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  • Morning Bell: The Axis of Oil

    Venezuela’s leftist leader Hugo Chavez isn’t set to arrive until tomorrow to meet with Russian Prime Minister Vladimr Putin and President Dmitry Medvedev, but two Russian media outlets are already claiming that Chavez will buy $1 billion to $2 billion worth of subs, helicopters and airplanes while in Moscow. Since 2003, Chavez has bought more than $4.4 billion in arms from Russia. Last year Russia announced plans to build two Kalashinkov assault rifle factories in Venezuela. Unfortunately, arms sales are just a small part of the Russian-Venezuelan axis that is looking more and more like a 21st-century throwback to the Cold War Soviet-Cuban alliance.

    With oil selling at record high prices, both Russia and Venezuela have begun to practice very similar forms of “resource nationalism” that threaten energy security and freedom worldwide. At home, both governments have launched systematic and sustained efforts to drive out foreign investors and solidify state control of the economy. Russia has forced Western energy companies out of massive development projects in Siberia and the Far East, pressured British Petroleum to sell a major stake in a large Siberian gas field to Gazprom, and squeezed Royal Dutch Shell in the giant Sakhalin Island project. Just this past May, Chavez nationalized the last privately run oil fields in his country.

    These practices, along with sustained assaults on the rule of law in both countries, have made the two countries among the least free places in the world. According to Heritage’s 2008 Index of Economic Freedom, Russia and Venezuela rank 134th and 148th respectively out of 157 ranked nations.

    Both countries are also bent on leveraging their oil wealth into influence abroad. Russia has been the most willing to use energy as a weapon, cutting off supplies to six countries over the past seven years. But the Russians can be more subtle, too, often using lucrative Gazprom jobs to buy off key European politicians.

    Chavez has also been more than willing to use oil dollars to bolster his popularity. He has already pledged more assistance in the Western Hemisphere than the United States, with even democratic Costa Rica receiving discount energy. Chavez has not been afraid to buy support in the U.S. either as Democrats such as ex-Rep. Joe Kennedy have been more than willing to appear in commercials promoting Chavez’ benevolence. Rep. William Delahunt (D-Mass.) has been supportive of Chavez’s intervention in Colombia’s battle with the leftist terrorist organization FARC (Revolutionary Armed Forces of Colombia) and a lap top found by the Colombian military suggests Rep. James McGovern (D-Mass.) has been working with an American go-between, who has been offering the rebels help in undermining Colombia’s elected and popular government.

    The United States buys 1.36 million barrels of oil a day from Venezuela. According to the Energy Information Administration, drilling in domestic waters off all the coasts except Alaska’s would increase annual production by about 200,000 barrels a day. Opening ANWR would bring in another 700,000 barrels a day. Any significant decline in incoming oil revenues would cripple these autocratic regimes.

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    Posted in Ongoing Priorities [slideshow_deploy]

    9 Responses to Morning Bell: The Axis of Oil

    1. Ed, Leesburg VA says:

      Why are we buying any oil from Venezuela? OK. It's probably due to some unbreakable obligation and the arrangement is making company XYZ lots of money, i.e., the capitalist way. However, I think it's time for a new idea: Common Sense.

      Obama playing at being president upsets me for a number of reasons. This guy is a sitting senator, a position of respect of course, but he does not represent American policy. The story-starved media only makes me distrust them more. Such misdirected promotion only underlines how we, the reading/watching/listening "herd" are manipulated.

      Russia's use of oil and energy supply is not "subtle" as mentioned in the article. Pretty blatant and obvious. Why don't you call them as you see them? Have something to protect?

    2. Vicki Eilenberger, L says:

      Putin et al has been buying up natural gas fields all over the world for forever now. We really should wake up. We are naive to think the relations with Russia are any different than they have been for years.

    3. Mark,houston says:

      Well ED, in this area of our great world there are two seperate and unequal countries . One is the beloved united states , you know , the place where responsible poeple have come to call home . the other is what we like to call "LA-la land".You see Ed in "La-La land" there is NO accountability for one's actions or inactions . In "La-La land" the government is your mother,your father and every other voice of reason , that way you don't have to be bothered with inportant issues . Corporations in this fancifull place don't have to care about the poeple they effect with their actions ,or the media for that matter . And best of all , in"La-La land" the middle class gives everything up for those who don't have a thing . Everyone there learnes spanish , even the millions of responsible poeples from europe and asia who have allready taken it upon themselves to learn english BEFORE they get here . Because Ed those spanish speaking poeples are much more deserving than you or I. And the best person to be ruler of "La-La land",why barack obama of course . "La-La land" sure sounds like a great place huh?

    4. Edwin Buck, Albuquer says:

      Good article; However, we're not discussing how to nip this in the bud. In my opinion, we can nip this in the bud buy drilling our own oil. According to experts, we have over 6 to 7 trillion bbls of oil in the continental USA, more oil than the Venezuela, Russia, and the middle east combined. If we were smart, this I don't give the libs that much credit, we can out produce all of these countries, making their oil when they sell it, at about $15.00 to $20.00 dollars/bbl. At that price, Jugo and the arab sheiks and Putin cannot afford any and all their plans to control the energy world would be moot. Oh, you ask, where are all this oil? Let's see, 1 to 2 trillion bbls. in the continental shelf, and continental USA, including Alaska, 5 to 6 trillion bbls in the oil shale, 1 to 3 trillion bbls in coal oil. Any more questions?

    5. Tyler, Ellicott City says:

      The way I see it, as a 15 year old kid looking forward to driving, is that anyone who dislikes current gas prices and does not want drilling in the US is contradictin. I'm not an expert, but it certainly seems simple to me.

    6. Jeffery L. Price, Sa says:

      Why are we funding these Asylem cities with our money. SanFransico in particular. We the Government should demand our hard earned taxes to go to some cities that follow the Law.

      Sincerly yours

      Jeffery L. Price

    7. Pingback: Why Hugo Chavez Is a Threat » The Foundry

    8. Darvin Dowdy, Houst says:

      I feel positive about this report, actually. We all know what happens when governments step in and start running things. Production/efficiency go south. So Russia and Ven. are sealing their own fate. And it makes the prospect of domestic production ever so much more attractive and practical here in the U.S.

      Most troubling is the democrats involvement w/Chavez. Too darn bad we don't have some 527 groups with big $$ that can get the word out to the public about this seditious democrat party. Someone that'll tell it like it is. The dem party is destroying itself and we need to help it along.

      We also need to begin the process of forming up a "new" party to take its place in this 2 party system we have. I'm a little disappointed that HF hasn't been the leader in that process. At a minimum beginning the debate/discussion. Or even posing the question. Darvin Dowdy

    9. Pingback: Wow.... these guy didn't waste any time... - TurboBuick.Com

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