THE NEW WORLD OIL ORDER:
No More Cheap Oil, Says Hugo Chavez
By Greg Palast (http://www.GregPalast.com) Reporting for BBC Newsnight TV
[May 2007] If you thought high oil prices were just a blip, think again. In an exclusive interview with Greg Palast for BBC Newsnight, Venezuelan President Hugo Chavez has ruled out any return to the era of cheap oil.
The colorful Venezuelan leader hosts the OPEC meeting on June 1 in Caracas and he will ask OPEC to set $50 a barrel - the average price last year - as the long term level. During the 1990s, the price of oil had hovered around the $20 mark, falling as low as $10 a barrel in early 1999.
Chavez told Newsnight "we're trying to find an equilibrium. The price of oil could remain at the low level of $50. That's a fair price, it's not a high price." Hugo Chavez will have added clout at this OPEC meeting.
US Department of Energy (DoE) analyses seen by Newsnight show that at $50 a barrel, Venezuela - not Saudi Arabia - will have the biggest oil reserves in OPEC. Venezuela has vast deposits of extra heavy oil in the Orinoco. Traditionally, these have not been counted because at $20 a barrel, they were too expensive to exploit - but at $50 a barrel, melting them into liquid petroleum becomes extremely profitable.
The DoE report shows that at today's prices, Venezuela's oil reserves are bigger than those of the entire Middle East, including Saudi Arabia, the Gulf states, Iran and Iraq. The DoE also identifies Canada as another future oil superpower. Venezuela's deposits alone could extend the oil age for another 100 years.
The DoE estimates that Chavez controls 1.3 trillion barrels of oil - more than the entire declared oil reserves of the rest of the planet. Hugo Chavez told Newsnight: "Venezuela has the largest oil reserves in the world. In the future, Venezuela won't have any more oil - but that's in the 22nd century. Venezuela has oil for 200 years." Chavez will ask the OPEC meeting in June to formally accept that Venezuela's re-serves are now bigger than Saudi Arabia's.
Chavez's increased muscle will not go down well in Washington. In 2002, the Bush administration welcomed an attempted coup against Chavez. He told Newsnight that the Americans had organized it in an attempt to get hold of Venezuela's oil.
Ironically, by invading Iraq, George Bush has boosted oil prices and effectively transferred billions of dollars from American consumers to Chavez. Up to $200 million a day - half of it from the US - is flooding into Caracas. Chavez is spending this on building infrastructure and increasing the minimum wage and improving health and education in the poor ranchos which surround the cities. As a result, even his opponents accept that Chavez is extremely popular and will easily win the next Presidential election in December.
Chavez is also spending billions in the rest of Latin America, exchanging contracts for oil tankers and infrastructure projects and buying up loans in Argentina and Brazil. He has made cheap oil deals with Ecuador and the Caribbean.
Chavez has also spent some of the dollars which have come in from the US supporting Fidel Castro in Cuba. In return, Cuba has supplied the thousands of doctors and teachers who are transforming conditions in the barrios of Caracas. Washing-ton accuses Chavez of buying influence in Latin America.
The Newsnight team had to endure the long
speeches and marathon six hour TV shows which Hugo Chavez delights in.
Chavez posed for Newsnight with the sword of Simon Bolivar the 18th
century liberator who drove out Spanish imperialists from South
America. The symbolism was clear, but behind the showman is a clever
political brain.
Chavez has not invaded any foreign countries. He does not have secret
prisons at home or abroad. Chavez has repeatedly won democratic
elections and the opposition operates freely, although some members
have been charged with accepting illegal foreign donations.
Nonetheless, George Bush's administration repeatedly targets Chavez on
human rights and finances his opponents.
Earlier this year, US Defense Secretary Donald Rumsfeld compared Chavez to Adolph Hitler - because he was elected democratically - and last year, the influential American evangelist Pat Robertson called for his assassination. Robertson later apologized and said that Chavez did not "necessarily" have to be killed, so long as he was kidnapped by American special forces.
Chavez told Newsnight that he was still concerned that George Bush had not learned the lessons of Iraq and would order an invasion to try to secure Venezuela's oil. "I pray this will not happen because US soldiers will bite the dust and so will we, Venezuelans." He warned that any such attempt would lead to a prolonged guerilla war and an end to oil production. "The US people should know there will be no oil for anyone."
Chavez does not accept British Prime Minister Tony Blair's criticism of him for lining up with Fidel Castro. He told Newsnight "if someone is sleeping together, it is Bush and Blair. They share the same bed."
(Special thanks to Matt Pascarella, Leni von Eckardt, and Richard Rowley for their research and production assistance on this report.)
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
> Also see The Guardian story about the report at: <http://business.guardian.co.uk/story/0,,1745467,00.html>
> Read "The Assassination of Hugo Chavez" in Greg Palast's new book, "ARMED MADHOUSE: Dispatches from the Front Lines of the Class War," to be released by Penguin Dutton on June 6, 2007. Pre-order it today or donate to Palast Investigative Fund for a personally signed copy at: <http://www.gregpalast.com/armedmadhouse/preorder.html>
> View Palast's investigative reports for Harper's Magazine and BBC Television's Newsnight at <http://www.GregPalast.com>