A week ago the Biden administration announced that it had approved an expansion of the license to Chevron so they could resume oil production in Venezuela.
This was a surprise given the administration’s hostility to fossil fuels in general and oil from Venezuela in particular.
Andrew Stuttaford of NRO described the decision, writing that it “combined disdain for human rights with a degree of geopolitical stupidity impressive even by its own dismal standards.”
That Biden would allow oil to flow from a socialist dictator like Nicolás Maduro isn’t shocking. The administration has made a nasty habit of dealing with dictators while leaving our friends high and dry. Such is the case with tiny Guyana, which was recently discovered to be sitting on an ocean of crude oil. One of the poorest countries in the western hemisphere, Guyana would benefit enormously from U.S. expertise and loans.
But that’s not going to happen.
It looked like a 21st-century fairy tale: wealth creation, low-impact energy production, environmentally careful investors and solar development all in a democracy aligned with the U.S. In a March interview with Guyana’s Stabroek News, then-IDB President Mauricio Claver-Carone spoke about the auspicious outlook: IDB oversight and transparency was poised to assist in producing real benefits for the nation rather than what has occurred under “Middle Eastern and African models that have actually seen development stalled with the new resources and democracy trampled.”
The U.S. vetoed the loan. Its reasoning was based on August 2021 Treasury “guidance on fossil fuel energy at the multilateral development banks,” which says that the U.S. will “promote ending international financing of carbon-intensive fossil fuel-based energy.” After two years of working with the IDB to ensure proper due diligence, the company had to go back to the drawing board.
Guyana oil is the future. Right now, Europe and the U.S. are facing an energy shortage this winter and Venezuela’s crude supplies are needed to prevent voters in the west from getting angry at politicians because their homes are cold and their cars won’t run for lack of gasoline. So, all of a sudden, the earth is no longer in imminent danger of burning up and Maduro’s heavy-handed oppression doesn’t look too bad.
“This Venezuelan deal, that’s a good example of the desperation that this administration is dealing with,” said Harold Hamm, the shale billionaire who founded Continental Resources and previously advised Trump on energy policy.
Hamm points to the extraordinarily short-sighted decisions of the Biden administration that virtually shut down the shale industry just as the price of fuel was skyrocketing and driving the rate of inflation.
“They know what they did. They know they took the federal lands off the table,” Hamm said. “They know better and shame on them . . . They want to put oil and gas out of business.” . . .
“You have to understand where diesel comes from, and you can’t make it out of tar,” he said, in a reference to Venezuela’s ultra-heavy bituminous oil, which needs to be blended with lighter grades and requires extensive refining. . . .
The decision to allow Venezuela to expand oil production is stupid, self-defeating, and dangerously naive. All are hallmarks of the Biden administration’s approach to international relations.
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