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The Axis of Energy

venezrus072808.jpg Ariel Cohen and Ray Walser have a new article arguing that the Russian-Venezuelan energy alliance is a throwback to the Cold War era Cuban-Soviet relations, and that these leaders are “well-positioned to plan substantial international mischief.

Mimicking the Russians, Caracas relishes using oil for geopolitical leverage and influence. In recent months, Chávez has bolstered oil subsidies and a financing facility known as Petrocaribe. Using the oil bonanza, Chávez has pledged assistance that eclipses U.S. aid in the Western Hemisphere. Even democratic Costa Rica cannot resist the seduction of relief at the pump. At the working level, Russia’s energy giant Gazprom and Venezuela’ national petroleum company, PDVSA, are cementing an energy partnership in South America. As the chief of PDVSA recently reported, “We want to make [PDVSA] like Gazprom, but with a social role.” Chávez seeks to deepen cooperation with the Kremlin and its state-run enterprises. He has invited Russian firms to exploit the Orinoco River basin—potentially the world’s largest oil deposit, holding 1.2 trillion barrels of extra-heavy crude. Gazprom is also involved in a proposed Venezuelan initiative to construct an 8,000-kilometer trans–South American gas pipeline that will link Venezuela’s oil and gas fields to Argentina via Brazil, with potential spurs going to Bolivia, Paraguay, Uruguay and Argentina. According to Chávez, these Russian state-run firms are part of the vanguard of the Bolivarian revolution.