Venezuela president ally of China

CARACAS, Venezuela, Jan. 17 (UPI) -- President Hugo Chavez has made clear his well-known strategic shift in Venezuela's international policy by increasing oil sales to China in lieu of the U.S. market, thereby doubling the trade between the two countries.

The two countries are quickly forging a strategic alliance based on China's increasingly omnivorous demands for energy. Less than a year ago that Chavez threatened the United States with stopping oil export shipments to that country to divert them towards China. Relations between the United States and Venezuela have been tense for a number of reasons, not the least of which is the Bush administration's uneasiness over Chavez's tight relations with Cuba's Fidel Castro.

High civil and military U.S. officials have accused the Venezuelan president of also having close ties to the Colombian guerrilla movement FARC, endangering regional stability. Chavez has repeatedly spoken out against imperialism, capitalism and "savage neo-liberalism," thinly veiled references to U.S. policy, and has gone so far as to strongly insulting his American counterpart George Bush.

The United States nevertheless continues to be Venezuela's main trade partner. More than 60 percent of Venezuelan crude exports are destined for the American market, where Venezuelan imports represent 14 percent of U.S. energy imports. Venezuela is the world's fifth-largest petroleum exporter and the fourth-largest supplier of the United States.

Since assuming power in February 1999, Chavez has repeatedly denounced the "unipolar" system, which predominates in international politics, a result of the global hegemony of the United States. Chavez favors instead an international "multipolar" structure for Venezuela with China and Russia as high-priority partners.

Only a few days ago the Venezuelan president concluded his most recent visit to China, his third in almost six years as president. At the end of the trip, he emphasized the importance of tightening links between the two nations, which were underscored by the signing of a number of important agreements. Chavez and his Chinese counterpart Hu Jintao concluded several agreements in energy matters, agriculture, railway transport, mining, housing, tourism, telecommunications and information technology. The last agreement includes China launching a satellite for Venezuela. They also signed agreements in the areas of customs, trade and military technology.

The next result of the basket of agreements is that Chinese-Venezuelan trade, currently at a level of $1.2 billion dollars annually, will jump in 2005 to almost $3 billion, according to Chavez. Chavez also noted out that Venezuela will give ample facilities to China to exploit Venezuela's petroleum resources, as China seeks to increase the country's strategic reserves. Among Chavez's offers to Beijing is access to the reopening of 15 oil wells, which were temporarily closed. The eventual total production of those well is estimated at 1 billion barrels. Chavez authorized Chinese companies to exploit the underdeveloped deposits.

At the same time, Chavez also emphasized that studies are underway to develop more efficient facilities to transport oil to China. Among the projects under consideration is a pipeline that would be built across Venezuela together with Colombia and that would end at a deepwater Colombian Pacific Ocean port. Another alternative under consideration is a similar pipeline through Panama.

Chavez also announced the acceleration of the project for constructing a second facility in Venezuela's orimulsion plant, heavily underwritten with Chinese investment. Orimulsion is a low-cost fuel invented in Venezuela and used for hydroelectric production. It is derived from bitumen and is produced only in Venezuela.

At present, Venezuela sells to China approximately 1.5 million tons of orimulsion annually, through its processing plant. China's $495 million Zhanjiang Orimulsion Power Station, the first of its type in China, has two generators capable of generating 0.6 million kilowatts apiece. According to Li Yi, the director of the Zhanjiang Orimulsion Power Station, the facility would eventually consume about 2 million tons of Venezuelan orimulsion annually. Although more expensive than coal-fired stations, the production costs of orimulsion-generated power are much lower than that generated by conventional oil. According to Chavez, the Venezuelan government will also provide China in January 2005 with 120,000 tons of oil fuel a month throughout 2005.

Chavez, referring to the power crises that China suffered last summer, the worst of last 20 years, said, "We know they had blackouts in their thermo-electric plants: With these shipments we want to contribute to China's development."

After concluding his four-day visit to China, Chavez described his trip as "extraordinary," adding that it resulted in "a strategic alliance."

Whether the Bush administration will allow Venezuela to slip out of its traditional orbit as a U.S. energy supplier to forge links with a nation that many in the Bush administration see as a potential strategic competitor is, of course, another matter.

There was a hard push to build an orimulsion plant in Florida, if I remember correctly, but in the end they couldn't get it permitted.

For China, national development is more important than being environmentally pristine.

While I imagine that most of us here favor common-sense environmental regulations, it should be clear that radical environmentalism is simply a ploy to stunt our own growth while shifting it to others. The Greens will never go to the mat to stop a pipeline in any OPEC country, and they will never rise up in righteous frenzy to stop a factory in China. Until they do, no one should ever take their permanent outrage seriously.

As for Chavez, he wants to build a pipeline across Colombia to the Pacific. Somehow I doubt the environmentalists will say much, even though they have thrown absolute fits over pipelines in Ecuador and Bolivia, for example.

And somehow he isn't worried about FARC or ELN attacks on the pipeline, even though existing pipelines in the country get hit almost weekly.

China and Venezuela sign oil agreements - 2005-01-30 - Venezuela President Hugo Chavez and Chinese Vice President Zeng Qinghong signed several agreements Saturday concerning oil, agriculture and technology, officials said.

Chavez has sought to forge new trade and political ties with foreign powers including China and Russia.

"Each (agreement) will turn into a thousand things," Chavez said after the signing ceremony at the presidential palace.

Zeng arrived in Venezuela on Friday as part of a tour of several Latin American and Caribbean countries.

His delegation includes 125 officials and business representatives who discussed bilateral investments with Venezuelan business leaders on Saturday.

During their meeting, Chavez and Zeng signed a total of 19 agreements after discussing technological cooperation, as well as mining, oil and gas projects, according to a statement issued by Venezuela information ministry.

On a visit to Beijing last month, Chavez signed agreements boosting Chinese investment in Venezuela's rich oil and gas resources.

The deals also involved the construction of a railroad in eastern Venezuela, the purchase of a satellite to improve telecommunications in the South American country, and the purchase of radars to tighten security along its border with Colombia.

Venezuela expects trade with China to reach US$3 billion this year due to the trade deals signed in December.

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