Venezuela Neg

Solvency
Say No
Venezuela will say no Snowden and Morales prove
Grand 7/6
Gabe Grand is an editorialist for PolicyMic and an avid scholar of Latin American affairs Edward
Snowden Asylum: Venezuelan President Nicols Maduro is Trolling the U.S.. July 6, 2013
http://www.policymic.com/articles/53099/edward-snowden-asylum-venezuelan-president-
nicolas-maduro-is-trolling-the-u-s
In the midst of the diplomatic crisis following the incident, Maduro himself blamed an invasive and overzealous
CIA for pressuring governments to refuse to allow Morales in their airspace. He stated that the
Morales affair "shows the level of madness and desperation that the [U.S.] empire has
reached." Whether or not Snowden will end up in Venezuela remains to be seen. Even if he decides to accept Maduro's offer, he
will have to figure out a way to get there from Moscow's Sheremedevo International Airport, where he has been stuck without a
valid passport for nearly two weeks. Regardless, Nicols Maduro's decision to extend asylum to Snowden
provides us with the first clear signal of what Venezuelan foreign policy will look like during the
Maduro presidency. It demonstrates a lack of faith in Washington's ability to cooperate equally with
Latin America that stems from a history of political and economic exploitation. Obama
administration bureaucrats and foreign policy advisers will inevitably get together on Capitol Hill in the coming weeks to discuss how
to handle the Snowden situation. But unless they also re-examine America's paternalistic attitude towards our long-abused
American neighbors to the south, they'll be missing the point entirely.

Venezuela will say noanti-Americanism is too entrenched
Drezner 13 professor of international politics at the Fletcher School of Law and Diplomacy at
Tufts University
Daniel, 3-7-13, Why post-Chavez Venezuela won't be a U.S. ally anytime soon,
http://drezner.foreignpolicy.com/category/wordpress_tag/venezuela
The passing of Hugo Chavez has prompted the usual 21st century cycle of news coverage and commentary that follows the
death of a polarizing figure: the breaking news on Twitter, followed by the news obits, followed by the hosannahs from
supporters, followed by denunciations of the figure, followed by official statements, followed by mealy-mouthed op-eds,
followed by hysterical, unhinged criticism of standard diplomatic language. Now that the first news cycle has passed, we can
get to the more interesting question of assessing Venezuela's future. There was always a fundamental irony to Hugo Chavez's
foreign policy. Despite his best efforts to chart a course at odds with the United States, he could never escape a
fundamental geopolitical fact of life: Venezuela's economic engine was based on exporting
a kind of oil that could pretty much only be refined in the United S tates. So, with Chavez's
passing, it would seem like a no-brainer for his successor to tamp down hostility with the
United S tates. After all, Chavez's "Bolivarian" foreign policy was rather expensive -- energy subsidies to Cuba alone were
equal to U.S. foreign aid to Israel, for example. With U.S. oil multinationals looking hopefully at
Venezuela and Caracas in desperate need of foreign investment, could Chavez's successor
re-align foreign relations closer to the U.S.A.? I'm not betting on it, however, for one simple reason:
Venezuela might be the most primed country in the world for anti-American conspiracy
theories . International relations theory doesn't talk a lot about conspiracy thinking, but
I've read up a bit on it, and I'd say post-Chavez Venezuela is the perfect breeding ground.
Indeed, the day of Chavez's death his vice president/anointed successor was already
accusing the United S tates of giving Chavez his cancer. Besides that, here's a recipe for creating
a political climate that is just itching to believe any wild-ass theory involving a malevolent
United S tates: 1) Pick a country that possesses very high levels of national self-regard. 2) Make sure that the country's
economic performance fails to match expectations. 3) Create political institutions within the country that are semi-
authoritarian or authoritarian. 4) Select a nation with a past history of U.S. interventions in the domestic body politic. 5) Have
the United States play a minor supporting role in a recent coup attempt. 6) Make sure the United States is closely allied with
the enduring rival of the country in question. 7) Inculcate a long history of accusations of nutty, American-led conspiracies from
the political elite. 8) Finally, create a political transition in which the new leader is desperate to appropriate any popular tropes
used by the previous leader. Venezuela is the perfect breeding ground for populist, anti-American
conspiracy theories. And once a conspiratorial, anti-American culture is fomented, it sets
like concrete . Only genuine political reform in Venezuela will cure it, and I don't expect
that anytime soon . Oh, and by the way: Those commentators anticipating a post-Castro shift by Cuba toward the
U.S., should run through the checklist above veeeery carefully. Am I missing anything?

Our argument is historically true
Gvosdev 13 --- faculty of the U.S. Naval War College and former editor of the National Interest
(3/8/2013, Nikolas, The Realist Prism: Washingtons Venezuela Dilemma,
http://www.worldpoliticsreview.com/articles/12776/the-realist-prism-washington-s-venezuela-
dilemma
Most of the U.S. foreign policy community assumes that relations between the United States and Venezuela can only improve in
the aftermath of Hugo Chavez's death. Exemplifying this optimism, the Obama administrations initial reaction was to note that
as a "new chapter" begins in Venezuela, Washington reaffirms "its interest in developing a constructive relationship with the
Venezuelan government." The U.S. response was based on the hope that any successor to Chavez will be interested in repairing
the breach that opened up between the two nations during the almost 13 years of Chavez's tenure. But nothing should be
taken for granted. When other implacably anti-American leaders have died or passed from the
scene, their successors have not automatically sought to improve their relations with
Washington -- Iran being a prominent example. Careful attention needs to be paid to separating Chavez's personal
animosities toward Washington -- which might not be shared by his successor -- from the incentives embedded in the needs of
Venezuelas ruling system. Depending on who wins the election to finish Chavez's term of office, the next Venezuelan
president may not be interested in improving ties with the United States; more likely,
Chavezs successor will have a far different standard as to what constitutes a
rapprochement than most American officials.

Maduros political position is too precarious to say yes
Shifter 13 president of the Inter-American Dialogue
Michael, 5-3-13, What Does the Future Hold for U.S.-Venezuela Relations?
http://www.thedialogue.org/page.cfm?pageID=32&pubID=3297
Q: The future of U.S.-Venezuela relations remains uncertain in the early days of the Nicols Maduro administration. Maduro has
voiced a desire for "respectful relations" with the United States, though Washington has still not recognized his government.
The United States has denied that it is considering sanctions against Venezuela, and Venezuelan authorities recently arrested a
U.S. citizen on accusations of attempting to spark social unrest. The State Department has denied any efforts to destabilize the
Venezuelan government. Will U.S.-Venezuela relations be better or worse under Maduro than they were under Hugo Chvez?
What do Maduro's cabinet picks portend about the future of bilateral relations? Should businesses be more worried about
political risk in Venezuela now than they were when Chvez was alive? A: Michael Shifter, president of the Inter-American
Dialogue: "The prospects for improved relations between the United States and Venezuela
under the Maduro administration now appear rather dim. Maduro's rhetoric directed at
Washington has been notably tough and aggressive, as he seeks to shore up support
among the Chavista base. Arresting a U.S. citizen and accusing him of stirring up trouble in Venezuela is a vintage
Chvez tactic, aimed at diverting attention from the country's myriad, fundamental problems. Lacking Chvez's
political skills and common touch, Maduro is in a particularly shaky position, compounded
by questions of legitimacy following the April 14 elections. To date, personnel picks and policy signals
coming out of the administration have been confusing and mixed. Some in Maduro's team are hardliners, while others, such as
Calixto Ortega--the recently appointed representative in Washington--are more open and moderate. Ortega, for example, was
very active in the so-called Boston Group, an effort that sought to facilitate dialogue between Chavista and opposition
lawmakers. As long as Maduro's political standing remains precarious, he will be severely
constrained in his ability to pursue closer ties with the United States. There is no appetite or interest
in Washington to adopt punitive measures and apply sanctions against Venezuela. In light of Maduro's
confrontational rhetoric and actions--and disturbing incidents of violence--no one is calling
for a rapprochement. Still, assuming that things begin to settle down, and given that other governments have already
recognized Maduro, it would be surprising if Washington didn't eventually come around and deal with the practical reality."

Doesnt have the political capital to change energy policy
Alic 13 geopolitical analyst, co-founder of ISA Intel in Sarajevo
Jen, 4-15-13, Foreign Oil & Gas Companies Look to Status Quo in Venezuela,
http://oilprice.com/Geopolitics/South-America/Foreign-Oil-Gas-Companies-Look-to-Status-Quo-
in-Venezuela.html
Now that Nicolas Madurothe late Hugo Chavezs choice for successorhas narrowly won Sundays presidential
elections in Venezuela, oil and gas investors can expect a perpetuation of the status quo. In Sundays
vote, Maduro won with a very narrow 50.7% and a vow to continue with Chavezs revolution, which has seen the oil industry
nationalized and the state-run PDVSA oil company funding social programs and voraciously courting China and Russia. The
narrow vote will not be without its challenges. Opposition rival candidate Henrique Capriles has refused to recognize the results
and is demanding a recount, though the electoral commission is standing firm on Maduros victory. For foreign oil and
gas companies, we can expect more of the same. There are no regulatory changes in the
works, and an unattractive windfall tax system announced in January will likely be pushed
forward under Maduro. What Maduro is inheriting, though, is a nightmare situation that will see him stuck between
using PDVSA to fund expensive social programs that cost it $44 billion last year alone diverted from oil revenues, and cutting
social spending or allowing a rise in the price of fuel that could spark regime-threatening unrest. If Maduro feels compelled to
reduce fuel subsidies, it could lead to riots as cheap fuelwhich cannot be sustainedis one of the most crucial social benefits
for Venezuelans, who pay around 6 cents per gallon. Maduro has inherited a sinking ship and does not
appear to have the political capital to make any short-term changes in Venezuelas energy
policy, experts at Southern Pulse told Oilprice.com.

Maduro will be more anti-American and anti-capitalist in the short term
NSN 13
National Security Network, 3-7-13, A Post-Chvez Venezuela, http://nsnetwork.org/a-post-
chavez-venezuela/
Carl Meacham, a Latin America expert at the Center for Strategic and International Studies
explains, For the next month or so, Maduro has to show he is even more Chvez than
Chvez was. That means he is going to be more anti-American , more anti-capitalist , more
anti-systemic. As far as a rapprochement, I dont see it coming anytime soon The U.S.
doesnt want to be in a situation where it is viewed at all as getting involved in domestic
affairs of Venezuela. If Maduro wins, he will be trying to keep the focus on domestic issues,
and that could put the resolve of Chavismo to the test. And that could mean the hardest days
between the U.S. and Venezuela is not behind us, but ahead of us. Piccone recommends a patient and
steady hand: Washington should bide its time and quietly wait out what should be a relatively smooth transition to a post-
Chvez leadership and then remount its earlier efforts to turn a page away from the antagonism of the Chvez era toward a
more pragmatic relationship of mutual interests. If Maduro concludes, however, that he has more to gain parroting the Chvez
line of virulent anti-Americanism, it will be difficult to turn the other cheek for another six years. *NY Times, 3/6/13. Carl
Meacham via CNN, 3/6/13. Ted Piccone, 3/6/13]

Certainly no short term acceptance
Fillingham 13 Managing Editor & Asia Analyst and MA in Chinese Studies from the School of
Oriental and African Studies in London
Zachary, 3-10-13, Post-Chavez US-Venezuelan Relations: Headed for a Thaw?
http://www.geopoliticalmonitor.com/post-chavez-us-venezuelan-relations-headed-for-a-thaw-
4790/
In this context, a limited rapprochement makes sense from a Venezuelan point of view, as it would balance against a
preponderance of Chinese economic influence. Now that the Bolivarian Revolution is all but discredited, and countries like
Brazil have proven that its possible to alleviate poverty through trade and keep US influence at arms length, a US-
Venezuelan thaw is theoretically possible. However, authorities in Washington will likely
have to endure another round of vitriol and wait until the dust settles in Venezuelan
domestic politics before their window of opportunity presents itself.

Maduro will maintain SQ oil policy
Saefong 13 MarketWatch reporter based in San Francisco
Myra, 3-6-13, Post-Chavez Venezuela: oils next Saudi Arabia?
http://www.marketwatch.com/story/post-chavez-venezuela-oils-next-saudi-arabia-2013-03-
06?link=MW_story_popular
***Clinton Carter is associate vice president for Latin America at Frontier Strategy Group
Chavezs politicization of PDVSA also led to an exodus of talent, and political risk in the nation kept foreign investment in energy
low. Now that the president is gone, big improvements in the energy sector wont happen
any time soon. Venezuelas declining output is unlikely to be reversed for years to come,
Carter said. But the first change in government leadership since 1999 for a major oil producer certainly offers the market some
food for thought. Change in power There are at least a few different ways to look at what happens next for Venezuela and its
oil industry. Most likely, Vice President Nicols Maduro, Chavez heir apparent, will be elected president, said Williams. If the
election proceeds on schedule and Maduro wins then we will be in a better position to assess the long-term prospects for the
country and its oil production. Under a Maduro win, the nation would likely follow the oil policy
its become accustomed to. The government and PDVSAs top priority will be directing
funds to social programs, instead of enhancing the oil industrys capabilities in exploration
and production and refining, said Carlos Bellorin, senior petroleum analyst at IHS, in an emailed
analysis Wednesday. PDVSA may be forced to ease some terms in negotiations to obtain capital from its partners to start
seven new projects in the Orinoco Belt and increase production from strategic assets, Bellorin said, so the state-owned oil and
gas companys top management is likely to be reappointed. This could be seen as a continuity of the previous oil policy based
on tight control over operations, Bellorin said.

Maduro will say no to the plan
Shinkman 13
Paul, 4-24-13, Iranian-Sponsored Narco-Terrorism in Venezuela: How Will Maduro Respond?
New Venezuelan president at a crossroads for major threat to U.S.,
http://www.usnews.com/news/articles/2013/04/24/iranian-sponsored-narco-terrorism-in-
venezuela-how-will-maduro-respond
***Doug Farah is senior fellow at International Assessment and Strategy Center and an expert
on narco-terrorism and Latin American crime
U.S. officials might try to engage the new Venezuelan president first in the hopes of
improving the strained ties between the two countries. But Maduro has never been close
with the senior military class in his home country, and will likely adopt a more
confrontational approach to the United S tates to prove his credentials to these Bolivarian
elites. "Maybe if he were operating in different circumstances, he could be a pragmatist," Farah says. "I don't think he
can be a pragmatist right now."

Political conditions prevent Maduro from being pragmatic
Meacham 13 director of the Americas Program at the Center for Strategic and International
Studies
Carl, 4-16-13, Venezuela Post-Election: Can Maduro Govern?
http://csis.org/publication/venezuela-post-election-can-maduro-govern
Maduro's narrow victory also dashes any expectations that he might turn pragmatic when
dealing with such issues as the Venezuelan economy. Maduros first goal will likely be to
show himself in charge and to satisfy Chavistas. This will likely lead to a doubling-down of
Chvezs policies and to profligate spending on social programs within Venezuela. Q4: What does the current situation
mean for U.S.-Venezuela relations? A4: These results likely bode ill for U.S.-Venezuela relations as
well. Maduro will likely be forced to play the anti- United S tates card to placate Chavismos
most ardent supporters and show himself to be a Chavista to the core. Conclusion: Sundays result
has changed the dynamics of Venezuelas transition to its next president. The close showing signifies political uncertainty and
potential conflict in the short term, as more Venezuelans seem to be tiring of the growing corruption, crime, and inflation that
defined the later years of Chvezs presidency. One thing is certain: while Maduro campaigned on inheriting the mantle from
Chvez, the Venezuelan people will not overlook Venezuelas problems as they did for the former president. Maduro described
himself as the son of Chvez, while campaigning but one has to believe Chvez would have been deeply disappointed with
Sundays outcome.

Empirically Venezuela rejects US pushed corruption reform
Sullivan 13
*Mark is a specialist in Latin American affairs for the CRS. Venezuela: Issues for Congress
Congressional Research Service. 1/10/13. http://www.fas.org/sgp/crs/row/R40938.pdf] RLY
Because of Venezuelas extensive 1,370-mile border with Colombia, it is a major transit route for cocaine
and heroin destined for the United States. Venezuela suspended its cooperation with the
U.S. Drug Enforcement Administration (DEA) in August 2005 because it alleged that DEA agents were spying on
Venezuela. U.S. officials maintained that the charges were baseless. From 2005 to 2008, President Bush annually
designated Venezuela, pursuant to international drug control certification procedures set forth in the Foreign
Relations Authorization Act, FY2003 (P.L. 107- 228), as a country that had failed demonstrably to adhere
to its obligations under international narcotics agreements. At the same time, the President waived
economic sanctions that would have curtailed U.S. assistance for democracy programs in Venezuela. President Obama has
taken the same action over the past three years, most recently in September 2012, marking the eighth consecutive year for
Venezuelas designation as a country not adhering to its anti-drug obligations.118 The United States and
Venezuela were on the verge of signing an anti-drug cooperation agreement in 2006 that
had been negotiated in 2005 (an addendum to the 1978 Bilateral Counternarcotics Memorandum of Understanding or MOU),
but Venezuelan approval of the agreement has still not taken place. The issue has been
repeatedly raised by the United States as a way to improve bilateral antidrug
cooperation.

Maduro will say no
Elliott Gue March 21 2013 (Founder and Chief Analyst at Capitalist Times and Energy & Income
Advisor, B.A. & M.A. from University of London; Venezuelan Oil Production: No Overnight
Recovery,) https://www.energyandincomeadvisor.com/venezuelan-oil-production-no-
overnight-recovery/ -KY
This rally reflects a belief that Chavezs death would hasten a return to market-friendly policies that would encourage foreign
investment in Venezuelas floundering energy industry.Over the long run, this investment thesis should pan out. Although
Maduro will likely coast in the upcoming presidential election, the country cant afford to continue Chavezs magnanimous
social programs because PDSVA flagging hydrocarbon output can no longer support these
expenditures. However, the national oil company cant restore production growth
overnight; reversing years of neglect will require significant foreign investment in
exploration and development.The idea that an upsurge in Venezuelan hydrocarbon
production in the aftermath of Chavezs death will depress global oil prices in the near
term betrays a lack of familiarity with the recent history of the countrys oil industry. A
more likely outcome: Murado will continue Chavismo until the situation truly becomes
untenable and the requisite foreign investment revitalizes Venezuelas neglected oil fields.

Venezuela will say no: cant trust em
Meacham 13
[Carl is the director of the Americas Program at the Center for Strategic and International
Studies. The Kerry-Jaua Meeting: Resetting U.S.-Venezuela Relations? CSIS. 6/21/13.
http://csis.org/publication/kerry-jaua-meeting-resetting-us-venezuela-relations] RLY
Conclusion: In short, relations between the United States and Venezuela have a rocky track
record that recent headlines cannot obscure. And while there are undoubtedly members of
the Venezuelan government who want to improve relations, its difficult to see their
argument winning over the more hardline Chavistas in the government, who would likely
see any steps to building ties as betraying the cause. Venezuela has time and again proven
to be unwilling to work with the United States, making it difficult for the United States to gauge any real
intentions of change. In order to move ahead and legitimize this new relationship, the United States must make a decision
regarding Maduros legitimacy: does the United States recognize Maduros election sans a proper audit?

Snowden proves Venezuela will say no
Forero 13
*Juan is the Washington Posts correspondent for Colombia and Venezuela. With Snowden
offer, Venezuelas Maduro is on world stage Washington Post. 7/8/13.
http://www.washingtonpost.com/world/with-snowden-offer-venezuelas-maduro-is-on-world-
stage/2013/07/08/35d83f42-e812-11e2-818e-aa29e855f3ab_story.html] RLY
The 50-year-old Maduro, who found his political calling as a socialist activist with close ties to Cuba, took a sharply
anti- imperialist stand in embracing Snowden. He said the United States had created an
evil system, half Orwellian, that intends to control the communications of the world, and characterized Snowden as an
antiwar activist and hero who had unmasked the dastardly plans of Americas ruling elite. Political analysts say the
opportunity to take sides against Washington was simply irresistible for a government that
has for years characterized itself as a moral force speaking out for the weak against the
empire, as the United States is known in Caracas. And the fact that the secrets Snowden divulged were
embarrassing to the Obama administration only gave more fuel to Venezuela, former Venezuelan diplomats and political
analysts in Caracas said.

Maduro hates the US and will say no
Forero 13
*Juan is the Washington Posts correspondent for Colombia and Venezuela. With Snowden
offer, Venezuelas Maduro is on world stage Washington Post. 7/8/13.
http://www.washingtonpost.com/world/with-snowden-offer-venezuelas-maduro-is-on-world-
stage/2013/07/08/35d83f42-e812-11e2-818e-aa29e855f3ab_story.html] RLY
Newly elected and facing staggering economic problems at home despite the countrys oil wealth, Maduro appears to
have made a high-pitched, openly hostile position against the Obama administration a
cornerstone of his governments foreign policy. He took his most provocative stand on Friday
when he announced in a speech that Venezuela would take in Snowden. Maduro has accused
the United States of fomenting protests against his government after his disputed April 14 election
victory, which gave him the presidency his predecessor, Hugo Chvez, had held for 14 turbulent years until his death from
cancer. The Snowden saga a young American revealing secrets the U.S. government wants to contain provided
the perfect opportunity for Maduro to take on the Obama administration, said Eduardo Semtei, a
former Venezuelan government official.

QPQ Doesnt Solve the aff, Venezuela will turn to China if we dont play nice
Daly 13
Daly, John CK. "Venezuelan President Maduro Offers Olive Branch to Washington."Venezuelan
President Maduro Offers Olive Branch to Washington. Oil Price.com, 27 May 2013. Web. 03 July
2013. <http://oilprice.com/Geopolitics/South-America/Venezuelan-President-Maduro-Offers-
Olive-Branch-to-Washington.html>.
But difficulties began with Washington in February 2007, when Chvez announced a new law to
nationalize the last remaining oil production sites that are under foreign company control, to take effect on
1 May. Under the law, which allowed foreign companies to negotiate the nationalization terms, earlier joint ventures, involving
ExxonMobil, ChevronTexaco, Statoil, ConocoPhillips, and BP, were transformed to give PDVSA a minimum 60 percent stake. The
process completed a government initiative begun in 2005, when the Chavez administration transformed earlier operating
agreements in Venezuelas older oil fields into joint ventures with a wide variety of foreign companies. Thirty out of 32 such
operating agreements were transformed, with most foreign companies accepting the new arrangements, but ExxonMobil and
ConocoPhillips refused, instituting lawsuits for compensation that continue to this day. The policies had
repercussions in the diplomatic sphere. On 28 June 2010 President Obama nominated Palmer as
U.S. Ambassador to Venezuela but three months later Chvez announced on his weekly TV program that he would
not allow Larry Palmer to take up his post after Palmer told a US senator that morale in the Venezuelan army was low and that
members of Chvez's government had ties to leftist FARC Colombian rebels. On 28 December Chvez flatly refused to
accept Palmer because of his derogatory remarks and the following day the U.S. revoked the
accreditation of Venezuelan ambassador, Bernardo lvarez Herrera. And there relations have remained until
now, even as oil sales have continued unabated. But Venezuela's new President, Nicols Maduro, is
now seeking to break the diplomatic logjam. On 19 May, during an interview with Venezuelas Televen
television channel, Foreign Minister Elias Jaua said, "We are going to remain open to normalizing
relations with the United States. The first thing would be to resume diplomatic representation at the highest level,"
adding that Venezuela is "interested in further deepening and cultivating a friendship with the
U.S. people." To be sure, there are still many roadblocks in the way quite aside from the rhetorical
sniping, the U.S. has yet to recognize Maduros election, and there remains that pesky issue of compensation. But an olive
branch has been extended, and Washington can lose little by at least listening to the
country with the Western Hemispheres largest energy reserves. If they do not, then
Caracas always has China, which is interested in trade more than ideological rhetoric.
US-Venezuela Relations High

U.S. influence and relations in Latin America are inevitable
Alvarado 13 former diplomat in the Mission of Venezuela to the Organization of American
States
Liza, 5/31/2013, The U.S. Must Re-evaluate its Foreign Policy in Latin America,
http://www.isn.ethz.ch/isn/Digital-Library/Articles/Detail/?lng=en&id=164370
Although there has been a decline in U.S. influence in the region, its presence is still there.
In Venezuela, for example, U.S. oil companies have seen their actions limited, yet they still
operate there. The United S tates is Venezuelas top commercial partner, as Venezuela supplies 12 percent
of U.S. oil imports. Relations between the United S tates and Latin America have experienced cyclical
ups and downs. Geographically, the United S tates and Latin America are linked and have a
natural shared market, so there will always be a relationship of one sort or another . The
United S tates will continue to seek to exert its influence over the region, whether through
future plans for the placement of military bases or the promotion of bilateral trade
agreements.

Tensions are inevitable
Duddy 13 served as the U.S. ambassador to Venezuela from 2007 until 2010
Ambassador (ret.) Patrick Duddy, May 2013, Venezuela after Chavez,
http://www.unc.edu/depts/diplomat/item/2013/0105/ca/duddy_venezuela.html
In such circumstances, would the Chavistas risk making the bilateral relationship worse? It is hard to imagine but probably not
impossible. That said, for the foreseeable future, Venezuela will depend on oil receipts from the U.S. to keep the ship of state
afloat. Until other markets are able to absorb a greater percentage of Venezuelas heavy, sulfuric oil and pay full price or
Venezuelas production increases substantially, Venezuela will continue to sell to the U.S. Just as importantly, we will likely
continue to buy what they produce. Might the relationship improve? Those who have faith in the power of common interests
believe it is possible. Moreover, during my tenure as ambassador, both the Bush administration and the
Obama administration have emphasized that the U.S. would like to have a more productive, a
more functional relationship with Venezuela. I think this will be tough to achieve with a
Chavista government. Anti-Americanism is a core tenet of Chavezs Bolivarian movement.
Tensions may ease from time to time but, as we have seen since Chavezs death, but the antipathy of
the Chavistas toward the U.S. is deeply established and never entirely absent .

Relations will improveChavez gave the order to improve ties before dying
Business Recorder 13
6/18/2013, US, Venezuela take steps towards mending ties,
http://www.brecorder.com/general-news/172/1197252/
***Note --- Elias Jaua is Venezuela's foreign minister
US and Venezuelan officials will meet soon for talks that could lead to the countries
exchanging ambassadors for the first time since 2010, Venezuela's foreign minister said late Thursday. The
meeting will be "in the next days, probably in Washington," said Foreign Minister Elias Jaua, speaking on the sidelines of the
Organisation of American States general assembly meeting here. Washington and Caracas have had a stormy relationship for
years, even as Venezuela exports 900,000 barrels of oil per day to the United States. Caracas and Washington have been
operating embassies in each other's country without an ambassador since a diplomatic spat in 2010. In one sign of the difficult
ties, President Barack Obama has yet to acknowledge the victory of Venezuelan leader Nicolas Maduro - the hand-picked
successor of the late leftist icon Hugo Chavez - in the April 14 presidential election. Maduro won the controversial vote by a
razor-thin margin in an election that his rival, centrist Henrique Capriles, has refused to concede. Jaua did not give a date for the
meeting, but told reporters that Venezuela will be represented by its charge d'affairs in Washington, Calixto Ortega. "I
believe there is good will on both sides," Jaua said about the upcoming meeting. Jaua also
downplayed Obama's failure to recognise Maduro's victory. It is "not an issue that matters," he said. During his lengthy
presidency Chavez regularly criticised US "imperialism" and courted US foes like Iran and Syria. Jaua however said it was
the late leader who told Venezuelan officials "that we had to work towards normalising
these relations" with Washington. On Wednesday Jaua met with US Secretary of State John Kerry in Antigua in a
first step to mend ties.

Oil Shocks Advantage
Cant Solve Shocks
Markets make production location irrelevantonly alternative energy solves
Hannah 2012
(John Hannah is a contributor to Foreign Policy's Shadow Government blog and a senior fellow
at the Foundation for Defense of Democracies.)Energy insecurity: How oil dependence
undermines America's effort to stop the Iranian bombPosted By John Hannah Friday, October
12, 2012 - 1:06 PM (http://shadow.foreignpolicy.com/posts/2012 /10/12/energy _
insecurity_how_oil_dependence_undermines_america_s_effort_to_stop_the_irania)
The fact that our oil vulnerability has put such severe constraints on our freedom-of-
maneuver to address the most pressing national security threat we face is deeply troubling.
The big question is whether we can do anything about it. Admittedly, history doesn't offer much reason for optimism. For almost 40 years, successive U.S. presidents have promised to tackle the problem
with very little to show for it. Of course, what's different today is that the United States is experiencing an
oil and gas boom that promises to transform our energy landscape in very fundamental
ways. Thanks to American ingenuity and technology, U.S. production is poised to increase
dramatically over the next decade, after years of steep decline. As Governor Romney has correctly emphasized, through close
cooperation with democratic allies in Canada and Mexico, the goal of energy self-sufficiency for North America may well be
within reach -- an unthinkable prospect just a few years ago, and one whose benefits in
terms of job creation and economic growth could be quite profound. In addition to the potential economic windfall,
however, we also need to be thinking hard about how we can best exploit the coming energy boom to really enhance U.S. national security. That's a much more difficult task. The fact is
that because there's a global market for oil, Middle East crises are likely to threaten the
U.S. economy with major price spikes no matter how much of our own crude we produce. Just
look at Canada and England. While both are oil independent, they remain exposed to the same price volatility that currently afflicts the United States. Their economies will be no more insulated than ours if
a war with Iran sends the cost of oil through the roof. It seems that what really needs to be part of the mix is a viable,
bipartisan, market-driven strategy for reducing the monopoly that oil has over our
transportation sector. If a sensible way could be found to begin moving some significant
portion of U.S. cars and trucks to run on cheaper, domestically produced alternative fuels --
natural gas, methanol, electric -- it would largely eliminate the sword of Damocles that Middle Eastern
tyrannies like Iran now hold over the West's economic wellbeing and its strategic decision-
making. That would put us on the path toward true energy independence, and restore to
the United States a degree of flexibility, leverage, and strength to pursue its interests and
values abroad, especially in the Middle East, that we have not known for at least a
generation. All much easier said than done, I know -- especially in an environment where energy issues, like the national budget, have become so politically charged. Nevertheless, hope
springs eternal. Perhaps once the upcoming election is over, a new administration will be prepared to look seriously at developing a bipartisan, comprehensive energy strategy that both fully exploits
America's new oil and gas bonanza while taking meaningful steps to reduce our vulnerability to extortion by hostile, repressive dictatorships in unstable parts of the world. If it is, one place that a new
president should definitely look to mobilize ideas as well as political support is Securing America's Future Energy (an organization that I'm proud to advise), which has brought together an extraordinary
group of American business and military leaders to highlight both the economic as well as national security dangers posed by our dependence on oil, and to recommend possible solutions. Co-chaired by
Fred Smith, CEO of FedEx and General P.X. Kelley, former commandant of the Marine Corps, the group includes such luminaries as General Jack Keane, former vice chief of the Army; Admiral Dennis Blair,
former director of national intelligence; David Steiner, CEO of Waste Management; Herb Kelleher, founder of Southwest Airlines; and John Lehman, former undersecretary of the Navy. A pretty hard-nosed
bunch, to be sure, that has decades of experience operating on the front lines of the global economy and national security, and is convinced that America can and must get after this challenge as soon as
possible.For the country's sake, we should all hope that they're right.

US cant gain price independence
Goldwyn 13 president of Goldwyn Global Strategies, LLC, an international energy advisory
consultancy, and a nonresident senior fellow with the Energy Security Initiative at the Brookings
Institution
David, 4-11-13, The Impact of the Tight Oil and Gas Boom on Latin America and the Caribbean:
Opportunities for Cooperation
http://docs.house.gov/meetings/FA/FA07/20130411/100622/HHRG-113-FA07-Wstate-
GoldwynD-20130411.pdf
This great wealth of domestically produced gas and, increasingly, oil, leads some to believe that
the U.S. is on the cusp of an era of energy independence. Many adherents of this line of thinking
predict that the unconventional revolution will allow the United States to look inward and take
less interest in international affairs, including those of the politically challenging countries that produce oil and natural gas
in the this Hemisphere, the Middle East, Africa and elsewhere. This is unlikely to happen. Despite
more production from shale deposits like the Bakken in North Dakota, oils share of total U.S. energy
demand is expected to decrease only to 32 percent from 36 percent in 2011 by 2040.
Natural gas will increase its share to 28 percent from 26 percent and renewables will grow to 11 percent from 8
percent, according to the EIA.8 Oil, even that produced domestically, will continue to be priced at market
levels, meaning that prices here will continue to be impacted by global events. The most
strategic factor in American consumption will remain the price of oil and the effect of
disruptions on the U.S. and the global economy, not the source or quantity of U.S. imports.

Oil prices are set globally middle east oil independence wont shield us from
price spikes
Aaron Menenberg September 6, 2012 (Analyst at Praescient Analytics and the Technology
Fellow at the Institute for the Study of War. He is also a graduate student in international
relations at The Maxwell School of Syracuse University. Previously he has worked at The Hudson
Institute on sovereignty issues, for the Israeli Ministry of Defense, and at the IBM Corporation.
Oil is a Global Commodity Oil is a global market and therefore a globally priced commodity, and so
long as America consumes oil and abstains from protectionist policies, self-sufficiency of oil would still mean
buying and selling oil at the world price. Because oil is available from dozens of countries
and hundreds of companies, and because it is relatively easily shippable, there is only a
single global market for oil no matter where the consumer is located. Oil prices are set in
open commodity markets, and oil is traded globally, which means that prices are affected
by events around the world and decisions made by countries and companies unassociated
with the United States. The way the oil production supply chain functions means it would be impossible to separate
domestic and foreign gasoline. William Nordhaus of Yale University illustrates the globally integrated oil market nicely as a
bathtub that: contains the world inventory of oil that has been extracted and is available for purchase. There are spigots
from Saudi Arabia, Russia, the United States, and other producers that introduce oil into the inventory; and there are drains
from which the United States, Japan, Denmark, and other consumers draw oil from the inventory. Nevertheless, the price and
quantity dynamics are determined by the sum of these demands and supplies and the level of total inventory, and are
independent of whether the faucets and drains are labeled U.S., Russia, or Denmark.*3+ A useful example of
how oil consumers are beholden to the global oil market is Europes experience in the
aftermath of Hurricane Katrina. After Katrina, gas prices in Europe soared as a result of the
damage to US refineries even though those facilities sent very little gas to Europe. Even if
the US does not import one barrel of oil from the Middle East or any other region, the price
US consumers pay at the pump would still be a function of worldwide supply and demand,
just as it was for Europeans after Katrina.[4] The extent of our vulnerability is not a function of how much oil we produce
domestically. Britain produces more oil than it needs, but its self-sufficiency does nothing to alter its gasoline prices or its
vulnerability to global price volatility.[5] Likewise, the US, so long as it uses significant amounts of oil, will
be susceptible to the global oil market no matter how much of our consumption comes from domestically
produced oil. Both Canada and Norwaywere net oil exporters for the entire period of the 2003-2008 when global oil prices
steadily increased, and both nations remained net exporters through the price spike in 2011. In both cases, domestic retail fuel
prices tracked global oil prices almost perfectly. Adjusted in a common currency and excluding taxes, retail fuel prices in Canada
and Norway moved in lockstep with global crude and also with retail fuel prices in the US. In fact, during this period, gas prices
were cheaper in the US than in either Canada or Norway.[6] In 1973 the US imported just over a third of its petroleum, yet the
economy proved far more, not less, exposed to the shock of global oil prices than it was two years ago when prices soared again
while dependence on foreign oil reached an all-time high.[7] Since 2005 production in the US has been steadily rising, and we
now produce about 1.5 million barrels more than we did six years ago. Over the same period of time, however, oil hit a record
of $147 a barrel.[8] What is more, it is largely because of these high prices that new American production is possible; low gas
prices actually stifle American production and hurt that sector of the economy because US production costs make US oil less
competitive at more affordable barrel prices.

Dependence on the Middle East will continue no matter what prices set
globally
Michael A. Levi December 21 2012 (Senior Fellow for Energy and the Environment and
Director of the Program on Energy Security and Climate Change, is the author of the
forthcoming book The Power Surge; The False Promise of Energy Independence)
http://www.nytimes.com/2012/12/21/opinion/the-false-promise-of-energy-
independence.html?_r=0 -KY
The International Energy Agency recently confirmed what market watchers have been saying for a year: oil and gas
production in the United States is surging and is expected to continue to rise. This trend
has led a parade of analysts and even the governments National Intelligence Council to predict that, after four
decades of failed attempts, America might soon become energy independent. This view, if taken too
far, is not only wrong, it is dangerous. The United States would remain entangled with the
global oil market indefinitely even if it were to import no oil. Political leaders lulled into a false sense of
security by rising domestic oil and gas output run the risk of making big mistakes. There is no doubt that oil and gas production
in the United States is growing strongly, bringing with it important economic and security benefits. Indeed, it is entirely plausible
that within 10 years or so, North America could produce as much oil as it consumes. (Canada and Mexico are typically grouped
with the United States in oil analyses because the three markets are tightly integrated.) The resulting freedom from any need to
import oil from overseas is what has led some analysts to herald a coming age of energy independence. But this misreads our
vulnerabilities. Since oil prices are set on world markets, we would not be immune from
volatility elsewhere unless the United States decided to wall itself off, an extreme measure that could inflict severe
pain on the nations allies. The United States economy is perpetually at risk because spikes in oil
prices can quickly strip consumers of cash at the gas pump. This sudden tax can knock
the economy on its back, regardless of where we buy oil. Instability in the Middle East
would still hit motorists in the Midwest, and the United States would still be called on to
provide stability there or to intervene. And the United States would still need to think
twice before escalating any regional conflict; for example, one with Iran, which would
likely push oil prices significantly higher. The great danger, though, about predictions of energy independence
is that policy makers who act on unreasonable optimism about the nations energy future could do major damage. The United
States is reconsidering its approach to military spending and strategy in the face of budget pressures. Policy makers who believe
that the Middle East matters far less because of looming energy independence might end up dangerously neglecting the region.
Some Middle Eastern leaders already fear such an outcome and may hedge their bets by cozying up with others. Americas
Middle East strategy may be due for a change, but the notion of energy independence should not drive those decisions.
Unjustified expectations about energy independence might also make lawmakers less interested in pursuing measures to
reduce oil consumption. But the nations vulnerability to events overseas and to volatile oil prices still stems from the amount
that Americans spend on oil. That is why government steps to reduce the demand for oil whether through tougher fuel
economy standards, support for technological innovations or other means remain essential regardless of where Americas oil
comes from. An exaggerated sense of independence could also lead policy makers to interfere with open trade in dangerous
ways. People eager to keep the newfound bounty of shale gas at home have attacked plans to allow natural gas exports. Similar
fights may arise over oil exports and foreign investment in the domestic oil industry. Blind faith in free trade is unwise. But the
United States still depends on relatively open global markets, which wrongheaded policies could undermine. The benefits of
the oil and gas boom jobs, wealth and, in the case of natural gas, reductions in greenhouse gas emissions offer plenty of
reasons to continue to develop these resources judiciously. But we should beware of turning this potential blessing into an
unintended curse.

Squo Solves Dependence
New extraction techniques have expanded domestic oil production - the US will
be energy independent by the end of 2 decades
Mark Thompson November 12 2012 (Assistant editor at CNN Money, previously worked at
Reuters, U.S. to become biggest oil producer IEA)
http://money.cnn.com/2012/11/12/news/economy/us-oil-production-energy/index.html -KY
The United States will overtake Saudi Arabia to become the world's biggest oil producer
before 2020, and will be energy independent 10 years later, according to a new forecast by
the International Energy Agency. The recent resurgence in oil and gas production, and efforts to make the
transport sector more efficient, are radically reshaping the nation's energy market, reported Paris-based IEA in its World Energy
Outlook. North America would become a net exporter of oil around 2030, the global organization said
Monday. "The United States, which currently imports around 20% of its total energy needs,
becomes all but self sufficient in net terms -- a dramatic reversal of the trend seen in most other energy
importing countries," the IEA stated. The U.S. is experiencing an oil boom, in large part thanks to high
world prices and new technologies, including hydraulic fracking, that have made the
extraction of oil and gas from shale rock commercially viable. From 2008 to 2011, U.S. crude oil
production jumped 14%, according to the U.S. Energy Information Administration. Natural
gas production is up by about 10% over the same period. Related: the facts about oil and gas under Obama
According to the IEA, U.S. natural gas prices will rise to $5.5 per million British thermal units (MBtu) in 2020, from around $3.5
per MBtu this year, driven by rising domestic demand rather than a forecast increase in exports to Asia and other markets. "In
our projections, 93% of the natural gas produced in the United States remains available to meet domestic demand," it said.
"Exports on the scale that we project would not play a large role in domestic price setting." North America's new role
in the world energy markets will accelerate a change in the direction of international oil
trade toward Asia, and underscore the importance of securing supply routes from the
Middle East to China and India. The IEA said it expects global energy demand to increase by more than a third by
2035, with China, India and the Middle East accounting for 60% of the growth, and more than outweighing reduced demand in
developed economies. That will push world average oil import prices up to $125 per barrel (in 2011 dollars) by 2035, from
around $100 per barrel at present, but they could be much higher if Iraq fails to deliver on its production potential. Iraq is set
to become the second largest oil exporter by the 2030s, as it expands output to take advantage of demand from fast growing
Asian economies. New fuel economy standards in the U.S. and efforts by China, Japan and the European Union to reduce
demand would help to make up for a disappointing decade for global energy efficiency. "But even with these and other new
policies in place, a significant share of the potential to improve energy efficiency -- four-fifths of the potential in the buildings
sector and more than half in industry -- still remains untapped," the IEA stated. Policymakers are still missing out on potential
benefits for energy security, economic growth and the environment. Growth in demand over the years to 2035 would be
halved and oil demand would peak just before 2020, if governments took action to remove barriers preventing the
implementation of energy efficiency measures that are already economically viable, the global organization said.

The US is set to become the dominant force in oil within the next decade
dependence will decline significantly
Patti Dom February 11 2013 (Patti Domm is CNBC executive news editor, Domm was the
equities editor for the Americas at Reuters. She was also Wall Street editor at Reuters, She also
edited three CNBC books on personal investing. Domm serves on the board of the Financial
Womens Association of New York, University of Rutgers graduate; US Is on Fast-Track to Energy
Independence: Study) http://www.cnbc.com/id/100450133 -KY
U.S. oil and gas production is evolving so rapidlyand demand is dropping so quicklythat in just five
years the U.S. could no longer need to buy oil from any source but Canada, according to
Citigroup's global head of commodities research. Citigroup's Edward Morse, in a new report, projects a dramatic reshaping of
the global energy industry, where the U.S., in a matter of years, becomes an exporter of energy, instead of one of the biggest
importers. The shift could sharply reduce the price of oil, and therefore limit the revenues of
the producing nations of OPEC, as well as Russia and West Africa. Those nations face new challenges:
not only are the U.S. and Canada increasing output, but Iraq increasingly is realizing its potential as an oil producer, adding
600,000 barrels a day of production annually for the next several years. "OPEC will find it challenging to survive
another 60 years, let alone another decade," the report by Morse and other Citi analysts said. "But not all of
the consequences are positive, for when it comes to the geopolitics of energy, the likely outcomes are asymmetric, with clear
cut winner and losers." The U.S. is a winner in many ways. Its super power status could be prolonged
because of this new growth in oil and shale gas production, made possible by "fracking"
and other non-conventional drilling technologies. Crude oil generated the largest single
annual increase in liquids production in U.S. history last year, with an increase of 1.16
million barrels per day. Oil production is booming in places like Texas and North Dakota, which has the lowest
unemployment in the country at just 3 percent last September, compared to the national rate of 7.8 percent then. Citi analysts
also foresee a new era of U.S. industrialization, fueled by cheaper power. They cite dozens of industrial projects across America
that have already begun or are planned, in such industries as auto, chemicals and steel. The oil producing nations of OPEC, and
others, will have to adjust to a world of lower prices. Separately, OPEC, in its February report Tuesday, commented about the
U.S., noting it is the fastest growing producer this year among the non-OPEC nations. But it noted there are risks associated with
these supply forecasts, including weather and technical, environmental and price factors, as well as the heavy decline associated
with shale drilling in the first year of production. Citigroup's report predicts a price decline in crude oil that will impact all
producers - and consumers. Brent crude, the international benchmark, could trade in a new lower range of $70 to $90 per
barrel by the end of the decade, from its recent range of $90 to $120 per barrel, Citi projects. That would be below the break-
even levels required by many producing countries. The price required by Saudi Arabia is $71, and Kuwait is $44 per barrel, but
many other countries have break-even levels of $110 or greater. "This is a momentous year for what's happening, and we're
having almost two million barrels a day of pipeline capacity built out in the U.S.," Morse said on "Fast Money." "The U.S. is
actually going to push out about 700,000 barrels a day of light sweet crude imports this year. We think as a result of that, plus
production elsewhere, we think the price is going to average, by the time you get to December, $10 less than where it is right
now." As the U.S. and Canada rise, some oil producing countries could face the threat of
becoming "failed states" as their leadership grapples with greater pressure for economic
and political reform while resource revenues decline, the report said. Others, especially China, could make
up for some of the demand, but not all. "Nigeria, the picture is fairly bleak. Venezuela is pretty bleak," Morse said. As for
Russia, "If it is the case that what is now a $90 Brent floor price becomes a $90 Brent ceiling price, given the dominance of
hydrocarbon exports in Russian revenue, there could be a three percent hit to GDP which is by no means insignificant over the
next five years. because that's how critical hydrocarbons are," he said. "Here you have a country that requires, on its own public
record, $117 per barrel Urals crude, on average, to balance their budget. If the price of oil collapses to only as low as $90 a
barrel, it does have that order-of-magnitude effect." At the same time, Citi sees a big impact on the U.S. economy. The current
account deficit is about 3.2 percent of GDP, and the oil import bill is 1.7 percent of GDP. Citi expects that energy self-sufficiency,
combined with the impact of low natural gas prices, could cut the current account deficit by up to 2.4 percent of GDP, with an
associated improvement in the dollar of 1.6 to 5.4 percent. To realize this production boom, the energy industry's near-term
challenge is moving the U.S. and Canadian oil that is locked in the heart of the continent because of insufficient pipeline
transportation. Citi expects that to improve but in the meantime, the railroad industry is helping pick up the slack, shipping U.S.
crude across the continent, and creating big demand for rail tanker cars. The Citi report, titled "Energy 2020: Independence
Day," also projects a larger and quicker decline in demand for oil in the U.S. over the next decade or two, due to efficiency and
the shift to cheaper natural gas. For instance, Citi expects 30 percent of the U.S. heavy duty truck fleet to turn to natural gas-
based fuel by 2015, well above the 10 percent it previously forecast. That would reduce diesel demand by an estimated 600,000
barrels per day. It also expects new automotive efficiency standards to reduce U.S. oil production by two million barrels per day,
up from the one million forecast last year. "Starting this year, North American output, as we indicate in this
report, should start to have tangible impacts both on global prices and trading patterns,
and will eventually turn the global geopolitics of energy on its head," the report said. Morse
surprised markets a year ago with a report that envisioned the U.S. as part of an energy independent North America. Since then,
the view has become mainstream. The International Energy Agency forecast last fall that the U.S. will
overtake Saudi Arabia and Russia as the top oil producer by 2017. The IEA also forecast that North
America could become a net oil exporter by around 2030 and the U.S. could become nearly
self-sufficient by 2035. Morse's latest report, released Tuesday, has an even more aggressive view of the U.S. move to
dominance as an energy producer. If crude oil and field condensates, natural gas liquids, renewable fuels and refinery
processing gains are counted, the report put U.S. production at 11.2 million barrels per day at the end of 2012, making the U.S.
the biggest oil producer already last year. Canadian production is expected to increase to 6.5 million barrels per day, and even
Mexico is now expected to join the North America energy renaissance under a new government interested in exploiting its
resources. In the past six years, oil imports into the United States have been cut in half, after
peaking in 2006. "The numbers are striking. The month of peak was 12.6 million barrels a day in October 2006 and ... now it's
under six, and by late 2012 totaled 6.8 million bpd," Morse said in an interview. Since 2006, U.S. oil field
production of crude, plus natural gas liquids and bio-fuels has grown by three million barrels a day,
about the same as the total output of Iran, Iraq, or Venezuela. In the same period, Canadian production
has grown by 510,000 barrels a day. "The impact of this extraordinary production growth is becoming increasingly apparent
and even if the growth rate subsides in the years ahead the mushrooming impacts of this growth will have dramatic impacts,"
the report said. "A half decade from now combined US and Canadian output will be in surplus of projected needs. Over the next
five years, demand for natural gas in the US should catch up with supply, opening up unexpected opportunities in transportation
and igniting a re-industrialization of the country." Morse, in an interview, said the U.S. could in theory need to import only
from Canada within five years. "Our projection of U.S. supply growth and U.S. demand collapse is to levels where the U.S. will
not need to import oil from any other country except for Canada," he said. He expects to see a fight for market share in the
U.S. and the ultimate result will be that the U.S. could re-export some Canadian crude. "But technically there should be no room
for anyone else's crude," he noted. But this does not mean the U.S. will be immune to price spikes,
even with its growing supply. "Disruptions actually affect the price of oil globally and the
more integrated we are in the world oil economy, the more we're going to be impacted by
it. If there's a price spike, we're going to feel the price spike but the weight of our production is going to
make that prices pike come from a much lower base in the future than it is now," Morse said on "Fast
Money."

New transportation infrastructure like pipelines and rail will open up domestic
and Canadian energy reserves pushes out Venezuela
Patti Dom February 11 2013 (Patti Domm is CNBC executive news editor, Domm was the
equities editor for the Americas at Reuters. She was also Wall Street editor at Reuters, She also
edited three CNBC books on personal investing. Domm serves on the board of the Financial
Womens Association of New York, University of Rutgers graduate; US Is on Fast-Track to Energy
Independence: Study) http://www.cnbc.com/id/100450133 -KY
2013Year of Change U.S. oil has been landlocked in the Midwest, lacking a strong
transportation system to bring supply to refining areas. A hodge podge of pipeline and rail transport has
taken over, as the industry awaits further pipeline development, including the stalled Keystone pipeline. But Citi points out that
2013 brings big change, what it calls "the most dramatic year of change ever in light sweet
crude flows." Pipeline capacity in the U.S. will expand by 1.7 million barrels a day, and up to
600,000 barrels of new rail capacity will be opened between the U.S. and Canada. The report said there is an
expected near doubling of receiving capacity of rail-shipped oil from 2012 to 2013. The
industry has innovated where necessary. Lacking pipelines, over half the North Dakota crude production, of 480,000 barrels a
day at the end of 2012, was estimated to have been moved by rail. Much of it went to St. James, La., and Port Arthur, Texas and
Mobile, Ala. Bakken is also being railed to facilities in Albany, N.Y., and New Brunswick, Canada. The report also points out the
big backlog in rail cars, many of them tank and hopper railcars. Citi said American Railcar Industries last fall said backlog for rail-
cars at the end of September was 61,400, and 75 percent were tank rail-cars. Tank rail-cars transport materials like crude,
chemicals, propane ethanol and asphalt. Independent North America The report describes how shipments of oil from
West Africa have been waning and as early as this summer, West African crude shipments into the U.S. Gulf Coast
could be unnecessary. East Coast refiners could also decrease dependence on West African crude,
replacing more imports with midcontinent oil, brought in by rail from Pennsylvania and Virginia to
upstate New York and New Jersey. That would also have a likely impact on gasoline prices, currently at record highs for this time
of year because of refining issues. There is also pressure to move light sweet crude from the Gulf Coast to higher value
locations. For instance, Morse expects to see light sweet crude move form the U.S. Gulf Coast to eastern Canada, displacing
more West African imports to North America. Citi expects that within in two years, there could be pressure for more exports to
other destinations or for pipelines on the East Coast or to change laws that would allow shipping of crude from the Gulf Coast to
the East Coast by non-U.S. flagged ships. By the end of 2014, Citi expects that sour Canadian crude should make its
way to the Gulf Coast by way of new pipelines and that should provide a challenge for
other producers shipping to the Gulf Coast, including Saudi Arabia, Iraq, Kuwait , Venezuela
and Mexico. Morse says they could be pushed out by Canadian crude, or these producers could
preserve market share by cutting prices. Canadian and U.S. crude should be delivered in greater
quantities to the U.S. East Coast and Gulf Coast by mid-decade. A happenstance of poor transportation
for all this energy wealth leaves Canadian crude locked in North America, but with exporting ability through the U.S. Gulf Coast
until pipelines are approved and built in Canada. Morse said if that were to happen, Canada could see an export boom to the
Pacific basin, turning Canadian crude into the benchmark for that region. The report notes that even before Canada builds
pipelines to the Pacific: "There should be exports of crude from the U.S. Gulf Coast - Canadian crude for sure and potentially U.S.
crude if the U.S. succumbs to economic logic and lifts current multiple bans on exports," the report said. Asked how his report
has been received so far, Morse said, with an ironic laugh, that he's had some "push back but not as much as last year."

Increased access to Canadian oil and increased gulf production will push out
Venezuela
Citi GPS February 2013 (Citi is one of the worlds largest nancial institutions, operating in all
major established and emerging markets. Contributors: Edward L Morse; Kingsmill Bond, CFA;
Eric G Lee; Tina M Fordham; Deane M Dray, CFA; Stan Fediuk; ENERGY 2020: INDEPENDENCE
DAY)
https://ir.citi.com/dY2GZTnBVKoXNrT1sVyHcQCSQNAUUsI%2F8pXCARkTtvUOa8zDR2EckBRtxCG
yJoDVW58uAgJ35%2BU%3D -KY
Soon after the onslaught of light, sweet crude production in 2013, new pipeline capacity
by 2014 could enable more than 1-m b/d of mostly sour Canadian crudes to reach the
Gulf Coast as well. At more or less the same time, US Gulf of Mexico production should reverse its
slide that started in 2010 as the post-Macondo drilling moratorium has ended and new
production growth should start in 2013. All of these developments start to challenge
suppliers of sour crude to US Gulf Coast markets. Producers with downstream marketing operations in the
US should literally find themselves swimming upstream against the tide to preserve market share. These producers
include Venezuela, Mexico and the Middle East.

Increased production on the North American continent will shift the
geopolitical oil market pushing out foreign dependence
Citi GPS February 2013 (Citi is one of the worlds largest nancial institutions, operating in all
major established and emerging markets. Contributors: Edward L Morse; Kingsmill Bond, CFA;
Eric G Lee; Tina M Fordham; Deane M Dray, CFA; Stan Fediuk; ENERGY 2020:
INDEPENDENCE DAY)
https://ir.citi.com/dY2GZTnBVKoXNrT1sVyHcQCSQNAUUsI%2F8pXCARkTtvUOa8zDR2EckBRtxCG
yJoDVW58uAgJ35%2BU%3D -KY
In the next five years, growing output in US, Canada and Mexico will have further impacts
on global oil and gas markets and the face of geopolitics. Rampant US shale oil production and
upgraded Canadian syncrude growth has already created a glutted situation in the US midcontinent. In the first phase
going forward as pipeline, rail and waterborne transportation allows US shale oil to reach
light sweet crude markets on the Gulf Coast, East Coast, West Coast and eastern Canada
light, sweet crude imports into the US are pushed out. West African producers have been
the main suppliers of light, sweet crude to the US and Canada, as North Sea production has shrunk,
and should see this import market dwindle. Eastern Canada would be reached by waterborne crude exports out of the Gulf
Coast, for which licenses have already been issued by the US Department of Commerce under the NAFTA free trade
agreement. Already as 2013 opened, significant shifts were under way on trade flows. More US crude was entering Canada,
not only pushing out West African crude, but also pushing Canadian offshore crude supply into Europe and away from
Canadian refiners. At the end of this phase, Louisiana Light Sweet (LLS) becomes a better marker for Atlantic Basin light sweet.
In the second phase, western Canadian upgraded syncrude and WCS-related bitumen blends should grow robustly
and increasingly reach the US Gulf Coast as pipeline capacity and rail is built out by 2014-15. Heavy Canadian
crudes would compete with Venezuelan, Mexican and Middle Eastern heavy crudes,
pushing out heavy Gulf Coast imports. Rail transportation could bring these crudes from Canada to Californian
markets, impacting imports there too. Before westward pipeline options are built (likely not until 2017-18 or later), Canadian
crudes may be the only other crude exportable from the US Gulf Coast other than exports from the US to Canada, current
rules also allow for re-export of foreign-origin crude oil, such as that from Canada. Syncrude exported from the Gulf Coast
could compete with Urals (a Russian export oil mixture), and receive a netback price to Alberta of Urals minus ~$10. In the
third phase, Canadian crudes begin to be exported from Canadss west coast after two key
pipelines are approved and built. As these crudes reach the lucrative Pacific Basin markets, Canada could enjoy
higher netbacks than, say, previously via US Gulf Coast exports. Canadian syncrude could find itself
competing with Russian ESPO crude for the role of Pacific Basin benchmark, keeping prices depressed
for Middle East crudes in the fastest growing market for oil in the world. Middle East crude to the Pacific Basin could
end up being priced off of Pacific benchmarks, not Oman/Dubai, causing loss of a ~$1-2/bbl premium. OPEC is thus
fundamentally challenged by the North American supply revolution as a result of on-the-
ground changes in production rather than by politics or intent, and while the US could end up stronger and
international oil prices could see a deflationary period, new instabilities could also come to the fore. Oil producers
increasing their social spending programs to assuage restless young, unemployed
populations look to face higher and higher fiscal breakeven prices for oil already well over $100
for many countries even as global oil prices look to be capped at $90/bbl this decade. There remains
a real possibility that such oil producing countries could, in the extreme case, become
failed states. The following sections run through these three phases of market impacts in greater detail. For the
geopolitical impacts, see the second half of this report, "Part II: The result is a very big difference for foreign policy and
geopolitics.

US energy independence increasing increased production and increased
efficiency mean a decline in imports
Joe Weisenthal November 12 2012 (Executive Editor at Business Insider, previously was a
correspondent for paidContent.org, as well as the Opening Bell editor at Dealbreaker.com. He
previously was a writer and analyst for Techdirt.com, and before that worked as an analyst for
money management firm Prentiss Smith & Co; The US Will Be The World's #1 Producer Of Oil
Before 2020, And A Net Exporter By 2030) http://www.businessinsider.com/iea-the-us-to-
become-the-worlds-top-oil-producer-before-the-year-2020-2012-11 -KY
The International Energy Agency is out with its new World Energy Outlook, a report which
makes some extremely positive comments about the future of US energy. In the factbook, the
IEA had this to say about US oil: An energy renaissance in the United States is redrawing the global
energy map, with implications for energy markets and trade. The United States, which currently imports
around 20% of its total energy needs, becomes all but selfsufficient in net terms by 2035
thanks to rising production of oil, shale gas and bioenergy, and improved fuel efficiency in transport.
Falling US oil imports mean that North America becomes a net oil exporter by around 2030.
This accelerates the ongoing shift in the international oil trade towards Asian markets, putting greater focus on the security of
strategic routes that link them to the Middle East. ... The United States is projected to become the
largest global oil producer before 2020, exceeding Saudi Arabia until the mid2020s. At the same time, new
fuelefficiency measures in transport begin to curb US oil demand. The result is a continued
fall in US oil imports, to the extent that North America becomes a net oil exporter around 2030. This accelerates the
switch in direction of international oil trade towards Asia, putting a focus on the security of the strategic routes that bring
Middle East oil to Asian markets. The United States, which currently imports around 20% of its total energy needs, becomes all
but selfsufficient in net terms by 2035 a dramatic reversal of the trend seen in most other energyimporting countries. This
chart, from the press presentation, shows the trajectory of US oil production.

US no longer dependent on Middle East oil
Gjeltan 12
(Tom Gjeltan; U.S. diplomacy and military affairs, first from the State Department and then from
the Pentagon; U.S. Rethinks Security As Mideast Oil Imports Drop
http://www.npr.org/2012/11/14/165052133/u-s-rethinks-security-as-mideast-oil-imports-drop)
In 2011, net imports accounted for 45 percent of U.S. petroleum demand. Of that, 52
percent comes from the Western Hemisphere. The top sources of crude petroleum and
oil products: Canada (29 percent), Saudi Arabia (14 percent), Venezuela (11 percent),
Nigeria (10 percent) and Mexico (8 percent). Source: U.S. Energy Information
Administration Credit: Stephanie d'Otreppe/NPR The Carter Doctrine has guided U.S.
policy ever since. When Iraq invaded Kuwait in 1990, threatening the Gulf oil supply, the
United States and its allies intervened. The public aim was to help Kuwait restore its
sovereignty, but that did not tell the whole story. "There were a lot of oil implications
underneath that whole episode and our response to it," says Roger Altman, who served
as deputy Treasury secretary in the Clinton administration. "I'm not saying we wouldn't
have liberated Kuwait absent the oil factors, but they had to play a big role." A Different
Energy Equation The oil picture has changed sharply since then, however. The share of
U.S. oil coming from the Gulf is down by about one-third. Much of that oil is going
instead to China, Japan and Korea. "The Asian states are really the prime consumers of
Middle East oil," says Mikkal Herberg, director of the energy security program at the
National Bureau of Asian Research. "We get really very little oil from the Gulf here in the
U.S. anymore. In the future we will need virtually no Persian Gulf oil to speak of." The
United States is now producing more of its own oil. Plus, it's getting more from Canada,
Mexico and Brazil. A new report from the International Energy Agency, or IEA, highlights
the shift in the Middle East oil trade. The Paris-based organization projects that by 2035
nearly 90 percent of Persian Gulf oil exports will go to Asia, with the United States getting
a negligible amount. "U.S.-Brazil relations will be quite important," says Altman, now
chairman of Evercore Partners, an investment banking firm. "Relations with Mexico will
be quite important. They will be more important, from an energy point of view, than
relationships with Iraq or Libya or potentially Iran." Where Mideast Oil Goes Demand for
Mideast oil is dropping in the U.S. and Europe, but growing dramatically in China and
India. Notes Units=millions of barrels per day 2035 figures are projections. Source:
World Energy Outlook, International Energy Agency Credit: Stephanie d'Otreppe/NPR
AT: Entanglement
Global markets mean the energy independence doesnt stop entanglements
Gjeltan 12
(Tom Gjeltan; U.S. diplomacy and military affairs, first from the State Department and then from
the Pentagon; U.S. Rethinks Security As Mideast Oil Imports Drop
http://www.npr.org/2012/11/14/165052133/u-s-rethinks-security-as-mideast-oil-imports-drop)
But there may also be an oil-related rationale for maintaining the U.S. security presence
in the Gulf. Oil is traded in a global market. The U.S. may not need as much oil from
the Persian Gulf as it used to, but it does have an interest in keeping that oil flowing. A
disruption of the Gulf oil trade would raise the oil price for everybody. "In a sense, the
U.S. has a new dilemma," says Herberg. "Its access to oil is increasingly very secure in
the Western Hemisphere. [There is] little reliance on the Gulf. But in terms of the oil
price, the global oil markets, and the impact on the global and U.S. economy, that flow
of oil from the Gulf remains a vital interest." If the price of oil were to skyrocket
because of some trouble in the Persian Gulf, it would mean a bigger trade deficit in the
energy sector, a bigger share of the U.S. national income leaving the country. Carl Pope,
the former chairman of the Sierra Club, says that is the reality to keep in mind. "It's not
so much the barrels of oil we import," Pope says. "It's the hundreds of billions of dollars
we export that threaten our security." Those U.S. aircraft carriers in the Persian Gulf may
be needed for a while yet.
AT: Hormuz
Iran wont close the straits
-alienates China, doesnt harm US oil imports significantly, ensures military action against
nuclear facilities
Singh '12
Michael, managing director of The Washington Institute and a former senior director for Middle
East affairs at the National Security Council. "The real Iranian threat in the Gulf," 1/3/12
shadow.foreignpolicy.com/posts/2012/01/03/the_real_iranian_threat_in_the_gulf AD 3/20/12
Iran's bellicose rhetoric and Gulf wargames in recent days have given rise to the
question of whether Tehran could close the Strait of Hormuz. As many analysts have
observed, the answer is no -- not for a meaningful period of time. Less frequently
addressed, however, is whether Iran would even try. The answer to that question is also
"no" -- even the attempt would have devastating strategic consequences for Iran. The
presumable target of an Iranian effort to close the Strait would be the United States.
However, while we would of course be affected by any resulting rise in global oil prices,
the U.S. gets little of our petroleum from the Gulf. The U.S. imports only about 49
percent of the petroleum we consume, and over half of those imports come from the
Western Hemisphere. Less than 25 percent of U.S. imports came from all the Gulf
countries combined in October 2011 -- far less than is available in the U.S. Strategic
Petroleum Reserve, were Gulf supplies to be interrupted. China, on the other hand,
would find its oil supplies significantly threatened by an Iranian move against the Strait.
China's most significant oil supplier is Saudi Arabia. China also happens, however, to be
Iran's primary oil customer and perhaps its most important ally: Beijing provides Iran
with its most sophisticated weaponry and with diplomatic cover at the United Nations.
Thus a move to close the Strait would backfire strategically by harming the interests of -
- and likely alienating -- Iran's most important patron and cutting off Iran's own
economic lifeline, while doing little to imperil U.S. supplies of crude. It is perhaps no
coincidence, then, that China quickly dispatched Vice Foreign Minister Zhai Jun to Tehran
in the wake of Iran's bellicose statements. In typically opaque fashion, the Chinese
Foreign Ministry said only that "China hopes that peace and stability can be maintained in
the Strait;" this is essentially diplo-speak for "Cool it." Even if Iran ignored these
considerations and proceeded with an effort to close the Strait, the U.S. and others
would move to keep it open, and would be unlikely to stop there. As Iran has crept closer
to a nuclear weapons capability, the possibility of military action against Iran has also
become more imminent. President Obama has been reluctant to threaten Iran militarily,
and any U.S. president would think long and hard before engaging in another armed
conflict in the Middle East. An effort by Iran to shut down the oil trade in the Gulf,
however, would make such a decision straightforward. The U.S. would react with force,
and once engaged in hostilities with Iran, would likely take the opportunity to target
Iran's nuclear facilities and other military targets. It is difficult to envision any scenario
beginning with an Iranian effort to close the Strait of Hormuz that does not end in a
serious strategic setback for the Iranian regime.
Irans changed its stance theyre reassuring Kuwait they wont close
Reuters 3/20
"Kuwait says Iran has assured it will not shut Hormuz," 3/20/12
www.reuters.com/article/2012/03/20/us-kuwait-iran-hormuz-idUSBRE82J0JG20120320, AD
3/20/12
(Reuters) - Iran has assured Kuwait it will not try to close the vital Strait of Hormuz
shipping route, Kuwait's ruler said in remarks carried by state-run news agency KUNA
on Tuesday. Sheikh Sabah al-Ahmad al-Sabah said Kuwait nevertheless had been working
for "a long time" on building up an oil stocks outside the Gulf to ensure steady supplies to
customers. After threats by Iran that it could shut the most important oil transit channel
in the world, if Western governments stop it from selling crude, Kuwait's emir and other
Gulf leaders have sought assurances that Tehran will not follow through with the threats.
"(We) have contacted officials in Iran to ensure that no action is taken to close the Strait
of Hormuz," according an English version of his remarks to Japanese press distributed by
Kuwait state news agency KUNA. "We have received assurances from Iran that it will not
take this step," the emir said during a visit to Japan, one of the Gulf oil exporter's biggest
customers. "For a long time, Kuwait has been working on providing a stockpile of oil
through its global companies outside the Gulf region to ensure constant supply," he said.
Iran could not feasible close down the Strait.
Gholz and Press 8
Eugene Gholz, associate professor of public affairs, Lyndon B. Johnson school of Public Affairs @
the University of Texas, and Daryl G. Press, associate professor of Government @ Darmouth
College. Oil and U.S. National Security in the Persian Gulf: An Over-the-Horizon Strategy
http://www.comw.org/qdr/fulltext/08Gholz&Press.pdf
But setting the bar for defender performance at a return to normal commercial activities
is unnecessarily high: nothing is sacred about the current oil industry pattern of
operations; what is strategically important is that sufficient oil supplies reach the global
market to prevent an acute disruption. Although fully suppressing a harassment campaign
would be a challenge, a US adversary intent on substantially disrupting oil flow would
also face a daunting mission. For example, an Iranian attempt to target tankers passing
through the Strait of Hormuz would have to be a sustained effort not a one-shot strike.
Iran could not physically close the Strait of Hormuz by scuttling a ship in the narrow
waterway; even at its narrowest point the navigable channel for large oil tankers is nearly
twenty miles across. The much narrower "traffic separation scheme" channel recognized
by the International Maritime Organization for peacetime transit is by no means the only
place where supertankers can sail. So instead of hitting just a handful of ships in a
constrained space, Iranian attackers would need to disable tankers across a wide area
day after day for an extended period. Furthermore, Iran would have to contend with the
many potential targets that pass through the Strait every day. Roughly a dozen
supertankers make the transit in each direction each day, plus container ships, bulk
carriers, and other vessels that would complicate Iranian operations in the haze that
typically shrouds the Gulf. All of the other shipping would absorb scarce Iranian anti-
shipping assets that the Iranians would prefer to expend against the oil tankers.
Moreover, tankers are difficult targets. They are massive ships that even dwarf aircraft
carriers, and the severity of weapons damage to ships scales dramatically with size.
Modern tankers have two layers of thick hulls designed to prevent oil spills, and they
have few vulnerable points where a "lucky" shot could do much damage. It is likely to
take many hits to cripple a large tanker which would require even more missile shots,
since the attackers should anticipate that several will miss or malfunction. An anti-
shipping campaign that would threaten to disrupt a substantial fraction of oil
throughput would rapidly expend Iran's limited supply of missiles. Finally, the world
would not sit idly as an aggressor tried to choke off oil supplies. Other oil suppliers
around the world would have incentives to activate their spare production capacity.
Spare capacity varies over time, depending on market conditions, but some exists even in
today's "tight" market, and more is likely to be available from time to time in the future.
And of course American (and allied) military forces, even if deployed over-the-horizon,
would rapidly react to undermine the aggressor's freedom to conduct its attacks. Even a
highly imperfect American counterforce operation one that actually destroyed very few
of the aggressor's units would surely force the attacker to pass up some good
opportunities to launch strikes or to launch hurried attacks that are more likely to miss
their targets.
There is no impact to closing the Suez
Learsy 11
Raymond J. Learsy, Scholar and author, "Over a Barrel: Breaking Oil's Grip on Our Future". Risks
to the Suez Canal Set the Stage for Falsely Hyping the Price of Oil. February 6, 2011.
http://www.huffingtonpost.com/raymond-j-learsy/the-risks-to-the-suez-can_b_819309.html
Over the past days, the airwaves and talking heads have been frightening us with somber
predictions of what would happen to the price of oil should current events in Egypt
shutter the canal. The oil boys and their allies can barely contain themselves in their
appearances of concern and like minded predictions of calamity, such as today's Reuters
report quoting Imad al-Atiqi, member of Kuwait's Supreme Petroleum Council -- "I expect
oil to reach $110 during the first half of 2011... A huge amount of oil passes through the
Suez Canal..." thereby ever nudging oil prices skyward with Brent Crude already
surpassing $100 a barrel. Yet has anyone stopped to determine what the closure of the
Suez Canal would actually mean to the oil market in dollars and cents? In the shipping
world the type of vessel that can transit the Suez Canal has its own designation, named a
"Suezmax" category. The typical deadweight of a Suezmax oil tanker is about 240,000
tonnes. Now, approximately 7.1 barrels of oil make up one metric tonne. Therefore, a
240,000 tonnes deadweight tanker carries some 1.7 million barrels of oil. According to the
New York Times, "Taking cargo around Africa would add about 16 days time to delivering
oil to world markets." Calculating a per diem charter rate for a Suezmax tanker at $50,000
per day (and probably less), brings the additional cost of transporting a cargo of oil, lifting
1.7 million barrels around Africa, to $800,000 per voyage. More to the point, the
additional cost per barrel of oil would be 47 cents per barrel. And these 47 cents would
apply only to the some 1.8 million barrels of crude oil that are transported through the
canal (an additional 2mm plus barrels can be transported through Egypt overland via the
Sumed pipeline). The additional cost of $800,000 for transporting these 1.8 million
barrels around the horn of Africa, distributed over the world's daily consumption of oil
of 85 million barrels, would settle out at just under a penny per barrel. All said, the
additional 16 days would be a problem if the oil market were in a state of hand to mouth.
Fortuitously, oil stocks are bulging throughout the world and the sixteen days additional
steaming time can be easily accommodated with ample leeway to alter delivery
schedules factoring in these changed logistics. Clearly, the closing of the Suez Canal to the
oil trade would be a hindrance but hardly the disaster portrayed in the media and our
friends at OPEC.
Iran Will Sell Oil
Global oil market means Iran will get oil money regardless
Nivola 8researching @ Brookings Institute
Pietro, Rethinking Energy Independence Governance Studies at Brookings December 30
Would that matters were so simple. The offending oil regimes will enrich themselves
whether or not America does business with them. Iran, for example, has not sold a single
barrel of oil to the United States since the hostage crisis in 1979. Yet the Iranians continue
to rake in money from the oil they sell to Europe, Japan, China and other major clients. The
result? Tehran remains defiant, disagreeable and emboldened. So much for us reaping any
geostrategic advantage by abstaining from Iranian oil.

Iran cant use oil as a leveragemajor consumers purchasing oil elsewhere and
producers promising to ramp up production if Iran cuts off supply
Ghitis 12
Frida, World Citizen: Disabling Iran's Oil Weapon
[http://www.worldpoliticsreview.com/articles/12035/world-citizen-disabling-irans-oil-weapon]
June 7
Much has happened in the ensuing months. Before Iran has had a chance to decide if it wants to stop the flow
of its own petroleum products, the West is planning to slash purchases of Iranian oil. A European
Union embargo is scheduled to start in July, and China has already cut its purchases of
Iranian oil by about a quarter. Even Turkey has sharply reduced purchases of Iranian oil. Under
normal circumstances, squeezing the flow of crude oil from the worlds second-largest
producer would be a form of self-flagellation for the West. But oil supplies have been
deliberately boosted from other sources, just as demand is easing because of economic problems.
Saudi Arabia, which sides with the West against Iran, its historical rival, has increased oil
production to the highest levels in 23 years. And overall OPEC output has reached the highest level since 2008.
Iran plans to pressure OPEC to lower production during this months meeting, hoping to raise prices. Iran still has the ability to
disrupt oil markets, which will undoubtedly affect consumers everywhere. But major oil-importing nations have
sent notice that they are prepared to deal with threats to the global supply. During last years war
in Libya, another important oil exporter, the International Energy Agency surprised markets
with its announcement that it would release 60 million barrels from the global strategic
petroleum reserves. The announcement alone caused prices to drop 4.5 percent in one day. As tensions have heated up
with Iran, Washington has persuaded its allies to draw up a similar plan. During last months G-8
meeting in Chicago, the worlds major economies agreed to coordinate their response and work
together to lower oil prices should a confrontation with Iran make it necessary. Meanwhile, as
the West moves to reduce its dependence on Iranian oil or on oil that passes through the
Strait of Hormuz, Gulf oil producers are seeking alternate routes to bring their
hydrocarbons to the global market. The United Arab Emirates, the fourth-largest exporter, is about
to open a 225-mile pipeline that will allow it to bypass Hormuz to reach shipping terminals
for its oil exports. And Abu Dhabi is reportedly planning yet another pipeline for its
liquefied natural gas, also allowing it to reach tankers without passing through the narrow
strait. In the meantime, the U.S., the worlds biggest consumer of oil, has managed to considerably lower
its reliance on crude oil imports. Higher domestic oil and natural gas production has resulted in a significant decline
in Americas need to buy from international markets, bringing seaborne imports to the lowest levels in more than 15 years.
America still imports 45 percent of the oil it consumes, and the price of those imports is set by the global commodities markets.
That means that the U.S., like any country that imports fuel, would feel the effects of a conflict in the worlds top oil-producing
region, the Persian Gulf. But, Irans ability to unilaterally inflict pain has been sharply reduced. Even
more troubling for Iran if a war started today, global oil supplies are better prepared to withstand
the shock than they have been in a long time. As the world worries that Iran may build a
nuclear weapon, Irans most powerful weapon to keep a Western military strike at bay has
become much less effective.
No Iran Leverage
Iran cant successfully use oil as leveragetoo reliant on oil revenues
Crane et al 9
Keith, Andreas Goldthau, Michael Toman, Thomas Light, Stuart E. Johnson, Alireza Nader, Angel
Rabasa, Harun Dogo Imported Oil and U.S. National Security RAND
Limitations. The Iranian governments threats to reduce oil exports have been empty because
it depends so heavily on them to finance its expenditures. If oil prices were to rise, Iran might be
tempted to announce a small cutback to increase prices, especially if the Ahmad-Nejad government believes that it would
recoup more from higher prices than it would lose through lower export volumes. However, a large reduction in oil
export volumes would result in severe financial and balance-of-payments difficulties for
the Iranian government, especially as foreign currency reserves decline.2 Irans ability to
close the strait indefinitely is doubtful. Iranian naval forces are less capable than the U.S.
5th Fleet, stationed in Bahrain. In addition to the likely military response, an Iranian
attempt to close the strait would result in severe financial hardship for the Iranian
government because of the fall in its own exports. An attempt to block the strait would
severely damage its relations with the Cooperation Council for the Arab States of the Gulf (Gulf Cooperation
Council, or GCC) states. Iran is heavily dependent on its commercial relations with the United
Arab Emirates, especially Dubai, and cannot afford to rupture its relations with that emirate.
Dependence Good Solves Iran
Turn dependence solves a nuclear Iran
Howard 8
Roger, An Ode to Oil, WSJ, http://online.wsj.com/article/SB122791647562165587.html
This identification wholly ignores the dependency of foreign oil producers on their consumers,
above all on the world's largest single market -- the United States. Despite efforts to diversify their economies, all of the
world's key exporters are highly dependent on oil's proceeds and have always lived in fear of the moment
that has now become real -- when global demand slackens and prices fall. The recent, dramatic fall in price per barrel -- now
standing at around $54, less than four months after peaking at $147 -- perfectly exemplifies the producers' predicament. So
even if such a move were possible in today's global market, no oil exporter is ever in a position to alienate
its customers. Supposed threats of embargoes ring hollow because no producer can assume that its own
economy will be damaged any less than that of any importing country. What's more, a supply disruption would always seriously
damp global demand. Even in the best of times, a prolonged price spike could easily tip the world into economic recession,
prompt consumers to shake off their gasoline dependency, or accelerate a scientific drive to find alternative fuels. Fearful of this
"demand destruction" when crude prices soared so spectacularly in the summer, the Saudis pledged to pump their wells at full
tilt. It seems that their worst fears were realized: Americans drove 9.6 billion fewer miles in July this year compared with last,
according to the Department of Transportation. Instead, the dependency of foreign oil producers on their customers plays
straight into America's strategic hands. Washington is conceivably in a position to hold producers to ransom by threatening to
accelerate a drive to develop or implement alternative fuels, realizing the warning once uttered by Sheikh Ahmed Zaki Yamani,
the former Saudi oil minister who pointed out that "the Stone Age did not end for lack of stone." Back in 1973, as they protested
at Washington's stance on the Arab-Israeli dispute, Middle East producers were in a position to impose an oil embargo on the
Western world. But a generation later, technological advances, and the strength of public and scientific concern about global
warming, have turned the tables. The United States has powerful political leverage over producers
because it holds the key to future oil supply as well as market demand. The age of "easy oil" is over, and as
fears grow that oil is becoming harder to get, so too will the dependency of producers on increasingly sophisticated Western
technology and expertise. Such skills will be particularly important in two key areas of oil production. One is finding and
extracting offshore deposits, like the massive reserves reckoned to be under the Caspian and Arctic seas, or in Brazil's recently
discovered Tupi field. The other is prolonging the lifespan of declining wells through enhanced "tertiary" recovery. Because
Western companies have a clear technological edge over their global competitors in these hugely demanding areas, Washington
exerts some powerful political leverage over exporters, many of whom openly anticipate the moment when their production
peaks before gradually starting to decline. Syria illustrates how this leverage can work. Although oil has been
the primary source of national income for more than 40 years, production has recently waned dramatically: Output is now
nearly half of the peak it reached in the mid-1990s, when a daily output of 600,000 barrels made up 60% of gross domestic
product, and can barely sustain rapidly growing domestic demand fueled by a very high rate of population growth. With enough
foreign investment Syrian oil could be much more productive and enduring, but Washington has sent foreign companies, as well
as American firms, a tough message to steer well clear. It is not surprising, then, that the Damascus regime regards a
rapprochement with the U.S. as a political lifeline and in recent months has shown signs of a new willingness to compromise.
The same predicament confronted Libya's Col. Moammar Gadhafi, who first offered to surrender weapons of mass destruction
during secret negotiations with U.S. officials in May 1999. Facing a deepening economic crisis that he could not resolve without
increasing the production of his main export, oil, Col. Gadhafi was prepared to bow to Washington's demands and eventually
struck a path-breaking accord in December 2003. Col. Gadhafi had been the "Mad Dog" of the Reagan years, but oil's influence
had initiated what President Bush hailed as "the process of rejoining the community of nations." Oil could also help the
outside world frustrate the nuclear ambitions of Iran, whose output is likely to steadily decline over the
coming years unless it has access to the latest Western technology. Many wells are aging rapidly and the
Iranians cannot improve recovery rates, or exploit their new discoveries, unless Washington lifts
sanctions, which have been highly successful in deterring international investment.

That leads to global proliferation
Inbar 6
Professor of Political Science at Bar-Ilan University and the Director of the Begin-Sadat (BESA)
Center for Strategic Studies, The Need to Block and Nuclear Iran, Middle East Review of
International Affairs, http://meria.idc.ac.il/journal/2006/issue1/jv10no1a7.html
The nuclear ambitions of the Islamic Republic of Iran are, of course, a challenge to the international nuclear
non-proliferation regime (NPT). A nuclear Iran might well bring an end to this regime and to
American attempts to curb proliferation in the Middle East and in other parts of the world.
Indeed, the emergence of a nuclear-armed Iran would have a chain-effect, generating further
nuclear proliferation in the immediate region. Middle Eastern leaders, who invariably
display high threat perceptions, are unlikely to look nonchalantly on a nuclear Iran. States
such as Turkey, Egypt, Saudi Arabia, and, of course, Iraq would hardly be persuaded by the
United States that it can provide a nuclear umbrella against Iranian nuclear blackmail or
actual nuclear attack. American extended deterrence is very problematic in the Middle East.[16] Therefore, these
states would not resist the temptation to counter Iranian influence by adopting similar
nuclear postures.

Nuclear war
Hellman, Professor @ Stanford, 9
Martin Hellman, is a member of the National Academy of Engineering and Professor Emeritus at
Stanford University. His current project applies risk analysis to nuclear deterrence. 2009. How
Confident Should a Nuclear Optimist Be?.
http://www.wagingpeace.org/articles/2009/09/09_hellman_nuclear_optimism.php.
In a five-page essay in the September 7 issue of Newsweek, Jonathan Tepperman explains Why Obama Should Learn to Love the
Bomb by quoting the dean of nuclear optimism, Prof. Kenneth Waltz: We now have 64 years of experience since Hiroshima. Its
striking and against all historical precedent that for that substantial period, there has not been any war among nuclear states.
Tepperman calls for coldblooded calculations about just how dangerous possessing them *nuclear weapons+ actually is. This
response rises to that challenge and shows that the data used to justify nuclear optimism is highly
misleading. In the same way that life-insurance companies utilize statistical analysis to produce cold blooded projections of
fatality rates for individuals, statistics tells us that, to be 95% confident of our statements, we cannot
project the last 64 years of nuclear non-use more than 21 years into the future. And, with
the fate of the earth at stake, a higher confidence level would seem appropriate. To be
99% confident about our statements, nuclear optimism can only be justified for another 14
years. Statistics does not rule out that we might survive significantly longer than these time horizons, but it does say that the
data thus far cannot be used to justify such hopes with any degree of confidence. To understand why we can only be confident
of surviving time horizons significantly shorter than the 64 years of non-use already experienced, it helps to consider
related space shuttle optimism arguments that led to the loss of Challenger and her crew. The
engineers who had designed the shuttles booster engine tried to delay Challengers final launch because the weather that
morning was unusually cold, and previous cold weather launches had a higher incidence of partial burn through on O-rings
designed to seal the booster. But those at NASA responsible for the launch decision suffered from the common misperception
that the shuttles prior 23 successful launches provided ample evidence that it was safe to proceed with launch number 24.
Instead, as we now know, that launch suffered catastrophic burn through of the O-rings, with resultant loss of the shuttle and
her entire crew. NASAs optimistic reasoning was literally dead wrong. Even 23 perfect launches
would not have provided sufficient evidence to confidently predict success for launch
number 24, and previous near misses, in the form of partial O-ring burn through, made optimism even more outrageous
and unsupportable. The unassailable, cold blooded conclusion provided by statistics and Challengers deadly lesson is that 64
years of nuclear non-use, particularly with near misses such as the Cuban missile crisis, is
no cause for nuclear optimism.
AT ME DisruptionDeliberate
No deliberate supply disruptions from the MEeconomic self interest
outweighs
Auerswald 7senior fellow @ Kauffman Foundation
Philip, The Irrelevance of the Middle East *http://www.the-american-
interest.com/article.cfm?piece=269] May/June
Petro-alarmism focused on the Middle East ignores the adverse impact on oil-producing
countries of withholding output. The near-apocalyptic scenarios frequently offered up
require oil producers to behave in ways that would be at least as damaging to their own
interests as to those of oil-consuming countries. 2 2. See James Woolsey, Testimony Before the Senate
Committee on Agriculture, Nutrition and Forestry, May 6, 2004; and Anne Myers Jaffe, United States and the Middle East:
Policies and Dilemmas, National Commission on Energy Policy, Ending the Energy Stalemate (December 2004). In reality,
the economies of the oil-producing countries of the Middle East are even more dependent
on oil revenues than the economies of consuming countries are on the crude they import.
(Saudi oil export revenues account for 9095 percent of the Kingdoms export earnings,
7080 percent of its state revenues and roughly 40 percent of the countrys GDP.) As a
result, producers have at least as much reason to be concerned about sustained high oil
prices as do oil consumers. Regardless of the strident, politically motivated pronouncements selected leaders from
the late Saddam Hussein to Ayatollah Ali Khomenei may make about their oil weapon, it does them (and their local political
patrons) little good to sell at very high prices today if the effect is to provide their globally distributed customers with an
incentive to develop substitutes for their product tomorrow. Producers who wish to maximize long-term
revenue will seek stable oil prices at the highest level that does not induce substantial
investment in substitutes. They will want particularly to dissuade research investments by customers with an
advanced ability to develop alternativesa category that includes the United States. For the past twenty years, oil
producers have had good reason to celebrate success in this regard. That leading oil
producers care at least as much about future profits as they do about present ones is borne
out by both word and deed. Adel al-Jubeir, a former foreign policy adviser to then-Saudi
Crown Prince Abdullah and now Saudi Arabias Ambassador to the United States, offered
this candid summary for the May 27, 2004, Wall Street Journal, when the strategic leverage of oil producers was
arguably at its height: Weve got almost 30 percent of the worlds oil. For us, the objective is to
assure that oil remains an economically competitive source of energy. Oil prices that are
too high reduce demand growth for oil and encourage the development of alternative
energy sources. The Saudi response to the recent surge in oil prices provides credence to
this claim: The U.S. Energy Information Agency estimates that from 2002 to the first half of 2005 Saudi Arabias total
oil production increased dramatically from 8.5 to 11.1 million barrels per day. Explaining
why the Saudis chose to help the United States and other oil-importers by boosting
production does not require resorting to conspiracy theories. It requires only understanding Saudi self-
interest.

AT ME DisruptionAT Leaders Irrational
No, theyre nothistory proves
Auerswald 7senior fellow @ Kauffman Foundation
Philip, The Irrelevance of the Middle East *http://www.the-american-
interest.com/article.cfm?piece=269] May/June
Nonetheless, it is possible that leadership in one or more of the major Middle Eastern oil-
exporting countries might at some point put ideological objectives ahead of economic
ones, thus acting irrationally from a profit-maximizing standpoint. The primary economic weapon at the disposal
of such a rogue oil-exporting country would be to sharply reduce exports in an effort to destabilize prices. In doing so, a
rogue state would drive prices only marginally higher, but it would punish itself with
sharply reduced revenues. It would also benefit other oil producers and induce consumers to change
their behavior. In short, the rogue would suffer, oil-producing competitors would absorb the abandoned market share, and
users would substitute. The worst-case scenario most frequently cited in this regard is a sudden change of regime in Saudi
Arabia, resulting in an abrupt termination of Saudi oil exports. Those with such concerns forget that we have
seen a close approximation of that scenario once before. A look at the output behavior of
Iran following the ascent of Ayatollah Khomeini is instructive. An initial sharp drop in
Iranian oil output between 1979 and 1980 was followed by steady output growth through
the 1980s (despite a war with Iraq) and that accelerated its pace in the 1990s. The bottom
line is that, for the past quarter century, the oil output decisions of Islamic Iran have been
no more menacing or unpredictable than Canadas or Norways.
AT Strait of Hormuz DisruptionDeliberate
Iran wont shut down the Strait of HormuzUS military deters and alternate
supply routes mean it would be ineffective
Rousseau 12political science and IR associate professor
Richard, Strait of Hormuz: Irans bluff and the wests fears
[http://www.opendemocracy.net/richard-rousseau/strait-of-hormuz-iran%E2%80%99s-bluff-
and-west%E2%80%99s-fears] January 19
On January 3, Tehran threatened to block off the worlds most strategically important crude oil export route, the Strait of
Hormuz. However, this gateway to oil importing countries no longer has the strategic significance that
many observers attribute to it, as only one-fourth or even one-fifth of the worlds crude export
currently pass through the strait, which means that Irans threats are not perceived as so intimidating as would
once have been the case. Finding itself under siege following the tightening of the United Nations sanctions, the Mullahs
regime is still trying to forge ahead with its nuclear programme. To get its own way, it is
hanging over the whole world the spectre of a blockade of the Strait of Hormuz. It is claimed
that if the Iranians take action the world oil price will increase by a staggering 50%, reaching $150 a barrel. Such an oil price hike
would cause chaos in the oil market and wreak havoc on an already stressed global financial situation. Already the threats
have produced a robust response. We made very clear that the United States will not
tolerate the blocking of the Strait of Hormuz. Thats another red line for us and we will respond to them,
thundered Leon Panetta, US Secretary of Defense, on January 8. Yet, when looking closely at the current situation in the Persian
Gulf, it quickly becomes apparent that Irans threats, and the reaction of those being threatened, are grossly disproportionate to
what can feasibly be brought about. Does Iran have the capability to display such bravado in the face
of opposition from the international community? The Iranian Navy has several Russian Kilo Class
submarines, fast frigates and corvettes, which are all able to hinder supertanker movement in the Hormuz Strait. They are
armed with Russian-designed torpedoes which can seriously damage oil tankers. However, in the event of a first strike by Iran,
the American response would be immediate and devastating. The US Fifth Fleet has been anchored for years
in Manama, Bahrain, not far from the Strait of Hormuz. If the Iranians send their ships to
sea and launch missiles against commercial or allied ships in a tanker war, they will be
exposed within a few hours to the rapid destruction of their fleet and military technology.
All response scenarios show that, at the very beginning of an offensive, the US and its allied Air Forces would destroy ports and
shipping terminals of Bandar Abbas and Kish Island (part of the Hormozgan Province of Iran), cutting off the Iranian Navy from
its rear operating bases. Ultimately, Tehrans only credible option is to disrupt activity in this key
Gulf trade route. Is the Strait of Hormuz actually vital to the worlds oil market? The answer is: Much less than it used to
be. While 40% of the worlds crude oil exports passed through the Strait in the early 2000s, this percentage has been
significantly decreased in recent years. Currently, only 20-25% of the worlds total crude exports originate from the Gulf.
Saudi Arabia, the second largest producer of crude oil, would be the country most affected
by a blockage. The Saudi Ras Tanura offshore oil terminal exports approximately 6 million barrels a day through the Strait
of Hormuz. However, the Saudis have an alternative means of transporting their crude oil to
world markets. They could quickly reactivate their defunct Trans-Arabian pipeline and send
their crude to the Red Sea coast, as they previously did, further reducing the significance of
the Strait of Hormuz route. On the consumer side, contrary to popular belief, the west would not be the first, or even
main, victim of an Iran-US war in the Persian Gulf. Eighty five percent of the oil extracted in the Persian Gulf is shipped to Asia
(China, Japan, India and South Korea). These countries and that region more generally would bear most of the burden of
such a war. The closing of the Strait of Hormuz would also greatly affect the Iranians themselves. Two million barrels of Iranian
oil pass through the Strait every day en route to Asian customers.
No shutdownstrait is too large for Irans navy to control and other pipeless
are being built that solve the impact
Luft 12co-director @ Institute for the Analysis of Global Security and US
Energy Security Council advisor
Gal, Choke Point
[http://www.foreignpolicy.com/articles/2012/07/19/choke_points?page=0,0] July 19
Today, Iran's economy is in shambles. Its oil exports have plummeted by nearly 50 percent
since last year because of U.S. and European sanctions, while its annual inflation rate has
surpassed 30 percent and its currency has declined by 50 percent against the dollar. And the
more desperate the Iranians become, the more aggressively they threaten to block the Strait of Hormuz, through which 40
percent of the world's seaborne oil passes each day. In late June, the commander of the Iranian army's
ground forces, Brig. Gen. Ahmad Reza Pourdastan said that "if conditions arise in which the Iranian
nation feels threatened, it will use all [its] means of pressure, including in the Strait of
Hormuz" -- a sentiment that his superior, Maj. Gen. Seyed Hassan Firouzabadi, echoed a few days later. Iranian naval officials
have confirmed that they have already installed sea-to-sea missiles on small, speedy patrol vessels with advanced maneuvering
capabilities. Later this month, Iran's parliament is scheduled to vote on a bill to block passage through the Strait to oil tankers
linked to countries applying new European Union (EU) sanctions -- a measure that would apply to 27 EU counties and the United
States and violate the Law of the Sea Treaty, which permits passage through the Strait in both directions even though part of
the navigation route falls within Iran's territorial waters. So far, Iran's threats have invited yawns from the
oil market, which seems to be more concerned about declining demand from stagnant
economies than a drop in supply. (Oil prices have dropped nearly 20 percent since April.) And there are
good reasons to think Iran is bluffing: At its narrowest, the Strait is about 25 miles wide -- a
fact that even the most neurotic traders seem to have grasped. Blocking an area as wide as Singapore will
require a vast and sustained naval effort that the Iranians cannot muster. To be sure, they could
mine coastal waters and harass the occasional vessel, but closing the Strait for a meaningful length of time
is a far-fetched scenario that would undoubtedly trigger a swift and decisive U.S. military
response. Yet Tehran would have us think otherwise. What the mullahs, their generals, and the 100 Iranian lawmakers
who've expressed support for the bill to block the Strait should know is that, like the Ottomans a century ago, they are likely to
be the prime casualties of any real or threatened disruption to maritime trade. The reason is simple: It's not about the heavy
price the Iranians would pay if they went through with a military effort to close the Straits. In fact, they're paying the price
already, as talk of closure has already made the Strait of Hormuz increasingly irrelevant. In
recent weeks, two pipelines that bypass the Strait have become operational. In the United Arab
Emirates (UAE), the Abu Dhabi Crude Oil Pipeline can now pump as much as 1.5 million barrels per day from Habshan in Abu
Dhabi some 230 miles south to Fujairah in the Gulf of Oman. This represents 60 percent of the UAE's oil
exports already, and this capacity can be easily expanded to almost 2 million barrels per day. In addition
to becoming the new outlet to the Arabian Sea, Fujairah will have storage space for 12 million barrels as well as three sub-sea
pipelines and mooring buoys for deepwater tanker loading. Saudi Arabia has also invested in infrastructure that enables it to
bypass the Iranians. In June, it reopened the Iraq Pipeline through Saudi Arabia (IPSA), which was confiscated from Iraq in 2001
and travels from Iraq across Saudi Arabia to a Red Sea port north of Yanbu. This pipeline will be able to carry 1.65 million barrels
per day. Together, these two pipelines could eventually reduce oil traffic in the Strait by 25 percent. But this is only the
beginning. At least two more projects connecting Saudi Arabia to Oman and Yemen are
under consideration. Iraq also has an outlet, which is currently being expanded, to the port of
Ceyhan in Turkey via the Kirkuk-Ceyhan pipeline. Should whatever regime replaces Syrian President Bashar al-Assad be
interested, Iraq may also revive the Iraq-Syria pipeline as another means of shipping crude
from southern fields to the Mediterranean. These projects have the potential to remove
millions of additional barrels from Hormuz's busy schedule. But it is not only Iran's neighbors who are
behind the efforts to reduce the strategic importance of Hormuz on their export lifeline -- China's also involved. Like Tsarist
Russia (though for the opposite reason), fuel-hungry China is fixated on keeping its economic lifelines open and under control.
China is one of the top purchasers of Iranian oil, and though it has been less than cooperative in the international boycott over
Tehran's nuclear program, its allegiance to Iran pales in comparison to its dependency on the other Gulf energy exporters --
Saudi Arabia, Iraq, Kuwait, and the UAE -- which in total supply 35 percent of China's crude imports, or three times the volume
supplied by Iran. Securing the flow of oil from those countries is therefore a paramount objective for Beijing. It was a Chinese
state-owned construction company that built the pipe to Fujairah, and there are also plans in the works to build an oil pipeline
connecting Pakistan's Arabian Sea port of Gwadar to Xinjiang province in western China. If built, this pipeline will be able to
collect oil from African ports and the alternative terminals mentioned above and pump it directly to China. Much of Iran's
current regional clout derives from its geographical location, but its antagonistic behavior
is driving the country's neighbors and clients to seek ways to defuse this power and
eliminate their dependence on the Strait of Hormuz. The effort to reduce Hormuz traffic presents the West
with a new opportunity to augment its current Iran containment strategy while eliminating for good one of the biggest
impediments to global energy security: a choke point that for decades has enabled rogue regional players to hold the world
economy hostage. Using steel on the ground rather than aircraft carriers in the water, world powers can do to Iran what Russia
did to the Ottomans. This time around, however, it won't require a world war.
TurnDecrease Demand Energy Wars
Decrease demand causes wars over oildecreases interdependence
Miller 10political science professor @ Oklahoma State
Gregory, The Security Costs of Energy
Independence*http://csis.org/files/publication/twq10aprilmiller.pdf] April
A drop in demand for oil would lead to increased probability of conflict between current oil
exporters and their customers, including developed Western states, as well as between oil producers and their
neighbors.. This risk will be especially pronounced in regions with a high number of oil-
exporting states such as the Middle East According to the concept of interdependence, the likelihood of
states going to war with each other decreases as mutual dependence between them
increases, with trade being the most common measure of interdependence. This idea was reflected in the Clinton
administration policy of increasing trade with China in the 1990s. Early European integration in the 1950s was similarly designed
to prevent a future European war. If valid, then the inverse of the theory suggests that as states reduce their demand
for foreign oil, levels of interdependence between consumer states and oil exporters will
fall, increasing the likelihood of conflict. Although it is unlikely that war would occur simply because of lower
trade levels, the logic of interdependence theory is that the wealth gained from trade restrains policymakers who otherwise
might engage in conflict If the United States is no longer dependent on foreign oil and if oil-exporting
states no longer gain revenue from the United States, there would be fewer constraints on each states
willingness to use violence, whether it be in the form of conventional military force or state
sponsorship of terrorism.
TurnDependence Solves War
Oil dependence is good allows de-escalation of conflicts globally
Howard 8 (Roger, freelance journalist specialising in defence and energy issues in the Middle
East. He is a contributor to The New Statesman and Spectator magazines, Middle East
International and Jane's Intelligence Review. An Ode to Oil
[http://online.wsj.com/article/SB122791647562165587.html?mod=googlenews_wsj] November
29)
Alarming as these scenarios are, they disguise the true picture, one that is really much more complicated and much more
reassuring. While there are, of course, circumstances in which oil can exacerbate tensions and be a source of
conflict, it can also act as a peacemaker and source of stability. So to identify America's
"foreign oil dependency" as a source of vulnerability and weakness is just too neat and
easy. This identification wholly ignores the dependency of foreign oil producers on their
consumers, above all on the world's largest single market -- the United States. Despite efforts to
diversify their economies, all of the world's key exporters are highly dependent on oil's proceeds and have always lived in fear of
the moment that has now become real -- when global demand slackens and prices fall. The recent, dramatic fall in price per
barrel -- now standing at around $54, less than four months after peaking at $147 -- perfectly exemplifies the producers'
predicament. So even if such a move were possible in today's global market, no oil exporter is ever in a position
to alienate its customers. Supposed threats of embargoes ring hollow because no producer can assume that its own
economy will be damaged any less than that of any importing country. What's more, a supply disruption would
always seriously damp global demand. Even in the best of times, a prolonged price spike
could easily tip the world into economic recession, prompt consumers to shake off their
gasoline dependency, or accelerate a scientific drive to find alternative fuels. Fearful of this
"demand destruction" when crude prices soared so spectacularly in the summer, the Saudis pledged to pump their wells at full
tilt. It seems that their worst fears were realized: Americans drove 9.6 billion fewer miles in July this year compared with last,
according to the Department of Transportation. Instead, the dependency of foreign oil producers on their
customers plays straight into America's strategic hands. Washington is conceivably in a
position to hold producers to ransom by threatening to accelerate a drive to develop or
implement alternative fuels, realizing the warning once uttered by Sheikh Ahmed Zaki Yamani, the former Saudi oil
minister who pointed out that "the Stone Age did not end for lack of stone." Back in 1973, as they protested at
Washington's stance on the Arab-Israeli dispute, Middle East producers were in a position to impose an
oil embargo on the Western world. But a generation later, technological advances, and the
strength of public and scientific concern about global warming, have turned the tables. The
United States has powerful political leverage over producers because it holds the key to
future oil supply as well as market demand. The age of "easy oil" is over, and as fears grow
that oil is becoming harder to get, so too will the dependency of producers on increasingly
sophisticated Western technology and expertise. Such skills will be particularly important
in two key areas of oil production. One is finding and extracting offshore deposits, like the
massive reserves reckoned to be under the Caspian and Arctic seas, or in Brazil's recently discovered Tupi field. The other is
prolonging the lifespan of declining wells through enhanced "tertiary" recovery. Because
Western companies have a clear technological edge over their global competitors in these
hugely demanding areas, Washington exerts some powerful political leverage over
exporters, many of whom openly anticipate the moment when their production peaks
before gradually starting to decline. Syria illustrates how this leverage can work. Although oil
has been the primary source of national income for more than 40 years, production has recently waned dramatically: Output
is now nearly half of the peak it reached in the mid-1990s, when a daily output of 600,000 barrels made
up 60% of gross domestic product, and can barely sustain rapidly growing domestic demand fueled
by a very high rate of population growth. With enough foreign investment Syrian oil could
be much more productive and enduring, but Washington has sent foreign companies, as
well as American firms, a tough message to steer well clear. It is not surprising, then, that
the Damascus regime regards a rapprochement with the U.S. as a political lifeline and in
recent months has shown signs of a new willingness to compromise. The same
predicament confronted Libya's Col. Moammar Gadhafi, who first offered to surrender
weapons of mass destruction during secret negotiations with U.S. officials in May 1999.
Facing a deepening economic crisis that he could not resolve without increasing the
production of his main export, oil, Col. Gadhafi was prepared to bow to Washington's
demands and eventually struck a path-breaking accord in December 2003. Col. Gadhafi had been the "Mad Dog" of the
Reagan years, but oil's influence had initiated what President Bush hailed as "the process of rejoining the community of
nations." Oil could also help the outside world frustrate the nuclear ambitions of Iran, whose output is likely to steadily decline
over the coming years unless it has access to the latest Western technology. Many wells are aging rapidly and the Iranians
cannot improve recovery rates, or exploit their new discoveries, unless Washington lifts sanctions, which have been highly
successful in deterring international investment. Sometimes the markets will prove at least as effective as any American
sanctions in keeping a tight political rein on oil producers. For example, when Russian forces attacked South Ossetia and Georgia
on Aug. 8, Russia's stock market -- of which energy stocks comprise 60% -- plunged by nearly 7%, and within a week capital
outflow reached a massive $16 billion, suddenly squeezing domestic credit while the ruble collapsed in value. A month later, the
country was facing its worst crisis since the default of August 1998. But the future of the oil sector is so dependent on attracting
massive foreign investment, and the wider Russian economy so heavily dependent on petrodollars, that the Kremlin simply can't
afford to unnecessarily unnerve investors. Today the markets know that Russia needs at least $1 trillion in investment if it is to
maintain, let alone increase, its oil production. Just five years ago, output was increasing so fast -- energy giants Yukos and
Sibneft were posting annual production gains of 20% -- that even the Saudis were worried about their own global dominance.
But in the past year Russian oil production has started to wane. Leonid Fedun, a top official at Lukoil, Russia's No. 2 oil producer,
admitted back in April that national output had peaked and was unlikely to return to 2007 levels "in my lifetime" and that "the
period of intense oil production [growth] is over." Without foreign money and expertise to extract offshore oil and prolong the
lifespan of existing wells, Russian production will fall dramatically. Russia's oil, in other words, acted as peacemaker. This seems
paradoxical for it has sometimes been said that the Kremlin's attack on South Ossetia and Georgia was prompted by an
ambition to seize control of local pipelines. But although this was an aggravating factor, it was not the primary cause because
Russian leaders would have felt threatened -- reasonably or not -- by the presence of NATO in what they regard as their own
backyard even if the region was not an energy hub. They were also reportedly eyeing Ukraine, which has no petroleum deposits
of its own and poses no threat to the dominance of their giant energy company, Gazprom. Oil can also act as a
peacemaker and source of stability because many conflicts, in almost every part of the
world, can threaten a disruption of supply and instantly send crude prices spiraling.
Despite the recent price falls, the market is still vulnerable to sudden supply shocks, and a
sharp increase would massively affect the wider global economy. This would have potentially
disastrous social and political results, just as in the summer many countries, including France, Nepal and Indonesia, were rocked
by violent protests at dramatic price increases in gasoline. Haunted by the specter of higher oil prices at a time of such economic
fragility, many governments have a very strong incentive to use diplomacy, not force, to resolve their own disputes, and to help
heal other people's. This is true not just of oil consumers but producers, which would also be keen not to watch global demand
stifled by such price spikes. Consider the events of last fall, when the Ankara government was set to retaliate against the Iraq-
based Kurdish guerrillas who had killed 17 Turkish soldiers and taken others prisoner in a cross-border raid on Oct. 21, 2007.
Even the mere prospect of such an attack sent the price of a barrel surging to a then record high of $85 because the markets
knew that the insurgents could respond by damaging a key pipeline which moves 750,000 barrels of oil across Turkish territory
every day. Not surprisingly, the Bush administration pushed very hard to prevent a Turkish invasion of northern Iraq -- State
Department spokesman Sean McCormack aptly described the frenzy of diplomatic activity as a "full-court press" -- not just to
avoid shattering the vestiges of Iraq's political structure but also to stabilize oil prices. In the end it was American pressure that
averted a major incursion, allowing crude prices to quickly ease. And the Turks would also have been aware that any invasion
could have prompted retaliatory damage on the oil pipeline, losing them vast transit fees. In general, oil is such a vital
commodity, for consumers, producers and intermediaries alike, that it represents a
meeting point for all manner of different interests. Sometimes it offers an opportunity for
competitors and rivals to resolve differences, as in March 1995, when Iranian President
Akbar Hashemi Rafsanjani tried to break deadlock with Washington by offering a
technically very demanding oil contract to Conoco. Today, the symbiotic energy
requirements of Europe and Russia allows scope to improve mutual relations, not least if
European governments act in unison to impose the rules of the European Union's energy charter on Moscow. Oil also gives
consumers a chance to penalize, or tempt, international miscreants, just as U.S. sanctions
are forcing the Tehran regime to reassess its cost-benefit analysis of building the bomb.
What cannot go unchallenged is a facile equation between oil on the one hand, and war,
bloodshed and, in America's particular case, strategic vulnerability on the other. For oil,
fortunately, can often be our guardian.

Oil dependence gives us leverage over key countries and regions
Fisher 10
Max The Upside of Depending on Foreign Oil
[http://www.theatlantic.com/international/archive/2010/04/the-upside-of-depending-on-
foreign-oil/38380/] April 2
The top ten oil exporters to the U.S., which account for half of all U.S. consumption, read
like a State Department tourism warning list: Saudi Arabia, Venezuela, Nigeria, Iraq,
Angola, Russia, Colombia, and Brazil. (To be fair, Canada has long been our number one oil source, and Mexico
alternates with Saudi Arabia for the number two spot.) But keep in mind that most of these countries need our
money a lot more then we need their oil. If Saudi Arabia and the U.S. suddenly ended our
trade tomorrow, for example, the U.S. and global economies would not suffer nearly as
much as Saudi Arabia's. The Saudis understand this and so want to keep U.S. and Saudi
interests aligned. As a result, buying Saudi oil gets us a lot more than just energy. It gets us
a dedicated ally that wields unparalleled influence in a part of the world where we
desperately need it: the Middle East. The Saudi royal family has put their wily intelligence
service at our disposal and allowed sprawling U.S. military bases onto their soil. In 1992,
the Saudis even exiled one of their own on America's behalf: A prominent, wealthy, and popular
humanitarian and freedom fighter named Osama bin Laden. Saudi royalty risked a violent backlash by
expelling bin Laden to Sudan, but U.S. officials had demanded his ouster. That's no small
favor. It would be almost as if the United States deported Google CEO Eric Schmidt to Honduras at the request of angry
Chinese officials. The Saudis came to our aid again in 1996 when they convinced the Sudanese regime to themselves deport bin
Laden. Bin Laden's anti-American terrorism did not begin until he fled to Afghanistan, where the United States then had little
influence. In the decade since, he has moved between there and Pakistan, two countries with which the U.S. has no meaningful
economic ties save foreign aid. Unlike with Saudi Arabia, our pleas to those governments to help us rout bin Laden went largely
ignored. If our oil-greased relationships with other top producing states are half as close as
the U.S.-Saudi partnership, it will give us much-needed leverage over some of this
century's biggest emerging threats. In Nigeria, we can pressure the government to
peacefully contain the state's alarming increase in terrorism. For Iraq, the economic ties
with America would be an important counterbalance to Iran's religious and political
influence. As for Venezuela, no matter how antagonistic President Hugo Chavez gets, he
would be a lot worse if we didn't take close to a million barrels off his hands every day.
AT Dependence Oil Wars
Its in the common interest of states to prevent war
Fettweis 09
Christopher, Professor of Political Science @ Tulane "Ch 5 No Blood for Oil: Why Resource Wars
Are Obsolete," p. 66-75 in "Energy Security Challenges for the 21st Century: A Reference
Handbook," Edited by Gal Luft, executive director of the Institute for the Analysis of Global
Security and Anne Korin, co-director of the Institute for the Analysis of Global Security, 2009.
Today oil is traded on a global marketsupply disruptions anywhere affect the price
everywhere. It is of course the price of oil is that is most clearly cor related with economic performance in consumer and
producer suites alike. Al though their interests diverge on precisely what that price should beproducers want it to be relatively
high, and consumers relatively lowthey both want to see it remain fairly stable Any war in a resource-rich area
that would disrupt the supply and raise the price would prove to be counterproductive. A
certain amount of predictability is necessary to assure that disruptions in price, the kind that have far-reaching implications for
an entire economy, do not occur. in order for any energy company to be interested in developing the resources of this region,
jurisdictional issues must be settled. As long as higher risks mean higher costs, the perception of
instability will remain an important factor driving potential investors away from energy
resource development.9 No state is able to benefit from oil and gas fields until ownership
issues are settled. Oil does no one any good in the ground. In order for any country to
profit from owning large stocks, it must sell. Control over the territory that contains oil is therefore hardly
necessary to assure access to its resources. Whoever controls the territory where oil is extracted will face the same incentives to
sell it on the world market. States of the 21st century may well reach the conclusion that it does not much matter who controls
oil, as long as those who do seem willing to sell it. No matter who is in charge of Saudi Arabia, or Kuwait,
or the UAE, for example, there is every reason to believe that they will have strong
incentives to sell their oil to the industrialized consumer states. In one of the very few
studies of the issue, political scientist Shibley Telhami found that a change in regime from
moderate to radical in one state does not appear to alter the pattern of that states foreign
trade.2 Throughout the Cold War, the nature of Gulf regimes had little or no impact on who they traded with, or how much.
In other words, market forces have a greater impact than national policy in determining the
flow of oil. Even the 198088 Iran-Iraq war failed to have much of an impact on oil production, despite the fact that much
of the fighting occurred within artillery range of major oil terminals and facilities.2 Even if profoundly unfriendly regimes were
to come to power in the Persian Gulf or in any other oil-producing region, they would still need to sell their oil. Any government
determined to act with profound economic irrationality would be quickly displaced by those eager to maximize the amount of
oil revenue coming into their country Also, unlike in 1973 when boycotts could target individual countries, today the oil
companies control distribution and will make adjustments to keep their customers satisfied and protect their profits. The
market will bring stability perhaps better than that currently provided by the over-strapped U.S. taxpayer.22 Oil-
producing countries have an interest in keeping the price high; consumer states wish to see
it low. Both, however, want it to keep flowing, instability in oil-producing regions prevents that from
happening. The fact that there no one on either side has an interest in seeing the spigot turned
off provides powerful, stabilizing incentives encouraging the peaceful development of
these resources.

Great powers wont go to war over oil
-Fighting is expensive, producer/consumer interests align, war declining
Fettweis 09
Christopher, Professor of Political Science @ Tulane "Ch 5 No Blood for Oil: Why Resource Wars
Are Obsolete," p. 66-75 in "Energy Security Challenges for the 21st Century: A Reference
Handbook," Edited by Gal Luft, executive director of the Institute for the Analysis of Global
Security and Anne Korin, co-director of the Institute for the Analysis of Global Security, 2009.
At some point in the 21st century, the world will begin to run low on oil. Demand around
the world is skyrocketing for the nonrenewable resource, far outpacing the growth of supply, and all projections
suggest the pace will continue. While oil will not likely ever run out in the literal sense, geologists
warn that in the not-so-distant future oil may well be a relatively scarce commodity Per capita
energy use may hold steady or even decline across much of the industrialized world, but projected growth in population will
more than compensate. In the U.S. Energy Information Agency mid-range projection, even with higher prices world oil use will
grow from 86 mbd in 2007 to 103 mbd in 2015 and 119 mbd by 2025. Such growth would obviously require a major increase in
the current production capacity of the industry. Few think that supply is likely to be able to keep pace.
War need not result from such shortages, however. There are at Least three good reasons to believe that
war to control the territory that contains fossil fuels will continue to be a very rare
phenomenon as the new century unfolds: First, fighting to control oil is likely to be a self-
defeating proposition. It will always be cheaper to buy oil than to seize it. Second, the interests of
consumers and producers do not conflictall parties involved in oil production have serious interests in
stability, without which no one can benefit. Finally, and perhaps counter-intuitively, all kinds of warfare are
becoming more and more rare. The 21st century is likely to be a great deal more stable
than the 20th century and oil politics should prove to be no exception.

Oil wars wont happenunfeasible and empirically denied
Fettweis 09
Christopher, Professor of Political Science @ Tulane "Ch 5 No Blood for Oil: Why Resource Wars
Are Obsolete," p. 66-75 in "Energy Security Challenges for the 21st Century: A Reference
Handbook," Edited by Gal Luft, executive director of the Institute for the Analysis of Global
Security and Anne Korin, co-director of the Institute for the Analysis of Global Security, 2009.
Fortunately, there is good reason to believe that resource wars will not be any more common in the coming century than they
were in the last. There has never actually been a war over fossil fuelsthe closest call was in
1973, when the Arab members of OPEC stopped selling oil to the United States and the
Netherlands. Washington drew up plans to break the embargo by force and seize Arab oil.
Secretary of State Henry Kissinger told Business Week that it was one thing to use oil as a weapon in the case of dispute over
price, but it was quite another where there is some actual strangulation of the industrialized world.2 U.S. Secretary of Defense
James Schlesinger apparently wrote to his British counterpart that the United States would not tolerate threats from under-
developed, under populated countries and that it was no longer obvious that the United States could not use force to resolve
the stand-off.3 That is as dangerous as the situation was to get, however. Despite the contingency planning,
using force never appears to have been a serious option to resolve the crisis. Kissinger repeatedly
stated afterward that he determined military solutions to be totally inappropriate to the problem: the prospect of using
military force to end the oil embargo died without serious debate.4 In 1975 Congress commissioned a feasibility
study to explore the potential for a military seizure of the oil fields of the Gulf, in case the
crisis should ever he repeated. The report concluded that such an action would be both
practically and strategically unwise, for the fields would likely be damaged in any such
operation, and assuring their long-term viability would probably prove costlier than any
benefit that could be gained from their possession.3 Political scientist Robert Tucker was hardly alone when he noted with
some amazement that the crisis was resolved in the absence of any meaningful threat of force. Suddenly, he wrote, we find
ourselves in a strange universe, where 20th century Melians could withhold a vital product from the Athenians of the day.6 The
United States was not the only inhabitant of this bizarre worldTucker noted in 1981 that the Soviets too had proven to he
oddly cautious and tenta tive in their actions in the Gulf.7 As it turns out, Moscow had come to the same
conclusions as Washington about the feasibility of seizing Arab oil. Even though the Soviets
had the obvious advantage of proximity and a massive imbalance in available forces in the
region, they did not seem to ever have seriously considered making such a move. Military power played no role in the
resolution of the 1973 crisis, nor did it factor into oil politics in any serious way during the Cold War. In fact, as a general rule
force has not proved to he useful in oil politics. There has never been a war to control territory that
contains fossil fuels, and there are good reasons to believe it is Likely that there never will
he. The conventional wisdom concerning the inevitability of energy wars is probably
wrong.

AT Dependence Oil WarsEmpirics Prove
No wars to secure oilnot perceived as within the countries interests and they
dont escalate
Fettweis 11
Christopher, Professor of Political Science @ Tulane Ch. 9: Is Oil Worth Fighting For? Evidence
from Three Cases," in "Beyond Resource Wars," edited by Shlomi Dinar International Relations
Professor at FIU, 2011, Googlebooks, AD 3/21/12
Even though the Gulf has been of vital strategic significance for the past fifty years, there has
never been a time when a great power war to assure access to its riches seemed imminent.
Over and over again, the outside powers have acted as if they felt that the imperative to
avoid direct confrontation outweighed even the potential value of the Gulfs riches (Reich 1987; Breslauer
1990). If historical trends are any indication of future potential, radical changes would have to occur to break
the interconsumer stability that exists regarding the Persian Gulf at the beginning of the
twentyfirst century. As the following sections should make clear, all regional trends
indicate that much more likely short- and longterm scenarios involve cooperation among
consumers (as well as between consumers and producers), rather than war between the
great oil-thirsty powers. Four times in the pastin 1 973, 1979, 1990, and 2003incidents
occurred that are instructive for those seeking insight into international behavior in oilrich regions. 1973 It is
probably not much of an exaggeration to suggest that the modern oil era began as the Yom Kippur War drew toward a
conclusion. The Arab oil embargo that followed rudely awakened the West to the extent and depth of its dependence on the
Persian Gulf. Rather than create divisions among the great importing powers, however, the
Arab states helped to solidify the notion that the real geopolitical chasm in the Persian Gulf
separates consumers from producers.

No wars to secure oil fields Caspian proves states recognize the possible
danger
Fettweis 09
Christopher, Professor of Political Science @ Tulane "Ch 5 No Blood for Oil: Why Resource Wars
Are Obsolete," p. 66-75 in "Energy Security Challenges for the 21st Century: A Reference
Handbook," Edited by Gal Luft, executive director of the Institute for the Analysis of Global
Security and Anne Korin, co-director of the Institute for the Analysis of Global Security, 2009.
There is good reason to believe that most states realize the limited utility of seizing oil
fields. Even in those few areas where oil has been discovered under weakly held or disputed
territories, the disputes have been resolved without even the realistic threat of force. If
conflict breaks out, then no oil can get to market, and no one benefits. As the old saying goes,
money is a cowardinvestment dollars flee away from the slightest hint of instability, providing
powerful incentives for cooperation over resource development issues. It is in the interest of all sides
to continue to seek solutions to their disagreements at the bargaining table rather than on the field of battle. The Caspian
Sea provides a great example of low utility of military force in oil disputes. Early on, all states
surrounding the sea (Russia, Azerbaijan, Iran, Turkmenistan and Kazakhstan) realized that two major issues
had the potential to pit regional states against one another, and bring in outside states on behalf of
their allies. First and foremost, pipelines had to be constructed to bring the oil to market. Because the Caspian has
no outlet to the oceans, there is no easy way to get its resources to international buyers. In order for the Caspian to realize its
potential, massive investment was needed to create or improve extraction equipment, such as rigs and platforms, and
transportation equipment, such as pipelines and tankers. The question of who would provide that investment has sometimes
pitted national against corporate interests. Analyses of potential pipeline routes tended to emphasize either their significance as
instruments of external control over the destiny of the region, regarding profits as incidental, or their economic viability,
treating politics only as a variable of risk.13 The second potentially explosive issue was the undefined
legal status of the Caspian Sea.4 The heart of the dispute is whether the Caspian, which is an entirely land-locked,
salty body of water, is a sea or a lake. The distinction is important not only for geography buffsif the Caspian is a sea, then
according to international law, each riparian state can claim ownership of the seabed adjacent to its coast; if it is a lake, then its
riches must be shared equally by all surrounding states. Unsurprisingly, the states with large oil and gas deposits close to their
shores (Azerbaijan and Kazakhstan) believe that the Caspian is a sea. The states whose coastlines hold fewer deposits (Russia,
Turkmenistan and Iran) have argued that the Caspian is a lake and therefore its resources should be shared equally among the
five states. Each side constructed an argument based on various precedents in international law, some of which date back to
agreements signed by the Soviets and the Iranians in 1921. Little would be gained by repeating the intricacies of these issues,
both of which have been addressed at length elsewhere. The important point for the purposes of this discussion is that,
despite the fears of pessimists, neither of these issues has come close to sparking conflict.
The states of the region, in conjunction with the energy companies, have reached a series
of agreements on export routes, including the well-known pipeline from Baku to Ceyhan (BTC), which started
carrying Caspian oil in mid-2006.5 The littoral countries have also held a series of meetings on the legal status issue, the most
recent of which was in Tehran in October 2007, and may well be close to reaching a lasting agreement. Russia has dropped its
objections to considering the Caspian to be a sea, and lran may well be close to doing the same. All sides seem to realize that
the absence of a well-defined legal status of the Caspian Sea prevents maximum exploitation of resources of the region. Many
major agreements for exploration and production, which faced seemingly insurmountable
problems only a decade ago, have been reached 16 The most important and obvious fact about Caspian
geopolitics is this: no side has ever used force, or even threatened to use force, in order to bring
about its preferred outcome in either the pipeline or legal status dispute. Despite the pessimistic
predictions to the contrary great power politics in the Caspian have evolved without a significant military component. The
relative power of the ac tors has not mattered in any of the outcomes, perhaps because
the utility of force is clearly minimal. The language that the players are using may resemble traditional realpolitik,
but the issues over which they are arguingand, much more importantly, the tools that they are using to pursue
themare entirely diplomatic and economic.


Venezuelan Stability Advantage
Squo Solves
New investment nowwill boost production
UPI 13
5-30-13, Chevron, PDVSA shoot for higher production,
http://www.upi.com/Business_News/Energy-Resources/2013/05/30/Chevron-PDVSA-shoot-for-
higher-production/UPI-86761369912958/
WASHINGTON, May 30 (UPI) -- A $2 billion investment in onshore oil developments in Venezuela
will help a recovery in production levels, Venezuelan Oil Minister Rafael Ramirez said. The
Venezuelan Embassy in Washington said U.S. supermajor Chevron committed to a $2 billion investment
in a joint venture with state oil company Petroleos de Venezuela, known also as PDVSA. The
investments target joint venture Petroboscan, formed to operate the Boscon oil field in western Venezuela. Ramirez
described the commitment as "an excellent arrangement for all of our joint ventures."
Ramirez is president of PDVSA. His country has some of the largest oil deposits in the world, leading the Organization of the
Petroleum Exporting Countries. Ramirez said the joint venture between Chevron and PDVSA aims to increase oil production at
Boscon from 107,000 barrels of oil per day to 127,000 bpd. The financing is part of an overall initiative by PDVSA to increase oil
production by more than 60 percent to 6 million bpd by 2019. "With this financing, we're going to recover
production and then work to take maximum advantage of the remaining reserves ," Ramirez
said.

Market pressures will solve the casewill push Venezuela to change
Gonzlez and Vyas, 13
Angel Gonzlez and Kejal Vyas, 4/4/2013, Unlocking Venezuelas vast energy potential; Revival
of the countrys oil sector post-Chvez on standby,
http://www.businesswithoutborders.com/topics/opportunities/unlocking-venezuelas-vast-
energy-potential/
But declining oil output and rising shale-oil production in the U.S., Venezuelas main market,
may force a redirection. Barring any new political or military shocks in the Middle East, global oil prices look
like a balloon with a slow leak, said Amy Myers Jaffe, executive director for energy and sustainability at the
University of California-Davis. The Venezuelan government cant count on high oil prices to match rising public spending, she
added. Anticapitalist rhetoric heated up in the days leading to Mr. Chvezs death. Venezuelan Acting President Nicols
Maduro accused Chevron Corp., the No. 2 U.S. oil company by market value behind Exxon, of aggression against Ecuador in a
multibillion-dollar environmental lawsuit pitting the company against Ecuadorean plaintiffs. Analysts said they were surprised
by the comments, as Chevron, the only major U.S. oil company to remain in Venezuela, was considered by Mr. Chvez as a key
investor, and is lending Venezuela $2 billion to increase output at a joint-venture oil development. A spokesman for Chevron
declined to comment on Mr. Maduros assertion. Despite the posturing, Mr. Chvezs death presents an opportunity for a new
administration to lift some of the burdens heaped on PDVSA, which has supplied billions of dollars in cheap oil to Cuba and
other friendly foreign governments, said Carlos Jord, a Houston-based oil consultant who was once a senior manager at the oil
company. To reach its full potential, Venezuelas entire oil industry sector needs to be reinvented, something that is unlikely,
said Luis Pacheco, a former PDVSA executive fired during the oil strike of 2003 along with 20,000 other employees who opposed
Mr. Chvez. In 2000, Mr. Chvez signed its first oil deal with Cuba, providing the communist island with 53,000 barrels a day of
cut-rate oil, a sum that has risen to 110,000 barrels now. In return, the Cuban government has sent some 40,000 doctors and
experts to support the popular social programs developed by Mr. Chvez. Mr. Jord, who called those oil deals unsustainable,
said that domestic fuel prices, the worlds lowest at around 6 cents a gallon, will also have to rise at some point. The cost to the
country of the domestic fuel subsidies has also increased because refinery accidents forced the government to import growing
quantities of gasoline, according to the EIA. The Venezuelan government denies it imports fuel. Worsening fiscal
conditions will also prompt Mr. Chvezs successors to improve relations with foreign
investorsand eliminate bottlenecks created by the deceased leaders highly-personal, hands-on management
style, said Jim Loftis, a partner with Vinson & Elkins LLCs international arbitration practice.
The country also needs to increase oil production to pay for tens of billions of dollars in
Chinese loans it undertook to finance large social projects and a big boost in election spending last year. Venezuelans
see their relationship with oil as if the nations virility is at stake, Mr. Pacheco said. Until that perception changes, the oil
industry will keep dancing in a circle around the fire, waiting for it to rain.

SQ solves the affpublic wont know about it
Daly 12 CEO of U.S.-Central Asia Biofuels Ltd
John, 12/19/2012, If Chavez Dies, What Next for U.S. - Venezuelan Energy Relations?
http://oilprice.com/Geopolitics/South-America/If-Chavez-Dies-What-Next-for-U.S.-Venezuelan-
Energy-Relations.html
So, if illness does sideline President Chavez, what might happen? First, given the enormity of the nations energy reserves, it is
most unlikely that foreign countries, starting with the U.S. will sit on their hands, but instead begin to manoeuvre behind the
scenes to find and promote a pliable candidate and administration willing to work with them. As Maduro is largely
unknown, in the event of Chavez being incapacitated, it is likely that he will come under enormous
foreign pressure, little of which is likely to be made public. Washingtons wish list would
include two primary elements an end to Venezuelan radical rhetoric and ties to such
states as Cuba and Iran, and increased U.S. access to those oil reserves. In May 2011 the U.S.
imposed sanctions on Venezuelas state oil company Petroleos de Venezuela, S.A. (PVDSA), and the countrys fiscal crown jewel.
President Chavez has used PVDSA as a cash cow for his social reform plans - between 2004 and 2010 PDVSA contributed $61.4
billion to social development funds. According to PDVSA figures, Venezuela currently has 77.5 billion barrels of oil reserves, the
largest in the Western Hemisphere. PDVSA has a production capacity, including its strategic associations and operating
agreements, of 4 million barrels per day, the highest production capacity in the Western Hemisphere. Related Article: Mexico
to Privatize State Oil Company Pemex? But it is President Chavezs nationalist approach to the countrys energy assets that is
likely to be the first target of foreign governments in a post-Chavez Venezuela. In February 2007 President Chavez announced a
new decree to nationalize the last remaining oil production sites that were under foreign majority company control, to take
effect on 1 May, allowing the foreign companies to negotiate the nationalization terms. Under the new regulations, the earlier
joint ventures, involving ExxonMobil, ChevronTexaco, Statoil, ConocoPhillips and BP, were transformed to give PDVSA a
minimum 60 percent stake. The process completed a government initiative begun in 2005, when the Chavez administration
transformed earlier operating agreements in Venezuelas older oil fields into joint ventures with a wide variety of foreign
companies. Thirty out of 32 such operating agreements were transformed, with only two being challenged in court. Most
foreign companies accepted the new arrangements, including Chevron, Statoil, Total and BP, but Americas ExxonMobil and
ConocoPhillips refused. It therefore seems likely that a new Maduro administration would hear
about compensation issues during any first meeting with the U.S. ambassador. Given
relative inefficiency and capital starved nature of PDVSA for major expansion projects, calls
to loosen up the countrys energy sector may be hard for Maduro to resist.

Economic pressures will force Venezuela to open up to foreign investment
Hussain 13
Yadullah, 3/6/2013, Life after Chavez: Americas oil gains could be Canadas loss,
http://business.financialpost.com/2013/03/06/life-after-chavez-venezuela-u-s-oil-industries-
are-naturally-attractive-trading-partners/?__lsa=d8ad-15ca
Nathan Piper of RBC Capital Market expects Mr. Chavezs death to trigger new elections within 30 days. Vice President Maduro
will continue in the meantime, and elections are likely to be contested between him and Henrique Radonski (Miranda State
Governor who lost by 11% to Chavez last year). However, this transition is not certain with Mr. Maduro claiming to assume
your (Chavezs) legacy. That said, oil is critical to the countrys earnings (~95% of export earnings), so
there could be the potential (longer-term on political change) for a change in approach to foreign
investment in the sector.
Venezuelan Stable Now
Muduro is stabilizing Venezuela now even opposition is backing off
PUCHI 6/25
LEOPOLDO PUCHI opposition political scientist and ex general secretary of the MAS. June 25th
2013 Venezuelan Government: Stability in Instability.
http://venezuelanalysis.com/analysis/9764
In this short article, opposition political scientist and ex general secretary of the MAS, Leopoldo
Puchi argues that the Maduro government is consolidating itself, but also that the opposition
wont accept the situation of calm for long. Venezuelanalysis.com thought it would be useful to
translate Puchis article, to give readers a sense of what the some of the opposition is thinking,
and because it is significant that even members of the opposition are recognising that the
country has entered into a state of some stability and political acceptance of the Maduro
government. Different signs indicate that the government of Nicolas Maduro is tending to
stabilise itself and consolidate itself, after the initial turbulence that followed the close
electoral results and the lack of acceptance of the numbers emitted by the National Electoral
Council by part of the opposition. Of course, the points of tension are numerous in Venezuelan
society and without a doubt it will be like this for many years: social demands, like those of the
university teachers; disagreements with Colombia and the United States over geopolitical
divergences; economic problems, due to the reduced productivity of Venezuelan companies;
grave deficiencies in public services; etc. Situations and conflicts that will exist for a long time,
with the current government or with a different one. For the rest, there is no defined social
hegemony, but rather an equilibrium of forces. The big picture is one of stability within
instability.

Venezuelan oil not key

Venezuela not key to worlds oil --- U.S. could just use its strategic reserves
Hussain, 13 (3/6/2013, Yadullah, Life after Chavez: Americas oil gains could be Canadas
loss, http://business.financialpost.com/2013/03/06/life-after-chavez-venezuela-u-s-oil-
industries-are-naturally-attractive-trading-partners/?__lsa=d8ad-15ca, JMP)
But Capital Economics Mr. Pugh argues that Venezuelan oil and gas is less important to the
rest of the world than it used to be, especially given the boom in North American supply. In a
worst case scenario, the US in particular could draw on ample strategic reserves.

No impact --- market can quickly adjust
Laten, 10 (8/3/2010, Grant, Venezuelan Oil Embargo Wouldnt Impact American Energy
Security, http://csis.org/blog/venezuelan-oil-embargo-wouldn%E2%80%99t-impact-american-
energy-security, JMP)
Should Venezuela cut off oil exports to the United S tates, the American market would need
to replace roughly one million barrels per day. Propitiously, current supply and demand
conditions are such that the market could easily adjust to prevent significant economic or
political disruptions . With a daily surplus of roughly five million barrels, the worldwide oil
market vis--vis OPEC (which does not participate in member countries embargos) is more
than capable of replacing Venezuelan exports to the US. This is especially true because spot
demand for oil is zero-sum, meaning that with one million extra barrels of Venezuelan oil
flowing into the Chinese market daily, China would need to purchase one million fewer barrels
on the world market. This would free up supply for the United S tates and maintain the five
million barrel surplus, since global oil production and consumption would remain unchanged
(PDVSA market adaptation issues notwithstanding).

U.S. can easily survive without Venezuelan oil
Elton, 10 (8/19/2010, Doug, What would happen if Chavez cut off the US from Venezuelan
oil? http://www.helium.com/items/1926791-chavez-cut-off-the-us-from-venezuelan-oil-china-
benefits, JMP)
The United States has long been the worlds leading oil consumer. Venezuelan President Hugo Chavez is aware of this fact and
brandishes his countrys oil supply as a sword against the U.S. to defend his own political interests. What if Chavez called
his own bluff? The truth is that the Yankee Empire, as Chavez would phrase it, could easily survive
without Venezuelan oil in the short-term. In fact, initially the gamble would only serve to hurt
Venezuela itself. In recent years, the countries surrounding the Persian Gulf have taken most of the headlines regarding oil,
but in reality most of the oil imported to the U.S. comes from sources closer to home. According to the U.S. Energy Information
Administration, the U.S imports oil from Canada at 2.527 million barrels per day followed by Mexico at 1.428 million barrels per day,
as of May 2010. Venezuela finishes as the bronze medalist at 1.109 million barrels per day. At first glance these numbers seem to
skew in favor of Venezuela, but consider that oil accounts for a third of Venezuelas gross domestic product. To lose the main
contributor in such a vital revenue stream would cripple the Venezuelan economy and is the predominant reason Chavez has failed
to make good on his threats. There is no question Venezuelan oil means a great deal to the U.S., a country that basically runs on gas
and diesel (sorry Dunkin Donuts). Still, years of diversifying its international relationships with oil rich
countries has made the U.S. oil dependent, not oil desperate. Saudi Arabia falls just under Venezuela as a
supplier to the U.S. and nearly matches it at 1.097 million barrels per day.

Alt Cause
Gold bet crushing the economy
Greenfield 13
(Daniel, 7/6/13, Shillam Fellow at the David Horowitz Freedom Center, Chavez Still Destroying
Venezuelas Economy From Beyond the Grave)
http://frontpagemag.com/2013/dgreenfield/chavez-still-destroying-venezuelas-economy-from-
beyond-the-grave/
The bet on gold that former Venezuelan President Hugo Chavez made in the final years of
his life is collapsing at the wrong time for his country. Chavez, who argued that Venezuela
should move away from the dictatorship of the dollar, stockpiled more than 70 percent of
Venezuelas foreign reserves in gold by 2012, the highest percentage among all emerging-
market countries and more than 50 times that held by neighbors Colombia and Brazil,
according to the World Gold Council. After rewarding Venezuela with a rally of almost 400
percent in the past decade, gold has tumbled 25 percent this year, pushing the central
banks reserves to an eight-month low and compromising the governments ability to
repay foreign bondholders. The yield on Venezuelas dollar-denominated debt has risen 62
basis points, or 0.62 percentage point, to 11.84 percent in the past month, compared with
an average increase of 57 basis points for other countries in Latin America. Venezuelas
reserves have taken a big hit, Francisco Rodriguez, an economist at Bank of America Corp.,
said by phone from New York. If current gold price levels continue, then you will see an
increase in perception that Venezuelas capacity to pay is weakening.

Lack of monetary controls will cause inflation and crush economy
Deniz 13 (Roberto, 6/15/13, Soaring inflation adds even more stress to the Venezuelan
economic model http://english.eluniversal.com/economia/130615/soaring-inflation-adds-
even-more-stress-to-the-venezuelan-economic-mod
Economist Jos Luis Saboin believes that the inflationary rise last month is due to three factors:
recent price adjustments to certain products, last February's devaluation, and inadequate fiscal
and currency policies. "Price controls repress inflation, but now the dam has begun to leak,"
says Saboin in reference to the 20.4% climb in prices of agricultural products and price adjustments to
chicken, beef, milk, and cheese. The Central Bank of Venezuela itself recognized this element in its report
issued early in June, which makes it likely that inflationary pressures will persist, as adjustments to
other food, personal-care and home-cleaning products are needed. In certain cases, prices have been frozen for over 18
months. "Government is trampled underfoot, and that is the issue behind controls." In this
connection, Saboin stressed that better management of controls is needed to avoid
distortion. With regards to devaluation, he added that the burden of having an exchange rate of VEB
6.30 per US dollar, set last February, is being felt, as well as the eradication of the Transaction System for Foreign
Currency Denominated Securities (Sitme). "Sitme is gone, and many enterprises are using the parallel market as reference."
The national government has attempted to create a system for allocating currency other than the Foreign Exchange
Administration Commission (Cadivi), but has not managed to achieve a successful outcome. Saboin also questioned
the fiscal and monetary policies applied by the government, which have been sustained
solely by "injecting" money. "Both have been expansive and have been based on massively
injecting money into the economy."

Sanctions have chilled foreign investment in PDVSA
Gyarfas 11
Vera de Gyarfas is counsel in the Global Transactions Practice Group. Ms. De Gyarfas practice is
focused on energy projects in Latin America and Africa representing companies in upstream E&P
projects, LNG and other gas projects, power companies in the construction of generation,
transmission and distribution facilities, and petrochemical companies in the development of
specialized plants under joint ventures, profit sharing agreements, operating services
agreements, EPC contracts, and oilfield service contracts. The Impact of the U.S. Secretary of
States Sanctions on PDVSA, Energy Newsletter,
http://www.kslaw.com/library/newsletters/EnergyNewsletter/2011/December/article4.html.
Despite the absence of any evident impact resulting from the sanctions, Venezuela responded by classifying the
measure as an imperialistic aggression that violated international law and indicated in an official
notice that it would study the impact of the measures further and reserved its rights to respond to such sanctions. [8] There has
been no further response of the Venezuelan government in this regard. The Venezuelan government has made
it clear that it prefers doing business with National Oil Companies (NOCs) with similar
political ideologies. Consequently, many U.S. oil companies and contractors have been
directly and indirectly shut out from business in Venezuela. Perhaps the hidden impact is
the perception within PDVSA, its employees, and contractors that dealing with U.S.
companies could be interpreted as an act of treason which could put at risk jobs and
contracts and generally create difficulty for U.S. companies to continue operating in the
Venezuelan oil industry, enter the Venezuelan market, or carry out business with PDVSA.

Too Long
Takes years to solve
AP, 13
5-4-13, Fabiola Sanchez, Outlook grim in Venezuela's essential oil industry,
http://news.yahoo.com/outlook-grim-venezuelas-essential-oil-industry-143827999.html
***Note --- Rafael Ramirez is Chavez's oil minister and the head of state oil company
Petroleos de Venezuela S.A
Ramirez said that PDVSA's efforts remained focused on developing the remote Orinoco belt, site of the world's biggest oil
reserves, with the aid of oil firms from China, Russia, the U.S., Italy, Vietnam, Malaysia, Japan and Spain. Venezuela hopes to lift
overall production to some 3.32 million barrels a day, 200,000 more than last year. "We're in a process of trying to
attract investment in dollars other than ours," Ramirez said, assuring reporters that PDVSA would work with
private investors to not take on more debt to make new investment. Outside experts, however, are deeply
skeptical. They say PDVSA is badly mismanaged and that even a radical overhaul would
take years to show results .

Energy sector reform will take years
Snow 13
3-6-13, Nick, Outlook uncertain following Chavezs death in Venezuela,
http://www.ogj.com/articles/2013/03/outlook-uncertain-following-chavezs-death-in-
venezuela.html
PDVSAs deterioration PDVSAs internal and managerial capabilities have deteriorated since 2002, according to Sarah A.
Ladislaw, co-director of the Center for Strategic and International Studies Energy and National Security Program, and CSIS
Senior Vice-Pres. Frank A. Verrastro, who holds the James R. Schlesinger Chair for Energy and Geopolitics there. Increasingly,
PDVSA relies on contractors, as well as other private company partners, to keep the fields in production but reports state that
contractors have not been paid in months and that the political uncertainty in the country has even driven routine decision
making to a halt, they said in a Mar. 6 commentary. Sustained political uncertainty also has stifled
outside investment in Venezuelas oil sector, Ladislaw and Verrastro noted. Russian and Indian companies
planning to invest in the countrys oil fields have withheld incremental new money, and China has not announced a new line of
credit or extensions on its development-linked financing since last April, they said. In Venezuela, Oil and Mining Minister and
PDVSA Pres. Rafael Ramirez said on Mar. 1 that PDVSA plans to increase its expenditures to $25 billion in 2013. Cooperation
between PDVSA and Russias Rosneft consortium also has been growing, Ramirez said on Jan. 31. Even under the
best of circumstances , reform in the energy sector will take a long time to emerge, Ladislaw
and Verrastro said. The damage that has been done to not only PDVSA but to the institutions of
the state and civil society could take years to rehabilitate.

Even if Venezuela makes massive reforms it will take a long time to resume
drilling
Sanati 13
3-6-13, Cyrus, Chavez's death won't spur new Venezuela oil drilling,
http://finance.fortune.cnn.com/2013/03/06/hugo-chavez-death-oil/
FORTUNE -- The death of Venezuelan President Hugo Chavez is no panacea for the nation's dysfunctional energy industry.
Political and economic uncertainty will likely continue to deter foreign investors from fully
committing the necessary cash, resources, and expertise that are desperately needed to
effectively tap the nation's oil wealth. Whoever takes over the reins of the nation will need to dismantle the
policies, structures, and rhetoric that have made investing in Venezuela a fool's errand. It is not hyperbole to say that Hugo
Chavez's death Tuesday rocked the energy industry. The "Bolivarian" strongman has been the oil industry's biggest villain for
over a decade. In his tenure as president of Venezuela, Chavez not only trashed contracts and expropriated lands and
equipment from foreign oil companies, like ExxonMobil (XOM) and ConocoPhillips (COP); he also managed to crush the national
oil company, Petrleos de Venezuela (PDVSA), by using it as a piggy bank to fund the programs and policies associated with his
nebulously defined "21st Century Socialism" experiment. There was a time when Venezuela was seen as a bastion of liberalism
-- an exception to the so-called resource curse, which posits that oil wealth fosters corrupt and dictatorial regimes. Its
democratically-elected governments, while far from perfect, were seen as more stable than other oil-rich nations, such as those
in the Middle East. This stability attracted foreign investors from around the globe, especially U.S. oil giants like ConocoPhillips
and Chevron (CVX). By the 1990s PDVSA and its foreign partners, which at the time included pretty much all the big U.S. and
European oil giants, were pumping around three million barrels a day of oil from Venezuelan fields, making it the third-largest
oil exporter in OPEC. PDVSA's long-term plan was to gradually increase its production capacity to around eight million barrels a
day, which would have put Venezuela on par with oil exporting giants like Russia and Saudi Arabia. But the ineptitude and
corruption of the Chavez kleptocracy have contributed to a decline in overall Venezuelan oil output, which at last count came in
at 2.4 million barrels a day, 25% less than what it was when Chavez took power 14 years ago. That would have been excusable if
Venezuela's oil reserves were rapidly depleting, but that isn't the case -- not by a long shot. Indeed, in 2010, OPEC confirmed
that Venezuela's Orinoco oil belt contained tar sand deposits equivalent to around 300 billion barrels of oil, enough to fulfill
current world demand for 10 years. That would mean Venezuela would have the largest oil reserves on the planet, outstripping
Saudi Arabia's 260 billion barrel oil stash. With today's oil price being 10 times higher than where it was when Chavez took
power in 1998, one would surmise that the Orinoco oil belt today would be littered with equipment and workers trying furiously
to tap its abundant oil wealth. But, of course, that isn't the case. During his reign, Chavez instituted a series of
devastating "reforms" to the nation's oil industry, which ended up breaking its back. He
ripped up production sharing contracts signed under the previous government, forcing
foreign oil companies to hand over more of their profit to the state. Chavez then used PDVSA as his
own personal ATM, starving the company of the necessary investment capital needed to expand its operations in the Orinoco.
In 2011, PDVSA was left with just $11 billion, or 9%, of its total income, to fund future operations. That was barely enough to
keep the lights on, let alone go out and enough to drill. By contrast, Pemex, Mexico's state owned-oil company (and all-around
bureaucratic basket case), spent around $19 billion, or 17%, of its income on operations, while Brazil's Petrobras invested $42
billion, or 29%, of its income. PDVSA says it will be investing some $140 billion in the Orinoco by 2015. It is hard to see how that
can happen given how much the government is siphoning off. In January, Chavez ordered PDVSA to increase its payments to his
off-the-books slush fund, Fonden, which is used to support the "revolution," further draining its resources. Lastly, the
government has saddled PDVSA with around $35 billion in debt, slapping the company with fat interest payments, which will
only augment its money woes. But probably the fatal blow to Venezuelan oil investment came in 2007
when Chavez essentially "renationalized" the industry, booting out a number of foreign oil
companies who refused to (once again) renegotiate their contracts, namely U.S. oil giants ExxonMobil and ConocoPhilips,
which had each invested billions of dollars in the country since the early 1990s. The new rules, which are more or less the same
today, require foreign investors to form partnerships with PDVSA in which the state-owned oil company would have a 60%
ownership. The foreign company, which would have 40% ownership, would still have to fund 100% of the investment.
Furthermore, whatever the foreign company made would be subject to a 50% tax rate and a 33% royalty (tax). Oh, and investors
must agree that any dispute that may arise in the future concerning their ownership with the government will be heard by
Venezuelan courts, not those pesky impartial international arbitration courts. But while the risk/reward ratio is clearly off,
Venezuela says that it has auctioned off 36 lease blocks in the Orinoco to 27 companies hailing from 21 nations. Most are
bizarre state-owned or controlled oil companies from places like Iran, Belorussia, and Cuba. But some of the big publicly traded
oil companies like Spain's Repsol, Brazil's Petrobras, Italy's Eni and France's Total have stakes as well. Even Chevron was
allocated a block -- albeit a small one. MORE: Petrobras: The next oil colossus While it makes sense to have a few foreign
partners to help to spread out the risk, one can go too far, especially when those partners have pretty much zero experience
working with oil sands. Indeed, this split looks more like a bizarre public relations stunt than a real division of labor. It should
therefore come as no surprise to learn that there isn't too much drilling going on in the Orinoco right now. While PDVSA says
that it has started to drill wells with its Russian and Vietnamese partners, the initial production numbers reported are trivial.
Meanwhile, India's ONGC and several other companies are reportedly holding back from investing any more cash until there is
some clarity as to the political situation in the country. You can bet even Venezuela's staunchest allies, like China, which has
loaned the Chavez regime some $46 billion in the last few years, will be among those taking a breather. It is difficult to see
what, if anything, could change in Venezuela's oil industry in the next few months. The political apparatus Chavez
has set up seems fully entrenched. It would probably take a full-fledged revolution for it to be wiped out at this
point. Nevertheless, Venezuela is nearing a breaking point when it comes to oil production. The government cannot continue to
rely on PDVSA to pay its bills. It needs real foreign partners with real experience to come in and help it boost production. That
means bringing back companies like ConocoPhilips, which before getting the boot in 2007, was the largest foreign operator in
the country. They have the engineers and know-how to help Venezuela quickly get off the ground. Venezuela would be wise to
also consult with oil companies like Husky, Suncor (SU), Syncrude and Nexen, all of which have extensive experience working in
Canada's vast Athabasca oil sands. To lure the right talent, Venezuela needs to make some serious
changes to its ownership and tax laws. Companies must feel safe to make their
investments so security and legal protections will need to be ironclad. But even if
Venezuela's new leaders give in to all of the oil companies' demands, it will probably be a
while before you see any real drilling. Chavez obliterated the nation's credibility, and it will
take some time for Venezuela to earn back that trust. So when Venezuelans go to the polls in a month to
choose their new leader, they would be wise to choose someone who knows how to eat a big helping of humble pie.
No Spill Over to Region

Chance of conflict is small
Laten, 10 (8/3/2010, Grant, Venezuelan Oil Embargo Wouldnt Impact American Energy
Security, http://csis.org/blog/venezuelan-oil-embargo-wouldn%E2%80%99t-impact-american-
energy-security, JMP)
Despite the economic doom and gloom, the precipitating condition for a Venezuelan embargo
would be an armed conflict between Colombia and Venezuela, and the odds of that occurring
are slim. Chvez, who has long been known for his outspoken anxiety over American influence
and imperialism in the region, certainly realizes that he has the most leverage over public
opinion and, to a lesser extent, United States foreign policy, when he acts tough but tangibly
steers clear of American interests. With last years military cooperation agreement between
Bogot and Washington allowing the American military use of seven Colombian bases, Chvez
has become increasingly outspoken over supposed American takeover plans for Venezuela.
World energy markets, however, failed to react to this most recent embargo threat, signaling
their desensitization to feather ruffling in Caracas. The reality remains that the United S tates
intends to continue its symbiotic energy relationship with Venezuela, and that means
managing its interests in Colombia to ensure economic and political stability in the region.

AT: Latin American Instability
Empirically, regional instability doesnt increase the risk of conflict outside the
region
Cincotta 10
November 24th, 2010 <Dr. Richard is a political demographer and currently demographer-in-
residence at The Stimson Center, as well as the consultant on politico-demographic issues for
the Woodrow Wilson Centers Environmental Change and Security Program> Whither The
Demographic Arc Of Instability? http://www.stimson.org/spotlight/whither-the-demographic-
arc-of-instability-/
After the Berlin Wall came down in 1989, the demand for geostrategic mapping went
up. Pentagon geographers revised maps almost monthly in order to keep pace with the rapid sequence
of events - the toppling of Eastern Europe's communist regimes, the rise of pro-Western liberal
democracies in their place, and the reunification of Germany. Then came more borders, and even more maps: the breakup
of the Soviet Union and the withdrawal of forces from former Warsaw-Pact states, the splintering of Yugoslavia and
Czechoslovakia, and requests for accession to NATO. When, in the late 1990s, it became apparent that the end of the Cold
War would have little effect on the emergence of civil and ethnic conflicts in Africa, Asia and Latin America, and that a
network of militant Islamist organizations had coalesced across Muslim Asia and Africa, strategic mapmaking shifted focus
to identifying conditions in the Global South. One map that quickly garnered the attention of
strategists outlined the world's weak and politically fractious states - a pattern that
came to be known as the "arc of instability" (Map 1, for 2000). Inside the arc, authoritarian
governments ruled with little regard for law, insurgencies undermined economic hopes,
and militant organizations capable of international terror, some linked to Al Qaida,
were equipped and trained. Outside the arc existed a world of modern industrial and
service economies, globalized communications, and trade. This geostrategic map was among the
first to hint at a link between security to development, forcing strategists to consider how countries in the arc could be
separated from it, one by one, and brought into the community of states. Political demographers had seen this pattern
before. With only a few exceptions, the arc was composed of states with a youthful age structure (an age distribution in
which the majority of the population was 25 years of age and younger). In fact, a few researchers had already made
connections between age structure and political instability-first, historian Herbert Mller in the late 1960s; then another
historian, Jack Goldstone, in the early '90s; and soon after a political scientist, Christian Mesquida. Each suggested that
countries with large proportions of young adults in the working - age population and rapid growth in the entry-level
working years were prone to more civil and ethnic conflict than their age-structurally mature neighbors. More recent
studies have shown that, since 1970, for a country within the demographic arc of instability (often referred to as a "youth-
bulge country"), the risk of intra-state conflict has been 2.5 times, or higher, than on the outside. At any one time, intra-
state conflicts inside the arc outnumber those outside the arc by an average of nine to one. Perhaps more surprisingly, after
a state's population matures, and after its internal armed conflicts have been settled, it tends to leave behind much of the
risk of an intra-state conflict.

US already working to mitigate regional instabilities
MANOUS 2003
07 April 2003 USAWC STRATEGY RESEARCH PROJECT ENVIRONMENTAL SECURITY: A STRATEGY
FOR THE MITIGATION OF REGIONAL INSTABILITIES? by JOE D. MANOUS, JR United States Army
Maintaining regional stability has risen in importance in United States foreign policy and in
some instances has risen to the level of a vital national interest. However, the current role of the
United States as the worlds sole hyperpower has produced unique challenges as the United States confronts asymmetric
threats from terrorist (non-state) organizations. Of special interest to the United States military is the
prevention or mitigation of regional instabilities. These instabilities hamper economic
prosperity and provide breeding grounds for popular discontent. While regional
instabilities alone may not constitute a direct physical threat to the United States, their
secondary effects, which include impacts on international trade, access to resources, and
support bases for terrorist organizations, have major implications for United States
national security interests.Of special interest to the United States, with regard to global security, are the
developments of regional instabilities, which are often rooted in political, economic, or military unrest. These instabilities can
hamper economic prosperity and provide breeding grounds for popular discontent. Consequently, the prevention
or mitigation of regional instabilities is an important and potentially cost effective (as
compared to war) strategy that can promote a global economy and reduce global terrorist
organization recruitment and training activities. Instabilities fall into three general categories; those caused
or supported by external forces, internal disturbance, or a combination of the two.3 The first case is controlled largely by the
relative political, economic, and military strengths of the States involved, but the later cases include popular support (or lack
thereof) for a political power. The strength of popular support is greatly influenced by governmental policies, the national
standard of living, and the strength of the economy. Often regional instabilities are found in developing countries where the
standard of living is low, the economy is weak, and government policies are either impotent due to a lack of authority or
repressive to maintain order. As a consequence of these factors (and sometimes as a cause of them), the populations of
developing countries often focus much of their energy fulfilling the basic needs of food, water, shelter, and health care. If a
population is unable to2 meet these basic needs, internal disruption results. The causes of shortages are sometimes induced
by humans for political advantage5 , but often the root causes of shortages are found in the natural or anthropogenically
modified environment in which the people live and work.

Latin America is stable now, and empirically sees no violent conflict from
instability
Petras 11
Latin America: Growth, Stability and Inequalities: Lessons for the US and EU, By Prof. James
Petras, Global Research, October 02, 2011 Region: Latin America & Caribbean Theme: Culture,
Society & History, http://www.globalresearch.ca/latin-america-growth-stability-and-
inequalities-lessons-for-the-us-and-eu/26887
The image of Latin America portrayed by the mass media and held by the educated public is a region of
frequent coups, periodical revolutions, perpetual military dictatorships, alternating boom
and bust economies and an ever-present International Monetary Fund (IMF) dictating economic policy. In
contrast the same opinion makers plus their academic counterparts project images of the United States and the
European Union as stable societies, with steady economic growth, incremental expansion
of social welfare programs, resolving issues via consensual compromises and practicing
sound fiscal policies. In recent times, the better part of the current decade, these images have
taken on the character of ideological dogmas they no longer correspond to reality. In fact a good argument can be made that
the roles have been reversed: the US and EU are in perpetual crises and Latin America, at least most of the
major countries, have experienced stability and growth which is the envy (or should be) of Washington pundits and financial
commentators. This role reversal has been recognized by many US, EU and Asian investors and multinationals, even as
respectable journalistic hacks for the Financial Times, NY Times and Wall Street Journal still write about vulnerabilities,
imbalances and other weaknesses while grudgingly acknowledging the dynamic growth of the region. Progressive opinion is
equally at fault, focusing on the advances of the left regimes but overlooking the underlying dynamics affecting
most of the region result in losing sight of the new points of conflict and contention. We will
proceed to outline the contrasting realities between the crises ridden North (US/EU) and the sustained growth of the South
( South America). The analysis will raise questions of whether the South American experience is transferable to the North and
what structural adjustments would be necessary to pull the US and EU out of the downward spiral of stagnation and violent
conflicts which have characterized these regions for the better part of the past decade.
No ImpactLatin American Instability
Latin American conflicts wont escalate no vacuum of power.
Fettweis 11 Professor of Political Science @ Tulane
Christopher, Professor of Political Science @ Tulane, Dangerous Times?: The International
Politics of Great Power Peace, pg. 85
The trend is apparent on every continent. The only conflict raging in the entire Western Hemisphere in
2010 was the ongoing civil war in Colombia, and even that was far less bloody than a
decade prior. Cruise ships have returned to Caratagena. Despite the fact that there are no nuclear
weapons south of the United States, the states of Central and South America act as if they
do not fear an attack from their neighbors. The rules of realpolitik no longer seem to apply.
Europe, which of course has been the most war-prone of continents for most of human history, is entirely calm, without even
the threat of interstate conflict. More than one scholar has noted the rather remarkable fact that no serious war planning now
goes on among the European powers.'; All over Europe and the Americas," John Keegan has observed, "armies are withering
away."" The situations in Bosnia and Kosovo, while not settled, are at least calm for the moment. And in contrast to 1914, the
great powers have shown no eagerness to fill Balkan power vacuums; to the contrary, throughout the 1990s. they had to he
shamed into intervention, and were on the same side when they eventually did so. International reactions to turmoil in the
Balkans in 1914 and in 1992 demonstrate the extent to which the international system had changed. Today's power vacuums
seem to repel far more than they attract.

No underlying triggers of interstate conflict in Latin America
Hofmeister '08
Wilhem, PhD, "International Security: A European-South American Dialogue" Conference
Report, 11/20/08, Konrad-Adenauer-Stiftung, www.kas.de/bruessel/en/publications/15122/, AD
5/22/12
Security is one main concern of Latin-Americas citizens. For them, it is not only a question of carefreeness with regard to
general risks, but a question of protection against violence and crime. Compared to international standards, most Latin-
American countries show a relativly elevated degree of intra-state violence. In Brazil, for example, more than 40.000 people fall
victim of criminal violence each year. This extent of intra-state violence seems to contrast with another phenomenom: In an
international comparison, Latin-America is considered the region with less inter-state conflicts and
the one, who in proportion to its gross national product (GNP), spends less in military expenses.
The subcontinent lacks any major territorial dispute, as well as religious or ethnical
conflicts. Besides, Latin-America is the only region in the world where all countries pronounce
openly against the aquisition and posession of nuclear weapons. Therefore, central topics on the agenda of
international security, as the fight against terrorism or the issue of non-proliferation, dont have an immediate impact on Latin-
American countries and thus, within the continent, the interest and comprehension of these topics remain rather limited.
Accordingly, the disposition of politicians, media and a broader part of civil society to support the fight against terrorism and the
constriction of the proliferation of nuclear weapons, is situated on a low level. This tendency is strengthened by the widely
spread critique against the Bush-Administration and the presence of the armed forces of the USA in Colombia. On the other
hand, the countries of Latin-America by no means have a cohesive position with regard to matters of international security.
They neither have a common view of security problems nor does there exist a coordinated collective strategy in international
forums. These countries are more or less free riders with regard to questions on security. Many times, the proximity to the
United States is not seen as protection against threat; on the contrary many countries feel threatened by the hegemon.

No risk of war in Latin America.
Barshefsky et al. 8
Charlene Barshefsky and James T. Hill, Chairs and Shannon K. ONeil, Project Director. U.S.-Latin
America
Relations: A New Direction for a New Reality. Council On Foreign Relations. Independent Task
Force Report No. 60. 2008. Online.
Cross-border threats among countries of the region are much diminished today, thanks to
the end of military governments in the region, relatively low levels of defense spending,
few significant external threats, the settling or tabling of most major border disputes, the
influence of the United States and other members of the international community, and
improving mechanisms for regional cooperation through the OAS and other regional and
sub-regional bodies. Of concern, however, are Venezuelas international arms purchases, which increased from an
estimated $71 million between 2002 and 2004 to $4 billion between 2005 and 2007, expenditures not included in the countrys
official military budget.26 While aggregate defense expenditures in Latin Americaremainamongthelowest regionallyin theworld
as a percentage of GDP, such substantial Venezuelan increases should be watched.

Regional and Sub-Regional institutions check conflict and resolve disputes.
Barshefsky et al. 8
Charlene Barshefsky and James T. Hill, Chairs and Shannon K. ONeil, Project Director. U.S.-Latin
America
Relations: A New Direction for a New Reality. Council On Foreign Relations. Independent Task
Force Report No. 60. 2008. Online.
Peaceful resolution of the crisis at the Rio Summit in the Dominican Republic showed, on the
one hand, the importance of institutional and legal mechanisms for security cooperation and
dispute resolution, especially those under the OAS. But as a general matter such mechanisms remain weak,
and improving and deepening them will be critical to averting such crises in the future. Other forums for regional
and sub regional cooperation, though not specifically dedicated to security cooperation (such as Mercosur
and the Community of Andean Nations), have been beneficial in reducing and managing interstate
tensions. Other proposed or incipient security forums, such as the South American Defense
Council and the Ameripol regional police force, could also play a positive role. Signed in 1967,
the Treaty of Tlatelolco has, so far, succeeded in committing the entire Latin American region
to remain free of nuclear weapons. While these mechanisms, taken together, do not provide an especially robust
regional system for managing interstate conflict, they do comprise a system of norms and practices
aimed at resolving such disputesand offer a platform on which to build.

Latin America literally poses no security threat
Naim 6
Moises Niam, editor of Foreign Policy Magazine. Foreign Policy No157 40-3, 45-7 N/D 2006.
For decades, Latin America's weight in the world has been shrinking. It is not an economic
powerhouse, a security threat, or a population bomb. Even its tragedies pale in comparison to Africa's.
The region will not rise until it ends its search for magic formulas. It may not make for a good sound bite, but patience is Latin
America's biggest deficit of all. Latin America has grown used to living in the backyard of the United States. For decades, it has
been a region where the U.S. government meddled in local politics, fought communists, and promoted its business interests.
Even if the rest of the world wasn't paying attention to Latin America, the United States occasionally was. Then came September
11, and even the United States seemed to tune out. Naturally, the world's attention centered almost exclusively on terrorism,
the wars in Afghanistan, Iraq, and Lebanon, and on the nuclear ambitions of North Korea and Iran. Latin America became
Atlantis--the lost continent. Almost overnight, it disappeared from the maps of investors, generals, diplomats, and journalists.
Indeed, as one commentator recently quipped, Latin America can't compete on the world stage in any
aspect, even as a threat. Unlike anti-Americans elsewhere, Latin Americans are not willing
to die for the sake of their geopolitical hatreds. Latin America is a nuclear-weapons free
zone. Its only weapon of mass destruction is cocaine. In contrast to emerging markets like India and China,
Latin America is a minor economic player whose global significance is declining. Sure, a few
countries export oil and gas, but only Venezuela is in the top league of the world's energy market. Not even Latin America's
disasters seem to elicit global concern anymore. Argentina experienced a massive financial stroke in 2001, and no one abroad
seemed to care. Unlike prior crashes, no government or international financial institution rushed to bail it out. Latin
America doesn't have Africa's famines, genocides, an HIV/AIDS pandemic, wholesale state
failures, or rock stars who routinely adopt its tragedies. Bono, Bill Gates, and Angelina Jolie worry about
Botswana, not Brazil. But just as the five-year-old war on terror pronounced the necessity of confronting threats where they
linger, it also underscored the dangers of neglect. Like Afghanistan, Latin America shows how quickly and easy it is for the
United States to lose its influence when Washington is distracted by other priorities. In both places, Washington's disinterest
produced a vacuum that was filled by political groups and leaders hostile to the United States. No, Latin America is not
churning out Islamic terrorists as Afghanistan was during the days of the Taliban. In Latin America, the power gap is
being filled by a group of disparate leaders often lumped together under the banner of populism. On the rare occasions that
Latin American countries do make international news, it's the election of a so-called populist, an apparently anti-American, anti-
market leader, that raises hackles. However, Latin America's populists aren't a monolith. Some are worse for international
stability than is usually reported. But some have the potential to chart a new, positive course for the region. Underlying the
ascent of these new leaders are several real, stubborn threads running through Latin Americans' frustration with the status quo
in their countries. Unfortunately, the United States'---and the rest of the world's--lack of interest in that region means that the
forces that are shaping disparate political movements in Latin America are often glossed over, misinterpreted, or ignored.
Ultimately, though, what matters most is not what the northern giant thinks or does as much as what half a billion Latin
Americans think and do. And in the last couple of decades, the wild swings in their political behavior have created a highly
unstable terrain where building the institutions indispensable for progress or for fighting poverty has become increasingly
difficult. There is a way out. But it's not the quick fix that too many of Latin America's leaders have promised and that an
impatient population demands.
No Narco-terrorism
No terrorism in Venezuela
Golinger 12
Eva, 1-12-12, Global Research, Venezuela: A Threat to the Security of the USA?
http://www.globalresearch.ca/venezuela-a-threat-to-the-security-of-the-usa/28622
The hyped-up, falsified accusations of terrorism and warmongering against Venezuela
none of which have ever been substantiated with real evidence are dangerous attempts
to scare public opinion into justifying some kind of aggression against a peaceful nation.
Venezuela has never invaded, attacked, threatened or intervened in another country, nor has it bombed or
assassinated the citizens of other nations. Venezuela has a policy of peace, and its never broken or
violated that promise.

Terrorism threat low
Sullivan and Beittel 13 *Specialist in Latin American Affairs @ CRS **Analyst in Latin
American Affairs @ CRS
Mark and June, 4-5-13, Latin America: Terrorism Issues
http://digitalcommons.ilr.cornell.edu/cgi/viewcontent.cgi?article=2063&context=key_workplac
e
For most countries in Latin America and the Caribbean, threats emanating from terrorism are low.
Terrorism in the region is largely perpetrated by groups in Colombia and by the remnants of
radical leftist Andean groups. According to the Department of State, most governments in the region
have good records of cooperation with the United States on anti-terrorism issues, although
progress in the region on improving counterterrorism capabilities is limited by several factors, including corruption, weak
governmental institutions, weak or non-existent legislation, and reluctance to allocate sufficient resources. Both Cuba and
Venezuela are on the State Departments list of countries determined to be not cooperating fully with U.S. antiterrorism
efforts, and Cuba has remained on the State Departments list of state sponsors of terrorism since 1982. U.S. officials and
some Members of Congress have expressed concern over the past several years about Venezuelas relations with Iran, with
concerns centered on efforts by Iran to circumvent U.N. and U.S. sanctions and on Irans ties to Hezbollah, alleged to be linked
to two bombings in Argentina in the 1990s. There is disagreement, however, over the extent and significance of Irans
activities in Latin America. The State Department maintains that there are no known operational
cells of either Al Qaeda or Hezbollah-related groups in the hemisphere, although it notes that
ideological sympathizers continue to provide financial and moral support to these and other terrorist groups in the Middle
East and South Asia.

Weakening now
Hanson 8
Stephanie Hanson, News Editor, Council on Foreign Relations, FARC, ELN: Colombias Left-Wing
Guerrillas, March 11, 2008, http://www.cfr.org/publication/9272/
FARC is Colombias largest and best-equipped rebel group. According to the Colombian government, the group had roughly
sixteen-thousand members in 2001. The head of the U.S. Southern Command testified in March 2008 that the FARC has
now been reduced to about nine thousand fighters (PDF). It operates in roughly one-third of the country,
mostly in the jungles of the south and east. In 1999, during peace negotiations with the group, then-president Andres Pastrana
ceded control of a 42,000-square-mile area (roughly the size of Switzerland) to the FARC. After three years of fruitless
negotiations and a series of high-profile terrorist acts, Pastrana ended peace talks in February 2002 and ordered Colombian
forces to start retaking the FARC-controlled zone. When Uribe took office in 2002, he launched an
aggressive security campaign against the FARC and ELN, bolstered by U.S. funding from Plan
Colombia, a multibillion dollar counternarcotics aid package. In 2007, members of the FARCs leadership
were killed and several of the groups hostages were murdered under murky circumstances. In 2008, the chief spokesman
in the FARCs secretariat, Raul Reyes, was killed during a Colombian incursion into Ecuador. These episodes show an
insurgent group in a state of strategic crisis, writes Adam Isacson on his blog for the Center for International
Policy. He adds that the FARC can no longer depend on local populations for support, as many
have turned against the group due to its violent methods.
No LA Terrorism
No risk of terror from Latin America Hezbollah only has money laundering and
Chavez-Iran ties are of little concern.
Barshefsky et al. 8
Charlene Barshefsky and James T. Hill, Chairs and Shannon K. ONeil, Project Director. U.S.-Latin
America
Relations: A New Direction for a New Reality. Council On Foreign Relations. Independent Task
Force Report No. 60. 2008. Online.
Much of the recent interest about transnational threats in Latin America stems from
concerns that the region may serve as a base or breeding ground for terrorist
organizations. This fear was highlighted when some of the people involved in an incipient terrorist plot at John F. Kennedy
airport in New York were found to have come from Guyana and Trinidad and Tobago. Attention has also focused on
the triborder area where Argentina, Brazil, and Paraguay meet, which is home to considerable criminal activity and
relatively low levels of government control. There is some evidence that Hezbollah has had a limited
presence in the area for purposes of money laundering, but there is no strong evidence
thus far that Middle East terrorist operatives have had much success making inroads into
Latin America. Similarly, although Hugo Chavezs ties with Iran and provocative statements about the United
States have raised concern in many quarters, there is little evidence that Venezuela currently presents a
haven for Islamic terrorism. Nonetheless, as Admiral Stavridis, Commander of the U.S. Southern Command,
expressed to Congress earlier this year, while narcoterrorism (addressed below) is a constant struggle for the region, Islamic
radical terrorism is a much less immediate force in the region, but it has the potential to become of greater concern to us.

No risk of terrorism from Latin America.
WOLA 7
The Washington Office on Latin America is the leading US human rights organization promoting
democracy and social justice in Latin America and The US Congress, the media and activists look
to WOLA for up-to-date analysis of U.S. policy and developments in the region. Forging New
Ties: A Fresh Approach to U.S. Policy in Latin America. September 2007.
http://www.wola.org/media/Forging%20New%20Ties-FINAL.pdf
Fearmongers sometimes portray populist movements and governments in the region as
potential threats to the United States and its security. This is a mistake. Latin American armed
forces do not pose military threats to us. Whatever their views of the United States, these
governments are unlikely to offer havens to terrorists. And though they may wish to renegotiate the terms
of trade with the United States, they are unlikely to cut off vital trade resources. Even Venezuela, on whose oil supply the
United States relies, and which has needled Washington with its strident anti-American rhetoric
and relations with Iran, poses challenges better handled through diplomacy and dialogue
than through confrontation. In fact, U.S. national security interests in Latin America depend in the long term not on
thwarting those who disagree with us but on helping the region deal with the poverty and inequality that are the catalysts of
these movements.
AT: RelationsGeneral

No impact to credibility allies wont abandon us and adversaries cant exploit
it
Walt 11 (Stephen, Professor of International Relations Harvard University, Does the U.S. still
need to reassure its allies? Foreign Policy, 12-5,
http://walt.foreignpolicy.com/posts/2011/12/05/us_credibility_is_not_our_problem, GDI File)
A perennial preoccupation of U.S. diplomacy has been the perceived need to reassure allies of
our reliability. Throughout the Cold War, U.S. leaders worried that any loss of credibility might cause
dominoes to fall, lead key allies to "bandwagon" with the Soviet Union, or result in some form of
"Finlandization." Such concerns justified fighting so-called "credibility wars" (including Vietnam), where the main concern was not
the direct stakes of the contest but rather the need to retain a reputation for resolve and capability. Similar fears also led the United
States to deploy thousands of nuclear weapons in Europe, as a supposed counter to Soviet missiles targeted against our NATO allies.
The possibility that key allies would abandon us was almost always exaggerated, but U.S.
leaders remain overly sensitive to the possibility. So Vice President Joe Biden has been out on the road this past
week, telling various U.S. allies that "the United States isn't going anywhere." (He wasn't suggesting we're stuck in a
rut, of course, but saying that the imminent withdrawal from Iraq doesn't mean a retreat to isolationism or anything like that.)
There's nothing really wrong with offering up this sort of comforting rhetoric, but I've never really understood why
USS.S. leaders were so worried about the credibility of our commitments to others. For starters,
given our remarkably secure geopolitical position, whether U.S. pledges are credible is first
and foremost a problem for those who are dependent on U.S. help. We should therefore take our
allies' occasional hints about realignment or neutrality with some skepticism; they have every incentive to
try to make us worry about it, but in most cases little incentive to actually do it .
AT: RelationsVenezuela Specific
Relations Resilient
Relations Resilient -- Single instances of action do not change international
perceptions of the U.S.
Fettweis 8 (Christopher professor of political science at Tulane, Credibility and the War on
Terror, Political Science Quarterly, Winter)
Since Vietnam, scholars have been generally unable to identify cases in which high credibility
helped the United States achieve its goals. The shortterm aftermath of the Cuban Missile Crisis,
for example, did not include a string of Soviet reversals, or the kind of benign bandwagoning with the West that
deterrence theorists would have expected. In fact, the perceived reversal in Cuba seemed to harden Soviet resolve. As the crisis was
drawing to a close, Soviet diplomat Vasily Kuznetsov angrily told his counterpart, "You Americans will never be able to do this to us
again."37 Kissinger commented in his memoirs that "the Soviet Union thereupon launched itself on a determined, systematic, and
long-term program of expanding all categories of its military power .... The 1962 Cuban crisis was thus a historic turning point-but
not for the reason some Americans complacently supposed."38 The reassertion of the credibility of the United States, which was
done at the brink of nuclear war, had few long-lasting benefits. The Soviets seemed to learn the wrong lesson. There is
actually scant evidence that other states ever learn the right lessons. Cold War history
contains little reason to believe that the credibility of the superpowers had very much effect
on their ability to influence others. Over the last decade, a series of major scholarly studies have cast
further doubt upon the fundamental assumption of interdependence across foreign policy
actions. Employing methods borrowed from social psychology rather than the economics-based models commonly employed by
deterrence theorists, Jonathan Mercer argued that threats are far more independent than is commonly
believed and, therefore, that reputations are not likely to be formed on the basis of individual
actions.39 While policymakers may feel that their decisions send messages about their basic dispositions to others, most of the
evidence from social psychology suggests otherwise. Groups tend to interpret the actions of their rivals as
situational, dependent upon the constraints of place and time. Therefore, they are not likely to
form lasting impressions of irresolution from single, independent events. Mercer argued that the
interdependence assumption had been accepted on faith, and rarely put to a coherent test; when it was, it almost inevitably
failed.40

Oil ties make relations resilient
New York Daily Sun, 13 (1/29/2013, Venezuela Open To Discussion On Improving Ties
With The US, http://www.newyorkdailysun.com/venezuela-open-to-discussion-on-improving-
ties-with-the-us/)
Despite the strained relationship of the US and Venezuela due to ideological differences, the
two countries cant help but keep their ties due to oil-trading . To date, the US is Venezuelas
largest importer, with the US taking forty per cent of Venezuelas crude oil exports. On the other hand, Venezuela provides
about 5.8 per cent of the US oil demands.

Both countries are working to find common ground now on drugs
New York Daily Sun, 13 (1/29/2013, Venezuela Open To Discussion On Improving Ties
With The US, http://www.newyorkdailysun.com/venezuela-open-to-discussion-on-improving-
ties-with-the-us/)
The two countries ties used to be strong. However, after taking office, President Hugo Chvez accused the Bush administration of
attempting a coup to oust him from his position and broke off diplomatic ties with the U.S. Furthermore, Chavez reasserted
sovereignty over Venezuelas oil reserves and raised royalties for foreign firms, which challenged the US economic position. More
than that, Chavez made his friendship with Fidel Castro public and made significant trade with Cuba which undermined the U.S.
policy of isolating the said nation. Their relation was only reestablished in 2009 when Barack Obama was elected President of the
United States, though their ties has been strained since then. But the tide has once again turned. With Chavez out of the
picture due to his illness, Venezuelan officials are trying to ally themselves with the US. To amend
their ties, the Venezuelan government is reported to be considering US proposal for the
return of anti-drug agents chased out of the Venezuela eight years ago by President Chavez. On this issue,
Venezuelas ambassador to the Organization of American States (OAS), Roy Chaderton said that both
countries are trying to find a common ground . He said: There are things that are being done with a great deal
of seriousness and a lot of caution, and added, We are not obliged to have bad ties with governments which have different visions
to ours I hope pragmatism prevails and we reach a fair place of mutual interest.

U.S. committed to relations despite recent diplomatic conflicts --- proves ties
are resilient
Sullivan, 13 --- Specialist in Latin American Affairs at Congressional Research Service
(1/10/2013, Mark P., Venezuela: Issues for Congress,
http://www.fas.org/sgp/crs/row/R40938.pdf, JMP)
Obama Administration Policy During the 2008 U.S. presidential campaign, Barack Obama maintained that his Administration would
use principled bilateral diplomacy to engage with such adversaries in the region as Venezuela under populist President Hugo Chvez.
Nevertheless, tensions continued in U.S.- Venezuelan relations, with President Chvez continuing to define himself in opposition to
the United States, using incendiary rhetoric to insult the U.S. Government and U.S. influence in Latin America.68 While in mid-2009,
Ambassadors were returned, in late 2010, the Chvez government revoked an agreement for U.S.
Ambassador-designate Larry Palmer to be posted to Venezuela. The Obama Administration
responded by revoking the diplomatic visa of the Venezuelan Ambassador to the United
States. Despite tensions in relations, the State Department maintains that the United S tates
remains committed to seeking constructive engagement with Venezuela, focusing on such
areas as anti-drug and counter-terrorism efforts.

U.S. open to improving relations now
Sullivan, 13
Specialist in Latin American Affairs at Congressional Research Service (1/10/2013, Mark P.,
Venezuela: Issues for Congress, http://www.fas.org/sgp/crs/row/R40938.pdf,)
In the aftermath of President Chvezs October 2012 reelection, the Obama Administration, while acknowledging differences with
Chvez, congratulated the Venezuelan people on the high level of participation and the relatively peaceful electoral process (see
Election Results and Implications above). Subsequently, in November 2012, the State Departments Assistant
Secretary of State for Western Hemisphere Affairs Roberta Jacobson engaged in a conversation with Vice
President Maduro about improving bilateral relations, including greater cooperation on
counternarcotics issues. In early January 2013, the State Department reiterated that the
United S tates remains open to dialogue with Venezuela on a range of issues of mutual interest,
and subsequently confirmed the Assistant Secretarys conversation with Vice President Maduro in November. In light of the setback
in President Chvezs health, a State Department spokesman maintained on January 9, 2013, that regardless of what happens
politically in Venezuela, if the Venezuelan government and if the Venezuelan people want to move
forward with us, we think there is a path thats possible. Its just going to take two to tango. 80 With regard
to U.S. views on Venezuelas potential political succession, the State Department has maintained that it is a decision for Venezuelans
to make, but would like to see any transition be democratic, constitutional, and legal within Venezuela. (See Chvezs Health Status
and Political Implications above.)

Alt Causes

Embargo undermines relations --- outweighs the signal from the aff
Inter-American Dialogue, 12
the leading U.S. center for policy analysis, exchange, and communication on issues in Western
Hemisphere affairs April 2012, An Inter-American Dialogue Policy Report, The Dialogues select
membership of 100 distinguished citizens from throughout the Americas includes political,
business, academic, media, and other nongovernmental leaders, Remaking the Relationship:
The United States and Latin America,
http://www.thedialogue.org/PublicationFiles/IAD2012PolicyReportFINAL.pdf,
Cuba, too, poses a significant challenge for relations between the United S tates and Latin
America. The 50-year-old US embargo against Cuba is rightly criticized throughout the hemisphere as a
failed and punitive instrument. It has long been a strain on US-Latin American relations. Although the United
States has recently moved in the right direction and taken steps to relax restrictions on travel to Cuba, Washington needs to do far
more to dismantle its severe, outdated constraints on normalized relations with Cuba. Cuba is one of the residual
issues that most obstructs more effective US-Latin American engagement. At the same time, Cubas
authoritarian regime should be of utmost concern to all countries in the Americas. At present, it is the only country without free,
multi-party elections, and its government fully controls the press. Latin American and Caribbean nations could be instrumental in
supporting Cubas eventual transition to democratic rule. An end to the US policy of isolating Cuba, without setting aside US concern
about human rights violations, would be an important first step.

Cant solve relations without addressing immigration, drugs and Cuba
Inter-American Dialogue, 12 --- the leading U.S. center for policy analysis, exchange, and
communication on issues in Western Hemisphere affairs (April 2012, An Inter-American
Dialogue Policy Report, The Dialogues select membership of 100 distinguished citizens from
throughout the Americas includes political, business, academic, media, and other
nongovernmental leaders, Remaking the Relationship: The United States and Latin America,
http://www.thedialogue.org/PublicationFiles/IAD2012PolicyReportFINAL.pdf,)
US ReversalsOver the last decade, the United S tates has suffered important setbacks in its regional and
global standing. It has waged draining wars in Iraq and Afghanistan. It has suffered the 2008
financial crisis brought on by a lack of fiscal discipline and poor economic management. It has
seen a widening gap between its rich and its poor and more acute social problems. The
countrys politics have become increasingly dysfunctional, making it harder to develop
sensible and effective foreign policies except in situations of great urgency. Taken together, these
developments have serious implications for US-Latin American relations . There are ample
opportunities for deeper engagement and more productive cooperation but, before moving to anything resembling
a genuine partnership, it will be necessary to deal more effectively with the long-standing
challenges on the inter-American agenda. That is the only way the United S tates will be able to
establish full trust and credibility. Agenda for a New Relationship An end to the current distancing and
distraction in US-Latin American relations will require Washington and other governments in
the hemisphere to refocus and deal more effectively with an array of difficult issues. Three long
unresolved problems that cause strain and frustration in inter-American affairs
immigration, drugs, and Cubademand especially urgent attention. Three other issueseconomics and
energy, democratic governance, and global and regional cooperationstand out as opportunities for broader coordination among
all nations of the hemisphere. To be sure, the nature and relevance of these challenges vary from country to country. In an
increasingly differentiated hemisphere, it is risky to refer in general terms to relations between the United States and Latin America.

Lack of immigration reform major factor undermining relations
Inter-American Dialogue, 12
the leading U.S. center for policy analysis, exchange, and communication on issues in Western
Hemisphere affairs (April 2012, An Inter-American Dialogue Policy Report, The Dialogues select
membership of 100 distinguished citizens from throughout the Americas includes political,
business, academic, media, and other nongovernmental leaders, Remaking the Relationship:
The United States and Latin America,
http://www.thedialogue.org/PublicationFiles/IAD2012PolicyReportFINAL.pdf, )
Immigration
Washingtons failure to repair the United States broken immigration system is breeding
resentment across the region , nowhere more so than in the principal points of origin and transit: Mexico, Central
America, and the Caribbean. Latin Americans find the idea of building a wall on the US-Mexico border
particularly offensive. Despite bitter political battles over immigration in the United States, there is general agreement
about what sensible reform would include. It combines effective border and employer enforcement, the adoption of a general
worker program consistent with labor market needs in the United States, and a path toward residence and citizenship for the
estimated 12 million unauthorized residents living in the country. This package is similar to the reform effort (unfortunately defeated
in Congress) proposed under President George W. Bush. The complicated and divisive politics of the United States,
compounded by the weakness of the US economy, have so far blocked this comprehensive
approach. But more limited measures such as the Dream Act, allowing children brought to the United States without appropriate
documentation an opportunity to qualify for citizenship, would not only be welcomed in US Latino communities and in Latin
America, but it would demonstrate that the issue is being taken seriously and with a measure of compassion in Washington.


China Advantage
Cant pushout China
Maduro wont cut ties with China
Alic, 13 --- geopolitical analyst, co-founder of ISA Intel in Sarajevo (4/15/2013, Jen, Foreign Oil
& Gas Companies Look to Status Quo in Venezuela, http://oilprice.com/Geopolitics/South-
America/Foreign-Oil-Gas-Companies-Look-to-Status-Quo-in-Venezuela.html, JMP)
In the meantime, Chinas foothold in Venezuela remains on solid ground. China is already privy
to 600,000 bpd from Venezuela in return for $42 billion in loans. Maduro is not likely to rock
this boat with Beijing, and according to the terms already in place, Venezuelan exports are set
to increase to one million bpd by 2015, though most of the loan money has already been spent.
According to Southern Pulse, Maduro will likely seek new loans from China, but this will depend
on the terms and stability in Venezuela.

Cant Solve Other Countries
Aff doesnt solve --- China is developing vast economic relations with several
Latin American countries
Jiang, 07 --- Deputy Director of the Institute of Latin American Studies (ILAS) of the Chinese
Academy of Social Sciences (Shixue, Three Factors in Recent Development of Sino-Latin
American Relations, in ENTER THE DRAGON? Chinas Presence in Latin America,
http://www.wilsoncenter.org/sites/default/files/EnterDragonFinal.pdf, JMP)
In recent years Chinas relations with Latin America have been developing very rapidly, attracting
attention from around the world. There are three specific areas of rapid growth. First, high-level visits
between the two sides are frequent. In the past decade, for instance, 74 Latin American
heads of state , members of the legislature and government leaders have visited China; and
Chinese leaders have visited 19 Latin American countries . From November 11 to 23, 2004, Chinese
President Hu Jintao paid an official visit to Brazil, Argentina, Chile and Cuba. From January 23 to February 3, 2005, Chinese Vice
President Zeng Qinghong visited Mexico, Peru, Venezuela, Trinidad and Tobago and Jamaica. Thus, in a time span of just two
months, the countrys president and vice president both paid visits to Latin America. This was unprecedented in Chinas
international relations. Then in May 2005, Jia Qinglin, Chairman of the National Committee of the Chinese Peoples Political
Consultative Conference (CPPCC), visited Mexico, Cuba, Colombia and Uruguay. In September 2005, Chinese President Hu Jintao
visited Mexico during his tour of North America and the United Nations. This was Hus second trip to the Latin American region in
less than one year. The second area of rapid growth is in economic exchanges, particularly bilateral
trade with the region. In 2000, Chinas trade with Latin America was only $12.6 billion. It reached $40 billion in 2004, $50
billion in 2005, and surpassed $70 billion in 2006. In addition, bilateral investment has also been increasing, though at a much slower
pace compared with that of trade. Third, cooperation and exchanges in other areas are growing. The
Communist Party of China has established relations with most of the political parties in Latin
America . Since 1990, China has had 15 dialogues with the Rio Group at the ministerial level. Since 1997, China and Mercosur,
the South American Common Market, have held five dialogues. On May 26, 2004, the Organization of American States (OAS)
accepted China as a permanent observer. Before obtaining OAS status, China had already become an observer in the United Nations
Economic Commission for Latin America and the Caribbean, the Latin American Integration Association, the Inter-American
Development Bank, and the Latin American Parliament. People-to-people contacts have also been growing. Almost one hundred
sister-city relationships have been established between Chinese cities or provinces and their counterparts in 15 countries in Latin
America, including Panama, a Central American country that has no diplomatic tie with the Peoples Republic. Moreover, 17 Latin
American countries have become tourist destinations for Chinese citizens. In the area of science and technology,
the most notable example of cooperation was the joint launching of two satellites by China
and Brazil. This has been considered one of the best success stories of South-South cooperation in science and technology.
Other Sino-Latin American cooperation has included such areas as agriculture, forestry, fishery, husbandry, medicine, earthquake
prediction, manufacturing, information technology, biology, geology and space. In discussing Sino-Latin American relations, it is
necessary to take into consideration three factors: 1) the Latin American factor in Chinas development; 2) the China factor in Latin
American development; and 3) the U.S. factor in Sino-Latin American relations.

No China War

Sino-Latin American cooperation benefits world peace and there is no threat to
U.S.
Jiang, 07 --- Deputy Director of the Institute of Latin American Studies (ILAS) of the Chinese
Academy of Social Sciences (Shixue, Three Factors in Recent Development of Sino-Latin
American Relations, in ENTER THE DRAGON? Chinas Presence in Latin America,
http://www.wilsoncenter.org/sites/default/files/EnterDragonFinal.pdf, JMP)
In the age of globalization, there is a high priority on promoting South-South cooperation in all
fields. Chinas relations with Latin American countries are part of this cooperation. The
strengthened cooperation between China and Latin America should benefit world peace and
development. No less important is the fact that the development of Sino-Latin American
relations will not harm the interests of the United S tates.
China and US increasing relations now to avoid war
Miller 6/10
(Zeke, He is a political reporter for TIME. He previously was the first White House correspondent
at BuzzFeed and extensively covered the 2012 presidential campaign. Prior to that, he covered
politics for Business Insider. A New York native, he graduated from Yale University where he was
an editor and reporter at the Yale Daily News, At U.S.-China Summit, Leaders Talk of Avoiding
Another Cold War, http://swampland.time.com/2013/06/10/at-u-s-china-summit-leaders-talk-
of-avoiding-another-cold-war/)
Chinas President Xi Jinping announced that he was looking for the establishment of a new
model of major country relationship with the United States, as he expressed urgency in
taking steps to prevent another Cold War at a carefully orchestrated meeting this weekend with
President Obama on isolated 200-acre Sunnylands estate. China and the United States must find a
new pathone that is different from the inevitable confrontation and conflict between the
major countries of the past, Xi told reporters Friday after his first session with Obama. In public statements,
President Obama welcomed the effort. We shared our respective visions for our countries futures and agreed that
were more likely to achieve our objectives of prosperity and security of our people if we
are working together cooperatively, rather than engaged in conflict, Obama said. The informal
meeting on the West Coast instead of a state visit to Washington lacked a specific publicized agenda. Both leaders and their
staff eschewed neck ties, and Obama and Xi took a walk around the picturesque property for one-on-one time. The walk
culminated in the two chatting while sitting on a California redwood bench that Obama presented Xi for the occasion, inscribed
with the dates of their meeting. But with the Chinese government, informality has its limits. Xi opted for consecutive
translationwhere he or Obama delivered a sentence and had to wait for it to be translated for the other leaderas opposed
to simultaneous translation, which both effectively shortened the meetings and gave Xi more time to formulate his responses to
the American president. And while American officials publicly insist the meeting was productive, the conversation in the room
often seemed wooden, a byproduct of lingering suspicions. Responding to reporters questions Friday evening, the two
leaders appeared to talk across each other on the issue of cybersecurity, which has emerged as
one of the most controversial issues between the two nations. The focus on the Cold War by Xi suggested a
sense of urgency from the Chinese leader. Its as if in parenthesis hes saying, If we dont get this
relationship right now, neither of us is going to like what were going to have to do next,
said Chris Johnson, a former China analyst for the CIA and the Freeman Chair in China Studies at the Center for Strategic &
International Studies.

US-China relations increasing on issues of North Korea and climate change to
avoid war
Miller 6/10
(Zeke, He is a political reporter for TIME. He previously was the first White House correspondent
at BuzzFeed and extensively covered the 2012 presidential campaign. Prior to that, he covered
politics for Business Insider. A New York native, he graduated from Yale University where he was
an editor and reporter at the Yale Daily News, At U.S.-China Summit, Leaders Talk of Avoiding
Another Cold War, http://swampland.time.com/2013/06/10/at-u-s-china-summit-leaders-talk-
of-avoiding-another-cold-war/)
According to National Security Advisor Tom Donilon, the meetings began Friday afternoon with a high level overview of the two
presidents priorities and visions for their countries futures. Over dinner, in an ornate dining room surrounded with gold and
crystal candelabras and sculpture, the two leaders, joined by aides, discussed a range of issues, including
North Korea. Following their morning walk, the two leaders sat down again to discuss economic issues
and cyber security. The discussions were positive and constructive, wide-ranging and
quite successful in achieving the goals that we set forth for this meeting, Donilon said Saturday after Xi had
departed the estate. A highlight of the meeting, according to U.S. officials, was Chinas embrace of the U.S.
position with respect to North Korea, with Donilon saying the presidents agreed it was a key area
for U.S.-China enhanced cooperation. They agreed that North Korea must be
denuclearized, and agreed on a path forward to apply pressure on the government in
Pyongyang, which U.S. officials view as one of Chinas first forays stepping in to promote
regional calm. I think what you have essentially underway here is a shared threat analysis and a shared analysis as to
what the implications and impact would be of North Korea pursuing a nuclear weapons program, Donilon said, adding there
was a discussion about further talks with North Korea being authentic and credible. We really havent seen from the North
Koreans at this point that kind of commitment on the substance of potential talks, I think, at this point to move forward, he
said. Obama also encouraged Xi to deescalate tensions with Japan over the disputed
Senkaku Islands in the East China Sea, which are believed to sit upon oil and gas reserves
and are claimed by both countries. Obama said that the parties should seek to de-escalate,
not escalate; and the parties should seek to have conversations about this through diplomatic
channels and not through actions out of the East China Sea, Donilon told reporters. Both leaders discussed
the importance of strengthening military-to-military ties, which lag diplomatic and economic relations by more than a decade.
Gen. Martin Dempsey, the chairman of the joint chiefs of staff, visited China earlier this year, and both leaders pledged to
increase the frequency and depth of those interactions to promote stability between the two powers. While American
officials repeatedly said no deliverables would come out of the meeting between the two leaders, Obama and Xi signed
off on an agreement to limit the release of Hydrofluorocarbons, or HFCs, which are used as
refrigerants and are a potent greenhouse gas. Long in the works, officials hope it is the first step
toward cooperation on climate change issues.

Chinas military is defensive and they want positive military relations with the
US not a war
Wong, 11
(Edward, Staff writer for NYT China Lays Out Vision for Military, 3/21/2013,
http://www.nytimes.com/2011/04/01/world/asia/01china.html?_r=2,%20dw:%203-31-
2011,%20da:%207-9-2011,%20lido)aml
The militarys vision was laid out in a national defense white paper, a document published every two years
since 1998. The paper tried to walk a line between trumpeting the modernization efforts of the Chinese
military and assuaging the fears of foreign governments and analysts that the fast-growing Peoples Liberation Army would
be used for expansionist purposes or regional dominance. It stressed that Chinas military buildup was
purely defensive, a position Chinese leaders have long taken. The paper had more detail than previous
editions on Chinas efforts to establish confidence-building measures with foreign militaries. In the past year, perceptions by
foreign countries of Chinas military growth and of a more assertive foreign policy have resulted in diplomatic discord and
discomfort, particularly between China and the United States. China attaches importance to its military
relationship with the United States and has made ongoing efforts towards building a sound
military relationship, Senior Col. Geng Yansheng said at a news conference on Thursday. The Chinese
military is now taking steps to advance exchanges with the U.S. military this year.

No conventional war between the U.S. and China
Bandow 9
By Doug Bandow. This article appeared in the Korea Times on May 5, 2009. Bandow:
specializing in foreign policy and civil liberties. He worked as special assistant to President
Reagan http://www.cato.org/publications/commentary/chinas-military-rise-means-end-us-
hegemony
However, notes the Department of Defense (DOD), Chinas military continues to face deficiencies in
inter-service cooperation and actual experience in joint exercises and combat operations.
Moreover, Beijing is not yet capable of defeating a moderate-size adversary. The Pentagon adds,
China will not be able to project and sustain small military units far beyond China before
2015, and will not be able to project and sustain large forces in combat operations far from
China until well into the following decade. In any case, China has minimal strategic
conventional reach. The United States possesses 11 carrier groups to Chinas none. Beijing
also lacks a significant strategic air capability. East Asian countries may be at greater risk, but defending these
nations which are largely capable of protecting themselves is not the same as defending the United States.

No China War
SAAG 10
SAAG: is the South Asia Analysis Group, a non-profit, non-commercial think tank. The objective
of SAAG is to advance strategic analysis. 2-10-12
www.eurasiareview.com/10022012-an-india-china-military-conflict-analysis/, accessed 2-12-12
Today, the scenario is different. The PLA is not prepared to fight a revolutionary war where giving
up ones life for the communist party was a matter of pride. It has not fought a battle for more than 30
years. Even the PLAs fight against terrorism against small bands of Uighur separatists in Xinjiang does not show any special
expertise. At the same time there is the PLAs significant advancement in the areas of armaments, information supported
warfare, and tri-services coordination. Indias military planners have been assessing these developments. A nuclear
warfare in a limited confrontation is not in the calculations of military planning. That is a
separate aspect. Despite Chinas naval projection in the Indian Ocean and offer from Seychelles to
open a naval base (obviously as a repayment to Chinese aid), an India-China confrontation on the high seas is
a distant speculation. This, unless China perceives Indias Look East policy is conflicting seriously with Chinas territorial
claims in the South China Sea.

No China conflict no military use
Alison & Blackwill 13 --- *director of the Belfer Center for Science and International Affairs
and Douglas Dillon Professor at Harvard's John F. Kennedy School of Government AND **Henry
A. Kissinger Senior Fellow for U.S. foreign policy at the Council on Foreign Relations (Graham
and Robert, 1/28/2013, "Beijing Still Prefers Diplomacy Over Force,"
http://www.cfr.org/china/beijing-still-prefers-diplomacy-over-force/p29892)
As China has become a leading export market for its neighbours, it expects them to be " more
respectful ", in Mr Lee's words. In public statements, China usually downplays the advantages its size begets, but in a heated moment at a 2010
regional security meeting, its foreign minister had a different message: "China is a big country and other countries are small countries and that is just a
fact." Mr Lee has a phrase for this message: "Please know your place." Unlike free-market democracies, in which governments are unable or unwilling
to squeeze imports of bananas from the Philippines or cars from Japan, China's government can use its economic muscle. As tensions mount
over competing claims for contested territories, should we expect Beijing to use military force to advance its claims? From
the perspective of the grand strategist, the answer is no unless it is provoked by others. "China understands that its
growth depends on imports, including energy, and that it needs open sea lanes. They are determined to avoid the
mistakes made by Germany and Japan," Mr Lee says. In his view, it is highly unlikely that China would
choose to confront the US military at this point, since it is still at a clear technological and military
disadvantage. This means that, in the near term, it will be more concerned with using diplomacy, not force,
in foreign policy. Henry Kissinger, the western statesman who has spent most quality time with Chinese leaders in the past four decades, offers a
complementary perspective. As he has written, their approach to the outside world is best understood through
the lens of Sun Tzu, the ancient strategist who focused on the psychological weaknesses of the adversary. "China seeks its
objectives," Mr Kissinger says, "by careful study, patience and the accumulation of nuances only rarely does China
risk a winner-take-all showdown." In Mr Lee's view, China is playing a long game driven by a compelling vision. "It is China's
intention," Mr Lee says, "to be the greatest power in the world." Success in that quest will require not only sustaining historically
unsustainable economic growth rates but also exercising greater caution and subtlety than it has shown
recently, in order to avoid an accident or blunder that sparks military conflict over the Senkakus,
which would serve no one's interests.

Chinese leadership will pull back
Ross 1 (Robert S., Professor of Political Science Boston College, The National Interest, Fall,
Lexis)
The strategic costs to China of a war with the United States are only part of the deterrence equation. China also
possesses vital economic interests in stable relations with the United States.
War would end China's quest for modernization by severely constraining its access to U.S.
markets, capital and technology, and by requiring China to place its
economy on permanent war-time footing. The resultant economic reversal
would derail China's quest for "comprehensive national power" and great power status. Serious
economic instability would also destabilize China's political system on account of the resulting unemployment in key sectors of the
economy and the breakdown of social order. Both would probably impose insurmountable challenges to party leadership.
Moreover, defeat in a war with the United States over Taiwan would impose devastating nationalist humiliation on the Chinese
Communist Party. In all, the survival of the party depends on preventing a Sino-
American war.

Iran Advantage
AT: Sanctions
Venezuela hardly helps Iran with sanctions
Katzman 13 Specialist in Middle Eastern Affairs @ CFR
Kenneth, 6-13-13, Iran Sanctions http://www.fas.org/sgp/crs/mideast/RS20871.pdf
Iran has looked to several Latin American countries, particularly Venezuela, to try to avoid or reduce
the effects of international sanctions. For the most part, however, Irans trade and other business
dealings with Latin America remain modest and likely to reduce the effect of sanctions on
Iran only marginally. And, Iran has lost a key Latin American ally with the March 2013 death of Venezuelan President
Hugo Chavez. As noted earlier and in the tables at the end of the paper, several Venezuelan firms have been
sanctioned for dealings with Iran.
Politics
Energy policy controversial
Energy policies never have bipartisan support
Behrens 2013
Energy Policy: 113th Congress Issues Carl E. Behrens Specialist in Energy Policy May 30, 2013
Energy policy historically has been legislated mostly in large, complex bills that deal with a
wide variety of issues, with debate spanning several sessions. The Energy Policy Act of 2005
(EPAct 2005; P.L. 109-58), was the most recent comprehensive general legislation, with provisions
and authorizations in almost all areas of energy policy. EPAct 2005 also set up in DOE the
program of energy project loan guarantees which has become a source of controversy and
debate following the bankruptcy of the Solyndra solar system manufacturing facility in 2011.23 The Energy Independence
and Security Act of 2007 (EISA, P.L. 110-140) set new target fuel economy standards for cars and light trucks of 35 miles per gallon
by 2020, and increased the renewable fuels standard (RFS) to start at 9.0 billion gallons in 2008 and rise to 36 billion gallons by 2022. EISA also
included new efficiency standards for appliances and for light bulbs, the latter being
particularly controversial in the 112th Congress. In the 111th Congress the American Recovery and Reinvestment Act
(the Stimulus Act, ARRA, P.L. 111-5) had major energy policy provisions, including expansion of the loan guarantee program and large increases
in funding for renewable energy programs. The Office of Energy Efficiency and Renewable Energy programs, in addition to the $2 billion
appropriated in the FY2009 regular appropriations bill, received $17 billion in ARRA, of which $11.5 billion was for grants to states for energy,
efficiency, and weatherization programs. The Office of Electricity Delivery and Energy Reliability, which had historically been funded at about $150
million per year, received $4.5 billion in ARRA, directed at establishing Smart Grid technology for the electric power industry. Legislation in the
112th and 113th Congress The 112th Congress did not deal with major energy legislation, but numerous energy policy questions were taken up in
proposed legislation. The major action was passage of the fiscal cliff act: P.L. 112-240, The American Taxpayer Relief Act of 2012, signed into law
January 2, 2013. It was primarily concerned with averting scheduled income tax rate increases and spending reductions required by the Budget
Control Act (P.L. 112-25), but it included extension of energy tax credits, including the Production Tax Credit (PTC) to January 1, 2014, some
biofuels incentives, and incentives for efficient homes, appliances, alternative fuels, and electric vehicles. In the 113th Congress, the following
issues have attracted legislative attention. In the ongoing debate over approval of the proposed Keystone
XL pipeline to bring Canadian oil sands crude oil to the Gulf of Mexico, H.R. 3, the Northern Route Approval Act, would declare
that a Presidential permit would not be required for its construction. The bill passed the House on May 22, 2013, by a
vote of 241-175.
China DA
Link UQ
China is deeply invested in Venezuela as a strategic energy partnership
Hirschberg 2013 China Weighs Risks to $50 Billion Investment After Chavez By Bloomberg
News - Mar 6, 2013 3:01 AM CT (editor for Bloomberg news)
(http://www.bloomberg.com/news/2013-03-06/china-weighs-risks-to-50-billion-investment-
after-chavez-death.html)
Chinese firms are assessing the risk that Venezuelan President Hugo Chavezs death poses to investments worth at least $50
billion, after 14 years of closer ties between the two countries. China Development Bank Corp., which has
lent Venezuela more than $40 billion since 2008, has contingency plans in place, Yao Zhongmin,
head of the banks supervisory board, said in an interview today. State-owned conglomerate Citic Group Corp. is also weighing
the risks, Chairman Chang Zhenming said. State-owned Chinese firms have won contracts to build railroads, housing and power
stations since Chavez took power in 1999 and nationalized more than 1,000 companies or their assets. The terms of some of the
deals may face new scrutiny should Venezuelas opposition wins elections required to be held within 30 days. If you do get an
opposition candidate that wins there could be more information out there about previous deals that will be very
uncomfortable, said Matt Ferchen, a scholar at the Carnegie-Tsinghua Center for Global Policy in Beijing. That could be
politically unnerving but also reason for leverage to rework some of the deals. Chavez died yesterday at age 58 of cancer.
Since he announced his illness in June 2011, investors have speculated that his departure could pave the way for the opposition
to win power and introduce more market-friendly policies. Dollar Bonds Chavez was a great friend of China, Foreign
Ministry spokeswoman Hua Chunying said at a briefing today in Beijing, adding that Chinas top leaders sent their condolences
over his death. China cherishes the two countries friendship and would like to work with
Venezuela to constantly develop their strategic partnership, she said. Moodys Investors Service rates
Venezuelan long-term foreign-currency debt B2, or five levels below investment grade, the same as Honduras and Cambodia.
Led by China Development Bank, the worlds largest policy lender, China has made
Venezuela the main focus of its global oil-for-loans program, in which loans were repaid
with oil shipments. Some of the biggest state-owned companies, including Citic Group, China Railway Group and
Sinohydro Corp. won more than $11 billion in contracts to build and supply equipment for infrastructure, according to data
compiled by Bloomberg. As long as Venezuela maintains stable oil exports to China, then the risks to Chinas loans are small,
said Sun Hongbo, an associate professor at the Institute of Latin American Studies, part of the Chinese Academy of Social
Sciences. No matter who wins the presidential election, China will continue to be a strategic partner for
Venezuela.

China is deeply invested in Venezuelawill protect interests
Anatoly Kurmanaev & Stephen Bierman January 25 2013 (Kurmanaev is a political and
economic news reporter for Bloomberg, former Energy analyst for Interfax, Financial Services
Reporter for Business News Americas, Oil & gas analyst for Business Monitor International;
associates degree in the arts at the University of London; Bierman is a staff writer for Bloomberg
who specializes in oil analysis, Chavez Cancer Freezes Venezuelas Overseas Oil Funding)
http://www.bloomberg.com/news/2013-01-25/chavez-s-cancer-freezes-oil-funding-from-russia-
to-india-energy.html -KY
The China Development Bank money has gone toward joint projects with state-owned
China National Petroleum Corp., or CNPC, in the Orinoco heavy oil belt, as well as housing,
infrastructure and agriculture ventures entrusted to PDVSA under Chavezs 21st century socialism. A CNPC spokesman didnt
return e-mails or phone calls seeking comment. CDB didnt reply to faxed questions about Venezuelan loans and the countrys
political risk. China is now our main oil partner, Rafael Ramirez, who as oil minister heads PDVSA, told reporters
in November. CNPCs gross production in Venezuela tripled to 140,000 barrels per day between 2006 and 2012, he said. In
September, Chavez said he asked Chinese President Hu Jintao for a new credit line, as he boosted public spending ahead of the
presidential elections on Oct. 7 that helped push last years budget deficit to 7.8 percent of GDP, according to Bank of America
Corp. Grown Frustrated China and Venezuela signed an average of 29 commercial agreements at each annual ministerial
meeting held since 2001, a survey of Venezuelan government statements shows. Ramirez returned from Beijing in
early December without announcing any new funding deals for the first time since 2008.
The meeting did not go well for the Venezuelans, Thomas ODonnell, a petroleum analyst affiliated with U.S. New
School University, said by telephone from Berlin Jan. 12. The Chinese have grown frustrated with the chaos
surrounding Chavez. While current political uncertainties in Venezuela are a concern for China, cooperation between the two
countries makes economic sense, is protected by law and will continue, said Sun Hongbo, a Latin American studies associate
professor at the Chinese Academy of Social Sciences in Beijing. Chinas growing demand for oil will push the
country to restart lending to PDVSA and then expand it as soon as Venezuela lays out a
clear transition plan in case of Chavezs death, said Evan Ellis, associate professor at the Center for Hemispheric Defense
Studies in Washington. Protecting Legacy That may not be necessary. Bolivian President Evo Morales said Jan. 22 that Chavez
is preparing to return home, a day after Venezuelas foreign minister said the self-declared socialist joked and laughed during a
meeting at his hospital bedside in Havana. Chavez missed his Jan. 10 inauguration after beating Henrique Capriles in Octobers
presidential election by more than 10 percentage points. He said Dec. 8 that voters should elect Maduro to protect his legacy if
his illness prevents him from remaining in office. Any government, whether led by Maduro, Capriles or anyone else, is going to
continue looking East, David Voght, managing director of IPD Latin America consultancy, said by telephone from Miami. An
opposition government may review the lending contracts, but with slowing U.S. oil market, it makes sense to
pursue continuity with China. Investment Delays Chavezs protracted health battle is slowing investment and
lending from other major emerging markets, executives said. Indias Reliance Industries Ltd. has postponed by a few months an
estimated $2 billion investment decision for four Venezuelan oilfields beyond the Jan. 31 deadline because it has not received
geological data from PDVSA, a person directly involved in the deal said from New Delhi, asking not to be identified citing
confidentiality terms. The new projects are suffering delays because theres no- one in PDVSA who can make a decision,
Antero Alvarado, Venezuela country manager for consultancy Gas Energy, said by telephone on Jan. 11. Russian President
Vladimir Putin, who like Chavez has governed since 1999, wished the South American strength to take the helm again, in a
Dec. 31 statement. OAO Rosneft Chief Executive Officer Igor Sechin, who sported a Chavez-emblazoned T-shirt during a trip to
Anzoategui state in September, said Jan. 15 that Venezuela is our number one overseas priority. Rosneft agreed to spend $36
billion with PDVSA and fellow Russian partners on the Orinoco projects it entered in the last three years and lend Venezuela $6
billion together with state-run OAO Gazprom in 2011. New Elections While Russian energy projects will advance as long as
Chavezs party remains in charge, they wont be supported by the opposition, a Gazprom Latin American manager, who asked
not to be named citing company policy, said Jan. 12. Gazprom spokesman Vladimir Voevoda and Reliance spokesman Tushar
Pania didnt immediately reply to e-mail and telephone requests for comments. OAO Surgutneftegas (SGGD), Russias fourth-
largest producer, decided to leave the Russian group developing the Junin-6 block in Orinoco, according to a Nov. 7 filing. TNK-
BP also sought to sell last year, according to two people familiar with the matter, until Rosnefts agreement to buy Russias
third-largest producer made the issue redundant. That $55 billion deal probably will restrict Rosnefts ability to make
investments needed to boost Venezuelan projects, said an official close to PetroMiranda, as the Russian group at Junin-6 is
called. The TNK-BP deal wont affect the Venezuelan work schedule, said a Rosneft spokeswoman, who asked not to be named
citing company policy. A press department official at Russias Energy Ministry, who cant be named due to policy, said she
wasnt aware of suspension of oil investments in Venezuela. While any government will need oil, preservation of the current
political system offers the best way for OAO Lukoil to carry out its contracts in Venezuela, Andrei Kuzyaev, head of the Russian
companys overseas arm, said in Davos Jan. 23. Everybody Concerned The constitution requires new elections to be held
within 30 days if Chavez is declared permanently absent. Although Chavezs chosen successor is favored to win, the oppositions
chances will grow as the economy slows, Bank of America economist Francisco Rodriguez said by phone Jan. 3. Beijing will be
among the keenest observers. Everybody is concerned about the situation in Venezuela, including
China, Wang Peng, a Latin American scholar at Beijings CASS, said by e-mail. China has very large commercial
interests there and wants to protect them from potential political risks from power
transition or party rotation.

Link
China will compete with the US in Venezuela
Daly 12
Dr. John C.K. Daly is the chief analyst for Oilprice.com, Dr. Daly received his Ph.D. in 1986 from
the School of Slavonic and East European Studies, University of London. If Chavez Dies, What
Next for U.S. - Venezuelan Energy Relations? http://oilprice.com/Geopolitics/South-America/If-
Chavez-Dies-What-Next-for-U.S.-Venezuelan-Energy-Relations.html, 19 December
But Washington wont necessarily have any reshuffling of the Venezuelan energy sector to
itself. Last year China agreed to provide more than $32 billion in assistance to Chavezs
government, with the loans to be repaid in oil, in increasing amounts during the next decade. Venezuela
is now exporting to China about 460,000 barrels a day, about 20 percent of its oil exports,
according to official figures.
Russia DA
Russia Relations Links
Russia is already investing in Venezuelan oil
AFP 5/24 (Agence Presse France, Venezuela, Russia in joint oil venture,
http://www.france24.com/en/20130524-venezuela-russia-joint-oil-venture) aml
Venezuela and Russia formed a joint venture to produce 120,000 barrels of oil a day by 2016
in two fields in the Orinoco Heavy Oil Belt. Russia will loan Venezuela $1.5 billion to finance
the development of the fields under the terms of the agreement, and put up $1.1 billion
for a 40 percent share in Petrovictoria. The agreement establishing Petrovictoria was signed by the president of
the state-owned Petroleos de Venezuela (PDVSA), Rafael Ramirez, and the president of Russian state oil
company Rosneft, Igor Sechin. PDVSA will sell to Russia 72 percent of the heavy and extra-heavy
crude produced by the company, which has a long-term goal of producing 400,000 barrels a
day. Three mixed capital companies are currently operating in the Orinoco Belt, producing 230,000 barrels
a day in a huge area of southeastern Venezuela. The Belt has estimated reserves of 220 billion barrels of
harder-to-refine heavy and extra-heavy oil, the largest in the world.

Russia is increasing its oil investment in Venezuela
Hiscock 2/14 (Geoff, He served as Sydney bureau chief and Asia Business Editor for CNN.com
Asia Pacific from 2001-2006, and as International Business Editor of The Australian daily
newspaper from 1995-2000, Russia deepens Venezuela oil ties,
http://www.theaustralian.com.au/business/mining-energy/russia-deepens-venezuela-oil-
ties/story-e6frg9df-1226577701328) aml
WHILE the United States forges ahead with its shale-led energy revolution, Russia is
steadily building up its stake in the oil industry of Venezuela, where anti-American rhetoric
has been the hallmark of now-ailing leader Hugo Chavezs 14-year rule. Igor Sechin, president of Russias state-
owned oil giant Rosneft, declared last month the oil-rich South American country would be
the main focus of Rosnefts overseas investments. Under a series of accords signed during Sechins visit to
Venezuela on January 29-30, Russia will commit to invest up to $US40 billion in jointly exploiting
the Orinoco extra-heavy oil belt -- regarded as one of the worlds largest hydrocarbon
reserves -- with Venezuelas state-owned Petroleos de Venezuela SA (PDVSA). The US Geological Survey
estimated in 2010 that the Orinoco belt, a 600-km strip straddling the Orinoco River in the central-eastern part of
Venezuela, held 513 billion barrels of technically recoverable oil. According to OPEC statistics, Venezuelas proven
reserves stand at 296 billion barrels, the largest in the world. Digital Pass $1 for first 28 Days It also has 5.5 trillion
cubic metres of gas reserves, ranking it No. 8 in gas behind Russia, Iran, Qatar, Saudi Arabia, Turkmenistan, UAE and
the US. Venezuela relies heavily on its oil exports, which supply 95 per cent of its foreign
earnings. Output, which was above 3 million barrels a day in the 1990s and early 2000s, has since fallen below that figure,
although Venezuelas stated goal is to reach 5 million barrels a day by 2015 and 6.5 million by 2020, through development of the
Orinoco belt. Venezuelas heavy sour crude remains in demand with some refiners because it is cheaper than light sweet crude.

Russia position in Venezuela core to Russian oil future
Bierman and Kravchenko 3/6 (Stephan and Stephan, Bierman is a reporter for Bloomberg
News, Kravchenko is a reporter for Bloomberg in Moscow, Putin Sees Venezuela Oil Deals
Moving Ahead After Chavez, http://www.bloomberg.com/news/2013-03-06/putin-sees-
venezuela-oil-deals-moving-ahead-after-chavez.html) aml
Russia expects to continue benefitting from economic ties with Venezuela via billions of
dollars in oil and weapons contracts after the death of Hugo Chavez, who led the South American country
for 14 years. A constructive, positive and mutually beneficial agenda will remain a constant for any government, as it will from
the Russian side, President Vladimir Putins spokesman, Dmitry Peskov, said in the Siberian city of Novosibirsk today. Putin
tapped OAO Rosneft Chief Executive Officer Igor Sechin to lead the Russian delegation to Chavezs funeral on March 8, Peskov
said. Sergey Chemezov, head of Rustech, a government holding company that includes several weapons manufacturers, and
Industry and Trade Minister Denis Manturov will also attend, Peskov said. Since Putin and Chavez first met in 2001,
Venezuela has become the most important overseas investment target for Russian oil
companies and is on track to become the largest export market for Russian arms after India by 2015, according to Viktor
Semyonov and Igor Korotchenko, analysts at the Russian Academy of Sciences and the Center for Analysis of World Arms Trade,
respectively. Chavez was an outstanding leader and close friend of Russia, Putin said in a statement released by the
Kremlin. The Venezuelan leader was an unconventional and strong person who looked to the future and always set the highest
standard for himself, Putin said. Worries Overblown Rosneft and other Russian oil producers plan to
invest $17.6 billion in Venezuela to quadruple their combined output in the country to
930,000 barrels a day by 2019, Venezuelas oil minister, Rafael Ramirez, said in January. That would be
about equal to what Azerbaijan, the third-largest supplier in the former Soviet Union,
currently produces.

Russia just signed a deal with Venezuela to increase its oil development in their
oil fields
Rapoza 7/2 (Kenneth, He has written about Brazil pre-Lula and post-Lula and spent the last
five years covering all aspects of the country for Dow Jones, Wall Street Journal and Barron's,
and will be moving onto Russia, India and China, In Venezuela, Russia's Rosneft Quietly Expands
Its Reach, http://www.forbes.com/sites/kenrapoza/2013/07/02/in-venezuela-russias-rosneft-
quietly-expands-its-reach/)
Russias largest oil company, Rosneft , said it signed a deal with Venezuelan state owned oil major
PDVSA on Tuesday to explore for fossil fuels off the coast of the oil rich South American nation.
The deal was signed in Moscow between Rosneft President Igor Sechin and Venenzuelan Oil Minister and PDVSA President
Rafael Ramirez. The agreement between the two state owned oil giants includes joint studies
for evaluation of technical and economic viability of offshore gas in Venezuela, gas
liquefaction for export and domestic sales and additional joint development of natural gas
fields . Rosneft and PDVSA are discussing the possibilities of developing oil and gas projects in the Rio
Caribe and Mejillones fields, as well as exploring for hydrocarbons in the Venezuelan part of
the Caribbean Basin, Gulf of Venezuela and the Atlantic Coast, Rosneft said in a press release today.
Sechin was in Venezuela in May to discuss trade relations. There, he also met with PDVSAs Ramirez to discuss future
collaboration between the historically close countries. While in Venezuela, Sechin signed agreements to create a joint venture
to develop heavy oil reserves in Venezuela within the Carabobo-2 project. Rosnefts stake in that joint venture
will amount to 40%, the other 60% will be held by PDVSA subsidiary CVP. The Carabobo-2 project includes blocks
Carabobo-2 North and Carabobo-4 West with a total area of 342 square kilometers located in the Orinoco Rivers
heavy crude belt. Reserves at the blocks are estimated to be 40 billion barrels. Commercial oil production is
expected to peak at over 400 thousand barrels per day, Rosneft said. The new Russia-Venezuela joint
venture is called PetroVictoria.

Russia and Venezuela signed an agreement to ensure cooperation over oil
projects
Mainwaring 7/3 (Jon, He is a journalist with 17 years of experience covering the energy,
engineering and technology sectors. Currently writing for Rigzone, Russia, Venezuela Sign
Energy Agreements, http://www.rigzone.com/news/article.asp?hpf=1&a_id=127487)
Russian President Vladimir Putin announced in Moscow late Tuesday that Russian investment in Venezuela had
reached $21 billion as the countries signed new cooperation agreements, including an
offshore deal involving Rosneft and Venezuelan state oil company PDVSA. Leading a Venezuelan government delegation
to Moscow, President Nicols Maduro signed five agreements covering cooperation in several
energy-related areas, including oil and gas, electrical generation and financing. "During the last
14 years, both countries have built a roadmap for cooperation in energy matters," Maduro said. Maduro also noted that
Russian-Venezuelan joint ventures in Venezuela had led to the production of 206,000
barrels per day, while the goal remains to raise this to a million barrels per day within four
years. Meanwhile, as part of the bilateral agreement between the two countries, Russia's Rosneft announced Wednesday
that it has signed a cooperation agreement with Petrleos de Venezuela. The deal, which was signed between Rosneft
President Igor Sechin and Venezuelan Oil Minister Rafael Ramirez, will see Rosneft and PDVSA cooperate on
offshore projects in Venezuela. In particular, the agreement covers joint studies for the technical and
economic viability of offshore gas and condensate production in Venezuela, gas
liquefaction for export and domestic sales and the evaluation of prospects for joint
ventures for the development of gas and gas condensate fields.
Russia Oil Prices Links

Russian economy depends on high oil prices
Schuman 2012 Michael Schuman is a correspondent for TIME, and he has a B.A. in Asian
history and political science from the University of Pennsylvania and a master of international
affairs from Columbia. Before joining TIME in 2002, he was a correspondent for the Wall Street
Journal and a staff writer for Forbes. Schuman, Michael. "Why Vladimir Putin Needs Higher Oil
Prices." Business Money Why Vladimir Putin Needs Higher Oil Prices Comments. N.p., 5 July
2012. Web. 08 July 2013. <http://business.time.com/2012/07/05/why-vladimir-putin-needs-
higher-oil-prices/>.
But Vladimir Putin is not one of them. The economy that the Russian President has built not only runs on oil,
but runs on oil priced extremely high. Falling oil prices means rising problems for Russia both
for the strength of its economic performance, and possibly, the strength of Putin himself.
Despite the fact that Russia has been labeled one of the worlds most promising emerging markets, often mentioned in the
same breath as China and India, the Russian economy is actually quite different from the others. While India gains growth
benefits from an expanding population, Russia, like much of Europe, is aging; while economists fret over Chinas excessive
dependence on investment, Russia badly needs more of it. Most of all, Russia is little more than an oil state in disguise.
The country is the largest producer of oil in the world (yes, bigger even than Saudi Arabia), and Russias dependence on
crude has been increasing. About a decade ago, oil and gas accounted for less than half of Russias exports; in recent
years, that share has risen to two-thirds. Most of all, oil provides more than half of the federal
governments revenues. Whats more, the economic model Putin has designed in Russia relies heavily not just on oil,
but high oil prices. Oil lubricates the Russian economy by making possible the increases in
government largesse that have fueled Russian consumption. Budget spending reached 23.6% of GDP in
the first quarter of 2012, up from 15.2% four years earlier. What that means is Putin requires a higher oil price to meet his
spending requirements today than he did just a few years ago.
Other Neg Cards

No Oil Cut-off
No supply cutoff
Salameh 11 PhD, international oil economist, a consultant to the World Bank in Washington,
DC on energy affairs and a technical expert of the United Nations Industrial Development
Organization
Mamdouh, Second Quarter 2011, Chinas Oil Adventure into Venezuela www.iaee.org
Though Venezuela has repeatedly threatened to cut off its oil exports to the United States,
analysts say the two countries are mutually dependent. Venezuela supplies around 1 mbd of crude oil to
the U.S. market according to the EIA. However, in order to wholly replace the U.S. market home to refineries
that can refine Venezuelas heavy crude oil into a marketable product Chavez must expand his domes- tic
capacity to refine heavy oil as well as transport it to alternative markets where there are
customized refineries. According to the O&GJ, Venezuelas re- fining capacity currently stands at 1.28 mbd. PDVSA
also wholly owns five refineries in the United States and partly owns four refineries, ei- ther
through partnerships with U.S. companies or through PDVSAs U.S. subsidiary, CITGO.9 The
World Bank says that Venezuela will con- tinue in the short term to be a key player in the U.S.
market and that it will be difficult in the short term for Venezuela to make a significant
shift in supply from the United States. Nonetheless, Chavez has been trying hard to diversify his oil clients in
order to lessen his countrys dependence on the United States.
Venezuela wont cut off oil supplies to U.S. --- mutual dependence guarantees
future oil trade
Restrepo, 6 --- Director, The Americas Project Center for American Progress (December 2006,
Dan, US-Venezuela Policy: A Reality Based Approach, http://www.americanprogress.org/wp-
content/uploads/issues/2006/12/pdf/venezuela.pdf,
Beyond the rhetoric.oil The often vitriolic rhetoric exchanged between Caracas and Washington
suggests a near complete and irreconcilable estrangement between the two countries. Although at a political
level such an estrangement may exist, beyond the rhetoric lays a very different realitya connection as
deep as Venezuelas abundant oils wells. As President Bush has noted, the United States is addicted to oil.1111 One
of the chief dealers feeding the addiction is none other than Chvez. Venezuela sits atop among the worlds largest oil reserves.12
Venezuela is the worlds eighth-largest exporter of crude oil.13 It is the fourth-largest supplier of oil and petroleum products to the
United States, trailing only Canada, Saudi Arabia, and Mexico.14 Whats more, Venezuela has reliably provided oil to the United
States since before 1960, making it one of the countrys longest standing and most stable sources of petroleum.15 The
magnitude of the U.S. addiction to Venezuelan oil is perhaps best captured by these two facts:
Venezuela is only the fourth-largest economy in Latin America, with a 2005 Gross Domestic Product of
approximately $13 0 billion,16 yet the United States sixth-largest trade deficit that year was with
Venezuela, totaling nearly $27 billion.17 Despite this dependence, the physical properties of Venezuelan
crude oil seriously impair Chvezs ability to use the dependence to harm the U nited S tates.
Most of the oil currently extracted in Venezuela is heavy, sour crude oil that requires
specialized and costly refinement.18 Not surprisingly most of the worlds refining capacity for such
oil is found a three-to-four day tanker trip from Venezuela to its closest and largest customerthe United S tates. Petroleos
de Venezuela S.A, or PdVSA, the Venezuelan state-owed oil company, owns all or part of nine refineries serving the United States
market from either inside the country or in the Caribbean. In combination, the nine facilities have a capacity of more than 1.5 million
barrels per day,19 which is equal to more than half of Venezuelas daily export output.20 Any unilateral interruption of
oil supply between Venezuela and the United S tates, be it initiated by one or the other country,
would therefore impinge on the total refining capacity serving the United S tates market. Even if
the U.S. government forced Venezuelan-owned refineries to continue operations during such an interruption, the specialized
refining capacity cannot function at peak efficiency with alternative grades of oil.21 This phenomenon would likely be exacerbated
because there is very little untapped production capacity elsewhere in the world to provide replacement oil.22 Notwithstanding
Chvezs nascent efforts to generate it, large-scale alternative refining capacity does not exist. Nor will efforts to develop such
capacity in, for example, China or even Brazil ever replicate the unique blend of volume and proximity that shapes the U.S.-
Venezuelan energy relationship. The U.S.-Venezuela oil relationship is thus one of co-dependence. The
U.S. Department of Energy has estimated that a disruption of Venezuelan oil supply to the United States under current global market
conditions would likely increase the per barrel price of oil by eight percent to 11 percent and the per gallon cost of gasoline by 1111
cents to 15 cents for the duration of any such disruption.23 Assuming Venezuela could still sell its oil on the world market, such a
disruption in sales to the United States would curtail Venezuelan oil revenues by approximately $3 billion to $4 billion per year.24
The complete removal of Venezuelan oil from the world market would have a far more profound impact on Venezuelas finances
and would lower U.S. GDP by at least $23 billion by significantly boosting the price of oil and gasoline, even if it only lasted a
relatively short period of time.25 In short, neither the United S tates nor Venezuela is in a position to end
their energy relationship with the other in the foreseeable future. That fact both mitigates the
national security threat presented by a Chvez-led Venezuela and limits the levers available to
U.S. policy makers in relation to the country.

Venezuela wont cut imports and the impact would be quickly remedied
Arias, 09 --- M.A. Strategic Intelligence, B.A. Political Science (2/9/2009, Frances, Venezuelas
Threats to U.S. Economic Security, http://www.e-ir.info/2009/02/09/venezuela%E2%80%99s-
threats-to-us-economic-security/, JMP)
The likelihood of Venezuela cutting oil exports is highly unlikely . Venezuela beleaguered by food
shortages, depends heavily on oil exports for about 90 percent of its export earnings and about half of the government revenue
(Mufson 2008, 1). The United States is Venezuelas biggest customer. Halting crude sales would affect CITGO. Halting crude
sales to the U.S. would divert heavy feed from CITGO, which PDVSA owns and which has a total of
756,000 b/cd of deep-conversion capacity in three wholly owned U.S. refineries 597,000 b/d of it on the Gulf Coast (Oil & Gas
Journal 2008, 21). According to Oil & Gas Journal, If Chavez did lose his senses and halts sales of Venezuelan
oil in the U.S., crude prices might jump in a trading panic but would quickly resettle as U.S.
refineries found new sellers probably the traders moving in to buy from PDSA (Oil & Gas 2006,
21). Also, Venezuelans are importing more U.S. products such as construction machinery, cars,
and computers. Although it may be Chavezs ultimate desire to end U.S.-Venezuelan
interdependence, such close economic linkages cannot be easily dismantled (Lapper 2006, 17).
Not only would the stopping of oil exports hurt Venezuelas economy, it would affect U.S.
foreign aid being sent there. According to the State Departments fiscal year 2007 budget, Venezuela will receive $1
million in Andean Counter Drug Initiative funds this year a decrease of nearly $2 million since 2005 and $1.5 million in Economic
Support Funds to strengthen civil society and the rule of law (Lapper 2006, 23).

Venezuela wont cut off the U.S. --- leverage is declining and it is importing U.S.
gasoline
Blas, 12 (12/13/2012, Javier, US net imports of Venezuelan oil hit 30-year low,
http://www.ft.com/intl/cms/s/0/5ef9e0fa-44f8-11e2-858f-00144feabdc0.html, JMP)
Not so long ago, Hugo Chvez, the leftist Venezuelan leader, almost every month would threaten the US that
he would shut down his countrys oil exports. Each time, Washington took the threats
seriously because of the importance of Caracas for US energy supplies. Not any longer. The US dependence of
Venezuelan net crude and oil products exports (including the US Virgin Islands, which largely refined Venezuelan
crude to export into the US) has dropped to levels last seen nearly 30 years ago. The sharp drop is due to three
factors. Overall US oil imports are down on the back of the shale boom. In addition, the closure of a large refinery in the US Virgin
Islands co-owned by Petrleos de Venezuela (Pdvsa) has further reduced imports of Venezuelan-origin oil products. And more
recently, Venezuela has started to import large amounts of US-made gasoline to offset a local shortage. The reduction in US
imports of Venezuelan-origin crude and oil products has been going on for the last five years.
The new factor is the surge in US exports of oil products into Venezuela. In September, US refiners
shipped a record of 196,000 b/d of gasoline and other oil products to Caracas. The International Energy Agency, the western
countries oil watchdog, associates the surge in US exports to outages in Amuay and El Palito refineries in Venezuela. The Amuay
plant, part of the 955,000 b/d giant Paraguana Refining Center the worlds second largest after the Jamnagar refinery in India
suffered an explosion and fire in August that killed nearly 50 people and injured more than 150. Although Caracas has said several
times the refinery is returning to full production, the surge in oil products from the US suggests the contrary. The jump in US
gasoline exports to Venezuela means that for each 10 barrels of crude that Caracas ships to
the US, two return to Venezuela as products. The US oil product exports accounted in
September for roughly 20 per cent of Venezuelan domestic oil consumption of about 1m b/d. The
combination of lower Venezuelan oil exports both from the country itself and the US Virgin Islands and higher US gasoline
exports reduced in June US net imports of Venezuelan-origin oil to 685,000 barrels a day, the lowest since March 1984, according to
Financial Times estimates based on data from the US Energy Information Administration. US net imports of Venezuelan-origin oil
recovered a bit in September the last data available , reaching 839,000 b/d. Mr Chvez, who is undergoing cancer treatment in
Cuba, may threaten an oil embargo in the future, as he did during the recent presidential elections. But his menace will no longer
worry Washington.

Venezuela cant cut exports to U.S. --- would hurt its country far more
Laten, 10 (8/3/2010, Grant, Venezuelan Oil Embargo Wouldnt Impact American Energy
Security, http://csis.org/blog/venezuelan-oil-embargo-wouldn%E2%80%99t-impact-american-
energy-security, JMP)
With Hugo Chvezs July 25 announcement that he would cease oil shipments to the United States in the event that Colombia and
Venezuela go to war, the potential implications for American energy security seem daunting. In 2009, Venezuela supplied 11.5
percent of the crude oil consumed in the United States, and with Colombia and Venezuelas recent break of diplomatic and
economic ties, the notion of armed confrontation in South America cant be entirely overlooked. So what, then, would
happen if Venezuela were to suddenly institute a petroleum embargo on the U nited S tates?
Would the ensuing chaos be politically worthwhile for the Chvez administration, or would it merely compound Venezuelan
economic woes? Venezuela exports just over one million barrels of crude oil to the United States per day, most of which goes to
refineries owned by Citgo, the American arm of Venezuelas state-owned oil company, Petrleos de Venezuela, S.A. (PDVSA).
Shipments of oil and refined petroleum products to the United States constitute roughly 60 percent of Venezuelas total petroleum
exports, and largely sustain Citgos operations. Over the past few years, Chvez has been gradually
diversifying Venezuelas petroleum customers, but the United S tates remains its most
important market. An oil embargo implemented within the next few months would impact the Venezuelan
economy much more acutely than it would that of the US because of Venezuelas structural
reliance on exports to the American market, coupled with current supply and demand
conditions. The sudden cessation of oil exports to the United States would wreak havoc on several
Venezuelan systems. First, because Venezuela would have to modify its production for another market probably China
PDVSA would be forced to drastically revamp its domestic production and transportation infrastructures. Different demand
proportions, chemistry, and regulatory constraints would tie up PDVSA assets, expose gross deficiencies in export refining capacity,
and slash oil shipments for months, if not years. Meanwhile, Citgo refineries and distribution networks in the United States would sit
dormant, leading to enormous investment losses for PDVSA and reductions in future operational capacity due to the loss of
experienced employees. With PDVSA feeling the financial brunt of an embargo, the availability of government-
backed social services in Venezuela would plummet. Recent structural reforms have placed responsibility for
administrating many aspects of the governments programs on PDVSA directly because it generates the majority of government
revenue. If that revenue disappeared, so would a large portion of PDVSAs ability to subsidize groceries, provide healthcare, and
maintain services for millions of people. Venezuelan citizens would be severely impacted by a measure
meant to punish the U nited S tates.

Wont cut off oil and would only raise world prices $11 a barrel
Sullivan, 13 --- Specialist in Latin American Affairs at Congressional Research Service
(1/10/2013, Mark P., Venezuela: Issues for Congress,
http://www.fas.org/sgp/crs/row/R40938.pdf, JMP)
Despite notable frictions in bilateral relations, Venezuela has continued to be a major supplier
of oil to the United S tates. On numerous past occasions, however, Chvez threatened to stop
selling oil to the United S tates, although Venezuelan officials maintained that Venezuela would
only stop sending oil to the United States if attacked by the United S tates. Because of Chvezs strong rhetoric,
however, some observers raised questions about the security of Venezuela as a major supplier of foreign oil. In June 2006, the
Government Accountability Office (GAO) issued a report, requested by then-Senate Foreign Relations Committee Chairman Richard
Lugar, on the issue of potential Venezuelan oil supply disruption. At the time, the GAO report concluded that a
sudden loss of all or most Venezuelan oil from the world market could raise world prices up to
$11 per barrel and decrease U.S. gross domestic product by about $23 billion.116


AT: Oil Sands Trade-off
Oil sands investment and production declining --- costs outpacing returns
Jones, 13 (5/24/2013, Jeffrey, Oil sands deals lose traction,
http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/oil-
sands-deals-lose-traction/article12115969/, JMP)
Suncor Energy Inc., Canadas largest oil company, is spending about $1-billion less on its oil
sands projects this year compared with early expectations for 2012, while reviewing costs. We as a shop
havent been bullish on oil sands for over a year . Part of the reason for that is that costs
keep going up and the revenue is not following . This is an unusual situation from over the
last 10 years, said Samir Kayande, an analyst and oil sands evaluation expert with research firm
ITG Inc. Over the last 10 years, you would make investments in marginal projects and the
commodity price would always bail you out. That seems like a distant memory. In the past half
year, the discount on Western Canada Select heavy blend crude versus benchmark West Texas intermediate (WTI) widened beyond
$40 a barrel, boomeranged back to as little as $12, and is now about $20.50, according to Net Energy Inc. For new steam-driven oil
sands projects, the break-even WTI price is around $83, compared with $60 to $70 a barrel for light oil production in the fast-
growing Permian Basin region of West Texas, Mr. Kayande said. The heavy oil spread has to be layered on to the benchmark oil
calculation, showing just how efficient a project has to be in terms of the amount of steam companies must pump into the ground to
get a barrel of bitumen out. Even interests in producing mining projects have proven to be a tough sell, especially after Ottawa
restricted the ability of foreign state-owned enterprises to acquire oil sands assets in the wake of Chinese state-owned CNOOC Ltd.s
$15.1-billion bid for Nexen Inc. That essentially took away a category of customer.

Without Keystone oil sands wont be economically viable
Johnson, 13 (6/7/2013, Keith, Pipeline Called Key to Canada Oil Sands,
http://online.wsj.com/article/SB10001424127887324069104578531713102125222.html, JMP)
Extracting Canada's huge deposits of oil sands in the next few years might not be economically
viable without building the hotly contested Keystone XL pipeline into the U.S., according to new research
that environmentalists said bolsters their view that blocking the project would shut off development of the energy source.
Environmentalists say producing Canadian oil sands releases more carbon dioxide than other kinds of oil and are pressing President
Barack Obama to block the pipeline, which would carry oil from Alberta and help it get to Gulf Coast refineries. The U.S. State
Department, industry officials and some analysts counter that burgeoning railroad capacity will eventually give Canadian crude a
way to reach global markets even if Keystone is blocked. "The potential for Canadian heavy crude oil supply to remain trapped in
the province of Alberta is a growing risk for the 2014-2017 period depending on the timing of new pipeline start-ups," analysts at
Goldman Sachs Group Inc. wrote in a research report this past week. Without adequate pipeline capacity,
Canadian heavy crude will continue to trade at a steep discount to other grades of oil for the
next few years, which could weigh on the economics of developing Canadian oil sands,
according to the Goldman Sachs report and other analysts. Environmentalists say Mr. Obama can help curb
greenhouse gases by rejecting the pipeline, and they want the State Department, which is reviewing the pipeline, to take into
account the environmental impact. "The evidence shows that Keystone XL is the linchpin" for oil-sands
production," said Danielle Droitsch of the Natural Resources Defense Council, an environmental
advocacy group. Hundreds of activists called on Mr. Obama to block the project Thursday and Friday at fundraisers he held in
California ahead of a summit with Chinese President Xi Jinping. "If that added capacity from Keystone XL isn't brought online,
there's potential for a gap between production and delivery," said Grady Semmens, a spokesman for TransCanada Corp., which is
proposing to build the pipeline. "But we don't necessarily view XL as a linchpin in oil production. The industry will look for other ways
to get to market," he said. In a report this past week, the Canadian Association of Petroleum Producers projected oil-sands
production capacity will more than double by 2030 to more than five million barrels a day. If the Keystone expansion is blocked,
production could exceed shipping capacity by as early as 2016unless rail delivery takes up the slack. "We're very confident the
market will respond," said Greg Stringham, CAPP vice president. Keystone is just the highest profile among a
spate of pipeline projects that would be needed to carry all of the growing Canadian oil
production to distant markets. The CAPP report says that even if all proposed pipelines for
Canadian crude are built on schedule, oil-sands production will still fall short of the 2030
forecast by one million barrels a day. Canada's RBC Capital Markets said blocking Keystone
would likely defer about $9 billion in oil-sands investment to the end of the decade.

Investment and production in Canadian Oil Sands already declining
Jones, 13 (5/24/2013, Jeffrey, Oil sands deals lose traction,
http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/oil-
sands-deals-lose-traction/article12115969/, JMP)
Theres a buyers strike in the oil sands. At least a half dozen energy companies have come up dry in
efforts to attract the rich bids they envisaged when they put oil sands assets on the auction
block in the past year, showing downward pricing pressure on a sector touted as the
cornerstone of Canadas economic growth. Would-be buyers and joint venture partners are
balking at deals amid a combination of wildly volatile Canadian crude prices, rising
development costs and weakening returns, a situation that could force the industry to
temper heady expectations for long-term oil sands production growth . Marathon Oil Corp., Murphy
Oil Corp. and Athabasca Oil Corp. had sought buyers and partners in the Northern Alberta oil sands, but now have changed their
minds or in Athabascas case, have told investors to hang tight after the company failed to clinch deals that had once appeared
imminent. Those companies join ConocoPhillips Co., Koch Industries Inc. and Royal Dutch Shell PLC in being disappointed after
putting properties up for sale that may have once attracted bids totalling in the billions of dollars. Those three say they have
rethought their plans after offers failed to meet expectations. Unsold assets are another indication that oil
price uncertainty, competition for limited pipeline capacity and high industry costs are
turning away investment in the worlds third-largest crude reserves after those in Saudi Arabia and Venezuela. The
deals slowdown may also add to a pullback in the sectors spending and development frenzy.

Developing countries, lax regulation, and profit maximization means warming is
inevitable
Porter, 13 - writes the Economic Scene column for the Wednesday Business section (March
19, Eduardo, A Model for Reducing Emissions
http://www.nytimes.com/2013/03/20/business/us-example-offers-hope-for-cutting-carbon-
emissions.html?_r=1&)
Even if every American coal-fired power plant were to close , that would not make up for the
coal-based generators being built in developing countries like India and China. Since 2000, the
growth in coal has been 10 times that of renewables, said Daniel Yergin, chairman of IHS Cambridge Energy
Research Associates. Fatih Birol, chief economist of the International Energy Agency in Paris, points out that if civilization is
to avoid catastrophic climate change, only about one third of the 3,000 gigatons of CO2 contained in
the worlds known reserves of oil, gas and coal can be released into the atmosphere. But the world
economy does not work as if this were the case not governments, nor businesses, nor consumers. In all
my experience as an oil company manager, not a single oil company took into the picture the
problem of CO2, said Leonardo Maugeri, an energy expert at Harvard who until 2010 was head of strategy
and development for Italys state-owned oil company, Eni. They are all totally devoted to replacing the
reserves they consume every year.

Declining U.S. demand will also undermine production
Cushman, 13 (5/23/2013, John H. Cushman Jr., With U.S. Awash in Oil, Keystone Argument
Weakens, http://www.bloomberg.com/news/2013-05-23/with-u-s-awash-in-oil-keystone-
argument-weakens.html, JMP)
Estimates of U.S. Oil Reserves Also Rise
The U.S. government's striking new estimate of domestic oil production is just one of the new
developments that undermines the appeal of Canada's crude oil. The United S tates Geological
Survey in April doubled its official estimate of recoverable oil reserves from the Bakken field
and related deposits in North Dakota, South Dakota and Montana, suggesting that the
region's oil boom won't fall off as quickly as previously assumed. "The finding could have major
implications for future oil and gas industrial activity in the region, particularly for pipeline companies," wrote Nathanial Gronewold,
Houston bureau chief for Environment & Energy Publishing. Advocates of domestic oil production say more untapped oil is
available on public lands. Responding to the USGS's new estimates, Thomas Pyle, president of the pro-drilling Institute for Energy
Research said: "America's true energy supply is undoubtedly even more robust, providing further certainty that domestic resources
can meet America's energy needs for years to come." That bullish tone ran through the EIA's latest short-term energy outlook,
released on May 7. It said it had revised upward its production forecast by 120,000 barrels a day this year and by 310,000 barrels a
day next year compared to the estimate it had made just a month earlier. "Production will rise from an average of 7.1 million
barrels a day in the first quarter of 2013 to 8.5 million barrels a day in the fourth quarter of 2014," it said. All that growth would
come before the Keystone could be completed, which TransCanada now says won't be until late 2015. Another sign of the
market's upheaval is the possibility that refineries along the Gulf Coast might consider
switching from Canadian heavy sour crude to the light, sweet U.S. grades. In its market analysis, the
State Department assumed that refineries wouldn't willingly make that switch and would continue importing heavy sour crude like
Canada's. The Gulf refineries have invested in plants that are tailored for that type of oil. But the EIA, in its May 1 issue of "This
Week in Petroleum," said swollen supplies of domestic oil could hold down prices so much that it
would be attractive for refineries to switch. They could adjust the mix of fuels they produce,
or spend some of their profits to switch over to the lighter U.S. crude. Oil Change International, an
advocacy group that campaigns for shifting from oil to clean energy, argues that the State Department's theory is already proving
wrong because the leading Gulf coast refiner, Valero, is looking for opportunities to increase its use of light crude. Valero buys oil
sands crude and is a big backer of the Keystone. "The world has changed dramatically with all this light
sweet oil," Valero's chief executive, William Klesse, told a group of analysts at a conference last week. "If you
were going to build a grassroots refinery today," he said, "you would build a light-sweet refinery."

Ecosystems will adapt no impact
Center for the Study of Carbon Dioxide and Global Change - Archived 8 March 11,
Surviving the Unprecedented Climate Change of the IPCC,
http://www.nipccreport.org/articles/2011/mar/8mar2011a5.html
(Citing: Willis, K.J., Bennett, K.D., Bhagwat, S.A. and Birks, H.J.B. 2010. 4C and beyond: what did
this mean for biodiversity in the past? Systematics and Biodiversity 8: 3-9.)
In a paper published in Systematics and Biodiversity, Willis et al. (2010) consider the IPCC (2007) "predicted climatic changes for the
next century" -- i.e., their contentions that "global temperatures will increase by 2-4C and possibly beyond, sea levels will rise (~1 m
0.5 m), and atmospheric CO2 will increase by up to 1000 ppm" -- noting that it is "widely suggested that the magnitude and rate of
these changes will result in many plants and animals going extinct," citing studies that suggest that "within the next century, over
35% of some biota will have gone extinct (Thomas et al., 2004; Solomon et al., 2007) and there will be extensive die-back of the
tropical rainforest due to climate change (e.g. Huntingford et al., 2008)." On the other hand, they indicate that some biologists
and climatologists have pointed out that "many of the predicted increases in climate have
happened before, in terms of both magnitude and rate of change (e.g. Royer, 2008; Zachos et al., 2008),
and yet biotic communities have remained remarkably resilient (Mayle and Power, 2008) and in some
cases thrived (Svenning and Condit, 2008)." But they report that those who mention these things are often "placed in the
'climate-change denier' category," although the purpose for pointing out these facts is simply to present "a sound scientific basis for
understanding biotic responses to the magnitudes and rates of climate change predicted for the future through using the vast data
resource that we can exploit in fossil records." Going on to do just that, Willis et al. focus on "intervals in time in
the fossil record when atmospheric CO2 concentrations increased up to 1200 ppm,
temperatures in mid- to high-latitudes increased by greater than 4C within 60 years, and sea
levels rose by up to 3 m higher than present," describing studies of past biotic responses that indicate "the scale
and impact of the magnitude and rate of such climate changes on biodiversity." And what emerges from those studies,
as they describe it, "is evidence for rapid community turnover, migrations, development of novel
ecosystems and thresholds from one stable ecosystem state to another." And, most importantly in this
regard, they report "there is very little evidence for broad-scale extinctions due to a warming
world." In concluding, the Norwegian, Swedish and UK researchers say that "based on such
evidence we urge some caution in assuming broad-scale extinctions of species will occur due
solely to climate changes of the magnitude and rate predicted for the next century," reiterating
that "the fossil record indicates remarkable biotic resilience to wide amplitude fluctuations in
climate."


No Impact to Warming

Their studies prove the existence of warming, not the impact doomsday
predictions are empirically denied and ignore scientists
John Stossel, Award-winning ABC News correspondent, 2007
The Global Warming Myth?, http://abcnews.go.com/2020/Story?id=3061015&page=1
Dr. John Christy, professor of Atmospheric Science at the University of Alabama at Huntsville said: "I
remember as a college student at the first Earth Day being told it was a certainty that by the year 2000, the world would be starving
and out of energy. Such doomsday prophecies grabbed headlines, but have proven to be completely
false." "Similar pronouncements today about catastrophes due to human-induced climate
change," he continued, "sound all too familiar and all too exaggerated to me as someone who
actually produces and analyzes climate information." The media, of course, like the exaggerated
claims. Most are based on computer models that purport to predict future climates. But
computer models are lousy at predicting climate because water vapor and cloud effects cause
changes that computers fail to predict. In the mid-1970s, computer models told us we should prepare for global
cooling. Scientists tell reporters that computer models should "be viewed with great
skepticism." Well, why aren't they? The fundamentalist doom mongers also ignore scientists who say the
effects of global warming may be benign. Harvard astrophysicist Sallie Baliunas said added CO2
in the atmosphere may actually benefit the world because more CO2 helps plants grow. Warmer
winters would give farmers a longer harvest season, and might end the droughts in the Sahara Desert. Why don't we hear
about this part of the global warming argument? "It's the money!" said Dr. Baliunas. "Twenty-five
billion dollars in government funding has been spent since 1990 to research global warming. If
scientists and researchers were coming out releasing reports that global warming has little to
do with man, and most to do with just how the planet works, there wouldn't be as much
money to study it."

Tar Sands Inevitable
Oil sands inevitable
Dlouhy, 13 (6/10/2013, Jennifer A., Canadian ambassador: Albertas oil sands crude will get
to market http://fuelfix.com/blog/2013/06/10/canadian-ambassador-albertas-oil-sands-
crude-will-get-to-market/, JMP)
Companies will keep harvesting bitumen from Albertas oil sands, even if a pair of pipelines
through North America are blocked, Canadas U.S. ambassador says. That oil will get to
market, Ambassador Gary Doer said on Platts Energy Week. The only question is how it gets
there, Doer said. The oil isnt staying in the ground. It is going to get to the Gulf Coast. But
oil sands producers are facing trouble on two fronts. Last month, British Columbia formally
opposed Enbridges plan to build the Northern Gateway pipeline, which would transport oil
sands crude through the province to the West Coast. In the United States, environmentalists
have been battling TransCanada Corp.s proposal to build the Keystone XL pipeline connecting
Alberta with Gulf Coast refineries. Weve got a delay in British Columbia, and controversy in
D.C., Doer noted. But, he said, even with the opposition, its not a question of (whether
this) oil comes into the United States. Its a matter of how. Other pipelines are a possibility to
transport diluted bitumen from Alberta to Canadian ports. Separately, companies are already
using rail to ship the Canadian crude across the U.S. border.

Other transportation avenues will be sought so the impact is inevitable
Dlouhy, 13 (6/10/2013, Jennifer A., Canadian ambassador: Albertas oil sands crude will get
to market http://fuelfix.com/blog/2013/06/10/canadian-ambassador-albertas-oil-sands-
crude-will-get-to-market/, JMP)
***Gary Doer is Canadas U.S. ambassador Doers assertions respond to a major argument
from Keystone XLs critics, who insist that the pipeline is essential to sustaining energy-intensive
oil sands development in Canada that yields heavy crude that has a bigger carbon footprint
from its production to combustion than alternatives. Earlier this year, the State Department
concluded that the project was unlikely to dramatically boost demand for Canadas oil sands or
the amount of heavy crude oil processed in Gulf Coast refineries. According to the State
Department analysis, companies will turn to rail and other options to transport the product
even if the government denies a permit for Keystone XL, so there would be little change in
greenhouse gas emissions tied to oil sands development . But the issue isnt settled. The
Environmental Protection Agency, which plays a secondary role reviewing the pipeline,
suggested that other pipelines and rail transport may not be inevitable and pushed the State
Department for a better analysis. Keystone XL critics say British Columbias move is a sign at
least one alternative pipeline wont be built, undermining the State Departments conclusion
that greenhouse emissions will be the same with or without Keystone XL. But supporters note
that British Columbias opposition doesnt put the Northern Gateway on ice. Canadas federal
government still plays a role evaluating the project. And other pipelines are still in the works,
Doer noted, including Kinder Morgans Trans Mountain pipeline expansion. Separately,
TransCanada has proposed another project that would send oil sands crude to New
Brunswick.

Keystone isnt key to oil sands --- can be transported other ways
Johnson, 13 (6/7/2013, Keith, Pipeline Called Key to Canada Oil Sands,
http://online.wsj.com/article/SB10001424127887324069104578531713102125222.html, JMP)
But market experts said blocking Keystone would at most temporarily sidetrack Alberta's
development plans. They said that just as rail capacity expanded in the U.S. to handle a boom
in oil output, alternative facilities will eventually handle the expected flood of Canadian
crude. "Keystone is the preferred enabler" of Canada's oil sands, "but it isn't the only enabler.
There's more than one way to skin the cat," said Robert Johnston of the Eurasia Group, a
consultancy that has closely studied the economics of Canadian oil production.