaders have died or passed from the scene, their successors have not
automatically sought to improve their relations with Washington -- Iran being
a prominent example. Careful attention needs to be paid to separating Chavez's personal
animosities toward Washington -- which might not be shared by his successor -- from
the incentives embedded in the needs of Venezuela’s ruling system. Depending on who
wins the election to finish Chavez's term of office, the next Venezuelan president
may not be interested in improving ties with the U nited S tates; more likely,
Chavez’s successor will have a far different standard as to what constitutes a
rapprochement than most American officials.
Maduro’s political position is too precarious to say yes
Shifter 13 --- president of the Inter-American Dialogue (5/3/2013, Michael, “What
Does the Future Hold for U.S.-Venezuela Relations?”
http://www.thedialogue.org/page.cfm?pageID=32&pubID=3297, JMP)
Q: The future of U.S.-Venezuela relations remains uncertain in the early days of the Nicolás Maduro administration.
Maduro has voiced a desire for "respectful relations" with the United States, though Washington has still not recognized
his government. The United States has denied that it is considering sanctions against Venezuela, and Venezuelan
authorities recently arrested a U.S. citizen on accusations of attempting to spark social unrest. The State Department has
denied any efforts to destabilize the Venezuelan government. Will U.S.-Venezuela relations be better or worse under
Maduro than they were under Hugo Chávez? What do Maduro's cabinet picks portend about the future of bilateral
relations? Should businesses be more worried about political risk in Venezuela now than they were when Chávez was
alive?¶ A: Michael Shifter, president of the Inter-American Dialogue: "The prospects for improved
relations between the United States and Venezuela under the Maduro
administration now appear rather dim. Maduro's rhetoric directed at
Washington has been notably tough and aggressive, as he seeks to shore up
support among the Chavista base. Arresting a U.S. citizen and accusing him of stirring up trouble in
Venezuela is a vintage Chávez tactic, aimed at diverting attention from the country's myriad, fundamental problems.
Lacking Chávez's political skills and common touch, Maduro is in a
particularly shaky position, compounded by questions of legitimacy
following the April 14 elections. To date, personnel picks and policy signals coming out of the
administration have been confusing and mixed. Some in Maduro's team are hardliners, while others, such as Calixto
Ortega--the recently appointed representative in Washington--are more open and moderate. Ortega, for example, was
very active in the so-called Boston Group, an effort that sought to facilitate dialogue between Chavista and opposition
lawmakers. As long as Maduro's political standing remains precarious, he will be
severely constrained in his ability to pursue closer ties with the U nited S tates.
There is no appetite or interest in Washington to adopt punitive measures and apply sanctions against Venezuela. In
light of Maduro's confrontational rhetoric and actions--and disturbing
incidents of violence--no one is calling for a rapprochement. Still, assuming that
things begin to settle down, and given that other governments have already recognized Maduro, it would be surprising if
Washington didn't eventually come around and deal with the practical reality."
Maduro doesn’t have the political capital to change energy policy
Alic 13 --- geopolitical analyst, co-founder of ISA Intel in Sarajevo (4/15/2013, Jen,
“Foreign Oil & Gas Companies Look to Status Quo in Venezuela,”
http://oilprice.com/Geopolitics/South-America/Foreign-Oil-Gas-Companies-Look-toStatus-Quo-in-Venezuela.html, JMP)
Now that Nicolas Maduro—the late Hugo Chavez’s choice for successor—has narrowly
won Sunday’s presidential elections in Venezuela, oil and gas investors can expect
a perpetuation of the status quo.¶ In Sunday’s vote, Maduro won with a very narrow
50.7% and a vow to continue with Chavez’s “revolution,” which has seen the oil industry
nationalized and the state-run PDVSA oil company funding social programs and
voraciously courting China and Russia. ¶ The narrow vote will not be without its
challenges. Opposition rival candidate Henrique Capriles has refused to recognize the
results and is demanding a recount, though the electoral commission is standing firm on
Maduro’s victory.¶ For foreign oil and gas companies, we can expect more of
the same. There are no regulatory changes in the works, and an unattractive
windfall tax system announced in January will likely be pushed forward
under Maduro.¶ What Maduro is inheriting, though, is a nightmare situation that will
see him stuck between using PDVSA to fund expensive social programs that cost it $44
billion last year alone diverted from oil revenues, and cutting social spending or allowing
a rise in the price of fuel that could spark regime-threatening unrest.¶ If Maduro feels
compelled to reduce fuel subsidies, it could lead to riots as cheap fuel—which cannot be
sustained—is one of the most crucial social benefits for Venezuelans, who pay around 6
cents per gallon.¶ Maduro has inherited a “sinking ship” and does not appear to
have the political capital to make any short-term changes in Venezuela’s
energy policy, experts at Southern Pulse told Oilprice.com.
Maduro will be more anti-American and anti-capitalist in the short term
NSN 13 (3/7/2013, National Security Network, “A Post-Chávez Venezuela,”
http://nsnetwork.org/a-post-chavez-venezuela/, JMP)
Carl Meacham, a Latin America expert at the C enter for S trategic and
I nternational S tudies explains, “For the next month or so, Maduro has to
show he is even more Chávez than Chávez was. That means he is going to be
more anti-American , more anti-capitalist , more anti-systemic. As far as a
rapprochement, I don’t see it coming anytime soon… The U.S. doesn’t want
to be in a situation where it is viewed at all as getting involved in domestic
affairs of Venezuela. If Maduro wins, he will be trying to keep the focus on
domestic issues, and that could put the resolve of Chavismo to the test. And
that could mean the hardest days between the U.S. and Venezuela is not behind
us, but ahead of us.”¶ Piccone recommends a patient and steady hand: “Washington
should bide its time and quietly wait out what should be a relatively smooth transition to
a post-Chávez leadership and then remount its earlier efforts to turn a page away from
the antagonism of the Chávez era toward a more pragmatic relationship of mutual
interests. If Maduro concludes, however, that he has more to gain parroting the Chávez
line of virulent anti-Americanism, it will be difficult to turn the other cheek for another
six years.” [NY Times, 3/6/13. Carl Meacham via CNN, 3/6/13. Ted Piccone, 3/6/13]
Certainly no short-term acceptance
Fillingham 13 --- Managing Editor & Asia Analyst and MA in Chinese Studies from the
School of Oriental and African Studies in London (3/10/2013, Zachary, “Post-Chavez
US-Venezuelan Relations: Headed for a Thaw?”
http://www.geopoliticalmonitor.com/post-chavez-us-venezuelan-relations-headed-fora-thaw-4790/, JMP)
Given its precarious economic situation, Venezuela will need outside assistance in the
near future. And while some would say that China is best suited to step up and bail out
Caracas, there are a few reasons to question whether this will actually come to pass. First
of all, The Chinese Development Bank has already provided a huge amount of money to
the Chavez government, about $40 billion between 2008 and 2012 alone. Thus, if
Venezuela were to be faced with a default, it would be Chinese investors with their
money on the line. Any debt renegotiations would surely include provisions that didn’t
sit well with the Venezuelan public. After all, there have already been agreements
reached between Venezuela and the Chinese state-owned company Citic Group that have
raised populist alarm bells regarding the signing of mineral rights over to foreign
companies.
In this context, a limited rapprochement makes sense from a Venezuelan point of view,
as it would balance against a preponderance of Chinese economic influence. Now that
the “Bolivarian Revolution” is all but discredited, and countries like Brazil have proven
that it’s possible to alleviate poverty through trade and keep US influence at arm’s
length, a US-Venezuelan thaw is theoretically possible. However, authorities
in Washington will likely have to endure another round of vitriol and wait
until the dust settles in Venezuelan domestic politics before their window
of opportunity presents itself.
Maduro will maintain SQ oil policy
Saefong 13 --- MarketWatch reporter based in San Francisco (3/6/2013, Myra P.,
“Post-Chavez Venezuela: oil’s next Saudi Arabia?”
http://www.marketwatch.com/story/post-chavez-venezuela-oils-next-saudi-arabia2013-03-06?link=MW_story_popular, JMP)
***Clinton Carter is associate vice president for Latin America at Frontier
Strategy Group
Chavez’s politicization of PDVSA also led to an exodus of talent, and political risk in the nation kept foreign investment in
energy low.¶ Now that the president is gone, big improvements in the energy
sector won’t happen any time soon. “Venezuela’s declining output is unlikely
to be reversed for years to come,” Carter said.¶ But the first change in government leadership since
1999 for a major oil producer certainly offers the market some food for thought.¶ Change in power¶ There are at least a few
different ways to look at what happens next for Venezuela and its oil industry.¶ “Most likely, Vice President Nicolás
Maduro, Chavez heir apparent, will be elected” president, said Williams. “If the election proceeds on schedule and Maduro
wins … then we will be in a better position to assess the long-term prospects for the country and its oil production.”¶
Under a Maduro win, the nation would likely follow the oil policy it’s
become accustomed to. ¶ “The government and PDVSA’s top priority will be
directing funds to social programs, instead of enhancing the oil industry’s
capabilities” in exploration and production and refining, said Carlos Bellorin,
senior petroleum analyst at IHS, in an emailed analysis Wednesday.¶ PDVSA may be “forced to ease
some terms in negotiations to obtain capital from its partners to start seven new projects in the Orinoco Belt and increase
production from strategic assets,” Bellorin said, so the state-owned oil and gas company’s top management is likely to be
reappointed.¶ “This could be seen as a continuity of the previous oil policy based on tight control over operations,” Bellorin
said.
Maduro Won’t Be Pragmatic
Political conditions prevent Maduro from being pragmatic
Meacham 13 --- director of the Americas Program at the Center for Strategic and
International Studies (4/16/2013, Carl, “Venezuela Post-Election: Can Maduro Govern?”
http://csis.org/publication/venezuela-post-election-can-maduro-govern, JMP)
Maduro's narrow victory also dashes any expectations that he might turn
pragmatic when dealing with such issues as the Venezuelan economy.
Maduro’s first goal will likely be to show himself in charge and to satisfy
Chavistas. This will likely lead to a doubling-down of Chávez’s policies and to
profligate spending on social programs within Venezuela.¶ Q4: What does the current situation mean for U.S.-Venezuela
relations?¶ A4: These results likely bode ill for U.S.-Venezuela relations as well.
Maduro will likely be forced to play the anti- U nited S tates card to placate
Chavismo’s most ardent supporters and show himself to be a Chavista to the
core.¶ Conclusion: Sunday’s result has changed the dynamics of Venezuela’s transition to its next president. The close
showing signifies political uncertainty and potential conflict in the short term, as more Venezuelans seem to be tiring of
the growing corruption, crime, and inflation that defined the later years of Chávez’s presidency. One thing is certain: while
Maduro campaigned on inheriting the mantle from Chávez, the Venezuelan people will not overlook Venezuela’s problems
as they did for the former president. Maduro described himself as the “son of Chávez,” while campaigning – but one has to
believe Chávez would have been deeply disappointed with Sunday’s outcome.
Takes Years To Solve
Takes years to solve
AP 13 (5/4/2013, Fabiola Sanchez, “Outlook grim in Venezuela's essential oil industry,”
http://news.yahoo.com/outlook-grim-venezuelas-essential-oil-industry143827999.html, JMP)
***Note --- Rafael Ramirez is Chavez's oil minister and the head of state oil
company Petroleos de Venezuela S.A
Ramirez said that PDVSA's efforts remained focused on developing the remote Orinoco
belt, site of the world's biggest oil reserves, with the aid of oil firms from China, Russia,
the U.S., Italy, Vietnam, Malaysia, Japan and Spain. Venezuela hopes to lift overall
production to some 3.32 million barrels a day, 200,000 more than last year.
"We're in a process of trying to attract investment in dollars other than
ours," Ramirez said, assuring reporters that PDVSA would work with private investors
to not take on more debt to make new investment.
Outside experts, however, are deeply skeptical. They say PDVSA is badly
mismanaged and that even a radical overhaul would take years to show
results .
Energy sector reform will take years
Snow 13 --- OGJ Washington Editor
3/6/2013, Nick, “Outlook uncertain following Chavez’s death in Venezuela,”
http://www.ogj.com/articles/2013/03/outlook-uncertain-following-chavezs-death-invenezuela.html
PDVSA’s deterioration¶ PDVSA’s internal and managerial capabilities have deteriorated
since 2002, according to Sarah A. Ladislaw, co-director of the Center for Strategic and
International Studies’ Energy and National Security Program, and CSIS Senior VicePres. Frank A. Verrastro, who holds the James R. Schlesinger Chair for Energy and
Geopolitics there.¶ “Increasingly, PDVSA relies on contractors, as well as other private
company partners, to keep the fields in production but reports state that contractors
have not been paid in months and that the political uncertainty in the country has even
driven routine decision making to a halt,” they said in a Mar. 6 commentary.¶ Sustained
political uncertainty also has stifled outside investment in Venezuela’s oil
sector, Ladislaw and Verrastro noted. Russian and Indian companies planning to invest
in the country’s oil fields have withheld incremental new money, and China has not
announced a new line of credit or extensions on its development-linked financing since
last April, they said.¶ In Venezuela, Oil and Mining Minister and PDVSA Pres. Rafael
Ramirez said on Mar. 1 that PDVSA plans to increase its expenditures to $25 billion in
2013. Cooperation between PDVSA and Russia’s Rosneft consortium also has been
growing, Ramirez said on Jan. 31.¶ “ Even under the best of circumstances ,
reform in the energy sector will take a long time to emerge,” Ladislaw and
Verrastro said. “The damage that has been done to not only PDVSA but to the
institutions of the state and civil society could take years to rehabilitate.”
Politics DA Links
Republicans would hate the plan – they see Venezuela as a narco-terrorist
state with ties to Iran
Oppenheimer 12
(Andres, “Republicans Tilt right on Latin America”,
http://www.miamiherald.com/2012/08/29/2974974/republicans-tilt-right-onlatin.html#storylink=cpy, 8/29/2012)//SR
The Republican platform approved by the party’s convention earlier this week — a
blueprint of what a Romney administration would do if it is elected — makes no bones about its hardline policy toward Latin America. Its section on the region starts out by
saying that “We will resist foreign influence in our hemisphere,” and calls
Venezuela a “narco terrorist” state. Much in line with the document’s general foreign policy plank —
whose first line reads, “We are the party of peace through strength” — the new Republican platform’s Latin America
section is also a sharp turn to the right from the same section in the party’s 2008 platform. That document started with
the words, “Faith and family, culture and commerce, are enduring bonds among all the peoples of the Americas.” Before
we get into what I think of the newly released 2012 Republican platform’s section on the region, let’s take a closer look at
what it says. “The current administration has turned its back on Latin America, with predictable results. Rather than
supporting our democratic allies in the region, the president has prioritized engagement with our enemies in the region,”
the new Republican document says. “Venezuela represents an increasing threat to U.S.
security, a threat which has grown much worse on the current president’s watch. In the
last three years, Venezuela has become a narco-terrorist state, turning it into
an Iranian outpost in the Western Hemisphere,” it says. “The current regime
issues Venezuelan passports or visas to thousands of Middle Eastern terrorists offering
safe haven to Hezbollah trainers, operatives, recruiters and fundraisers,” it adds.
Republicans want a tough stance against Venezuela
Isacson 10
(Adam, “The House Republicans and Latin America,”
http://justf.org/blog/2010/11/03/house-republicans-and-latin-america,
11/3/2010)//SR
Having majority control of a chamber of Congress means having
overwhelming control of that chamber’s agenda. In the House, the Republican Party
leadership will decide what legislation gets debated and voted on the floor (in plenary). It gets to write the first draft of
every budget bill, starting next year with those for 2012. And they get the chairmanships of all committees, which hold
hearings, draft and approve legislation. Legislation approved by the House must also pass the Democratic-controlled
Senate. The two houses must then reconcile differences in the legislation, which may prove to be very difficult. Then, bills
must ultimately be signed into law by Democratic President Barack Obama, who could refuse to do so if he objects
strongly to provisions that come out of the Republican House’s version. What this means for Latin America In general,
the new Republican House majority favors: A tougher stance toward leftist
governments, especially Cuba, Venezuela, Nicaragua and Bolivia. Legislative efforts to soften the
Cuba trade embargo or travel ban will face huge obstacles. Expect more resolutions, legislative
language and hearings criticizing human rights abuses, evidence of
democratic weakening, ties to Iran and other non-democratic regimes, or
increased narcotrafficking activity in Venezuela or Bolivia.
China DA Links
China is investing in Venezuelan oil --- key to fuel its
economy
Winkley, 13 (6/7/2013, Ben, WSJ, “Energy Journal: China Broadens Reach Into
Latin America,” blogs.wsj.com/moneybeat/2013/06/06/energy-journal-chinabroadens-reach-into-latin-america/, JMP)
CHINA TARGETS LATIN AMERICA
Having successfully made vast inroads into Africa, North America and the
key oil-producing region of the North Sea, resource-hungry China is
turning its attention to Central and South America .
Venezuela is negotiating a $4 billion credit line from the Export-Import
Bank of China that would be used for purchasing oil-field equipment, The
Wall Street Journal’s Kejal Vyas reports from Caracas. The deal adds to a separate
$4 billion loan that state oil company PdVSA will receive from the Chinese
government to boost oil production at Petrolera Sinovensa, a joint venture in
Venezuela’s vast Orinoco heavy-oil belt.
The Chinese Ex-Im Bank is also extending a credit line of $1 billion to Petroleos
Mexicanos, Rigzone reports, again to buy vessels and offshore equipment.
The Mexican and Venezuelan oil sectors have been hampered by underinvestment and
restrictions on outside money.
What’s in it for China? As ever, access to the fuel for its economy—Venezuela
currently sends more than 600,000 barrels of oil a day to China and aims to
reach 1 million barrels a day within a couple of years, the Journal says. Pemex
will begin increasing oil exports to China by an initial 30,000 barrels a day, Reuters
reports.
China signing oil deals to boost Venezuelan oil production
PLNA, 13 (5/17/2013, From Presna Latina News Agency, “Venezuela, China
Strengthen Cooperation in Oil Sector,”
http://www.energytribune.com/76932/venezuela-china-strengthen-cooperation-in-oilsector#sthash.8RLoHoEy.dpbs, JMP)
China’s Vice President Li Yuanchao and Venezuelan Minister of Oil and
Mining Rafael Ramirez today ratified their will to strengthen bilateral
cooperation in the hydrocarbons field. In statements made from an oil extraction
deposit of Sinovensa joint venture, in the Orinoco Oil Belt (OOB), the Chinese vice
president said that the goal is to jointly produce 40 million tons of oil annually
in the coming years.
The Chinese government is willing to back the investment projects and also
work in other aspects, such as the protection of the environment and the
local population, said the visitor during a visit to oil extraction areas.
According to Ramirez, the next step in that sense will be to decide about a $4 billion USD
funding to bring the Sinovensa or the OOB Carabobo division production to about
330,000 barrels of oil daily.
The also president of Petroleos de Venezuela S.A. (Pdvsa) said that this agreement
should be signed in his next visit to China.
Sinovensa, whose 60 percent belongs to Pdvsa and the rest to China National
Petroleum Company, increased its production from about 20,000 barrels of oil
daily in 2005 to 140,000 barrels of oil in the present day.
Ramirez also talked about the goal of extracting about 400,000 barrels of oil
daily by 2017 in another of the Chinese-Venezuelan companies, Petrourica,
located in Junin 4 bloc.
Plan will be seen as interference by China
Snow, 13 --- Washington Editor (4/29/2013, Nick, “US can play constructive Western
Hemisphere role, House panel told,” http://www.ogj.com/articles/print/volume111/issue-4d/general-interest/us-can-play-constructive-western-hemisphere.html, JMP)
Other witnesses emphasized that the US will need to not make other countries
feel it is not interfering in their internal affairs as it offers encouragement
and assistance. That may prove difficult as China and other countries from
outside the region negotiate resource agreements with teams of state energy
companies and national banks, they conceded.
"The US still leads the world in energy technology," said David L. Goldwyn, the Special
Envoy and Coordinator for International Energy Affairs at the State Department during
2009-11 who now heads Goldwyn Strategies LLC. "It also has a business development
model that is more favorable than China's, which is increasingly seen as colonial with
employees who keep to themselves and don't work to help develop local economies."
Russia DA Links
The plan trades off with Russia’s energy cooperation with
Venezuela --- key to counter U.S. regional influence
Rinna, 13 (3/9/2013, Anthony, “Russia’s Uncertain Position in post-Chávez
Venezuela,” http://centerforworldconflictandpeace.blogspot.com/2013/03/russiasuncertain-position-in-post.html, JMP)
The domestic and regional implications of the death of Hugo Chávez are numerous and
wide-ranging, but unique to Venezuela is the reverberations the death of its leader will
have in faraway Russia and Eastern Europe. With the passing of “El Comandante,"
it’s possible that Russia’s geopolitical influence in Latin America may
weaken and that it’s arms exports will decline, directly affecting Russia’s
economic growth. Much of this depends on who succeeds Chávez and what
sort of relationship his successor pursues with Russia.
In the 21st century, Russia has had a tendency in its foreign policy to pursue relations
with smaller, less powerful, but in many cases very central, states in regions around the
world (i.e. Serbia in the Balkans, Syria in the Middle East, etc.) in an effort to increase its
own role in the so-called “multi-polar” world. While Russia’s major ally in Latin America
is actually Brazil, Russia has found Venezuela to be a willing partner in
supporting Russia’s own foreign policy, with Venezuela even going so far as to
(hypocritically) recognize South Ossetia’s declaration of independence from Georgia
while opposing Kosovo’s independence from Serbia because of the “bad precedent” it
would set. Venezuelan vice president Nicolás Maduro said that "the unipolar world
is collapsing and finishing in all aspects, and the alliance with Russia is part
of that effort to build a multipolar world."
Russia’s ties with Venezuela as its Latin American partner was a perfect
match- Chávez was an outspoken critic of the U nited S tates and his country
controlled vast reserves of energy, which gave Russia an excellent
opportunity to exert its influence in the country and counter American
power in the region , namely, by combining mutual feelings on U.S.
influence abroad with the capacity to develop Venezuela’s energy industry.
Venezuela was billed as a regional leader for Latin America. For while Chávez’s leftist
administration was one of several that proliferated throughout the region, his had been
by far the most vocal (it is not uncommon, in fact, for Latin American governments to be
relatively aligned on the right-left spectrum, with rightist governments predominating in
the 1970’s and 80’s). Chávez carefully developed relations with Evo Morales of Bolivia,
Rafael Correa of Ecuador and the two most recent Argentine administrations, that of the
late Nestor Kirchner and his wife Crisitina Fernández (who succeeded her late husband
in 2007). His flamboyant anti-American rhetoric was occasionally balanced out by
Brazil’s center-left president Inácio Lula da Silva and Lula’s successor, Dilma Rousseff.
Nevertheless, Venezuela provided a beacon through which Russia was able to exert
geopolitical influence in a region far beyond its periphery.
One of the biggest areas of cooperation between Russia and Venezuela is
the energy sector, a fact recently underscored by Vladimir Putin’s decision to send
Igor Sechin, CEO of Russia’s state owned oil company Rosneft, as a special presidential
envoy to Hugo Chávez’s funeral. Venezuela has the largest proven reserves of crude oil in
the world, but the oil is in need of a more intense refinement process than most other
crude supplies around the world. Russia has the technological capabilities
Venezuela needs to refine its heavy crude, and Russian energy companies
are active in several aspects of the Venezuelan energy industry.
Russian companies plan to invest $17.6 billion in Venezuela by 2019 and
multiply energy output fourfold in an attempt to expand cooperation to
offshore areas and oil services, according to Reuters. Sechin has said Rosneft will
finance production with loans from Russian banks and credit lines from international
banks. Because the Venezuelan economy is currently in shambles, it is highly likely that
the Russian-Venezuelan energy cooperation will continue, with the possibility that if a
government friendlier to the U nited S tates should take power, existing
contracts with Russian companies would continue, but that American
companies would be invited to participate in new ventures .
The situation in Venezuela may actually effect Russia’s energy relations with one of its
Eastern European neighbors- Belarus. Belarus has had a rather unique relationship with
Russia, and is part of a “union state” with Russia. Yet since 2007, the one thorn in the
side of Belarus-Russia relations has been energy, mainly because of a dispute which
emerged when Russia accused Belarus of siphoning Russian gas transported through
Belarus and selling it at world market prices (Belarus had enjoyed Russian gas at a
discounted price). When Russia refused to meet Belarusian quotas for energy imports,
Belarus turned to Venezuela for energy imports starting in 2010, with energy shipped via
tankers from Venezuela to the Ukrainian port of Odessa, then up to Belarus through a
pipeline.
Belarus has sought 23 million tons of oil from Russia for 2013, but Belarusian President
Aleksandr Lukashenko has stated that if Russia will only sell Belarus up to 18 million
tons (as it has stated) and it will import energy from Venezuela and Azerbaijan. Yet if
Venezuela for any reason suspends its sales of energy to Belarus, this may give Russia
more leverage over Belarus as it (Belarus) will have lost a valuable supplier of alternative
energy. This situation seems unlikely since Venezuela can only benefit from the influx of
cash, but is still an example of how far reaching the implications of the upcoming
transfer of power in Venezuela really are.
After energy, Russia’s most valuable export is armaments and military hardware. Chávez
constantly feared a U.S. invasion of Venezuela, and had been engaged in a long-standing
dispute with neighboring Colombia over the presence of U.S. troops in Colombia (these
U.S. troops including most notably the U.S.’s élite Special Forces, whose purpose is to
assist with counter-narcotics and counter-insurgency). This, in principle, was the basis
for his decision to enter into contractual agreements with Russia regarding arms sales.
Venezuela is the second-largest customer for Russian military hardware (after India),
and as Russia’s economy is famously lacking in diversity of exports outside of energy, a
willing market for arms is greatly welcomed (a situation only enhanced by the instability
in another major importer of Russian arms- Syria). In 2009, then-Secretary of State
Hillary Clinton warned of a possible arms race between Colombia and Venezuela.
Since 2006, the gross income for Russian military sales abroad has doubled, and Russian
arms sales are now almost exclusively handled through state-owned company
Rosoboronexport. Chávez’s death, however, could reduce Russia’s client relationship
with Venezuela in the arms industry, depending on how the succession plays out. It
would be easy to assume that Nicolás Maduro, Venezuela’s vice president, would succeed
the late Chávez, yet Venezuela’s opposition is relatively strong. The Venezuelan economy,
despite the strength of the country’s crude reserves, is not entirely healthy, and if the
Venezuelan opposition ends up in power they may decide that it is not economically
viable to have such contracts arms with Russia. Viachelav Nikonov, deputy chair of the
Russian Parliament’s committee on foreign affairs, has stated that he does not believe a
new Venezuelan administration would be able to opt out of currently existing contracts,
but future contracts may not be pursued.
Given the fragile state of Venezuela’s economy, Russia will most likely remain a major
player in Venezuela’s foreign relations, because even if the opposition were somehow to
come to power, Russian participation in the country’s energy sector is still largely
necessary for it to be able to produce energy in adequate amounts and at sufficient levels
of refinement. Yet Russia may lose a large part of its customer base in the armaments
industry, and if a right-wing administration comes to power, or at least a
Chávez lieutenant who seeks to improve relations with the U nited S tates,
Russia may also find itself with less of a partner in the geopolitical arena of
countering U.S. influence in Latin America.
Russian oil investment high now but increased U.S.
involvement will crowd it out
RT, 13 (3/6/2013, “Chavez’s death opens oil industry questions for Venezuela,”
http://rt.com/business/chavez-venezuelan-death-oil-887/, JMP)
Venezuela a 'priority' for Russian oil investment
Similar to the US, Russia has also had a large presence in the Venezuelan
energy sector. For almost a decade, Russia’s largest privately owned oil
company Lukoil has been developing the Venezuelan Orinoco Oil Belt with
the country’s state-oil firm Petroleum of Venezuela, the world’s third largest.
Another Russian energy major, Gazprom has been developing gas deposits
in the Gulf of Venezuela since 2008.
Last month Russia's leader in petroleum industry, Rosneft announced
Venezuela will be a ‘priority’ for the company in foreign energy projects. The
oil giant agreed to develop several fields in the crude-rich southeast region,
and has committed $40 billion in investment. However, Petroleum of Venezuela
will control the majority of the project’s stake, at 60%.
Russia hopes all the agreements reached with Venezuela under the Hugo
Chavez presidency will remain in place and the two countries will retain the
same level of cooperation, Russian Deputy Prime Minister Arkady Dvorkovich said
on Wednesday.
“We hope that all the agreements that were reached will be implemented. We also intend
to fulfill our commitments and hope that the policy of Venezuela will stay the same,” Mr
Dvorkovich said.
Oil games
If the opposition comes to power in Venezuela, the rules of the oil game can change and
not necessarily to the benefit of Russian companies, Konstantin Simonov, head of the
National Energy Security Fund told RT Business.
“The opposition in Venezuela is quite strong. We remember elections in 2012 when the
gap between Chavez and his closest rival was just a small percent. It means Mr Maduro
can lose the election and this scenario will be extremely dangerous for the Russian
companies. I’m pretty sure in that case we will see American companies returning to
Venezuela,” Mr Simonov said.
Russian companies will be forced out of major projects they managed to
nail, once American players enter the game, as they will try to eliminate
unwanted rivals and become sole shareholders of the projects. Peaceful coexistence is unlikely to happen there , says Konstatin Simonov, as the costly
production of the cites will leave not enough profit to be shared among all
sides engaged.
A new leader can also take advantage of the competition among the companies for the
rights to get their hands on Venezuela’s oil reserves, Mr Simonov goes on, and simply sell
the projects Russia has only agreed to develop but has yet to finialize.
“If we are speaking about the Junin-6 project, Rosneft and its Russian partners paid
Chavez an “entrance ticket” of $1 billion. It wasn’t an investment, just a payment. So
instead of asking for $1 bln, how about half a billion, to take these assets from Russian
companies and sell them to Americans. This is very simple logic with such political
regimes – if we see a new leader come to power, they'll try to abolish all the old contracts
and sell the same assets to the new parties because you can sell the same assets twice.
This tactic clearly makes for very good business.”
But experts say that it is likely that the country’s policies will not change
much, as Nicholas Maduro, endorsed by Chavez, is favored by political pundits to take
over as president. The election will be held in 30 days.
“My expectation is that we will see the status quo, with a transition to a similar style of
government from Chavez’s successor,” said Katherine Spector, head of commodity
strategy at CIBC World Markets in New York.
Russia cooperating with Venezuela to develop Orinoco oil
fields
AFP, 13 (5/24/2013, Voice of Russia, “Russia and Venezuela to develop Orinoco oil
fields,” http://english.ruvr.ru/news/2013_05_24/Russia-and-Venezuela-to-developOrinoco-oil-fields/, JMP)
The Russian federation and Venezuela have formed a joint venture to
produce 120,000 barrels of oil a day by 2016 in two fields in the Orinoco Oil
Belt.
Russia will provides a loan to Venezuela in the amount of $1.5 billion to
finance the development of the fields under the terms of the agreement, and
invest $1.1 billion for a 40 percent share in Petrovictoria.
The agreement establishing Petrovictoria was signed by the president of the state-owned
Petroleos de Venezuela (PDVSA), Rafael Ramirez, and the president of Russian state oil
company Rosneft, Igor Sechin.
PDVSA will sell to Russia 72 percent of the heavy and extra-heavy crude
produced by the company, which has a long-term goal of producing 400,000
barrels a day.
Three mixed capital companies are currently operating in the Orinoco Belt, producing
230,000 barrels a day in a huge area of southeastern Venezuela.
The Belt has estimated reserves of 220 billion barrels of harder-to-refine heavy and
extra-heavy oil, the largest in the world.
Recognize Maduro CP
Not recognizing Maduro is tanking U.S.-Venezuelan relations
Baverstock 5/13 (Alasdair, “Venezuela’s Maduro Still Waiting on Washington’s Recognition”,
http://www.csmonitor.com/World/Americas/2013/0517/Venezuela-s-Maduro-still-waiting-onWashington-s-recognition, 5/17/2013)//SR
More than a month after Venezuela’s contested presidential election,
President Nicolás Maduro’s narrow victory has yet to be recognized by the
United States. Refusing to legitimize the new premier while a partial
recount of the vote is underway, the US position has led to further political
tensions in a relationship historically stressed under the leadership of former President Hugo
Chávez. Venezuela's Maduro victory upheld in audit - but opposition says fight not A handful of countries, including Chile,
Peru, and the US, have expressed concern over the democratic standards of the election, which Maduro won by a little
more than 1 percent of the vote. Venezuela’s opposition party is calling for the results to be annulled, citing over 3,000
instances of election fraud, ranging from alleged multiple-voting in chavista-strongholds to polling booth intimidation.
“Obviously, if there are huge irregularities we are going to have serious questions about the viability of that government,”
said Secretary of State John Kerry during a hearing of the US Foreign Affairs Committee following the announcement of
President Maduro’s victory in April. While the US has pledged not to interfere with
Venezuelan politics, the refusal to recognize Maduro's presidency has left
many to question what message the US is trying to send, and how – if at all –
it will impact Venezuela post-Chávez. “[The US isn’t] recognizing or failing to
recognize,” says David Smilde, professor of sociology at the University of Georgia.
“They’re just waiting. But here in Venezuela that’s seen as an act of belligerence.”
Recognition of Maduro solves case - lack of recognition is the cause of
instability and poor relations
Carlsen 13 – Fulbright scholar, Americas Project, editor of Business Mexico (Laura,
“U.S. Efforts to Block Democracy in Venezuela harms Hemispheric Relations”, Foreign
Policy in Focus, 5/2,
http://www.fpif.org/articles/us_efforts_to_block_democracy_in_venezuela_harm_rel
ations_in_the_hemisphere)//mm
The U.S. government stands alone among major world governments in
refusing to recognize the results of the recent Venezuelan presidential
election. The petulant position of the Obama administration harms U.S.
relations across the entire hemisphere and feeds a scenario of violence in
that Caribbean country.¶ Nation after nation--including the last hold-out Spain and the Organization of
American States—has recognized Nicolas Maduro, who took office following his narrow win in the April 14 elections. The
results ratified by the National Electoral Council show Maduro with 50.78 percent to 48.95 percent for defeated
conservative candidate Henrique Capriles—a difference of 1.8 percent, or some 260,000 votes. There were no
major anomalies on Election Day, which by all reports went remarkably smoothly.¶ Following the
elections, Capriles contested the results in fiery speeches and called on supporters to demonstrate, but curiously did not
file a legal challenge.¶ The Venezuelan electoral system is highly tamper-proof, as
the Carter Center, which before the vote assessed the
system as “the best in the world.” Delegations from the Carter Center, the Union of South American
Countries, and other experts observed the elections and proclaimed them clean and
fair. Venezuelans vote electronically, then print out and double-check a paper ballot before depositing it as well. The
recognized by monitoring organizations like
Electoral Council carries out an audit at polls of 54.3 percent of the votes. These reviews are signed by members of the
political parties, including Capriles’ Democratic Unity Party.¶ The Electoral Council has agreed to audit the remaining 46
percent of ballots, although the electronic vote is the legal vote and the process for reviewing the paper backup after the
on-site audit is unprecedented and logistically challenging, with almost no possibility of changing the result.
Representatives of the conservative coalition announced instead that they plan to gather alleged evidence of fraud to
present to the Supreme Court. Capriles said from there he will attempt to take the case to international courts, promising a
drawn-out process that will feed sharp divisions with the country. The opposition still has not presented the suit or the
proofs for judicial review.¶ Daniel Kovalik, a U.S. human rights lawyer who was among 170 international election
observers from around the world, reported in the Pittsburgh Post-Gazette, “What we found was a transparent, reliable,
well-run and thoroughly audited electoral system.” Voter turnout was reportedly 79 percent—a major achievement that
would be the envy of more mature democracies, including the United States.¶ And still the U.S. State Department
spokesperson Patrick Ventrell stated on April 24, 10 days after the elections, “We do continue to believe that the
ongoing CNE recount
and a thorough review of alleged voting irregularities will…ensure that the
Venezuelan people feel that their democratic aspirations are being met and that
they have greater confidence in the election outcome.Ӧ This, coming after recognizing in the same press
conference that the Maduro government was making overtures to repair relations
with the United States through the appointment of its new charge d’affaires, dashed hopes of
more cordial relations between the two trade partners.¶ The frame of concern for “the Venezuelan people”
rings hollow. In a democratic contest, especially in a society as polarized as Venezuela’s, the losing side never feels like its
“aspirations are being met” when they lose. And the insistence on a 100-percent recount after the ignominy of the BushGore election of 2000 and the immediate U.S. recognition of the conservative Mexican president Felipe Calderon, despite
evidence of voter fraud and a much narrower margin in 2006, is hypocritical at best.¶ At worst, it is an example of U.S.
external pressure that encourages a break with the rule of law and violates the principle of self-determination that
President Barack Obama claims to uphold.¶ This is the first time the U.S. government has
refused to recognize a Venezuelan election result, as Mark Weisbrot of the Center for
Economic and Political Research points out.Weisbrot notes, “Washington's efforts to de-legitimise
the election mark a significant escalation of US efforts at regime change in
Venezuela. Not since its involvement in the 2002 military coup has the US
government done this much to promote open conflict in Venezuela.Ӧ The Obama
administration is bending over backwards to spur on an opposition movement that has no virtually legal leg to stand on in
its desire for new presidential elections. There are some indications that the strategy to refuse to accept defeat at the polls
was considered even before the close vote. Although Capriles conceded rapidly and gracefully to former President Hugo
Chavez in the presidential elections last fall, it was a bad omen when he refused to sign a pre-electoral pact to respect the
results prior to this election.¶ Now violent opposition protests in the streets have led to the deaths of nine people. Maduro
has attended the funerals of his supporters killed in the disturbances with vows to defend his victory and prosecute those
inciting and participating in violent acts. Health clinics established by Chavez have been frequent targets. ¶ It is highly
unlikely that Capriles would stake his future on rejecting legal electoral institutions if he did not have the support of the
U.S. government. It is even more unlikely that he could sustain a movement for non-recognition. Even many members of
his own coalition will not go so far as to say they honestly believe he won the April 14th elections. The other countries of
the region recognized Maduro as the new president within hours of the results. Not only did the left-leaning governments
provide their diplomatic welcome, but also Colombia, Mexico, and other nations closely allied with the United States. ¶
Capriles’ actions and de facto U.S. support for prolonging post-electoral unrest not only
endanger peace and stability in Venezuela, but also potentially the entire
region. Venezuela is a geopolitical hub—for its oil, for its role in building
south-south integration projects like ALBA and Unasur, for its solidarity trade pacts, and for its
defiance of U.S. hegemony.¶ To illegally disrupt the constitutional order there will not be as easy as it was in Honduras,
where even a broad opposition movement couldn’t restore the constitutionally elected president after a right-wing coup in
2009. Inevitably, nations across the hemisphere and the world will react with
anger if the Obama administration decides to maintain this course, both in
defense of their neighbor Venezuela and also in what they see as a threat to their own sovereignty. Already former
Brazilian president Lula da Silva has warned that "Americans should take care of their own business a little and let us
decide our own destiny."¶ The longer the United States remains globally isolated in its
refusal to accept Venezuela’s election results, the longer the instability,
uncertainty, and violence will continue. Extending the conflict could very well end up
unnecessarily costing more lives.¶ The Obama administration should consider that its stubbornness about what it
considers an adverse election result in a foreign country is a direct cause of bloodshed. It harms relations with our
hemispheric neighbors and partners and sows the seeds of distrust and enmity in a region where we have a good chance at
building cooperation on issues of vital importance to all of our countries. Venezuela’s elections must be
accepted at once to show that the United States will uphold democratic processes and the rule of law, even when
its government is not particularly pleased with the results.
Alternative Energy CP
Engagement on alternative energy alone solves the case, avoids the Dutch
disease turn and solves climate change better
Council on Foreign Relations 08 – independent task force project, CFR is an
independent, nonpartisan organization (‘US Latin America Relations: A New Direction for a New
Reality’, May 2008, http://www.cfr.org/mexico/us-latin-america-relations/p16279)//MJ
As the United States and other nations look to diversify their energy
sources and reduce dependence on oil , Latin America presents a unique
opportunity for engagement and cooperation. Latin America already leads
the United States in the production and use of hydroelectric power, which
supplies 23 percent of its energy needs (as compared to less than 3 percent in the United States).50
The region has also made investments in solar- and wind-powered
technologies, particularly in Argentina, Brazil, and Chile. Cooperation on alternative energy
research and production could become an important component of U.S.Latin America relations in the years ahead. Partnering with Latin American
nations in the development of alternative energy sources would allow the
United States to build and deepen diplomatic relationships through joint
initiatives on development, climate change , and environmental
sustainability. Two areas in particular—biofuels and nuclear energy—
present important and immediate opportunities.¶ Only in the past several years have scarcity
in oil markets, environ- mental awareness, scientific advances, and proactive subsidy policies combined to make biofuels,
notably ethanol and biodiesel, reasonably price competitive with petroleum products on a wider scale. Biofuels
now provide an opportunity for Latin America and the United States to
assume global leadership in a sector of future competitive and environ- mental value (namely, decreased
greenhouse gas emissions).¶ Brazil and the United States are currently the largest producers of ethanol in the world (with
51
38 and 50 percent of global production in 2007, respectively). Brazil has become a global leader in the promotion of
sugar-based ethanol usage through the implementation of flex-fuel technology, mandatory fuel blends, and infrastructure
investment. In 2006, domestic consumption of ethanol accounted for nearly half of Brazilian passenger vehicle fuel supply
by volume (in the United States,¶ Other nations following Brazil’s lead are considering their own potential in this area:
Guatemala, Costa Rica, and El Salvador have the right climate and well-developed sugar industries, while Honduras and
Colombia are looking forward to producing biodiesel based on palm. After a series of high-profile meetings between
Presidents Bush and Lula da Silva, the United States and Brazil launched a Biofuels Partnership in April 2007, pledging to
expand technical assistance to nations in Central America and the Caribbean with the goal of commoditizing ethanol, first
regionally and then globally.¶ Protectionism remains a significant challenge to building a global biofuels market; however,
the negative consequences of external oil dependence have led some to concentrate on greater energy self- sufficiency
through the development of domestic biofuel industries, and by introducing subsidies, tax breaks, and tariffs. In the
United States, efforts have concentrated on corn-based ethanol, which is widely recognized to be less cost- and energy52
efficient than sugar-based produc- tion techniques. Nonetheless, the corn industry enjoys substantial government
53
support, as well as significant tariff protection from its Brazilian competitors. These policies may hinder the
development of freer biofuel commodity markets, discouraging longer-term invest- ments.¶ Latin America has
also seen resurgent interest in nuclear power. A little over forty years ago, there appeared to be
a genuine risk of a nuclear arms race in the region—a trend that was short-circuited by the establishment of a Nuclear
Weapons Free Zone by the 1967 Treaty of Tlatelolco. Since then, Argentina, Brazil, and Mexico have built seven nuclear
power plants, although only Argentina has established a strong technical capacity in
this area—a capacity that recently has been¶ tapped by Venezuela to explore
the possible development of a nuclear energy program of its own. Today there is a
compelling argument for the expansion of nuclear energy, which provides base power with zero greenhouse gas emissions,
as Brazil’s construction of new reactors and use of nuclear-powered submarines attest. However, achieving such
expansion will require that Latin America address the complex chal- lenges of managing and disposing of uranium and
nuclear waste and meeting international standards (especially given concerns over Cha ́vez’s desire for nuclear-
enrichment capability and a relationship with Iran).¶ The Task Force finds that although biofuels will not displace oil and
gas, they can help diversify energy choices, lower the energy intensity of national economies, decrease greenhouse gas
emissions, and foster greater energy security for the entire hemisphere. While being mindful of the need to guarantee
food security, diversifying
energy sources could be an important driver of
economic development in Latin America as the region becomes an
important technology, production, and research hub in the long-term
development of a global biofuels market. Expanding nuclear power would
further efforts at energy diversification . Cooperation on such issues
provides a unique opportunity for the United States to reengage Latin
America proactively, with shared environmental and energy con- cerns
deepening diplomatic relationships.54¶
Shunning Link
Venezuela is a massive human rights violator
Sullivan, 13 --- Specialist in Latin American Affairs at Congressional Research
Service (1/10/2013, Mark P., “Venezuela: Issues for Congress,”
http://www.fas.org/sgp/crs/row/R40938.pdf, JMP)
Human Rights Concerns
Human rights organizations and U.S. officials have expressed concerns for several years
about the deterioration of democratic institutions and threats to freedom of speech and
press in Venezuela under the Chávez government. According to Human Rights Watch’s
World Report 2012, “the weakening of Venezuela’s democratic system of checks and
balances under President Hugo Chávez has contributed to a precarious human rights
situation.” It maintained that “without judicial checks on its actions, the government has
systematically undermined the right to free expression, workers’ freedom of association,
and the ability of human rights groups to protect rights.”87
An extensive Human Rights Watch report on Venezuela issued in July 2012
maintains that the human rights situation in the country has become even
more precarious in recent years.88 It noted that the pro-Chávez majority in the
National Assembly approved legislation in 2010 expanding the government’s powers to
limit free speech and punish its critics. It asserts that the Supreme Court “has explicitly
rejected the principle that the judiciary should serve as a check on presidential power,
while joining with the president in dismissing the authority of the Inter- American
system of human rights.” For almost a decade, President Chávez has not allowed the
Inter-American Commission on Human Rights to visit the country, while in July 2012 he
announced that Venezuela would withdraw from the jurisdiction of the Inter-American
Court of Human Rights. The report contends that “the accumulation of power
in the executive, the removal of institutional safeguards, and the erosion of
human rights guarantees have given the Chávez government free reign to
intimidate, censor, and prosecute Venezuelans who criticize the president
or thwart his political agenda.”
The State Department’s 2011 human rights report (issued in May 2012) maintains
that the “principal human rights abuses reported during the year included
government actions to impede freedom of expression and criminalize
dissent.”89 According to the State Department, the Venezuelan government harassed
and intimidated privately owned television stations, other media outlets, and journalists.
The government was reported to have thwarted judicial independence, and to have used
the judiciary to intimidate and selectively prosecute political, union, business, and civil
society leaders critical of the government. The State Department report also cites other
human rights problems such as unlawful killings; torture and degrading treatment;
prison violence and harsh prison conditions; inadequate juvenile detention centers;
arbitrary arrests and detentions; police corruption and impunity; interference with
property rights; and threats against domestic nongovernmental organizations. The
significant problem of prison violence was highlighted once again on August 19, 2012,
when a clash between gangs at a prison in Miranda state reportedly resulted in at least
25 deaths.
Venezuelan government is anti-Semitic
Sullivan, 13 --- Specialist in Latin American Affairs at Congressional Research
Service (1/10/2013, Mark P., “Venezuela: Issues for Congress,”
http://www.fas.org/sgp/crs/row/R40938.pdf, JMP)
Anti-Semitism
Venezuela, which has a Jewish community of about 9,000,104 has witnessed a rise
in anti-Semitic acts over the past several years under the government of
President Chávez. In the past, anti- Semitism appeared to be rare in Venezuela, but
has grown in recent years as Venezuela has moved toward closer relations
with Iran and as it has criticized Israel for its actions in Lebanon against
Hezbollah and for its actions in Gaza.105 According to the State Department’s
2009 human rights report, there was an increase in anti-Semitic vandalism, caricatures,
and expression at rallies and in newspapers. Government-affiliated media outlets
broadcast or printed numerous anti-Semitic comments. The State Department
report noted that the government did not officially condone anti-Semitism, but
maintained that it orchestrated several anti-Israel demonstrations and that President
Chávez called on the Jewish community to denounce Israel’s actions. These activities
were accompanied by an increase in anti-Semitic rhetoric and graffiti, and vandalism of
property owned by Jews.
In late January 2009, a Caracas synagogue was vandalized. Criminal charges were filed
against 11 people for the attack, including 8 police officers (A Venezuelan court
sentenced six of the 11 defendants to 10 years in prison in July 2011, while the remaining
five defendants remain on trial.) According to the State Department’s 2009 international
religious freedom report, Venezuelan government officials publicly condemned the
synagogue attack, including President Chávez, who phoned the president of the
Confederation of Jewish Associations in Venezuela (CAIV) and promised to guarantee
the safety of the Jewish community. A State Department official at the OAS condemned
the incident, maintaining that it served “as a warning of what can happen in a highly
politicized environment when intolerance is left to simmer.”106 In February 2009, 16
Members of Congress spoke out against the synagogue attack in a letter to President
Chávez. They stated in the letter that they believed that the attack was “a direct result of
the dangerous environment of fear and intimidation against the Jewish community
which your government has fostered.” The Members called on Chávez “to end the
bullying and harassment of the Jewish community” and “to extend the community the
robust protection it deserves in light of the threats it faces.”107
In the aftermath of Israel’s Gaza flotilla incident in late May 2010, the
Venezuelan government’s strong anti-Israeli rhetoric and conspiracy
theories about the state of Israel contributed to continued anti-Semitic
language in Venezuelan media.108 In a September 2010 meeting with President
Chávez, Jewish leaders raised the problem of anti-Semitism in the state-owned media.
In May 2011, CAIV and U.S.-based Jewish organizations denounced a state-owned radio
station that featured a reading of selections from the anti-Semitic tract known as the
“Protocols of the Elders of Zion,” with the radio host suggesting that listeners read it.
In February 2012, U.S. Jewish groups criticized attacks in the Venezuelan media against
opposition presidential candidate Henrique Capriles Radonski that portrayed his Jewish
heritage negatively. Capriles is a practicing Catholic, but is the grandson of Polish Jewish
immigrants who survived the Holocaust.
Russia CP
Russia solves-they have experience in joint ventures
RIA Novosti 13
(“Rosneft and Venezuela’s PDVSA Sign Shelf Exploration Deal”,
http://en.ria.ru/business/20130702/182014244/Rosneft-and-Venezuelas-PDVSA-SignShelf-Exploration-Deal.html, 02/07/2013)//SR
Venezuela’s national oil company Petroleos de Venezuela S.A. (PDVSA) and
Russia’s state-owned oil-and-gas giant Rosneft on Tuesday signed an
agreement to jointly develop extensive offshore deposits in South America.
Venezuelan Oil Minister and PDVSA head Rafael Ramirez, who attended the
signing ceremony, said the deal envisaged joint work on five gas blocks off
Venezuela, including the Mariscal Sucre project and the Blanquilla and
Tortuga deposits, with their total reserves estimated at 21 trillion cubic feet.
“Investment in Mariscal Sucre alone will total at least $5 billion,” he said.
Gazprombank, which is affiliated with Russian energy giant Gazprom, said Tuesday that
it had signed a deal with Venezuela’s PDVSA to invest $1 billion in their joint
venture, PetroSamora. “Today an agreement has been signed on the basic
terms of financing a contract for crude oil production and delivery, with
total financing at $1 billion,” said Gazprombank deputy CEO Alexander
Muranov. PetroSamora was established in February 2012 to develop deposits in the oil
belt of the Orinoco River, which has one of the world’s largest oil reserves, estimated at
86.4 billion barrels. Venezuela holds 60 percent in PetroSamora, while Gazprombank
holds 40 percent.
Russia is best actor for joint investment projects- bilateral trade and
experience in oil industry
RIA Novosti 13
(“Venezuela, Russia Have Huge Investment Potential – Putin”,
http://en.ria.ru/business/20130702/182015585/Venezuela-Russia-Have-HugeInvestment-Potential--Putin.html, 2/07/2013)//SR
Venezuela and Russia have huge potential for joint investment projects, Russian
President Vladimir Putin said Tuesday, the same day that Rosneft and Gazprombank
signed major deals with Venezuela’s national oil company, Petroleos de Venezuela.
“Energy is an important area for joint investment projects,” Putin said after meeting
with Venezuelan President Nicolas Maduro. “Russia’s National Oil Consortium in
September 2012 launched the first oil well at the Junin-6 deposit [in Venezuela].
[Electricity trader] Inter RAO UES supplies gas turbines to Venezuela for nuclear power
plants under construction there,” Putin said. Venezuela is Russia’s key partner in Latin
America, the Russian leader said, adding that bilateral trade exceeded $2 billion in 2012
and tripled in January through April this year. Russian investment in the Venezuelan
economy has reached $21 billion, he said. Putin also said the two nations had great
potential for industrial partnerships. “Russia and Venezuela are implementing joint
projects in the auto industry, machine-building, transportation and infrastructure,” he
said, adding that Russian truck maker KamAZ planned to set up a joint venture with
Venezuela to produce trucks and buses
Maduro will say yes to Russia-strong bilateral relations and previous
experience investing
Prensa Latina 7/2
(“Putin Satisfied with Continuity of Russian-Venezuelan Ties”,
http://www.plenglish.com/index.php?option=com_content&task=view&id=1570261&It
emid=1, 7/02/13)//SR
Russian President Vladimir Putin expressed satisfaction on Tuesday with the continuity
of relations and friendship between Russia and Venezuela, in the spirit of late Bolivarian
leader Hugo Chavez, who is recalled here with love. During an official meeting with
President Nicolas Maduro, Putin said he was very happy that the Venezuelan head of
State had strongly taking over the command from his predecessor, one of the most
prominent leaders in Latin America, said Putin when evoking Chavez. He added that
during Maduro's visit, a street in northern Moscow would be named after Chavez, as an
expression of the respect and affection expressed by several sectors of Russian society for
the supreme leader of the Bolivarian Revolution. Putin noted that Maduro is carrying on
the work of the late president in favor of progress and the strengthening of RussianVenezuelan relations. Economic and commercial ties grew to two billion dollars and our
companies have an investment plan worth more than 20 billion dollars, Putin told the
members of the two delegations. According to him, the two countries are working
successfully to diversify contacts and joint projects. Maduro, in turn, highlighted the
solid path built by Russia and Venezuela over the past ten years, covering different fields
of cooperation. He noted the great achievements in collaboration in the fields of energy,
especially oil and gas, machinery and the military. Russian-Venezuelan relations are
also growing in the sector of finance, the agri-industrial complex, education and
cultureb. We inherited that great love and respect for Russia that Chavez cultivated and
promoted, pointed out Maduro at the beginning of his first meeting with Putin as the
Venezuelan head of State. Maduro said he was happy to be in Moscow and to travel here
to ratify our wish to strengthen the strategic alliance with Russia, and to follow the path
traced out by Hugo Chavez.
Russia solves-new oil deal
Bai 13
(Yevgeny, “Rosneft oil deals give Russia clout in post-Chavez Venezuela”, RBC Magazine,
http://rbth.ru/opinion/2013/03/06/rosneft_oil_deals_give_russia_clout_in_postchavez_venezuela_23567.html, 3/06/2013)//SR
In September last year, Russia’s oil giant Rosneft signed an agreement with Venezuela's
Corporacion Venezolana del Petroleo (CVP), a subsidiary of Petroleum Petroleos de
Venezuela (PDVSA), to set up a joint venture. According to Rosneft’s influential CEO,
Igor Sechin, the Russian firm will invest $16 billion in the development of one of CVP's
fields. This investment comes on top of$20 billion of Russian investment already
planned into the Venezuelan energy industry. Russian oil companies to remain in
Venezuela in short-term regardless of Chavez's death - expert In an interesting first for
Russian companies, Rosneft agreed to pay a $1.1 billion signing bonus, simply to gain
access to fields with the prospect of bringing them online in 5 to 10 years’ time.
Rosneftalso promised to provide CVP with a $1.5 billion credit line for five years. In
return, Russia’s biggest oil firm is due to receive a 40 percent stake in the Carabobo-2
field in the Orinoco oil belt.
Russia solves-already deepening oil ties with Venezuela
Hiscock 13
(Geoff, “Russia Deepens Venezuela Oil Ties”,
http://www.theaustralian.com.au/business/mining-energy/russia-deepens-venezuelaoil-ties/story-e6frg9df-1226577701328, 2/14/2013)//SR
Igor Sechin, president of Russia’s state-owned oil giant Rosneft, declared last month the
oil-rich South American country would be the main focus of Rosneft’s overseas
investments. Under a series of accords signed during Sechin’s visit to Venezuela on
January 29-30, Russia will commit to invest up to $US40 billion in jointly exploiting the
Orinoco extra-heavy oil belt -- regarded as one of the world’s largest hydrocarbon
reserves -- with Venezuela’s state-owned Petroleos de Venezuela SA (PDVSA). The US
Geological Survey estimated in 2010 that the Orinoco belt, a 600-km strip straddling the Orinoco River in the centraleastern part of Venezuela, held 513 billion barrels of technically recoverable oil. According to OPEC statistics, Venezuela’s
proven reserves stand at 296 billion barrels, the largest in the world. It also has 5.5 trillion cubic metres of gas reserves,
ranking it No. 8 in gas behind Russia, Iran, Qatar, Saudi Arabia, Turkmenistan, UAE and the US. Venezuela relies heavily
on its oil exports, which supply 95 per cent of its foreign earnings. Output, which was above 3 million barrels a day in the
1990s and early 2000s, has since fallen below that figure, although Venezuela’s stated goal is to reach 5 million barrels a
day by 2015 and 6.5 million by 2020, through development of the Orinoco belt. Venezuela’s heavy sour crude remains in
demand with some refiners because it is cheaper than light sweet crude. Last week’s hefty devaluation of the bolivar
currency by the government of Chavez – who has been in hospital in Havana, Cuba since surgery in December – will ease
the country's budget shortfall, but will also likely spur inflation and further weaken the economy. Vice President Nicolas
Maduro is running the country in the absence of Chavez. In the late 1990s, Venezuela was supplying almost 2 million
barrels a day of crude oil to the United States. But that figure has shrunk in recent years to just over a million barrels a
day, on the back of increased US shale oil and gas production, and increased imports from friendlier US neighbour
Canada. Even so, Venezuela ranks as a top-four supplier, behind Canada and Saudi Arabia, and about level with Mexico.
That makes the United States Venezuela’s most important trading partner, despite Chavez constantly railing at US
“imperialism”. The big change for Venezuela is the increased interest being shown in the Orinoco belt by Russia, China
and India. European and Asian oil companies such as Eni of Italy, Repsol of Spain, Petronas of Malaysia and
Petrovietnam are active there, as is the US major Chevron, in partnership with Japanese companies. PDVSA has a
majority 60 per cent stake in all the various Orinoco blocks that have been licensed since 2009. Rosneft, for
example, has committed to spend $US10 billion on its Venezuela projects over the next
few years, including the highly prospective Junin-6 and Carabobo-2 blocks in the
Orinoco belt. Rosneft heads a Russian consortium with 40 per cent of Junin-6, where the
technically recoverable reserves of oil are close to 11 billion barrels. Late last month
Rosneft said it would buy out one of its Russian partners, Surgutneftegas.
China CP
China oil companies have a competitive advantage --- have
helped Venezuela boost oil production
Tyler, 13 --- reporter for Marketplace’s Los Angeles bureau, where he reports on
issues related to immigration and Latin America (5/31/2013, Jeff, “The battle of trade for
Latin America,” http://www.marketplace.org/topics/world/battle-trade-latin-america,
JMP)
***Eric Farnsworth is vice president of the Council of the Americas
Leaders from the U.S. and China down-play their competition.
“I don’t think either of them see themselves in a head-to-head race for influence in the
region necessarily,” Farnsworth says.
But the U.S. and China also compete in Latin America, as the continent
becomes increasingly important to the world’s economy.
“Chinese national oil companies have a competitive advantage over U.S. oil
companies,” says Jorge Piñón with the U niversity of T exas in Austin. “They
also play the role of a banker to the energy sector.”
Piñón says China loaned a total of $45 billion to Brazil and Venezuela to
develop energy projects, with the loans to be repaid with oil.
That’s a deal it would be hard for Exxon or Chevron to match.
China can help Venezuela boost oil production
PLNA, 13 (5/17/2013, From Presna Latina News Agency, “Venezuela, China
Strengthen Cooperation in Oil Sector,”
http://www.energytribune.com/76932/venezuela-china-strengthen-cooperation-in-oilsector#sthash.8RLoHoEy.dpbs, JMP)
China’s Vice President Li Yuanchao and Venezuelan Minister of Oil and
Mining Rafael Ramirez today ratified their will to strengthen bilateral
cooperation in the hydrocarbons field. In statements made from an oil extraction
deposit of Sinovensa joint venture, in the Orinoco Oil Belt (OOB), the Chinese vice
president said that the goal is to jointly produce 40 million tons of oil annually
in the coming years.
The Chinese government is willing to back the investment projects and also
work in other aspects, such as the protection of the environment and the
local population, said the visitor during a visit to oil extraction areas.
According to Ramirez, the next step in that sense will be to decide about a $4 billion USD
funding to bring the Sinovensa or the OOB Carabobo division production to about
330,000 barrels of oil daily.
The also president of Petroleos de Venezuela S.A. (Pdvsa) said that this agreement
should be signed in his next visit to China.
Sinovensa, whose 60 percent belongs to Pdvsa and the rest to China National
Petroleum Company, increased its production from about 20,000 barrels of oil
daily in 2005 to 140,000 barrels of oil in the present day.
Ramirez also talked about the goal of extracting about 400,000 barrels of oil
daily by 2017 in another of the Chinese-Venezuelan companies, Petrourica,
located in Junin 4 bloc.
Maduro prefers to reach out to China for oil assistance
Alic, 13 --- geopolitical analyst, co-founder of ISA Intel in Sarajevo (4/15/2013, Jen,
“Foreign Oil & Gas Companies Look to Status Quo in Venezuela,”
http://oilprice.com/Geopolitics/South-America/Foreign-Oil-Gas-Companies-Look-toStatus-Quo-in-Venezuela.html, JMP)
In the meantime, China’s foothold in Venezuela remains on solid ground.
China is already privy to 600,000 bpd from Venezuela in return for $42
billion in loans. Maduro is not likely to rock this boat with Beijing, and
according to the terms already in place, Venezuelan exports are set to increase to one
million bpd by 2015, though most of the loan money has already been spent. According
to Southern Pulse, Maduro will likely seek new loans from China, but this will
depend on the terms and stability in Venezuela.
If this doesn’t work, Maduro will have to look elsewhere—first to Russia and then
perhaps to US Chevron or Spanish Repsol, the latter two having only limited operations
in the country.
Overall, we should consider that Maduro will pursue all-out chavismo. “As
president, Maduro will govern as he thinks Chavez himself would have ruled.
However, Maduro probably will not begin pandering to the most radical elements of his
party, PSUV, because he has little to gain from that. Maduro is not blind to the myriad
problems facing the next president such as blackouts, food shortages and rampant
criminal violence,” according to Southern Pulse.
--- AT: U.S. Key
U.S. domestic flaws undermines capacity of its policies
Schultz, 13 (3/17/2013, Kylie, “The Rocky U.S.-Venezuela Relationship: What Both
Countries Could Learn,” http://www.theinternational.org/articles/370-the-rocky-usvenezuela-relationship-wh, JMP)
While confrontational rhetoric towards one another might serve some purpose for each
country, the continued trade between the two countries, and the unique economic and
social struggles facing each nation give both much more to gain from establishing a
positive relationship than an oppositional one.
Why U.S. and Venezuela are wrong and how they can learn from each other
The aforementioned 2012 report from The Inter-American Dialogue on remaking U.S.
and Latin American relations states that the longer relations are stagnant, “the harder it
will be to reverse course and rebuild vigorous cooperation.” The U nited S tates has
lost standing with Latin American countries who see political gridlock ,
poor immigration policies , and substantial inequality and wealth disparity
in the U nited S tates as undermining its “capacity to propose and carry out
strategies to deal with the issues that most concern” Latin America. The
United States has long been accused of putting Latin American relations on the
backburner which has led many Latin American countries to remain economically
connected with the United States, but politically detached. The Inter-American dialogue
report highlights the fact that the United States must be flexible, innovative and sensitive
to different definitions of democratic ideals to reshape regional institutions and “better
align them with current realities and challenges to make them more effective.”
The U nited S tates has also seen a sharp increase in poverty, and as current
discussions over the national budget consider cutting social programs like
welfare, medicaid and social security, the government needs to consider the
success of social programs throughout Latin America and Venezuela which
have vastly decreased those nations’ poverty levels, lowered infant mortality and
unemployment, increased literacy and availability of education, and increased living
standards.
Venezuela’s extreme Chavez-era policies may prove to not be economically viable;
instead Venezuela could look to more conservative leftist Latin American governments,
like Brazil, who have implemented policies which allow for some free-trade, privatization
and foreign investment, in order to ensure a more sustainable economy in the future.
There is hope that Chavez’s supposedly more pragmatic successor, Nicolas Maduro, if
elected in next month’s elections, might be open to a more positive relationship with the
United States. Both sides have expressed interest in open dialogue and perhaps the
exchange of ambassadors, but the recent expulsion of diplomats from each country
seems to illustrate stubbornness from both parties.
When it comes to Hugo Chavez and his legacy in Venezuela, opinions remain divided.
Whether he is remembered as a champion of the people, who trampled inequality and
redistributed wealth while openly criticized the western policies which he believed
promoted such inequality, or whether he is remembered as a radical leader who altered
Venezuela forever through revolution but left it in shambles, the legacy of Chavez
challenges the world, and the U nited S tates, to consider the effectiveness of
their own governments and policies. In his Time magazine obituary for Chavez,
journalist Tim Padgett states that “Washington and the rest of the world need to
remember the unmistakable reasons for his rise to power” which has been
their failure to build institutions that can close the “unconscionable wealth
gap.” It seems both countries have much to learn and gain from one another, but seem
unwilling to do so to the possible detriment of their own people and economies.