Latin America again may be on America's radar.
There have been a recent string of discoveries of large reserves of oil and natural gas in the Southern Cone (Brazil, Uruguay, Argentina) in the last 6 months. The most notable of these has been the massive find of oil off Brazil, known as the Tupi and Sugarloaf fields. According to Bloomberg:
"A tripling of proved reserves from 12.6 billion barrels would move Brazil into the world's top 10 nations in oil supplies, according to estimates from London-based BP Plc. Brazil, Latin America's largest economy, would overtake Nigeria, currently No. 10 with 36.2 billion barrels, and put it close to Kazakhstan, which has 39.8 billion barrels."
This has massive implications for geopolitics of the world and Latin America in particular. Since the oil is readily accessible to the American market, conceivably it can supplement or replace Venezuelan oil supplies to the US. Hugo Chavez is not a dumb one, he has signed an agreement with China to supply China with 1 million barrels of oil a day, and before people say that he can't because the oil is too heavy, China is building a refinery in Southern China for the express purpose of refining Vene. oil. What this means is that since Venezuela's oil production has been falling, if Venezuela wants to keep its commitment to China it has to reduce exports to the US.
This is actually against US interests because in so doing, Chavez is enabling China to become vested in the future of the pseudo-socialist regime of Hugo Chavez, meaning political, material,and possibly even military support to his administration and project. Hugo Chavez is also making overtures to Moscow:
"President Hugo Chavez says that Venezuela is fortifying "all levels of cooperation" with Russia, including the purchase of more arms."
"Venezuela spent $4.4 billion in weapons purchases from 2003 to 2006 to modernize its armed forces, according to a report by the U.S. Congressional Research Service."
"Venezuela's military fired its first test missile from a recently acquired Russian Sukhoi fighter jet and launched its first seaborne missile in 13 years, showcasing new capabilities in exercises carried live on state television."
The Chavez regime has every reason to beef up its military in light of the record of the Bush regime and traditional American imperialism in the Caribbean basin. It would rather impossible to have a socialist revolution without the force of arms to protect yourself against American intrigues (lest we forget Chavez was overthrow by an American supported coup d'etat in 2002). By appealing to China for diplomatic assurances, and Russia for investment (Gazprom, which is really an arm of Russia's corporate state, and foreign policy apartus) Chavez is building a truly powerful coalition of international forces to protect him against the United States.
Brazil though has the capacity to undermine Chavez, with the large reserves of oil recently found in Brazil's waters, it could change the whole dynamic. For Venezuela, the more centrist, but still socialist Brazilian government could spread Brazilian semi-peripheral imperialism to safeguard against "revolutionary" socialism of Hugo Chavez, while still appealing to the redistributionist demands of the populations. The oil find will give Brazil major power status, and its oil monopoly Petrobras the ability to challenge Exxon and other major Western oil firms (it is already bigger than Chevron). Brazil can also challenge American or support the United States in the region, certainly Brazil wants to replace the United States as the hegemonic power in Latin America, and has succeeded imo in Mercosur. The United States needs Brazil more than ever, also considering that Brazil will now export major amounts of ethanol to the United States:
"America’s thirst for ethanol is set to grow in line with targets in last year’s Energy Independence and Security Act. Brazil would like to sell more to Europe and Japan too...This year Brazil hopes to export up to 3 billion litres of ethanol to the United States. But this market depends on the corn price being so high as to make it profitable to pay the import tariff...For those worried about climate change, Brazilian ethanol is worth buying only if it is as green as it claims to be. It is certainly much greener than its corn-based rival in America: it packs 8.2 times as much energy as is used in its production, compared with just 1.5 times for corn ethanol, according to the Woodrow Wilson Centre, a Washington think-tank."
So Brazil has the capability of become America's new Saudi Arabia...instead its MUCH COOLER!
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