Venezuela's Oil Giveaway

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Venezuela's Oil Giveaway

Hugo Chavez is helping the U.S. poor with discounted heating oil -

while irritating his foes in Washington

By TIM PADGETT/MIAMI

 

Posted Tuesday, Feb. 07, 2006

When you're a U.S. Congressman and 25,000 constituent families

can't find affordable heating oil this winter, you tend not to care

where help comes from. That's at least how U.S. Representative Chaka

Fattah of Philadelphia felt last week when Citgo - the U.S.-based

company owned by the government of Venezuela's left-wing President

Hugo Chavez - delivered 5 million gallons of heating oil at a 40%

discount to low-income Philadelphia residents. Fattah says he doesn't

understand the objections of many congressional conservatives who feel

U.S. cities should not be helping improve the image of Chavez, one of

President Bush's most strident critics. " The U.S. buys 1.5 million

barrels of oil from Venezuela each day at full price, " says Fattah, " so

why would anyone complain about getting some at almost half price? "

 

That's a question the Bush Administration - whose feelings for

Chavez are certainly mutual - has struggled to answer ever since

Venezuela initiated the Citgo program last November. While the heating

oil gesture has certainly allowed Chavez to tweak Bush's nose, it is

also being recognized inside and outside of Washington as a public

relations coup for Chavez's Bolivarian Revolution (named for South

America's 19th - century independence hero, Simon Bolivar).

 

As a result, it's growing well beyond its original scope:

Philadelphia, Boston, the Bronx and cities in Maine, Vermont and Rhode

Island have received a total of 45 million gallons of the subsidized

Citgo fuel, and other cities are slated for another 5 million soon.

That's a small percentage of the heating oil Venezuela exports to the

U.S. each year, but Citgo says it has set aside about 10% of its

refined petroleum products for the program. Says Larry Birns, director

of the Council on Hemispheric Affairs in Washington, D.C.,

" Unfortunately for the Bush Administration, Chavez is proving to be a

more inventive thinker in terms of hemispheric politics. "

 

It's also good business thinking, says Venezuela's Ambassador to

the U.S., Bernardo Alvarez, one of the program's architects. When 13

U.S. Senators sent a letter to major U.S. oil companies last fall

seeking heating fuel aid for lower-income residents in northern states,

Citgo - a subsidiary of the state-owned Petroleos de Venezuela

(PDVSA) - was the only one to step forward. " The U.S. is our biggest

(oil export) customer, " says Alvarez. " PDVSA is simply responding to

that client the way any company should. "

 

Critics suggest Chavez's oil diplomacy is simply a ploy to take

consumers' minds off of record high oil prices, which are partly a

result of his efforts to rebuild the power of OPEC, of which Venezuela

is a founding member. Alvarez insists crude prices in the 1990s were

" unfairly low " for producers like Venezuela - but says the Citgo

program does give Chavez a chance to showcase " one of our

revolution's most important principles: the redistribution of oil

revenues, especially for the poor. " He adds it also reflects " the kind

of cooperation mechanism we're using with our neighbor countries in

Latin America. " Many of them - especially Cuba, whose communist

leader Fidel Castro is one of Chavez's closest allies - get cheaper

access to Venezuelan crude as part of Chavez's campaign to forge

greater Latin American integration and less economic reliance on the

U.S. Last Friday, in a move that further irritated the U.S., Chavez was

awarded the United Nations' Jose Marti prize for promoting Latin

American unity.

 

But the heating oil project's biggest diplomatic coup, Alvarez

concedes, may be the good will it generates among Americans at a time

of deteriorating U.S.-Venezuela relations - strained ever since the

Bush Administration was widely accused of backing a failed 2002 coup

against Chavez (a charge it denies). Chavez, who has been

democratically elected twice and is almost certain to win re-election

this year, is convinced the U.S. is out to assassinate him or invade

Venezuela for its oil; the White House, concerned about a growing wave

of leftist victories in Latin American presidential elections, insists

Chavez is a would-be dictator sowing instability in the region. Last

week, as U.S. Secretary of Defense Donald Rumsfeld even likened

Chavez's rise to Hitler's in the 1930s, Venezuela accused a U.S.

naval attaché of spying and expelled him from the country; a few days

later the U.S. expelled Alvarez's chief of staff.

 

Amidst those tensions, says Alvarez, the Citgo program is proof that

Chavez's revolution is still fond of Americans, if not their

government. (Citgo, Chavez aides point out, is also a NASCAR sponsor.)

" We'll continue to support a people whose government is hostile to

us, " says Alvarez. " We have nothing against this country. " Venezuelans

and Americans might feel that way, but for the moment it seems that no

amount of heating oil, no matter how deeply discounted, could thaw the

enmity between their two governments.

 

http://www.time.com/time/nation/article/0,8599,1157172,00.html

 

 

 

" I challenge anyone to live on my salary " [$158,000 a year].

Tom Delay