As for Brazil, while the article might suggest Brazil being NSS green given its promotion by the Analyst for the U.S. to align with, it is anything but. In fact, Brazil is yellow at best and maybe even flashing yellow, suggesting much work to do, coupled with the added sense of urgency to do so with China and Russia knocking on Brazil's door. Both are extremely interested in strategic partnering with Brazil. Its national security relevance to the U.S. accordingly, grows more significant by the day.
Interestingly though, friction between Venezuela and Brazil is rapidly growing (in fact, getting quite serious) as each jockey for overall Latin American supremacy. The U.S. would be well served in its relationship building efforts and strategy (see SWOOP plan later in article) by playing that "enemy (U.S) of my enemy (Venezuela) is my (Brazil) friend" card/aspect, in leveraging a strong partnership relationship with Brazil.
With superpower potential, Brazil takes a big step forward in that coveted direction, thrusting itself onto the world stage with its overnight transformation into one of the world's top 10 oil producers. With that too, it becomes a potential new, high value chip in the escalating poker match between Venezuela (and China) and the U.S.
The recent announcement by the Brazilian oil company Petrobras of a massive find in the Atlantic Ocean off Rio de Janeiro in the Tupi field, catapults Brazil to the elite tier of global oil producing countries. Specifically, on Nov. 9, 2007 the Associated Press reported Petrobras President Sergio Gabrielli at a news conference on the find being quoted as saying "the oil from ultradeep areas, including the Tupi field, would give Brazil the world's eighth-largest oil and gas reserves. Brazil's reserves will lie somewhere between those of Nigeria and those of Venezuela." The same report noted Brazil's current (pre-Tupi) 17th in the world ranking with 14.4 billion barrels of oil equivalent (i.e. reserves).
On the heels of a string of key discoveries in recent years, with this by far the largest, Brazil marches into the top ranks of oil producing nations. The company conservatively estimates the Tupi field to possess 8 billion barrels in reserves. Some outside analysts think a great deal more, perhaps twice as much. That in addition to even greater unexplored reserve potential in these offshore fields still to be discovered by Petrobras.
Interestingly, this discovery makes Brazil an even more desired strategic partner for the U.S. than ever before, and adds even more impetus for the U.S. to prioritize and aggressively court Brazil – for additional reasons at the end of this and a coming artcle. With this oil find and upon it being operational, Brazil would become a substantial net exporter, able to now fully satisfy its own domestic energy needs, yet with substantial reserves remaining to export. Thus the ideal opportunity for the U.S. to break an increasingly unpredictable and adversarial populist run Venezuela's energy (and related political bullying) grip on it by now doing what Venezuela thought never would – Terminating Venezuelan oil contracts and strategically shifting those geographic sourced U.S. oil supply needs from Venezuela to Brazil, even though the flow of oil can't start right away – see development discussion below.
Analyst Note: The recommendation to shift any part of the U.S. oil supply to another third party country, in this case Brazil, does not usurp the Analyst's broader and longer term view for the U.S. to continually and aggressively strive for energy self sufficiency vis-a-vis diversified and enhanced domestic oil and gas exploration/production, nuclear power and alternative fuels and energy sources.
In doing so, does Venezuela really care? Does Venezuela really think it will hurt? The answers are yes and yes.
Yes, from the standpoint the U.S. is (currently) far and away Venezuela's largest customer, yet ironically its most irresponsibly abused customer. Evidence Venezuela's renewed threats the last few days to cut off oil to the U.S., it clearly enjoys the game, which would not exist if the U.S. was not a customer. Yes too, in that the U.S. (currently) accounts for 50-60% of Venezuela's daily production. That equates to approx. 1.4-1.5 million barrels per day out of a total 2.5 million barrels per day Venezuelan production rate according to Wikipedia. Note these numbers were for 2006. Other limited data suggests in 2007 that Venezuelan production and U.S. imports have each fallen some, but for discussion purposes, still at generally the same percentage levels.
The Energy Information Administration (EIA), which provides Official Energy Statistics from the U.S. Government shows 2007 U.S. crude imports running at approximately 420 million barrels per month or approximately 14 million barrels per day. Therefore Venezuela is supplying 10% or more of U.S. import need.
It's important to note that Venezuela is not comfortably resting on its laurels and/or caustic rhetoric. While it continues to make threats of cutting off U.S. oil supplies, it has increasing strategic buyer flexibility to actually do so. It has aggressively sought alternative buyers, including China, even at a higher cost. That additional cost in the form of additional refining and transportation expense. The U.S. refineries used by Venezuela are built to process the less desirable (than light sweet crude) heavy sulfurous crude which Venezuela mostly produces. China's refineries generally are not. It takes 5 days to transport the crude to the U.S. It takes 30 days to tanker to China. It will cost significant sums to build these new heavy crude refineries, and the differential transportation cost for a trip 6x's as long is significant too.
Supporting the point on alternative markets, a Feb. 26, 2006 NY Times article states "the threats out of Caracas have not been lost on the White House, high-ranking American military officials and Republicans in Congress, who in public hearings and closed-door sessions have addressed both Mr. Chávez's warnings about diversifying oil markets and China's increasing role in Latin America"......."I think they're not as quick to dismiss his bluster as they used to be," said Michael Shifter, a senior analyst at the Inter-American Dialogue, a Washington policy group that follows American-Venezuelan relations.
A point on Chavez' "cut the oil off threats". These are really a reflection or indicator of just how really vulnerable he knows Venezuela is to the U.S., with the U.S. at 50% of his production base. With exports estimated by many to be approximately 70-75% of production, the remaining approximately 600-700, 000 barrels per day is targeted for domestic consumption. The essential U.S. lock on total production (and why the U.S. has incredible untapped leverage) is precisely why Chavez is now scrambling to diversify his export customer base (to China and elsewhere) and over time completely dis-enfranchise the U.S. from that export base. His tactic, which the U.S. does not apparently recognize is the age old "the best defense is a good offense". That offense in the form of intimidating and threatening bullying rhetoric. The U.S. should take away only one thing when Chavez embarks on those wild rants. That is he knows it's he (Venezuela), and NOT the U.S. that is vulnerable, and precisely why the U.S. should realize it possesses the leverage in the relationship, not Venezuela. With that recognition, the U.S. should turn the tables and push back hard - now.
Here's the disturbing supporting facts behind the threats noted above. The June 11, 2007 Xinhua News Agency release noted "China to expand its oil exploration activities in the (Venezuelan) Orinoco River region.....with an investment of 'billions of US dollars"...China will cooperate with the Venezuelan side to build three refineries in China with a total capacity of processing 800,000 barrels of Venezuelan heavy crude per day, which would be likely completed in two or three years...Chavez emphasized that Venezuela and China would also establish a joint oil shipping company to carry crude and other products between the two countries, and do business in the Caribbean and take shipments to Africa... With these moves, China has become a strategic partner of Venezuela, which will help the country (Venezuela) reduce dependence on oil export to the U.S.........At present, the U.S is still the biggest oil customer of Venezuela......Chavez said China is set to replace the U.S. as Venezuela's top oil buyer, as Venezuela plans to raise oil export to China to one million barrels a day by 2012 from its current level of about 150,000 barrels a day".
China is leveraging that developing relationship and toehold/anchor point with Venezuela as a springboard to spread its influence and investment dollars throughout Latin America. So keep in mind, the Venezuela/U.S. brouhaha in the global scheme of things is really about China too, and its grab for greater economic and political control in this hemisphere. China brings with it, its own global ambitions and political and economic challenges for the U.S. to address. Therefore, the way to deal with China in this hemisphere is to prevent it from getting a real foothold in Venezuela. By default, that means upsetting President Hugo Chavez' applecart wherever possible.
In that regard, this recommended "immediate" change of supply (contract, not immediate oil flow) from Venezuela to Brazil is a major way to play that. By doing so, it severely impacts and/or destabilizes Venezuela's at least short term (and ripple effect to the longer term) domestic and international agenda and ambitions, as they are fueled and financed with oil revenues. Again, the Veneuelan heavy crude is not desirable, so it becomes much more of a challenge to re-direct it elsewhere (if U.S. terminates contract). His recent announcement to conduct a sweeping revision of the Constitution and create massive new social programs, will be hugely costly. Much if not all of these new expenditures to be financed by (re)nationalized oil asset revenues.
Brock Novak is a freelance Military and Geo-Political Analyst. He is credited with coining the contextual term "COMMULISM" (COMMUnism fueled by capitaLISM), the "Commulism Series", and creating the "Commulism Response Framework" (CRF).
Among others, his credits further extend to coining and defining the 21st century concepts of "Fusion Warfare" and "Fission Threat Environment", as well as the contextual terms "Pandanomics", "Benevolent Terrorism", "Phased and Jammed Democracy".
Coming: The launch of COMMULISM.COM - A website dedicated to increasing the U.S. government and public awareness of this, the greatest near and long term threat to U.S. economic and national security.
As for the opposition.....it is gaining strength behind student activists who demand the country pursue and embrace democratic principles. Whether it has the substance in numbers at the voting booth to defeat the Referendum remains uncertain. Not likely "if" the poor get out to vote in the numbers that Chavez craves. Yes, if they don't.
2) Analyst Article section on "what if" Referendum loss:
What if Chavez loses "THIS" Referendum?
If history as outlined above is an indicator, and if in fact Chavez is following Bolivar's lead, one can argue he intends to remain President indefinitely whether achieving that through "legitimate?" Constitutional reform with another Referendum(s) or as last resort, follow again in Bolivar's precedent noted above, Dictatorship.
Remember, he still would have six years left in his term, meaning 5 more potential Referendums to get it right, each time learning (lessons learned) from the last. Odds are given his sheer determination to win, at some point he will get it right (from his perspective).
And if he fails 6 times by Referendum, odds are too that he won't fail at his first try at Dictator in 2013.
In other words, if he loses the "2007" Referendum, it unfortunately "ain't" over, by no means. The Venezuelan and global community should save the celebrations, as it's not the end of Chavez' march toward permanent power.
Rather, it's just the beginning.
3) Analyst Article Note Regarding Putin and "what if" a Venezuelan Referendum Loss:
The tactic can now be observed firsthand by watching the Chavez plan unfold, with Chavez taking the flak and clearing the way for Putin to follow with an even grander and from a U.S. national security perspective, more troubling scheme of his own. If Chavez fails, there are certainly lessons to be learned, which will help Putin (and Chavez) too.
by
Brock Novak (32 articles, 0 quicklinks, 0 diaries, 14 comments)
on Monday, December 3, 2007 at 7:45:58 AM
People have Rights; govts are created to protect our Rights
governments and states come and go, adopted and tossed aside as they serve the People's will, to whom they belong. The Democrats and the Republicans have long supported funding and training dictators and death squads, incl. Hussein, in order to secure access to resources and markets, and as a result the US has become the most hated nation on the planet, with the majority of the world's people labeling it the greatest threat to peace. If they had instead been building bonds with the People of these nations, we would have deep friendships and alliances. Instead, as Novak points out here, now China and Russia are doing that, and this will be of no benefit to the US. It is not too late to change the world's opinions, but we will have to turn ALL the Republocrats out of power, and put people in office who will honor their oath to defend the Constitution, and who will put the People's interests first, not elite business interests.
Also, this article seems to have been written before the Venezuelan vote on the referendum, which Chavez just lost and did not contest; why publish this article the day after, without updating it?
by
Better World Order (4 articles, 444 quicklinks, 31 diaries, 970 comments)
on Monday, December 3, 2007 at 12:40:27 PM
Your personal political and "other issues" are your own. Not for me to comment.
As respects your final questions to me, specifically:
"Also, this article seems to have been written before the Venezuelan vote on the referendum, which Chavez just lost and did not contest; why publish this article the day after, without updating it?"
1. Your first excerpted question: Why publish this article the day "after"? (I believe based on your para intro, you meant to say "before", which then would make your question sensible).
BN Answer: (Really) Read the article, rather than use the comment space for convenient personal politicizing. The answer is quite clear.
2. Your second excerpted question: "Why publish.......without updating it?"
BN Answer: Read "Update" Comment #1 - just before your Comment #2.
3. An added BN bonus: Analyst view to your statement on "Chavez not contesting."
BN Response: Read Comment #1. He plans on doing this again, and again....and again til successful. Unless you're saying he's "not" politically saavy, any politician with half a brain who plans on repetitive election attempts would graciously take the high road rather than the low road following defeat. Just as Chavez did.
Taking the high road in defeat ingratiates oneself to the voting public, while the low road distances oneself from the voting public, i.e. High road - more future votes. Low road - lost/less future votes.
In this case, he hopes taking the high road in defeat now, gets him dividend extra votes (needs just 2% more - recall, he lost by only 51-49 percent) during his "predictable" next attempt at a Constitutional term limit reform Referendum.
With that his intent on being gracious in defeat, not contesting the result (this time) was entirely predictable.
No additional articles on the subject necessary.
by
Brock Novak (32 articles, 0 quicklinks, 0 diaries, 14 comments)
on Monday, December 3, 2007 at 2:13:24 PM
Why not just buy their oil and leave Venezuela alone to chart their own course. The US is going to fall one day and the more people we piss off the harder we will fall. We are a broke and broken nation and this type of thinking has lead us to the brink we are now perched on. The US needs to but out.
by
DCDobbs (0 articles, 0 quicklinks, 0 diaries, 15 comments)
on Monday, December 3, 2007 at 3:47:25 PM
Simply stated, he won't let us buy his oil very much longer. He knows the U.S. has more leverage on him than he has on the U.S.
He's understandably very uncomfortable with that.
Chavez is therefore rapidly dis-enfranchising the U.S. from his supply, shifting that current U.S. distribution to China and other aligned parties - and why the (window) time to make an economic and political impact (terminate U.S. oil supply contracts) on him is now - before he's fully re-distributed and the U.S. has no leverage.
Please read the article for detailed analysis on just this point.
by
Brock Novak (32 articles, 0 quicklinks, 0 diaries, 14 comments)
on Monday, December 3, 2007 at 4:02:50 PM
What is our leverage? Assasination. Regime change by military force. It is their oil. If we hadn't actively participated in a coup, maybe we would be able to continue to buy their oil. If we hadn't poured millions of dollars into defeating this referendum and minded our own business we wouldn't be so disliked by Chavez.
If you are sugesting that we buy oil elsewhere and nothing else, that is our choice. Brazil can not replaced that amount of oil and no other country can either.
The US has behaved badly towards Venezuela.
by
DCDobbs (0 articles, 0 quicklinks, 0 diaries, 15 comments)
on Monday, December 3, 2007 at 4:26:50 PM
"Being his primary and effectively only customer is the U.S. leverage. He needs the U.S....The U.S. does not needs him (i.e. Venezuelan oil)."
I am sorry I missed something. I thought your meant we should stop buying oil from Venezuela and buy it from Brazil. The problem with trying to do this is oil production is barely keeping up with demand world wide. Does Brazil have excess oil to sell to US? Can Venezuela find another buyer for it's oil. In other words isn't it a sellers market?
by
DCDobbs (0 articles, 0 quicklinks, 0 diaries, 15 comments)
on Monday, December 3, 2007 at 6:29:11 PM
Since you refuse to read or really read the article, then to your attempt at a point, here is a factual counter-point excerpted from the article on the issue you raised - global oil supply and demand. You implied demand is or nearly outstripping supply, and the U.S. has no place to go.
Article Excerpt:
Note b): Current global oil production capacity (supply) is estimated to be approximaely 100 million barrels per day. Current global "demand" is approximately 85 million barrels per day. Therefore, there is alternative production sourcing the U.S. can immediately tap into. While on the subject, analysts project at current estimated global oil demand growth rates, that around 2012 to be when that current 85 million barels per day demand reaches the 100 milion barrels per day production capacity. At that point, if production capacity has not substantively increased, oil prices are expected to soar ($100 per barrel oil will look cheap).
Bottom line, re-sourcing Venezualen "heavy" crude with surplus global "light" crude capacity is easy for the U.S.. However, for Chavez, finding immediate new buyers for his high sulfurous (special refinery required) heavy crude will be a significant challenge, and take (alot of) time.
In other words, U.S. leverage over Venezuela. Not vice versa.
I'm now (officially) done!
by
Brock Novak (32 articles, 0 quicklinks, 0 diaries, 14 comments)
on Monday, December 3, 2007 at 8:09:32 PM
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