Oil Nationalization A Threat, Says US Generals

Not for the first time the US military is identifying threats in its Southern Command region which it claims could seriously impact the national security of this country.
Recently, Southern Command generals warned Congress that governments of countries like Venezuela, which have moved to the Left, are exercising total control of their energy reserves and could if they wished restrict the flow of oil and gas to the United States. The nationalization process, they argued, would lead to poor oil and gas production that would also impact the US economy.
The Southern Command’s sudden emphasis on an area of responsibility, which includes Latin America and the Caribbean, comes at a time when oil prices are at an all time high and the US imports almost 35% of its oil from the region. And, oil is not the only resource linking the US to what constitutes one sixth of the world’s landmass and 32 countries. More than 40% of US exports are sold there.
Until recently, the Bush administration paid little attention to what has often been called America’s “back door” or “near abroad” because the major focus of US foreign policy was directed at the wars in Afghanistan and Iraq. Some critics have argued that the White House was blindsided by its concentration on the Middle East and failed to pay close attention to growing anti-American sentiment in the western hemisphere and the fact it was contributing to the rise of populist left wing governments.
Any student of history knows that Latin America has always been a volatile part of the world, sometimes due to American interventionist policies. Throughout the Cold War and in recent times the Southern Command defined the western hemisphere as an area where America can intervene at any time to protect its own security. In some instances that led to the funding of campaigns to overthrow regimes not favored by Washington and its business allies. In certain cases, the US was involved in promoting and funding dirty wars under the guise of the promotion of security and democracy. In many Southern Command documents the by-words security and democracy were often been narrowly defined to support strategies dealing with narco-trafficking, illegal immigration and the rise of leftwing guerilla movements. And now terrorism. But missing was a recognition of a growing disapproval of US policy which many people saw as benefiting Washington’s globalization programs, and as a consequence America’s corporate giants, including its lending institutions.
None of the Southern Command staff involved in the latest warning to Congress appeared that some anti-American sentiment has flowed from a Bush White House policy to punish small Latin American and Caribbean nations that signed up to the International Court in The Hague. Funding to those nations was stopped in what many some observers described as a crude strategy which exhibited double standards. It illustrated that the US was happy to promote the prosecution of others for human rights crimes but would never permit the international court to try a US citizen.
A close study of present day Latin America shows that a major dynamic that moved many countries in the region towards an anti-US posture and got the attention of Southern Command and the White House was the rise to power in Venezuela of Hugo Chavez, an admirer and close friend of Cuban leader, Fidel Castro. He wrested control of his country’s massive oil reserves from international oil giants, sending shock waves through Washington and America’s oil industry. It was a stunning move for a small nation that produces a fifth of the world’s oil and supplies 35% of US oil needs. Recently Chavez doubled the taxes on multi-nationals operating many of his nation’s oil fields and refineries.
Other Latin Americans countries, including Mexico, Brazil, Bolivia Argentina and Ecuador have been impressed with his nationalization policy and that is what now troubles the US military. Overall, Latin America produces 8.4% of the global oil output and the generals at Southern Command think an expanding program of energy nationalization, especially in countries that have become disenchanted if not outright hostile to America, could lead to a poorly run oil industry or even an embargo on exports to America, something Hugo Chavez threatened he would do if US troops were sent to overthrow him.
The Southern Command’s heightened concern about the nationalizing of energy was, they said, predicated on a belief that Chavez may, at some time in the future, follow through with his threats to cut off oil. But that may have been a smokescreen to hide their real fears and ambitions. On the one hand, they may well have been jolted into issuing a warning after the new left wing government in Bolivia, followed quickly by Ecuador, to nationalize oil and gas just as Chavez had done. In Ecuador oil fields in the hands of Occidental Petroleum were seized by troops and returned to government control. But there was something else underpinning the Southern Command’s actions and it was missing from their threat assessment. It was an admission they should have made that this was all about who controlled the oil and their belief, allied to that of politicians in Washington, that it should be in the hands of US oil giants or governments allied to the US. The Southern Command’s concentration on the dangers of nationalizing oil and gas also ignored a deep malaise in relations between Washington and made no attempt to trace its roots.
The new US military emphasis on the region could equally have been motivated by the growing presence of China in our backyard. The Chinese desperately need energy and are prepared to spend outrageously to buy up oil and natural gas resources in Latin America as well as the African continent.
In 2002 the Pentagon was presented with several policy papers about China’s insatiable appetite for energy and how it might eventually target Latin America’s oil wealth. Those papers were ignored but in 2004 senior figures in Southern Command returned to what they called China’s “emerging dynamic that must not be ignored.” Lt. General Bantz J. Craddock pointed to visits by Chinese “national defense” staff to the region. According to him, China’s growing interest in Latin America could not be ignored and would have to be considered within the overall US military context of “objectives, policies and engagement in the region.”
While the Southern Command now sees a real threat in the nationalization of resources in the western hemisphere it fails to grasp a bigger picture and one that is not pretty. A major reason for anti-US feeling is a fear that interventionist US policies are traditionally aimed at expanding US influence in favor of US corporations and are promoted under the guise of furthering democracy and security. Another ingredient in the rift between the US and its neighbors is that the Bush administration since it came into office has paid littler attention t the needs of the region. Instead it has encouraged the Republican Party in Washington to act as a de facto State Department, financing organizations to undermine left wing movements and governments and making public statements denouncing any emerging leader who is critical of US policy. That has made it easier for Hugo Chavez to promote an anti-American agenda that has garnered wide popular support across the western hemisphere.
The Southern Command’s response to the problems of the region is to “contemplate beyond strictly military matters.” What that means is anybody’s guess but it could be interpreted as an indication the generals are not ruling out military intervention. One thing seems certain. They have no solution to offer. They told a Congressional panel they are engaged in a detailed study of the issue, confirming they are convinced oil in America’s backyard is an issue that no longer can be taken for granted or ignored. If all they can do is study the issue that suggests they have come to the problem much too late to device a broad social, political and economic strategy. But in their defense, military leaders are rarely good at anything but offering military solutions in accordance with their training and mindset.