Too Close to Home

March 29, 2005
Chuck Missler
K-House eNews

The United States is now more dependent on oil imports than ever before. In 1950, it imported just one-tenth of its oil supplies. By 1973, the share of imported oil had grown to one-third. Today, the United States gets nearly two-thirds of its petroleum from abroad. Many of these foreign suppliers, however, are politically and economically unstable.

In June 2004, the price of oil reached $42 a barrel - the highest point ever in 21 years of trading on the New York Mercantile Exchange - pushing average US gasoline prices to more than $2 per gallon. The surge had numerous causes, including higher Chinese demand and insecurity in the Middle East. The root of the crisis, however, lay closer to home: in Venezuela, where a general strike in late 2002 and early 2003 severely constricted the flow of oil and gasoline for several months. Venezuela is the world's fifth largest oil exporter and provides about 13 percent of US crude oil imports.

For the first time, the US oil supply was significantly disrupted by strife in a region other than the Middle East. The Venezuelan strike was also the first disruption not caused by a war, revolution, or embargo, but rather by a slow, debilitating political standoff.

Venezuela, led by Hugo Chavez, suffers from increasing political turmoil. Before President Chavez came to power in 1998, oil-rich Venezuela was a wealthy nation and one of South America's oldest democracies. This wealth attracted a large influx of poor immigrants from neighboring Colombia, Peru, Ecuador, and the Caribbean. The poor became increasingly resentful of the wealthy and middle class. Chavez, who had been imprisoned for a failed coup in 1992 but was later released, became the champion of the poor during the 1998 elections.

Chavez won the election with 56 percent of the vote. He immediately embraced Cuba's communist leader, Fidel Castro, as Venezuela's chief ally, called Iraq's Saddam Hussein his "brother", aligned himself with Libya's Moammar Qadaffi, and formed alliances with North Korea's Kim Yong-Il and Palestinian leader Yasser Arafat. Venezuela is one of the founding members of OPEC and is strongly aligned with the Islamic oil-producing nations of the Middle East. President Hugo Chavez recently defended Iran in its dispute with the United States and Europe over its nuclear program, saying Iran has a right to atomic energy.

Venezuela is emerging as a potential hub of terrorism in the Western Hemisphere, providing assistance to Islamic radicals from the Middle East and other terrorists. Middle Eastern terrorist groups are operating cells in Venezuela, including support cells for organizations such as Hamas and Hezbollah. Thousands of Venezuelan identity documents are being distributed to foreigners from Middle Eastern nations, including Syria, Pakistan, Egypt, and Lebanon.

Venezuela is also supporting armed opposition groups from neighboring Colombia. These groups are on the official US list of terrorist organizations. These groups generate funds through money laundering, drug trafficking, or arms deals and make millions of dollars every year through illicit activities.

Last week Defense Secretary Donald Rumsfeld criticized Venezuela's reported efforts to purchase 100,000 AK-47 assault rifles from Russia. The US government is concerned that the weapons could fall into the hands of terrorists and that Venezuela’s military buildup could trigger a South American arms race. Venezuela also is negotiating for the purchase of at least 40 Russian combat aircraft, at least 30 Russian attack helicopters, and possibly some Spanish naval vessels.

In addition to its support of terrorism, Venezuela has been a source of serious economic concern. Despite the country's tremendous oil wealth, most Venezuelans remain quite poor. Like many South American nations there is a vastly unequal distribution of income. As much as 80 percent of the population lives in poverty. In 2003 unemployment was 18 percent, the inflation rate was recorded at a staggering 31 percent, and the GDP declined by 9.2 percent. Some experts speculate that Venezuela might follow in Argentina's footsteps and default on its foreign debt. Venezuela's economy is dangerously over-dependent on the petroleum industry. Oil accounts for roughly one-third of its GDP, around 80 percent of its export earnings, and more than half of government operating revenues. Chavez has threatened to stop exporting oil to the US if the Bush administration supports an attempt to force him from office. Chavez has also threatened to sell Citgo - a subsidiary of Venezuela’s primary state-owned oil company. Citgo supplies gasoline to over 14,000 retail outlets in the US and owns oil refineries in Illinois, Louisiana, and Texas.

With major developments happening in Israel and Iraq on a daily basis it isn't hard to understand why the situation in Venezuela has been largely overlooked. However Venezuela's socialist leadership still poses a serious threat to the interests and security of the United States – a fact which will undoubtedly become more apparent in the coming weeks and months.

http://www.khouse.org/enews/2005-03-29/print/
 

 
Maranatha!
Deborah
* * .(\ *** /).*. *
   * (\ (_) /) *
 * . (_/ ll\_) . * .
  * . /___\ . *
      * .. *