Monday, June 04, 2012

Chavismo Without Chavez: Analysis

Venezuelan Movement Likely to Hold Onto Power 

Contrary to conventional wisdom, Venezuela's populist, anti-American movement is likely to outlive its cancer-stricken founder, provided Chavismo can continue to deliver economic gains and benefits to its various constituencies--a feat that will require renewed foreign investment in the country's oil industry. Read more.

Venezuela is more than oil-rich; it is incredibly oil rich. The Orinoco River belt, an area approximately the size of Massachusetts, sits atop the largest oil deposits in the world, estimated at 1.3 trillion barrels of oil “in place," including molasses-like heavy crude and semisolid tar sands. An estimated 270 billion barrels of this oil is regarded as recoverable--roughly matching the oil reserves of Saudi Arabia. Improved technologies and/or higher oil prices could increase the size of the reserves even further.

Back in the days of the first big U.S. energy crisis, under the Carter administration, the United States had a golden opportunity to form a Western Hemisphere energy alliance with Canada, Mexico, Venezuela and other nations; but proposals fell on deaf ears. Carter and his advisors painted with a broad brush; they practically viewed all oil as evil, regardless of who produced it, and therefore had to be pressured into lifting price controls on domestic heavy oils that had hampered development of the neglected resource.