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Advantages

Brazilian Prolif
First, the Venezuelan economy will collapse in the status quo A. Brink Lees 13
Venezuela's Controversial Election Results Are Only the Start of Its Troubles KEVIN LEES APRIL 15, 2013 http://www.newrepub lic.com/article/112920/venezuela-elections-2013-close-results-are-defeat-chavismo#

Maduro immediately face an economic crisis, the hangover from a 14-year spending binge and an economy on the brink of collapse Venezuela's economy has precariously
was favored to win on Sunday and then . Since Chvez's reelection in October 2012,

slipped from troubled to tumbling

all while oil prices have surged to $103 a barrel. But Venezuela now also faces its Bush v. Gore moment, with Capriles demanding a recount of the vote in a late-night Sunday address to

the nation. Maduro, in his victory speech, claimed that Capriles had called to offer a pact, but Capriles angrily denounced Maduro as a liar. Capriles started the campaign by taunting Maduro, "No one elected you, kid," and in his speech, he argued that if Maduro was illegitimate before, he's just as illegitimate now. He stopped short of outright declaring victory himself, but he stated that the election result didn't reflect the truth of the Venezuelan electorate, and he made it all but clear that he expected a promised audit to show that he, in fact, was the real victor on Sunday. Venezuela will now confront a long and grueling battle in unprecedented territory you have to go back to December 1968 to find a presidential result that was even closer in Venezuela, a result that ended with Venezuela's first-ever peaceful transfer of power following an

the more acute economic problems continue, and may well accelerate, given that government policy for the past six months has been designed merely to get Maduro to the finish line of Sunday's election.
election. If Maduro holds on to his victory, however, he'll be crippled by nagging doubts over the legitimacy of his presidency, and the close result, barely a month after Chvez's funeral, was a stinging defeat for Chavismo. Meanwhile,

B. Failing oil sector Levisohn 13


Venezuelan Bonds Do the Collapse Ben Levisohn; former stock trader who has covered financial markets for the Wall Street Jo urnal, Bloomberg and BusinessWeek; April 16, 2013 http://blogs.barrons.com/emergingmarketsdaily/2013/04/16/venezuelan-bonds-do-the-collapse/

Barclays cut Venezuelan bonds noting that a weak presidency and high uncertainty are the main outcomes from this election and are the key drivers political gridlock can delay the implementation of the economic measures and could accelerate the deterioration of Venezuelas already fragile fundamentals Those risks are compounded by oils collapse , which could
, for instance, to neutral from overweight, in our change in stance. Its strategists also note that .

put Venezuela on an unsustainable path if they continue to fall

C. No foreign investment Toro 11


Foreign Investment in Venezuela: Mission Almost Impossible Francisco Toro; CaracasChronicles; March 28, 2011 http://www.wha tsnextvenezuela.com/expropriation/foreign-investment-in-venezuela-mission-almost-impossible/

With the largest oil reserves in the Western Hemisphere, Venezuela might appear like a natural candidate to attract major Direct Foreign Investment funds. But, as a direct result of Mr. Chvezs policy of marginalizing private sector capital, Foreign Direct Investment flows actually slammed into reverse in 2009 Venezuela continues to experience a net outflow of foreign direct investment to the tune of $3.1 billion a year
the latest for which ECLAC figures are available. United Nations 2009 Report ECLAC). in the process. Such startling figures are driven largely by the Chvez governments nationalization drive, since compensation for expropriated businesses is counted as negative Foreign Direct Investment. What does this tell us? Rather than seek out new foreign investors, the Venezuelan government is busily buying out those who stopped by in the past.

(page 53 of the report). Investors thinking of doing business in Venezuela should be aware that they are likely to lose money

The dearth of foreign investment not only slows economic growth now, it will also undermine the medium-to-long-term competitiveness of the Venezuelan economy each new foreign investor needs the plant equipment, technology and business services from data-banks to accounting other foreign companies offer. With investments flowing out of Venezuela at a record pace, new foreign investors find themselves between a rock and a hard place with next to none or few new investments coming into Venezuela outside the extractive sector, domestic firms arent enjoying any of the positive spillover effects from foreign investments whether it is the most advanced technology, added dynamism, or cutting-edge management practices Venezuela has one of the worlds most hostile environments for business as well as the tightest foreign exchange control regimes. Its labor market is exceptionally rigid. Venezuelas notoriously byzantine red-tape that characterizes any routine business operations is bewildering enough to confirm that it is intentional
. New businesses tend to flock together for a reason: in Chvezland. In addition, Seek advice on becoming a foreign investor in Venezuela these days and your enquiries are likely to be met with blank stares. The disincentives now facing potential foreign investors is formidable. Last but not least, . Remarkably, Venezuela has never officially rescinded the National Treatment provisions adopted during its short -lived economic reform experiment during the early 1990s. The provisions stipulate that foreign investors are not to be discriminated against vis--vis domestic investors.

It is, arguably, not foreign investment the government is concerned with short-circuiting, but rather private investment in
One can argue that it is a principle that the government has largely respected, but only in the sense that domestic investors face much of the same hardships as their international counterparts.

general, regardless of its source The one type of investment that is still flowing into the country in any significant quantity is investment in oil projects in Venezuelas rich but expensive to exploit Orinoco Tar Belt. To the extent that major Western companies are able to find investment opportunities in Venezuela, its almost always in the oil sector. That said, such investments are usually as minority partners in projects led by the state-owned PDVSA. However big the potential of the Orinoco Tar Belt might be, however, its nonetheless an enclave of this extractive industry, accounting for relatively few jobs and largely disconnected from much of the rest of Venezuelas economy. For the vast majority of Venezuelans, the companies they work for, buy from and contract are simply bereft of significant investment from abroad. And if this is a lost opportunity for international investors, in the long term, it will be an even bigger handicap to Venezuelas existing businesses and those interested in ever doing business there. Venezuelan firms are now cut off from not just foreign investment, but also from the technology foreign investment brings, and the cutting edge management techniques that come with it. Little by little, Venezuelas ability to host genuinely competitive, world-class firms is being eroded
. There, state-owned oil companies from ally countries often receive though not always most favored treatment. China has signed a $20 billion financing facility tied to a major investment by Sinopec Corp. in the region. Likewise, Russias Lukoil and Gazprom as well as Irans Petropars gas contractor have received lucrative development contracts there, a s has PetroVietnam. Petrleos de Venezuela, SA or Italys ENI, Japans Mitsubishi, Spains Repsol, and Chevron have managed to land such contracts in the Orinoco Tar Belt. In sectors like construction, light manufacturing, retail and services, .

D. Default Devereux 12
Venezuela Risks Default If Chavez Wins, Morgan Stanley said Charlie Devereux Sep 14, 2012 http://www.bloomberg.com/news/2012-09-14/venezuela-faces-debt-crisis-if-chavez-wins-morgan-stanley-says.html

Venezuela could default on its debt as early as 2013 if fails to shore up the oil- producing nations increasingly fragile balance sheet One tipping point could be the $4.3 billion in external debt payments that come due between August and November 2013 Chavez has damaged Venezuelas balance sheet through the nationalization of key sectors of the economy, endemic inflation and a lack of fiscal discipline The policies are an unsustainable mix that heighten the risk of default on Venezuelas $110.6 billion stock of debt, especially if oil prices tumble Government actions may be taking
the second half of President Hugo Chavez wins re-election next month and , Morgan Stanley said. Volberg wrote in a note to clients today. Enlarge image Hugo , who is seeking to extend almost 14 years in power with another six-year term, of fiscal discipline, Volberg said. , Volberg wrote. the second half of

, Morgan Stanley analyst Daniel

, Morgan Stanley analyst Daniel Volberg said. Chavez, who is seeking to extend almost 14 years in power with another six-year term, has damaged Venezuelas balance sheet through the nationalization of key sectors of the economy, endemic inflation and a lack

Venezuela towards a crisis and potentially even a debt event that could come as early as 2013 At 11.6 percent of gross domestic product, Venezuela has the largest fiscal deficit in Latin America, while its international reserves have fallen by $17 billion since 2008 to $25.6 billion Output by state oil company Petroleos de Venezuela SA fell to 2.72 million barrels a day in 2011 from 3.48 million barrels in 1998
the report said. Venezuelas debt is no longer with large bank lenders as much as publicly traded bonds held by a dispersed group of creditors, which could make restructuring more challenging. , Volberg said. ,

according to British Petroleums statistical review. Bond Yields The yield on Venezuelas benchmark 9.25 per cent bonds due in 2027 fell 11 basis points, or 0.11 percentage point, to 10.77 percent at 11:27 a.m. in Caracas, according t o data compiled by Bloomberg. The bonds price rose

The cost of insuring Venezuelan bonds against default for five years rose four basis points to 737 basis points
0.74 cent today to 88.80 cents on the dollar. , according to prices compiled by Bloomberg.

Second, the Venezuelan economy is key to the Brazilian economy A. Market access on the brink Israel 13
Brazilian firms root for Chavez's man in Venezuela vote Esteban Israel Mar 21, 2013 http://www.reuters.com/article/2013/03/21/us-venezuela-brazil-business-idUSBRE92K0ZY20130321 Brazil, the world's seventh largest economy, has emerged as regional powerbroker in Latin America with moderate center-left policies that it hopes can influence more stridently left-wing neighbors such as Venezuela. With Brazil's economy slowing to a crawl, the last thing its entrepreneurs want to do is forfeit growing markets. Over the past decade, Brazil's exports to Venezuela soared by 533 percent to some $5 billion, making it Brazil's second largest market in Latin America after Argentina, both major

buyers of Brazilian manufactured goods. Economists say Brazil's investments in Venezuela are around $20 billion. Venezuela, an oil producing nation that imports some 70 percent of its food, is now the third largest consumer of Brazilian beef and an important buyer of its chicken. Key infrastructure projects launched during the 14 years of Chavez's government, from the Caracas metro expansion to bridges across the Orinoco river that divides Venezuela, are run by Brazilian firms like Odebrecht.

B. Manufacturing Daudelin 13
Why Venezuela matters for Brazil Jean Daudelin; The Norman Paterson School of International Affairs (NPSIA); April 20, 2013 http://npsia.wordpress.com/2013/04/20/why-venezuela-matters-for-brazil/ I think the answer lies deeper than ideology or even security preoccupations and reaches to the very core of the Brazilian governments economic model, which is still rooted in old and increasingly farfetched dreams of industrialization. The ten-year-long Golden Age of Lulas presidency was based on low inflation and the effective redistribution of reasonably high growth. The axis of that growth, however, has lied in growing exports of primary products, primarily agricultural. For twenty years now, Brazil has been quickly de-industrializing. The fast decline of its manufacturing sector has taken place in the face of strenuous efforts of the government, particularly under the PT, to shore up and protect what a half-century of state efforts had produced, until the brief neo-liberal opening of the early 1990s triggered a debacle that Chinas rise, and the primary goods bonanza it produced, only deepened. Much of Brazils industry is not competitive globally. Domestic protection and support for national champions have consequently been crucial to its survival, but so has regional integration, particularly Mercosur. Hiding its industries behind a common tariff with even less competitiveand even keener protectionistArgentina, ensured that a market would be found for Brazilian products. Bringing Venezuela on board was an even better deal: with no industry to speak of, Venezuela brought no competition within the bloc but putting its sizeable market behind the tariff wall broadened the reach of Brazils uncompetitive manufactured products. Deepening economic instability in Argentina is now threatening the whole scheme. Cristina Kirchners attempts to protect her own industrial sector by imposing barriers to Brazilian products, along with declining demand in Argentina, is hurting Brazilian manufacturing exports to that country which, in the first three months of this year, have declined by 10%.[2] With mass protests against Kirchner in the streets of Buenos Aires and most of the countrys major cities last week, continuing high inflation and falling confidence, things are not looking up. In such a context, what export market is left for Brazils industrial goods but troubled Venezuela, whose oil revenues protect from economic collapse? Mercosur is a raw deal for Venezuelan consumers, who would be much better off importing from the cheapest world producers, but the chavista mix of ideological blindness and economic incompetence is proving to be a boon for Brazil. In that context, quickly recognizing Maduro and keeping a clearer-eyed opposition out of power was a no-brainer.

Third, Brazilian economic stability is critical to avert Brazilian proliferation Shultz 2K


Donald SHULTZ, Research Professor of National Security Policy at US Army War College, THE UNITED STATES AND LATIN AMERICA: SHAPING AN ELUSIVE FUTURE, March, 2000, pg. Online @ http://www.carlisle.army.mil/ssi/pdffiles/PUB31.pdf While we are in a speculative mode, it may be useful to raise the issue of whether, two or three decades from now, the United States might have to deal with a regional hegemon or peer competitor. The most obvious candidate for such a role would be Brazil, which already accounts for almost half of Latin Americas economic production and has by far the largest armed forces in the region (313,250 active troops).53 That country could very well assume a more commanding political and military role in the

decades ahead. Until recently, the primary U.S. concern about Brazil has been that it might acquire nuclear weapons and delivery systems. In the 1970s, the Brazilian military embarked on a secret program to develop an atom bomb. By the late 1980s, both Brazil and Argentina were aggressively pursuing nuclear development programs that had clear military spin-offs.54 There were powerful military and civilian advocates of developing nuclear weapons and ballistic missiles within both countries. Today, however, the situation has changed. As a result of political leadership transitions in both countries, Brazil and Argentina now appear firmly committed to restricting their nuclear programs to peaceful purposes. They have entered into various nuclear-related agreements with each othermost notably the quadripartite comprehensive safeguards agreement (1991), which permits the inspection of all their nuclear installations by the International Atomic Energy Agencyand have joined the Missile Technology Control Regime. Even so, no one can be certain about the future. As Scott Tollefson has observed: . . . the military application of Brazils nuclear and space programs depends less on technological considerations than on political will. While technological constraints present a formidable barrier to achieving nuclear bombs and ballistic missiles, that barrier is not insurmountable. The critical element, therefore, in determining the applications of Brazils nuclear and space technologies will be primarily political.55 Put simply, if changes in political leadership were instrumental in redirecting Brazils nuclear program towards peaceful purposes, future political upheavals could still produce a reversion to previous orientations. Civilian supremacy is not so strong that it could not be swept away by a coup, especially if the legitimacy of the current democratic experiment were to be undermined by economic crisis and growing poverty/inequality. Nor are civilian leaders necessarily less militaristic or more committed to democracy than the military. The example of Perus Fujimori comes immediately to mind. How serious a threat might Brazil potentially be? It has been estimated that if the nuclear plant at Angra dos Reis (Angra I) were only producing at 30 percent capacity, it could produce five 20-kiloton weapons a year. If production from other plants were included, Brazil would have a capability three times greater than India or Pakistan. Furthermore, its defense industry already has a substantial missile producing capability. On the other hand, the country has a very limited capacity to project its military power via air and sealift or to sustain its forces over long distances. And though a 1983 law authorizes significant military manpower increases (which could place Brazil at a numerical level slightly higher than France, Iran and Pakistan), such growth will be restricted by a lack of economic resources. Indeed, the development of all these military potentials has been, and will continue to be, severely constrained by a lack of money. (Which is one reason Brazil decided to engage in arms control with Argentina in the first place.) 56 In short, a restoration of Brazilian militarism, imbued with nationalistic ambitions for great power status, is not unthinkable, and such a regime could present some fairly serious problems. That government would probably need foreign as well as domestic enemies to help justify its existence. One obvious candidate would be the United States, which would presumably be critical of any return to dictatorial rule. Beyond this, moreover, the spectre of a predatory international community, covetous of the riches of the Amazon, could help rally political support to the regime. For years, some Brazilian military officers have been warning of foreign intervention. Indeed, as far back as 1991 General Antenor de Santa Cruz Abreu, then chief of the Military Command of the Amazon, threatened to transform the region into a new Vietnam if developed countries tried to internationalize the Amazon. Subsequently, in 1993, U.S.-Guyanese combined military exercises near the Brazilian border provoked an angry response from many high-ranking Brazilian officers. 57 Since then, of course, U.S.-Brazilian relations have improved considerably. Nevertheless, the basic U.S./ international concerns over the Amazonthe threat to the regions ecology through burning and deforestation, the presence of narcotrafficking activities, the Indian question, etc.have not disappeared, and some may very well intensify in the years ahead. At the same time, if the growing trend towards subregional economic groupingsin particular, MERCOSURcontinues, it is likely to increase competition between Southern Cone and NAFTA countries. Economic conflicts, in turn, may be

expected to intensify political differences, and could lead to heightened politico-military rivalry between different blocs or coalitions in the hemisphere. Even so, there continue to be traditional rivalries and conflicts within MERCOSUR, especially between Brazil and its neighbors, and these will certainly complicate the groups evolution. Among other things, the past year witnessed a serious deterioration of relations between Brazil and Argentina, the product partly of the formers January 1999 currency devaluation, which severely strained economic ties between the two countries. In part, too, these conflicts were aggravated by Argentinas (unsuccessful) bid to join the North Atlantic Treaty Organization (NATO), which Brazilians interpreted as an attempt to gain strategic advantage. The upshot was that relations soured to the extent where questions have been raised as to the continued viability of MERCOSUR itself. In light of these problems, one cannot but wonder what impact a resurgence of Brazilian authoritarianism, combined with a push for regional hegemonic status, would have on Argentina, currently a non-NATO ally of the United States.

Fourth, Brazilian proliferation is the most likely scenario for global nuclear war multiple warrants
Border disputes, instability, unpredictable leaders, accidents, military coups, lower warning times, first strikes, arms race, technical accidents, physical security

Yusuf 8
Predicting Proliferation: The History of the Future of Nuclear Weapons Moeed Yusuf; Fellow at the Frederick S. Pardee Center for the Study of the Longer-Range Future at Boston University; January 2009 http://www.brookings.edu/~/media/research/files/papers/2009/1/nuclear%20proliferation%20yusuf/0 1_nuclear_proliferation_yusuf.pdf Michael Mandelbaum, earlier mentioned as someone who remained relatively comfortable about the ability of the superpowers to deter each other, was less optimistic regarding the capacity of developing countries to do so. He stressed that developing country proliferation would increase the likelihood of the use of nuclear weapons in conflicts.78 Ted Greenwood, an American academic who later advised the U.S. Department of Defense, pointed to the active border disputes of Nth states such as South Africa, Israel, and Taiwan to suggest an increased likelihood of nuclear war.79 Mentions of the possibility of weapons falling into the hands of irresponsible powers the mad ruler scenario were frequent. As French scholar, Thierry de Montbrial pointed out: there are many politically unstable countries whose leaders are not predictableand would not hesitate to use an atomic weapon, if they had one.80 Hinting at the same concern, the renowned French sociologist Raymond Aron argued that acquisition of nuclear weapons by developing countries could even result in a superpower conflict in the Cold War context due to a deliberate or inadvertent action of a small state.81 Moreover, in contrast to the relative stability within the borders of developed countries, Dunn and Overholt pointed to frequent military coups in countries like Argentina, Chile, Brazil, Greece, Indonesia, Iraq, Libya, Nigeria, Pakistan, South Korea, Syria, Turkey, Venezuela, and Zaire to emphasize the possibility of militaristic leaders wresting power and utilizing nuclear weapons as a means of coercing adversaries.82 A number of commentators anticipated that Nth powers would seek to create a first strike capability to preempt traditional rivals. Counterforce targeting strategies were considered likely, but also inherently destabilizing, especially for contiguous countries where warning times were diminished. Technical deficiencies in ensuring robust command and control and the security of the arsenal were taken for granted and used to further heighten fears of accidental or unauthorized use.83

Finally, the plan prevents a Venezuelan economic collapse, the key to the Venezuelan economy is improving their oil sector and increasing private investment Homan 13
EXPLORING THE NEXT GENERATION OFPROLIFERATORS Patrick Homan; Monterey Institute of International Studies, James Martin Center for Nonproliferation Studies; 26 Feb 2013. http://www.niu.edu/polisci/announcements/Grad%20attachments/Homan.pdf Despite being the worlds eighth-largest oil producer, Venezuela faces a host of economic issues. After recovering from a recession that began in 2009, the Venezuelan economy grew consistently from 201012, including 5 percent growth in 2012.59 However, much of this growth can be attributed to public spending, as Chvezs main short-term solution to his countrys economic woes has been borrowing. As a result, net public debt rose from 14 percent of GDP in 2008 to 29 percent in 2010.60 In 2011, the International Monetary Fund reported Venezuelas public debt as 45.5 percent of GDP.61 Much of Chvezs borrowing has been from China. Between 2008 and 2010, China lent Venezuela $12 billion and is being repaid in oil shipments, which cuts even further into government revenues.62 Furthermore, inflation in Venezuela during 2012 was near 20 percent; as a result, the Venezuelan currency traded on the black market for a third of the official rate.63 While Chvezs near-term future seems safe with oil prices around $100 a barrel, there are growing long-term risks within the Venezuela economy. Any future decline in oil prices would send the Venezuelan economy into a tailspin and lead to a default on its obligations. Chvezs handling of his countrys oil sector is the chief cause of Venezuelas economic problems. Chvez pillaged Petrleos de Venezuela (PDVSA), the state-owned oil firm, by packing it with pro-Chvez loyalists, starving it of much needed investment, and using its profits for social spending. As a result, PDVSAs output has gone from 3.3 million barrels per day (b/d) in 1998 to its current level of around 2.25 million b/d, according to recent industry estimates.64 Of that, some 1 million b/d is sold at subsidized prices at home or to regional allies (such as Cuba), leaving just 1.25 million b/d for full-price exports.65 The declining state of its oil sector is having a large impact on the overall Venezuelan economy, as petroleum now accounts for 92 percent of its export revenue.66 This is an extremely troubling development for Chvezs government because its domestic support relies heavily on petrodollars for providing government subsidies and funding social welfare programs. Meanwhile, Chvezs harassment and hostility towards businesses and the private sector has devastated the rest of the Venezuelan economy. In his pursuit toward state socialism, Chvez nationalized hundreds of companies, seizing everything from steel companies and bottle makers to housing schemes.67 When workers have resisted, he has deployed the National Guard against them and trumped up charges against their owners. His efforts to accelerate the revolutionary process caused much of Venezuelas private sector to close or flee. The results are a significant amount of capital flight and a need to import many goods that it previously produced.

Venezuelan Prolif
First, the Venezuelan economy will collapse in the status quo A. Brink Lees 13
Venezuela's Controversial Election Results Are Only the Start of Its Troubles KEVIN LEES APRIL 15, 2013 http://www.newrepub lic.com/article/112920/venezuela-elections-2013-close-results-are-defeat-chavismo#

Maduro immediately face an economic crisis, the hangover from a 14-year spending binge and an economy on the brink of collapse Venezuela's economy has precariously
was favored to win on Sunday and then . Since Chvez's reelection in October 2012,

slipped from troubled to tumbling

all while oil prices have surged to $103 a barrel. But Venezuela now also faces its Bush v. Gore moment, with Capriles demanding a recount of the vote in a late-night Sunday address to

the nation. Maduro, in his victory speech, claimed that Capriles had called to offer a pact, but Capriles angrily denounced Maduro as a liar. Capriles started the campaign by taunting Maduro, "No one elected you, kid," and in his speech, he argued that if Maduro was illegitimate before, he's just as illegitimate now. He stopped short of outright declaring victory himself, but he stated that the election result didn't reflect the truth of the Venezuelan electorate, and he made it all but clear that he expected a promised audit to show that he, in fact, was the real victor on Sunday. Venezuela will now confront a long and grueling battle in unprecedented territory you have to go back to December 1968 to find a presidential result that was even closer in Venezuela, a result that ended with Venezuela's first-ever peaceful transfer of power following an

the more acute economic problems continue, and may well accelerate, given that government policy for the past six months has been designed merely to get Maduro to the finish line of Sunday's election.
election. If Maduro holds on to his victory, however, he'll be crippled by nagging doubts over the legitimacy of his presidency, and the close result, barely a month after Chvez's funeral, was a stinging defeat for Chavismo. Meanwhile,

B. Failing oil sector Levisohn 13


Venezuelan Bonds Do the Collapse Ben Levisohn; former stock trader who has covered financial markets for the Wall Street Journal, Bloomberg and BusinessWeek; April 16, 2013 http://blogs.barrons.com/emergingmarketsdaily/2013/04/16/venezuelan-bonds-do-the-collapse/

Barclays cut Venezuelan bonds noting that a weak presidency and high uncertainty are the main outcomes from this election and are the key drivers political gridlock can delay the implementation of the economic measures and could accelerate the deterioration of Venezuelas already fragile fundamentals Those risks are compounded by oils collapse , which could
, for instance, to neutral from overweight, in our change in stance. Its strategists also note that .

put Venezuela on an unsustainable path if they continue to fall

C. No foreign investment Toro 11


Foreign Investment in Venezuela: Mission Almost Impossible Francisco Toro; CaracasChronicles; March 28, 2011 http://www.whatsnextvenezuela.com/expropriation/foreign-investment-in-venezuela-mission-almost-impossible/

With the largest oil reserves in the Western Hemisphere, Venezuela might appear like a natural candidate to attract major Direct Foreign Investment funds. But, as a direct result of Mr. Chvezs policy of marginalizing private sector capital, Foreign Direct Investment flows actually slammed into reverse in 2009 Venezuela continues to experience a net outflow of foreign direct investment to the tune of $3.1 billion a year
the latest for which ECLAC figures are available. United Nations 2009 Report ECLAC). in the process. Such startling figures are driven largely by the Chvez governments nationalization drive, since compensation for expropriated businesses is counted as negative Foreign Direct Investment. What does this tell us? Rather than seek out new foreign investors , the Venezuelan government is busily buying out those who stopped by in the past.

(page 53 of the report). Investors thinking of doing business in Venezuela should be aware that they are likely to lose money

The dearth of foreign investment not only slows economic growth now, it will also undermine the medium-to-long-term competitiveness of the Venezuelan economy each new foreign investor needs the plant equipment, technology and business services from data-banks to accounting other foreign companies offer. With investments flowing out of Venezuela at a record pace, new foreign investors find themselves between a rock and a hard place with next to none or few new investments coming into Venezuela outside the extractive sector, domestic firms arent enjoying any of the positive spillover effects from foreign investments whether it is the most advanced technology, added dynamism, or cutting-edge management practices Venezuela has one of the worlds most hostile environments for business as well as the tightest foreign exchange control regimes. Its labor market is exceptionally rigid. Venezuelas notoriously byzantine red-tape that characterizes any routine business operations is bewildering enough to confirm that it is intentional
. New businesses tend to flock together for a reason: in Chvezland. In addition, Seek advice on becoming a foreign investor in Venezuela these days and your enquiries are likely to be met with blank stares. The disincentives now facing potential foreign investors is formidable. Last but not least, . Remarkably, Venezuela has never officially rescinded the National Treatment provisions adopted during i ts short-lived economic reform experiment during the early 1990s. The provisions stipulate that foreign investors are not to be discriminated against vis--vis domestic investors.

It is, arguably, not foreign investment the government is concerned with short-circuiting, but rather private investment in
One can argue that it is a principle that the government has largely respected, but only in the sense that domestic investors face much of the same hardships as their international counterparts.

general, regardless of its source The one type of investment that is still flowing into the country in any significant quantity is investment in oil projects in Venezuelas rich but expensive to exploit Orinoco Tar Belt. To the extent that major Western companies are able to find investment opportunities in Venezuela, its almost always in the oil sector. That said, such investments are usually as minority partners in projects led by the state-owned PDVSA. However big the potential of the Orinoco Tar Belt might be, however, its nonetheless an enclave of this extractive industry, accounting for relatively few jobs and largely disconnected from much of the rest of Venezuelas economy. For the vast majority of Venezuelans, the companies they work for, buy from and contract are simply bereft of significant investment from abroad. And if this is a lost opportunity for international investors, in the long term, it will be an even bigger handicap to Venezuelas existing businesses and those interested in ever doing business there. Venezuelan firms are now cut off from not just foreign investment, but also from the technology foreign investment brings, and the cutting edge management techniques that come with it. Little by little, Venezuelas ability to host genuinely competitive, world-class firms is being eroded
. There, state-owned oil companies from ally countries often receive though not always most favored treatment. China has signed a $20 billion financing facility tied to a major investment by Sinopec Corp. in the region. Likewise, Russias Lukoil and Gazprom as well as Irans Petropars gas contractor have received lucrative development contracts there, as has PetroVietnam. Petrleos de Venezuela, SA or Italys ENI, Japans Mitsubishi, Spains Repsol, and Chevron have managed to land such contracts in the Orinoco Tar Belt. In sectors like construction, light manufacturing, retail and services, .

D. Default Devereux 12
Venezuela Risks Default If Chavez Wins, Morgan Stanley said Charlie Devereux Sep 14, 2012 http:/ /www.bloomberg.com/news/2012-09-14/venezuela-faces-debt-crisis-if-chavez-wins-morgan-stanley-says.html

Venezuela could default on its debt as early as 2013 if fails to shore up the oil- producing nations increasingly fragile balance sheet One tipping point could be the $4.3 billion in external debt payments that come due between August and November 2013 Chavez has damaged Venezuelas balance sheet through the nationalization of key sectors of the economy, endemic inflation and a lack of fiscal discipline The policies are an unsustainable mix that heighten the risk of default on Venezuelas $110.6 billion stock of debt, especially if oil prices tumble Government actions may be taking
the second half of President Hugo Chavez wins re-election next month and , Morgan Stanley said. Volberg wrote in a note to clients today. Enlarge image Hugo , who is seeking to extend almost 14 years in power with another six-year term, of fiscal discipline, Volberg said. , Volberg wrote. the second half of

, Morgan Stanley analyst Daniel

, Morgan Stanley analyst Daniel Volberg said. Chavez, who is seeking to extend almost 14 years in power with another six-year term, has damaged Venezuelas balance sheet through the nationalization of key sectors of the economy, endemic infl ation and a lack

Venezuela towards a crisis and potentially even a debt event that could come as early as 2013 At 11.6 percent of gross domestic product, Venezuela has the largest fiscal deficit in Latin America, while its international reserves have fallen by $17 billion since 2008 to $25.6 billion Output by state oil company Petroleos de Venezuela SA fell to 2.72 million barrels a day in 2011 from 3.48 million barrels in 1998
the report said. Venezuelas debt is no longer with large bank lenders as much as publicly traded bonds held by a dispersed group of creditors, which could make restructuring more challenging. , Volberg said. ,

according to British Petroleums statistical review. Bond Yields The yield on Venezuelas benchmark 9.25 percent bonds due in 2027 fell 11 basis points, or 0.11 percentage point, to 10.77 percent at 11:27 a.m. in Caracas, according to data compiled by Bloomberg. The bonds price rose

The cost of insuring Venezuelan bonds against default for five years rose four basis points to 737 basis points
0.74 cent today to 88.80 cents on the dollar. , according to prices compiled by Bloomberg.

Second, Venezuelan economic downturn would collapse the region, consolidate power, and increase terrorism Wilson 5
Lieutenant Colonel Jeffrey K. ; United States Army War College Strategy; March 18, 200 PROMOTING STABILITY AND SECURITY IN VENEZUELA http://www.dtic.mil/cgi-bin/GetTRDoc?AD=ADA431740 NCHO

the Venezuela region remains on the brink of collapse Any down-turn in Venezuelas economic health could trigger a series of events that might lead to the end of democratic government. Chavez has already shown that he is willing to move away from democratic processes to consolidate his power in the executive branch
U.S. policy with respect to Venezuela is aligned with national interests and is fairly well balanced between the various elements of national power diplomatic, economic, military and informational, but it has not been effective in improving situation in . Over the past two decades, the U.S. has spent billions of dollars and significant manpower in the Andean region to stop the flow of drugs into the U.S. and promote regional security, stability, free markets and human rights. Yet, the . In Venezuela specifically, a country with more than 40 years of democracy is in crisis and the situation seems to be worsening rather than improving. President . So, what is the path forward that the U.S. needs to follow to promote freedom, stability, security and economic prosperity in Venezuela? There are several possible alternative courses of action, including: staying on the current course (status quo); pulling back and letting the Chavez regime crumble from its own corruption and flawed policies; taking unilateral action to cause regime change; or finding new, more effective ways to work multilaterally to support security, democratic processes and economic growth in Venezuela. Staying on the current course is not feasible because, as stated above, current policy is not working and the possible consequences of failure in Venezuela are too great.

If democracy in Venezuela collapses, it will probably become a failed state. This will

mean loss of freedom and democracy, increased poverty, increased drug trafficking, increased terror activity in ungoverned areas of the country, regional instability The U.S. government cannot risk the implosion of Venezuela simply because it does not want to support the Chavez regime. The disadvantages of this course of action include loss of international respect and loss of the opportunity to influence the future in Venezuela and the region this is more likely to result in the failure of Democracy in Venezuela and the U.S. would have to invest much more to repair a failed state than to prevent such a failure
and loss of oil imports to the U.S. This is also the wrong time for the U.S. to disengage from a leadership role in guiding Venezuela back onto the path of freedom and liberty. . Some would argue that an advantage of this course of action would be a short term savings in resources, but this is a false economy since .

Third, that creates multiple scenarios for extinction Manwaring 5, Marx G., Retired U.S. Army Colonel and an Adjunct Professor of International Politics at
Dickinson College, Venezuelas Huge Chvez, Bolivarian Socialism, and Asymmetric Warfare, 2005. The Issue of State Failure. - President Chvez also understands that the process leading to state failure is the most dangerous long-term security challenge facing the global community today. The argument in general is that
failing and failed state status is the breeding ground for instability, criminality, insurgency, regional conflict, and terrorism. These conditions breed massive humanitarian disasters and major refugee flows. They can host evil networks of all kinds, whether they involve criminal business enterprise, narco-trafficking, or some form of ideological crusade such as Bolivarianismo. More specifically, these conditions spawn all kinds of things people in general do not like such as murder, kidnapping, corruption, intimidation, and destruction of infrastructure. These means of coercion and persuasion can spawn further human rights violations, torture, poverty, starvation, disease, the recruitment and use of child soldiers, trafficking in women and body parts, trafficking and proliferation of conventional weapons systems and WMD, genocide, ethnic cleansing, warlordism, and criminal anarchy. At the same time, these actions are usually unconfined and spill over into regional syndromes of

poverty, destabilization, and conflict.62 Perus SenderoLuminoso calls violent and destructive activities that facilitate the
processes of state failure armed propaganda. Drug cartels operating throughout the Andean Ridge of South America and

elsewhere call these activities business incentives. Chvez considers these actions to be steps that must be taken to bring about
the political conditions necessary to establish Latin American socialism for the 21st century.63 Thus, in addition to helping to provide wider latitude to further their tactical and operational objectives, state and nonstate actors strategic efforts are aimed at prog ressively lessening a targeted regimes credibility and capability in terms of its ability and willingness to govern and develop its national territory and society.

Chvezs intent is to focus his primary attack politically and psychologically on selected Latin American governments ability and right to govern. In that context, he understands that popular perceptions of corruption, disenfranchisement,
poverty, and lack of upward mobility limit the right and the ability of a given regime to conduct the business of the state. Until a given populace generally perceives that its government is dealing with these and other basic issues of political, economic, and social injustice fairly and effectively, instability and the threat of subverting or destroying such a government are real.64 But failing and failed states simply do not go away. Virtually anyone can take advantage of such an unstable situation. The tendency is that the best motivated

and best armed organization on the scene will control that instability. As a consequence, failing and failed states become
dysfunctional states, rogue states, criminal states, narco-states, or new peoples democracies. In connection with the creation of new peoples democracies, one can rest assured that Chvez and his Bolivarian populist allies will be available to provide money, arms,

and leadership at any given opportunity. And, of course, the longer dysfunctional, rogue, criminal, and

narco-states and peoples democracies persist, the more they and their associated problems endanger global security, peace, and prosperity.65

Fourth, specifically nuclear prolif Ferkaluk 10


Latin America: Terrorist Actors on a Nuclear Stage Brian Ferkaluk; Diplomacy Department atNorwich University; Global Securi ty Studies, Fall 2010, Volume l, Issue 3 http://globalsecuritystudies.com/Ferkaluk%20Latin%20America.pdf

The close relationship the US must maintain with Latin America is not only vital in the fight against domestic and international terrorism, but also in the fight to curtail nuclear proliferation Latin America could pose a serious threat of pursuing nuclear weapons in the coming years if the civilian-run governments of these states fall victim to revolutionaries Latin America has historically been active in both nuclear weapons development and nuclear power development. And given Latin Americas tendency toward military regimes the US cannot turn a blind eye to the possibility of nuclear activity in Latin America
immediate risk of in becoming a haven for a nuclear arms race, it leftist fact that junta (stratocracy), international conventions such as the Vienna Convention on Civil Liability for Nuclear Damage and not all adopt an Additional Protocol (AP) to their safeguards agreements with the International Atomic Energy Agency (IAEA). The region itself has been declared a nuclear-free zone

in the region. Although there is no

. Another factor to consider is the

. All Latin American countries are party to the NPT. Not all are members of

Brazil has not let the Treaty of Tlatelolco stand in the way of its own weapons development program in the late 1970s. And Venezuela today is not letting it stand in its way either. The most significant weakness of the treaty is the fact that it permits parties of the treaty to develop nuclear explosives for peaceful purposes. Therefore, Latin America has served as battlefield in the fight for non-proliferation.
according to the Treaty of Tlatelolco. It entered into force in 1969 and did not have all 33 Latin American states sign onto it until Cuba added its name in 2002. However, the treaty itself has not served as an absolute ban of nuclear weapons in the region. , for instance,

Fifth, Venezuelan proliferation is the most likely scenario for global nuclear war multiple warrants
Border disputes, instability, unpredictable leaders, accidents, military coups, lower warning times, first strikes, arms race, technical accidents, physical security

Yusuf 8
Predicting Proliferation: The History of the Future of Nuclear Weapons Moeed Yusuf; Fellow at the Frederick S. Pardee Center for the Study of the Longer-Range Future at Boston University; January 2009 http://www.brookings.edu/~/media/research/files/papers/2009/1/nuclear%20proliferation%20yusuf/0 1_nuclear_proliferation_yusuf.pdf Michael Mandelbaum, earlier mentioned as someone who remained relatively comfortable about the ability of the superpowers to deter each other, was less optimistic regarding the capacity of developing countries to do so. He stressed that developing country proliferation would increase the likelihood of the use of nuclear weapons in conflicts.78 Ted Greenwood, an American academic who later advised the U.S. Department of Defense, pointed to the active border disputes of Nth states such as South Africa, Israel, and Taiwan to suggest an increased likelihood of nuclear war.79 Mentions of the possibility of weapons falling into the hands of irresponsible powers the mad ruler scenario were frequent. As French scholar, Thierry de Montbrial pointed out: there are many politically unstable countries whose leaders are not predictableand would not hesitate to use an atomic weapon, if they had one.80 Hinting at the same concern, the renowned French sociologist Raymond Aron argued that acquisition of nuclear weapons by developing countries could even result in a superpower conflict in the Cold War context due to a deliberate or inadvertent action of a small state.81 Moreover, in contrast to the relative stability within the borders of developed countries, Dunn and Overholt pointed to frequent military coups in countries like Argentina, Chile, Brazil, Greece, Indonesia, Iraq, Libya, Nigeria, Pakistan, South Korea, Syria, Turkey, Venezuela, and Zaire to emphasize the possibility of militaristic leaders wresting power and utilizing nuclear weapons as a means of coercing adversaries.82 A number of commentators anticipated that Nth powers would seek to create a first strike capability to preempt traditional rivals. Counterforce targeting strategies were considered likely, but also inherently destabilizing, especially for contiguous countries where warning times were diminished. Technical deficiencies in ensuring robust command and control and the security of the arsenal were taken for granted and used to further heighten fears of accidental or unauthorized use.83

Finally, the plan prevents a Venezuelan economic collapse, the key to the Venezuelan economy is improving their oil sector and increasing private investment Homan 13
EXPLORING THE NEXT GENERATION OFPROLIFERATORS Patrick Homan; Monterey Institute of International Studies, James Martin Center for Nonproliferation Studies; 26 Feb 2013. http://www.niu.edu/polisci/announcements/Grad%20attachments/Homan.pdf Despite being the worlds eighth-largest oil producer, Venezuela faces a host of economic issues. After recovering from a recession that began in 2009, the Venezuelan economy grew consistently from 201012, including 5 percent growth in 2012.59 However, much of this growth can be attributed to public

spending, as Chvezs main short-term solution to his countrys economic woes has been borrowing. As a result, net public debt rose from 14 percent of GDP in 2008 to 29 percent in 2010.60 In 2011, the International Monetary Fund reported Venezuelas public debt as 45.5 percent of GDP.61 Much of Chvezs borrowing has been from China. Between 2008 and 2010, China lent Venezuela $12 billion and is being repaid in oil shipments, which cuts even further into government revenues.62 Furthermore, inflation in Venezuela during 2012 was near 20 percent; as a result, the Venezuelan currency traded on the black market for a third of the official rate.63 While Chvezs near-term future seems safe with oil prices around $100 a barrel, there are growing long-term risks within the Venezuela economy. Any future decline in oil prices would send the Venezuelan economy into a tailspin and lead to a default on its obligations. Chvezs handling of his countrys oil sector is the chief cause of Venezuelas economic problems. Chvez pillaged Petrleos de Venezuela (PDVSA), the state-owned oil firm, by packing it with pro-Chvez loyalists, starving it of much needed investment, and using its profits for social spending. As a result, PDVSAs output has gone from 3.3 million barrels per day (b/d) in 1998 to its current level of around 2.25 million b/d, according to recent industry estimates.64 Of that, some 1 million b/d is sold at subsidized prices at home or to regional allies (such as Cuba), leaving just 1.25 million b/d for full-price exports.65 The declining state of its oil sector is having a large impact on the overall Venezuelan economy, as petroleum now accounts for 92 percent of its export revenue.66 This is an extremely troubling development for Chvezs government because its domestic support relies heavily on petrodollars for providing government subsidies and funding social welfare programs. Meanwhile, Chvezs harassment and hostility towards businesses and the private sector has devastated the rest of the Venezuelan economy. In his pursuit toward state socialism, Chvez nationalized hundreds of companies, seizing everything from steel companies and bottle makers to housing schemes.67 When workers have resisted, he has deployed the National Guard against them and trumped up charges against their owners. His efforts to accelerate the revolutionary process caused much of Venezuelas private sector to close or flee. The results are a significant amount of capital flight and a need to import many goods that it previously produced.

Oil Prices
High oil prices kill the environment results in tar sands and offshore drilling while failing to reduce demand FFF 12
Myth: High Oil Prices Are Good For The Environment Fuel Freedom Foundation January 2012 http://www.fuelfreedom.org/myth-high-oil-prices-are-good-for-the-environment/ THE REALITY: . Conventional wisdom says that high oil prices can reduce oil consumption and thus reduce pollution both at the source and from the tailpipe. In this scenario, high oil prices would increase

High prices make it possible to extract oil from unspoiled or environmentally sensitive areas

The price of gasoline has almost doubled since 2004. Since transportation accounted for 70% of U.S. oil use in 2008, we should have seen a very significant decline in oil consumption. Instead, global consumption has increased, despite a U.S. decrease of about 8%. In particular, the demand for gasoline decreased 8.5%. Amidst a period of stagnant growth and a lingering recession, such a rapid price increase should have resulted in a much larger drop in demand . On the other hand, price signal has a significant influence over the extracting industry. Higher oil prices not only generate higher profits, but also increase the economic viability of extracting oil from unconventional oil sources such as tar sands. The following graph charts the growth in oil production from the Alberta Tar Sands in Canada, in conjunction with the increasing price of oil in recent years: Tar Sands Production Graph MILLIONS OF BARRELS/DAY The signal of higher oil prices also enables oil production in more remote and technically challenging areas. These areas may be more environmentally sensitive and can introduce greater risk in extraction. For example, deep sea drilling is increasing along with oil prices, while the greater technical complexity of deep sea drilling increases the possibility of future disasters like the Deepwater Horizon spill in 2010. Gulf Of Mexico Oil Rigs DRILLING OVER THE YEARS Locations In summary, higher oil prices changes driving behavior only at the margins, while significantly increasing production from both environmentally sensitive areas and environmentally intensive extracting technologies.
gasoline prices, which would in turn reduce miles traveled and/or inspire a transition to smaller, more fuel-efficient vehicles.

Tar sands development causes extinction from global warming JAMES HANSEN; directs the NASA Goddard Institute for Space Studies; May 9, 2012 Game Over for the Climate http://www.nytimes.com/2012/05/10/opinion/game-over-forthe-climate.html?_r=0 NCHO GLOBAL warming isnt a prediction. It is happening. That is why I was so trouble d to read a recent interview with President Obama in Rolling Stone in which he said that Canada would exploit the oil in its vast tar sands reserves regardless of what we do.

If Canada proceeds, and we do nothing, it will be game over for

the climate. Canadas tar sands, deposits of sand saturated with bitumen, contain twice the amount of carbon dioxide emitted by global oil use in our entire history . If we were to fully exploit this new oil source, and continue to burn our conventional oil, gas and coal supplies, concentrations of carbon dioxide in the atmosphere eventually would reach levels higher than in the Pliocene era, more than 2.5 million years ago, when sea level was at least 50 feet higher than it is now. That level of heat-trapping gases would assure that the disintegration of the ice sheets would accelerate out of control. Sea levels would rise and destroy coastal cities. Global temperatures would become intolerable. Twenty to 50 percent of the planets species would be driven to extinction. Civilization would be at risk . That is the long-term outlook. But near-term, things will be bad enough. Over the next several decades, the Western United States and the semi-arid region from North Dakota to Texas will develop semi-permanent drought, with rain, when it does come, occurring in extreme events with heavy flooding. Economic losses would be incalculable . More and more of the
Midwest would be a dust bowl. Californias Central Valley could no longer be irrigated.

Food prices would rise to unprecedented levels . If

this sounds apocalyptic, it is . This is why we need to reduce emissions dramatically. President Obama has the power not only to deny tar sands oil additional access to Gulf Coast refining, which Canada desires in part for export markets, but also to encourage economic incentives to leave tar sands and other dirty fuels in the

ground. The global warming signal is now louder than the noise of random weather, as I predicted would happen by now in the journal Science in 1981. Extremely hot summers have increased noticeably. We can say with high confidence that the recent heat waves in Texas and Russia, and the one in Europe in 2003, which killed tens of thousands, were not natural events they were caused by human-induced climate change.
We have known since the 1800s that carbon dioxide traps heat in the atmosphere. The right amount keeps the climate conducive to human life. But add too much, as we are doing now, and temperatures will inevitably rise too high. This is not the result of natural variability, as some argue. The earth is currently in the part of its long-term orbit cycle where temperatures would normally be cooling. But they are rising and its because we are forcing them higher with fossil fuel emissions. The concentration of carbon dioxide in the atmosphere has risen from 280 parts per million to 393 p.p.m. over the last 150 years. The tar sands contain enough carbon 240 gigatons to add 120 p.p.m. Tar shale, a close cousin of tar sands found mainly in the

If we turn to these dirtiest of fuels, instead of finding ways to phase out our addiction to fossil fuels, there is no hope of keeping carbon concentrations below 500 p.p.m. a level that would, as earths history shows, leave our children a climate system that is out of their control. We need to start reducing emissions significantly, not create new ways to increase them.
United States, contains at least an additional 300 gigatons of carbon.

Offshore drilling destroys ocean ecosystems Waage AND Chase 9


Protecting Our Ocean and Coastal Economies: Avoid Unnecessary Risks from Offshore Drilling Melissa Waage AND Alison Chase; both NRDC; September 2009 http://www.nrdc.org/oceans/offshore/files/offshore.pdf

Offshore Drilling Poses Serious Environmental Risks Expanded offshore drilling poses the risk of oil spills ruining our beaches from Florida to Maine and along the Pacific Coast, bringing harm to those who live, work, and vacation along the coasts, as well as harming habitats critical to plants and animals. Oil spills can quickly traverse vast distances. For example, when powered by the Gulf of Mexicos Loop Current, an oil spill in the eastern Gulf of Mexico could affect Floridas Panhandle beaches and even travel around the Florida Keys to wreak havoc on estuaries and beaches from the Everglades to Cape Canaveral.1 Contamination from the massive 1989 Exxon Valdez oil spill reached shorelines nearly 600 miles away; if the spill had occurred on the East Coast,
it would have extended from Massachusetts to North Carolina.2 In September 2008, Hurricane Ike destroyed oil platforms, tanks, and pipelines throughout the Gulf of Mexico, releasing at least a half-million gallons of crude oil.3 During Hurricanes Katrina and Rita the re were 125 spills from platforms, rigs, and pipelines on the oceans Outer Continental Shelf, releasing almost 685,000 gallons of petroleum products.4 Worse yet, if you include the land-based infrastructure that supports offshore drilling, the damage from these two hurricanes includes 595 spills releasing millions of gallons of oil.5 Oil Spills Inflict Devastating Economic Losses Upon Coastal Communities Oil spills exact a serious toll on coastal economies, including our approximately $35 billion commercial fishing and $60 billion ocean and coastal tourism and recreation industries.6 The damage and clean up costs following the Exxon Valdez spill were so extensive that Exxon paid out more than one billion dollars to the federal and state governments for damages and clean up costs and still owes fishermen, Alaska Natives, business owners, and others a billion dollars to redress the spills harm.7 In another example of economic and environmental damage, a July 2008 accident between a chemical tanker and an oil barge discharged more than 270,000 gallons of fuel oil, closing a huge swath of the Lower Mississippi River to vessel traffic for several days. The Port of New Orleans, located at the center of the worlds busiest port complex, was shut down and residents were asked to conserve water when water intakes were closed to pre vent contamination

Oil Spills Have Lasting Ecological Impacts According to the National Academy of Sciences, current cleanup methods can only remove a small fraction of the oil spilled into the ocean, leaving the remaining oil to continue affecting ocean ecosystems over time.9 Scientists investigating the long-term impacts of the Exxon Valdez spill estimate that nearly 20,000 gallons of oil from that spill remain in Prince William Sound, continuing to harm threatened and endangered species and undermine their recovery.10 Marine mammals, sea birds, fish, shellfish, and other sea life are extremely vulnerable to oil pollution and the long-term toxic effects can impair reproductive success for generations. Studies have shown that tiny amounts of oilas little as one part per billioncan harm pink salmon and cause their eggs to fail.11 Spills Aside, Drilling Operations are a Major Source of Pollution In addition to environmental damage from oil spills, the routine operations associated with offshore drilling produce many toxic wastes and other forms of pollution. For example, each drill well generates tens of thousands of gallons of waste drilling muds (materials used to lubricate drill bits and maintain pressure) and cuttings.12 Drilling muds contain toxic metals such as mercury, lead, and cadmium that may bioaccumulate and biomagnify in marine organisms, including in our seafood supply.13 The water that is brought up from a given well along with oil and gas, referred to as produced water, contains its own toxic brew of benzene, arsenic, lead, toluene, and varying amounts of radioactive pollutants. Each oil platform can discharge hundreds of thousands of gallons of this produced water daily, contaminating both local waters and those down current from the discharge.14 An average oil and gas exploration well spews roughly 50 tons of nitrogen oxides, 13 tons of carbon monoxide, 6 tons of sulfur oxides, and 5 tons of volatile organic chemicals.15 Drilling Exploration Activities Harm Marine Life Seismic surveys designed to estimate the size of an oil and gas reserve generate their own environmental problems. To carry out such surveys, ships tow multiple airgun arrays that emit thousands of high-decibel explosive impulses to map the seafloor.16 The auditory assault from seismic surveys has been found to damage or kill fish eggs and larvae and to impair the hearing and health of fish, making them vulnerable to predators and leaving
of drinking water.8

them unable to locate prey or mates or communicate with each other. These disturbances disrupt and displace important migratory patterns, pushing marine life away from suitable habitats like nurseries and foraging, mating, spawning, and migratory corridors.17 In addition, seismic surveys have been implicated in whale beaching and stranding incidents.18

Ocean ecosystems are on the brink multiple warrants Levitt 13


Overfished and under-protected: Oceans on the brink of catastrophic collapse Tom Levitt; CNN; March 22, 2013 http://www.cnn.com/2013/03/22/world/ oceans-overfishing-climatechange/index.html?iid=article_sidebar (CNN) -- As the human footprint has spread, the remaining wildernesses on our planet have retreated. However, dive just a few meters below the ocean surface and you will enter a world where humans very rarely venture. In many ways, it is the forgotten world on Earth. A ridiculous thought when you consider that

oceans make up 90% of the living

volume of the planet and are home to more than one million species, ranging from the largest animal on the planet -- the blue whale -- to one of the weirdest -- the blobfish. Remoteness, however, has not left the oceans and their inhabitants unaffected by humans, with overfishing, climate change and pollution destabilizing marine environments across the world. Many marine scientists consider overfishing to be the greatest of these threats. The Census of Marine Life, a decadelong international survey of ocean life completed in 2010, estimated that 90% of the big fish had disappeared from the world's oceans, victims primarily of overfishing. "Anywhere you go and try to harvest fish with a trawl you
are going to destroy any coral that lives there, and there is example after example of the damage that is done by trawlers Ron O'Dor, senior scientist on the Census of Marine Life Tens of thousands of bluefin tuna were caught every year in the North Sea in the 1930s and 1940s. Today, they have disappeared across the seas of Northern Europe. Halibut has suffered a similar

the collapse has spread to entire fisheries. The remaining fishing trawlers in the Irish Sea, for example, bring back nothing more than prawns and scallops, says marine biologist Callum Roberts, from the UK's York University. "Is a smear of protein the sort of marine environment we want or need? No, we need one with a variety of species, that is going to be more resistant to the conditions we can expect from climate change," Roberts said. The situation is even worse in south-east Asia. In Indonesia, people are now fishing for juvenile fish and protein that they can grind into fishmeal and use as feed for coastal prawn farms. "It's heading towards an end game ," laments Roberts. Trawling towards disaster One particualar type of
fate, largely vanishing from the North Atlantic in the 19th century. Opinion: Probing the ocean's undiscovered depths In some cases, fishing, bottom-trawling, is blamed for some of the worst and unnecessary damage. It involves dropping a large net, around 60 meters-wide in some cases, into the sea and dragging it along with heavy weights from a trawler. Marine conservationists compare it to a bulldozer, with the nets pulled for as far as 20km, picking up turtles, coral and anything else in their path. The

Upwards of one million sea turtles were estimated to have been killed as bycatch during the period 1990-2008, according to a report published in Conservation Letters in 2010, and many of the species are on the IUCN's list of threatened species. Campaigners, with the support of marine scientists, have repeatedly tried to persuade countries to agree to an international ban, arguing that the indiscriminate nature of bottom-trawling is causing irreversible damage to coral reefs and slow-growing fish species, which can take decades to reach maturity and are therefore slow to replenish their numbers. Opinion: Deep sea fishing is 'oceanocide' "It's akin to someone plowing up a wildflower meadow, just because
bycatch, unwanted fish and other ocean life thrown back into the sea, can amount to as much as 90% of a trawl's total catch. they can," says Roberts. Others have compared it to the deforestation of tropical rainforests. Bottom-trawling's knock-on impacts are best illustrated by the plight of the deep-sea fish, the

humans are having unrecognized impacts on every part of the ocean , and there is much we have not seen that will disappear before we ever get a chance Ron O'Dor, marine biologist Orange roughys are found on, or around, mineral-rich seamounts that often form
orange roughy (also known as slimeheads) whose populations have been reduced by more than 90%, according to marine scientists. "The disturbing truth is that coral and act as feeding and spawning hubs for a variety of marine life. "Anywhere you go and try to harvest fish with a trawl you are going to destroy any coral that lives there, and there is example after example of the damage that is done by trawlers," says Ron O'Dor, a senior scientist on the Census of Marine Life. "If I ruled the world, they would be banned, they're just such a destructive method of catching fish. Fishermen have other methods, such as long-line, that cause far less damage. "The disturbing truth is that humans are having unrecognized impacts on every part of the ocean, and there is much we have not seen that will disappear before we ever get a chance," says O'Dor, who is also a professor of marine biology at Dalhousie University in Halifax, Canada. Acid test for marine species

At the same time fisheries and vital marine ecosystems like coral are being

decimated , the oceans continue to provide vital services, absorbing up to one third of human carbon dioxide emissions while producing 50% of all the oxygen we breathe. Hi-res gallery: Extraordinary creatures of the Great Barrier Reef But absorbing increasing quantities of carbon dioxide (CO2) has come at a cost, increasing the acidity of the water. "The two worst things in my mind happening to oceans are global warming and ocean acidification," says O'Dor, "They're going to have terrible effects on coral reefs. Because of acidification essentially, the coral can't grow and it's going to dissolve away." The ocean has become 30% more acidic since the start of The Industrial Revolution in the 18th century and is predicted to be 150% more acidic by the end of this century, according to a UNESCO report published last year. "There's a coral reef off Norway that was discovered in
2007 and it's likely to be dead by 2020," says O'Dor. "The problem is that the acidification is worse near the Poles because low temperature water dissolves more acid. Starting from the Pole and working south these

reefs are going to suffer extensively." Currents estimates suggest 30% of coral reefs will be

endangered by 2050, says O'Dor, because of the effects of ocean acidification and global warming. Higher acidity also disrupts marine organisms' ability to grow, reproduce and respire. The Census of Marine Life reported that phytoplankton, the microscopic plants producing most of the oxygen from the oceans, have been declining by around 1% a year since 1900. "We need to fish less and in less destructive measures, waste less, pollute less and protect more Callum Roberts, Marine biologist The falling numbers of smaller, but lesser known species and plant life has significant impact further up the marine food chain. For example, seabirds which used to visit and breed on Spitsbergen -- a Norwegian island near the Arctic -are being wiped out because of changes in their previously abundant food sources. Bringing law and order to ocean
protection "There's a real lack of public and political awareness of these issues," says Alex Rogers, professor of conservation biology at the UK's Oxford University. "They're too big to understand in economic terms. We can put a value on the loss of fishing, but how can we put a value on oxygen production or the absorption of carbon dioxide?" he says. The problem is that most of the world's ocean is located outside of international law and legal control. Any attempts to implement rules and regulation come with the problem of enforcement, says Rogers, who is also scientific director of the International Program on State of the Ocean (IPSO). Marine conservationists estimate that at least 30% of the oceans need to be covered by marine protected areas, where fishing and the newly emerging deep-sea mining of valuable minerals on the seabed, is banned or restricted. Callum Roberts, who helped form the first network of marine protected areas in the high seas in 2010, says on their own they are not enough. "I could sum it up as: we need to fish less and in less destructive measures, waste less, pollute less and protect

This change of course will see us rebuild the abundance, variety and vitality of life in the sea which will give the oceans the resilience they need to weather the difficult times ahead. Without such action, our future is bleak."
more," says Roberts. "

Ocean ecosystem collapse causes extinction Craig 3, Robin, Associate Professor of Law at the Indiana University School of Law, 2003.
Biodiversity and ecosystem function arguments for conserving marine ecosystems also exist, just as they do for terrestrial ecosystems, but these arguments have thus far rarely been raised in political debates. For example, besides significant tourism values - the most economically valuable ecosystem service coral reefs provide, worldwide - coral reefs protect against storms and dampen other environmental fluctuations, services worth more than ten times the reefs value for food production. Waste treat ment is another significant, non-extractive ecosystem function

ocean ecosystems play a major role in the global geochemical cyclingof elements that represent the basic building blocks of living organisms , carbon, nitrogen, oxygen, phosphorus, and sulfur, as well as other less abundant but necessary elements. In a very real and direct sense, therefore, human degradation of marine ecosystems impairs the planets ability to support life. Maintaining biodiversity is often critical to maintaining the functions of marine ecosystems. Current evidence shows that, in general, an ecosystems ability to keep functioning in the face of disturbance is strongly dependent on its biodiversity, indicating that more diverse ecosystems are more stable. Coral reef ecosystems are particularly dependent on their biodiversity.
that intact coral reef ecosystems provide. More generally, all the Most ecologists agree that the complexity of interactions and degree of interrelatedness among component species is higher on coral reefs than in any other marine environment. This implies that the ecosystem functioning that produces the most highly valued components is also complex and that many otherwise insignificant species have strong effects on sustaining the rest of the reef system. Thus, maintaining and restoring the biodiversity of marine ecosystems is critical to maintaining and restoring the ecosystem services that they provide. Non-use biodiversity values for marine ecosystems have been calculated in the wake of marine disasters, like the Exxon Valdez oil spill in Alaska. Similar calculations could derive preservation values for marine wilderness. However, economic value, or economic value equivalents, should not be the sole or even primary justification for conservation of ocean ecosystems. Ethical arguments also have

At the forefrontof such arguments should be a recognition of how little we know about the sea- and about the actual effect of human activities on marine ecosystems. The United States has traditionally failed to protect marine ecosystems because it was difficult to detect anthropogenic harm to the oceans, but wenow know that such harm is occurring - even though we are not completely sure about causation or about how to fix every problem. Ecosystems like the NWHI coral reef ecosystem should inspire lawmakers and policymakers to
considerable force and merit. admit that most of the time we really do not know what we are doing to the sea and hence should be preserving marine wilderness whenever we can - especially when the United States has

: if we kill the ocean we kill ourselves, and we will take most of the biosphere with us. The Black Sea is almost dead, its once-complex and
within its territory relatively pristine marine ecosystems that may be unique in the world. We may not know much about the sea, but we do know this much productive ecosystem almost entirely replaced by a monoculture of comb jellies, starving out fish and dolphins, emptying fishermens nets, and converting the web of life into brainless, wraith-like blobs of jelly. More importantly, the Black Sea is not necessarily unique. The Black Sea is a microcosm of what is happening to the ocean systems at large. The stresses piled up: overfishing, oil spills, industrial discharges, nutrient pollution, wetlands destruction, the introduction of an alien species. The sea weakened, slowly at first, then collapsed with shocking suddenness. The lessons of this tragedy should not be lost to the rest of us, because much of what happened here is being repeated all over the world. The ecological stresses imposed on the Black Sea were not unique to communism. Nor, sadly, was the failure of governments to respond to the emerging crisis. Oxygen-starved dead zones appear with increasing frequency off the

Ethics as well as enlightened self-interest thus suggest that the United States should protectfully-functioning marine ecosystems wherever possible- even if a few
coasts of major cities and major rivers, forcing marine animals to flee and killing all that cannot. fishers go out of business as a result.

Specifically, High oil prices lead to tar sands development Stockman 10


Tar Sands Oil Means High Gas Prices Lorne Stockman; Corporate Ethics International; May 2010 http://dirtyoilsands.org/repor ts/tar_sands_oil_means_high_gas_prices

Tar sands (also known as oil sands) oil production is the most expensive oil production in the world. The Keystone XL pipeline will create significant over capacity for tar sands crude into the U.S. raising pipeline tariffs and adding to the already high cost of tar sands production. The growth in tar sands production needed to fill the Keystone XL pipeline will only occur if oil prices keep rising. Tar sands production exerts little if any influence over global oil prices because it maintains no spare production capacity. Tar sands production is a symptom of high oil prices and not a basis for lower prices.

Additionally, High oil prices are saving offshore drilling from the brink of collapse we must develop new land sources of oil before 2014 to prevent the next wave of investment OConnell 12
Higher Oil Prices Boost Offshore Drilling Brian O'Connell May 10, 2012 http://www.epmag.com/Production -Drilling/Higher-Oil-Prices-Boost-Offshore-Drilling_100203

the offshore industry is making a big comeback on the back of high oil prices and depleted onshore resources, but which companies are benefitting most? Royal Dutch Shell and Chevron are good candidates, for starters. It wasnt so long ago that deep sea drillers were flat on their backs, victimized partly by their own hubris and hounded by Washington politicians and federal regulators. Offshore drillers have had it tough for the past few years, following the ban on offshore drilling in the Gulf of Mexico in the aftermath of the Deepwater Horizon spill. But that was then and this is now. A new report from the New York City-based Paragon Group said offshore drillers are rebounding nicely from that two-year term in regulatory purgatory, and the group is poised for stronger growth in 2012 and 2013. Nearly two years ago, the offshore-drilling industry was in danger of collapse under the pressure of lawmakers and regulators pushing to ban offshore drilling in reaction to BP's oil spill and Transoceans rig explosion, noted Paragon. The industry persevered and now seems to be in the midst of a comeback as rising oil prices and depleted resources are forcing major oil companies to focus on exploration and development of offshore oil and gas reserves. Paragon added that oil companies are once again turning to the high seas as those regulatory burdens abate. But even more so, deepwater drillers are rising in numbers as the rush to get oil and gas out of the ground may be losing some steam, just as oil demand is picking up steam . Offshore oil and gas reserves have been an increasing focus for energy companies as significant oil discoveries on land are becoming less common, explained Paragon. With recent offshore discoveries and the large number of underdeveloped oil and gas fields, demand for mobile offshore drilling units (MODUs) are expected to increase dramatically. Major energy
No question, companies such as Royal Dutch Shell and Chevron have already reinvested earnings in offshore ventures. The International Energy Agency (IEA) expects global oil demand will rise from 88 million barrels today to around 99 million barrels in 25 years' time. What do analysts see in both Royal Dutch Shell and Ch evron as they kick-start drilling efforts in the Gulf? Great quarterly numbers, with reason to believe that outperformance will keep rolling on. Royal Dutch Shell The first quarter 2012 was a home run for Shell, with revenues and earnings both up, and significantly so, on a year-to-year basis. Revenues were up to $119.9 billion. Analysts at S&P capital had pegged revenue growth at $107.6 billion. Sales posted were 9% higher than the $109.9 billion earned in Q1 2011. Average earnings for Q2 2012 are expected to clock in at $111.61 billion, and estimated average earnings-per-share are $2.24. Average revenue earnings for 2013 are estimated to be $469 billion, with the outlook on earnings-per-share at $9.24. Analysts monitored by S&P Capital listed Shell as an outperform, and called for an average price target of $82 per share (it was trading at $71 per share as of May 1). Wall Street generally credits Shells sterling first quarter to higher oil prices and income generated from new exploration and recovery projects -- areas that should improve as Shell re-commits to the Gulf of Mexico. According to Zacks Investment Research, She lls crude oil production contributed 47% to gross volumes, with total oil and gas output 4% higher than 2011. Zacks expects that trend to continue in 2012. The Hague -based group continues to make solid progress with its three-year strategic plan that commenced in 2010, said Zacks in an April research report. Shell has been able to boost returns and remain competitive by emb arking on aggressive cost-reduction initiatives, exiting unprofitable markets, refocusing its efforts on emerging economies and streamlining the organization. Chevron Chevron is another deepwater oil producer that leveraged high crude oil prices to earn big first-quarter profits. Earnings-per-share rolled in at $3.39, above the Zacks estimate of $3.30, and adjusted 2011 profit of $3.17. Quarterly revenue rose by 0.6%, to $60 billion, which saw some dampening against expectations from the falling price of natural gas -- a big market for Chevron. U.S. crude oil output fell by 6.2% on a year-toyear basis, but its re-emergence in the Gulf should boost output in 2012 and 2013, analysts say. Chevron stock, which was trading at $106 per share on May 1, has a one-year target estimate of $125 per share, according to a survey of analysts by Thompson Financial Network. Despite the slight dip in Chevrons quarterly volumes, we believe its production outlook remains one of the most robust in its peer group with a number of major initiatives scheduled to come online during the next few years, Zac ks stated in an April research commentary on Chevron. Major start-ups during the last few months include the deepwater Usan project in Nigeria and the Caesar/Tonga project in the deepwater Gu lf of Mexico. Deutsche Bank energy analyst Paul Sankey sees Chevron stock rising to $130 per share, about 22% ahead of the stocks current trading price. But he cautions investors to be patient about the comany -- possibly until 2014.

there are a multitude of waits. We are waiting for final capex spend to emerge on major projects; and we are waiting for volume growth to start in 2014. We are waiting for cash return from the $19 billion cash pile. We are waiting to be sure there are no acquisitions instead. We are waiting for the multiple to expand and reflect its high Brent leverage, short U.S. natural gas, high profitability, and its high returns . Slow and steady may win the race here, as offshore drillers like Shell and Chevron capitalize on high crude oil prices, and re-access into the oil-rich Gulf of Mexico.
Chevron is a waiting game, he noted in a recent research report. In fact,

Refining
First, American demand is key - declining Venezuelan production is shifting that demand to Canadian tar sands without Venezuela, tar sands output will multiply twenty-fold Hussain 13
Growing Canadian oil exports to U.S. bittersweet for producers as price discount bites Yadullah Hussain 07/02/13 http://business.financialpost.com/2013/02/07/growing-canadian-oil-exports-to-u-sbittersweet-for-producers-as-price-discount-bites/?__lsa=0861-4749 But a deeper dive into the data shows Canadian oil exports to the United States have actually risen over the past decade in real and percentage terms. In 2002, Canadian crude accounted for just less than 16% of all U.S. imports, a figure estimated to have reached 28% by the end of 2012. While overall U.S. oil imports have declined, Canadian crude shipments south of the border have risen by a third. Growing Canadian imports from oil sands projects effectively pushed out waterborne imports of heavy crude oil from less stable regions, such as Mexico or Venezuela , said Sabine Schels, analyst at Bank of America Merrill Lynch. This is bittersweet for Canadian companies. Cornering the U.S. market has come at a heavy price in the shape of depressed prices fetched by the Western Canada Select, the heavy Canadian crude. The discounts on Canadian heavy crude are forcing companies including Suncor Energy Inc. to delay plans worth billions of dollars and depressing their bottom lines. In a desperate effort to escape the dreaded $30 discount they must offer U.S. refiners, Alberta-based companies are seeking ways to ship their crude out of Alaska, Atlantic and B.C. But Canadian producers know their biggest market remains the United States. Overall the U.S. Gulf Coast is a huge crude oil market nearly equivalent to all of China today , IHS CERA, an energy research consultancy, said in a report. Consequently, the U.S. Gulf Coast will be a critical part of the future for oil sands , particularly for bitumen blends. TransCanada Corp.s CEO Russ Girling knows this, which is why proposes a pipeline to the Atlantic to take Alberta crude not just to global markets, but back into the United States. Scott Eells/BloombergRuss Girling, chief executive officer of TransCanada Corp. Its not a Plan B, its a Plan A, and it will go if the market supports it, along with Keystone, Mr. Girling told Bloomberg. Once you get on tidewater, you can get anywhere, and you dont need a presidential permit to bring oil into the Gulf Coast. IHS expects oil sands volumes to the Gulf Coast to increase considerably as more than two million barrels per day of new pipeline capacity planned is expected to connect Western Canada to the Gulf Coast in the next three years that is assuming it is approved and gets built. Clearly, Canadian producers are caught in the U.S. orbit and will remain in its vortex for the foreseeable future . It could have been much worse. Unlike their natural gas counterparts who have been dealt a double blow of plunging exports to the U.S and plummeting prices, Canadian crude is popular among U.S. refiners and theres more to it than just being the cheapest crude on earth. Many U.S. Gulf Coast refiners are addicted to heavier crudes, and dont have a taste for the lighter crude churned out from Texas and North Dakota shale plays. Which is why while light blends from places like Nigeria and Angola have declined dramatically, Canadian heavy has been in the ascendancy. John Powell, senior petroleum analyst with the U.S. Department of Energy, expects more sweet crude to be replaced by home-grown blends from places like Eagle Ford, but heavier crude imports will hold their own. In 2013, we see imports, wherever they come from, probably going to get heavier, he said. The Canadian surge has come as other sources of heavy crude face structural issues. Mexican heavy supply is

expected to decline, and there is uncertainty around future supply from Venezuela, IHS said. If oil sands could displace most of the Mexican and Venezuelan imports, the opportunity for bitumen blends would be about 1.5 million barrels per day . U.S. tight oil will grow, but it is still going to leave a lot of room for other suppliers, said Jackie Forrest, senior director at IHS CERA. Canada is specifically well placed. The heavy crude refiners are still going to make more money running heavy crude than the light sweet crude, so they are going to prefer Canadian supply, said Ms. Forrest. While that does not mean Canadian producers should stop exploring other markets to diversify their revenue streams, Canadian crude will not disappear in the U.S. anytime soon, even without Keystone XL pipeline being built. Over time, though, there are concerns that U.S. refiners may move toward lighter crude to meet the needs of rising U.S. shale plays, which produce lighter crude. But is it easy for refiners to flip the switch from heavy crude to light crude? Probably not, says Bill Simpkins, Atlantic Canada representative of the Canadian Fuels Association, which represents many refiners in Canada. Mainly because once you have a refinery and its purpose-built for particular crude and slate of products, they are probably always sourcing that type of crude. And the market for heavier crude is likely to only get bigger. Because of the dwindling supply of conventional sweeter crudes, and their higher costs, you are more likely to see older refineries to move into producing heavier crudes , said Mr. Simpkins. Gulf Coast refiners such as Marathon Petroleum Corp. and Valero Energy Corp. are strong advocates of Keystone XL and are keen to get Canadian crude to the Gulf market.

Second, Canada is capturing American demand now, but investment in Venezuela gives them the advantage Hussain 13
Life after Chavez: Americas oil gains could be Canadas loss Yadullah Hussain 06/03/13 http://business.financialpost.com/2013/03/06/life-after-chavez-venezuela-u-s-oil-industries-arenaturally-attractive-trading-partners/?__lsa=0861-4749 Brent crude prices didnt move much as traders absorbed the death of Hugo Chavez who ruled the worlds sixth largest OPEC producer, but it may mask a long-term shift that could impact North American energy trading patterns. Over the longer term, changes in policy towards the energy sector might eventually allow Venezuelas oil production to return to the much higher levels seen in the late 1990s, said Tom Pugh, commodities economist at Capital Economics. However, any such recovery would take many years. Venezuela is home to the worlds largest proven oil reserves of around 296.5 billion barrels, but its production has steadily fallen under Mr. Chavez who diverted Venezuelas oil revenues to his pet projects and weakened the state-owned Petrleos de Venezuela, which is responsible for developing the countrys enormous riches. Even as 40% of Venezuelan oil exports headed towards the United States, Mr. Chavez despised Washingtons policies and was actively pursuing a policy to shift exports to China, the Caribbean, Central America and other Asian markets. U.S. imports of Venezuelan petroleum products peaked in 1997, at 379,000 bbl/d, and have since fallen to as low as 23,000 bbl/d in October 2012, the U.S. Department of Energy said in a January note. Despite severe disagreements, the two countries oil industries are naturally attractive oil trading partners due to their proximity , according to the U.S. Department of Energy. The robust trade in crude oil from Venezuela to the United States is due to the compatibility between the configuration of some U.S. refineries and the quality characteristics of Venezuelan crude, which is predominately sour and medium or heavy. This is a worrying development for Canadian crude producers, which offer similar type of heavy crude to the U.S. Gulf Coast refineries, and may lose out if Venezuela reforms its oil industry . Despite shrinking U.S. oil imports, Canada is now it southern neighbours largest

supplier of crude, accounting for nearly 30% of all U.S. imports last year. Much of these gains were at the expense of heavier crudes from Venezuela and Mexico. A long-term reversal in Venezuela oil production could compete with Canada in the United States and even China and Asian markets. Its too soon to say what Hugo Chavezs death means for oil prices, but it is certainly true that oil prices are what made Hugo Chavez possible, Daniel Yergin, the chairman of IHS Cambridge Energy Research Associates, said in an email to Bloomberg. Declining crude prices brought Chavez to rise to power and rising prices gave him the funds needed to sustain state spending and consolidate power, Yergin told the newswire. The countrys crude export stood at 1.7 million bpd in 2011, according to the International Energy Agency, similar to Libyas crude production, which was completely shut down during its bloody civil war in 2011. 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 .

Third, Venezuelan oil production steals the US market from Canada prevents development of tar sands McKenna 13
The secret threat to Canadas oil sands BARRIE MCKENNA; The Globe and Mail; May. 02 2013 http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/the-secretthreat-canadas-oil-sands/article11597201/ OTTAWA Natural Resources Minister Joe Oliver likes to pick on Venezuela when he sells the virtues of Canadian oil to Americans. Buy from a loyal ally, not from less friendly, less stable countries with shoddy environmental records, Mr. Oliver warned bluntly in a speech last week in Washington. Unfortunately, Venezuelan oil has a lot more in common with Canadian oil sands crude than Mr. Oliver cares to admit. Oil is a commodity, after all. And price typically trumps virtue and a smiling face. The bottom line is that Canada and Venezuela produce the same kind of heavy crude thats now sought by re-engineered U.S. petroleum refineries along the Gulf of Mexico. So does Mexico. In recent years, Canada has been winning the competitive battle to feed those refineries. Alberta oil has steadily displaced Mexican and Venezuelan crude in the U.S. market. But there is no certainty that shift will continue. Indeed, Venezuela and Mexico are showing tentative signs of getting their energy act together. Canada has benefited from the ineptitude of its energy producing rivals in the hemisphere. The state-run oil industries in Venezuela and Mexico are hobbled by inefficiencies, poor technology and under-investment in exploration. In spite of vast reserves, the two countries are producing less oil now than they did five years ago. U.S. imports of Venezuelan crude, for example, have dropped to less than a million barrels a day from 1.7 million barrels a day in 1997. Oil imports from Mexico have shrunk nearly 30 cent since 2006. New drilling technology and foreign investment cash could change all that . An often overlooked risk for Canadas oil patch is the possibility that both these underperforming competitors could start ramping up production and exports again. That would exacerbate the already-significant price discount on Canadian crude in the U.S. market. It would also ratchet up pressure on Canadian producers to access alternative markets in China and India via pipelines to the West Coast. Politics and economics have held back Venezuela and Mexico. But the landscape in both countries is shifting. Hugo Chavez was an unexpected gift to the oil sands. Now that hes gone,

Venezuela has a much greater chance of shedding its image as an unstable and inefficient supplier of oil to the U.S. Venezuela has proven oil reserves of 211 billion barrels, eclipsing Canadas 175 billion barrels, according to the U.S. Energy Information Administration. And in Mexico, newly installed President Enrique Pena Nieto is vowing to reform the countrys troubled oil industry and attract private investment, particularly to help develop deep offshore and shale reserves in the Gulf of Mexico. Mexico has nearly 11 billion barrels of proven oil reserves, but roughly twice that including potential unconventional and deepwater sources. Mexico is unlikely to privatize Petroleos Mexicanos the stateowned oil company known as Pemex. But Finance Minister Luis Videgaray acknowledged recently that Mexico cant do everything itself and there might be opportunities for private investors in unconventional oil and gas projects where Pemex clearly doesnt have either the capital or the expertise. Venezuela and Mexico have a long way to go to right their energy industries, and some tough political decisions to make. But if, and when, they do, Canada could be the biggest loser. More Venezuelan and Mexican oil coming into the U.S. would likely lead to an even larger discount on oil sands crude, which is already hampered by high extraction costs and limited pipeline capacity. The threat of new and more productive rivals underscores why projects such as the Keystone XL and Northern Gateway pipelines are so vital to Canada. The industry needs access to markets before there is a gusher of rival capacity in the neighbourhood oil thats free of the extraction, transportation and environmental challenges of the oil sands.

Fourth, American demand is key to oil sands development keystone put it on the brink Johnson AND Dawson 13
Pipeline Called Key to Canada Oil Sands KEITH JOHNSON in Washington and CHESTER DAWSON in Calgary, Alberta June 7, 2013 http://online.wsj.com/article/SB10001424127887324069104578531713102125222.html 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. GS +1.22% 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., TRP.T +0.42% 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. But market experts said blocking Keystone would at most temporarily sidetrack Alberta's development plans.

Fifth, US market key to oil sands Daly 13


Hard sell? Canada Doubles PR Budget to Promote Tar Sands in U.S. John Daly May 2013 http://oilprice.com/Energy/Crude-Oil/Hard-sell-Canada-Doubles-PR-Budget-to-Promote-Tar-Sands-inU.S.html Canada is, according to the U.S. Energy Administration, the leading source of United States crude oil imports, which average 9.033 million barrels per day (mbpd), with Canada sending 2.666 mbpd southwards to the U.S. Mexico is second with 1.319 mbpd and Saudi Arabia third with 1.107 mbpd. The EIA notes, Canada is one of the world's five largest energy producers and is the principal source of U.S. energy imports. Just as the United States depends on Canada for much of its energy needs, so is Canada profoundly dependent on the United States as an export market . The EIA continues, Canada is the world's sixth-largest oil producer, and virtually all of its crude oil exports are directed to U.S. refineries . Long a major onshore and offshore producer of conventional crude, the recent growth in its liquids production has been driven by bitumen and upgraded synthetic crude oil produced from the oil sands of Alberta. The vast majority of Canada's reserves and the expected future growth in Canada's liquids production will derive from unconventional resources .

Sixth, Time is key US refineries will cut off Venezuela soon, unless their oil exports increase Ladislaw AND Verrastro 13
Post-Chavez Outlook for Venezuelan Oil Production Sarah O. Ladislaw; co-director and senior fellow with the Energy and National Security Program at the Center for Strategic and International Studies (CSIS) in Washington, D.C.; Frank Verrastro; senior vice president and James R. Schlesinger Chair for Energy & Geopolitics at CSIS; MAR 6, 2013 http://csis.org/publication/post-chavez-outlook-venezuelanoil-production U.S. refineries in the Gulf Coast are specifically designed to process Venezuelas sour and medium to heavy crude and serves as its natural market. Despite oil production being down, the United States still imports just under a million barrels of crude per day from Venezuela (down from a peak of 1.4 mmbd in 1997) and, as stated earlier, the government of Venezuela is highly dependent on those revenues for their ongoing stability, especially as revenue from other exports and domestic consumption decline. As we look ahead to another period of transition in Venezuela it is important to be mindful of the potential for disruption and to look for ways to mitigate the impacts of such disruption, but it is equally important to remember the trade ties that bind the two countries for the time being and to find opportunities to drive change in a positive direction. Time may be limited in this regard because the U.S. domestic

production outlook is changing thanks to tight oil development in the United States and the influx of Canadian oil sands, both of which are giving U.S. refiners more options in terms of the crudes they use and more decisions to make about how they want to configure their refineries going forward. A future in which Venezuela is no longer as competitive in its natural market in the United States would change the outlook for Venezuelan crude marketing decisions. The long-term outlook for Venezuelas continued oil market production is changing both in commercial and political terms .

Seventh, Tar sands development causes extinction JAMES HANSEN; directs the NASA Goddard Institute for Space Studies; May 9, 2012 Game Over for the Climate http://www.nytimes.com/2012/05/10/opinion/game-over-forthe-climate.html?_r=0 NCHO GLOBAL warming isnt a prediction. It is happening. That is why I was so troubled to read a recent interview with President O bama in Rolling Stone in which he said that Canada would exploit the oil in its vast tar sands reserves regardless of what we do.

If Canada proceeds, and we do nothing, it will be game over for

the climate. Canadas tar sands, deposits of sand saturated with bitumen, contain twice the amount of carbon dioxide emitted by global oil use in our entire history . If we were to fully exploit this new oil source, and continue to burn our conventional oil, gas and coal supplies, concentrations of carbon dioxide in the atmosphere eventually would reach levels higher than in the Pliocene era, more than 2.5 million years ago, when sea level was at least 50 feet higher than it is now. That level of heat-trapping gases would assure that the disintegration of the ice sheets would accelerate out of control. Sea levels would rise and destroy coastal cities. Global temperatures would become intolerable. Twenty to 50 percent of the planets species would be driven to extinction. Civilization would be at risk . That is the long-term outlook. But near-term, things will be bad enough. Over the next several decades, the Western United States and the semi-arid region from North Dakota to Texas will develop semi-permanent drought, with rain, when it does come, occurring in extreme events with heavy flooding. Economic losses would be incalculable . More and more of the
Midwest would be a dust bowl. Californias Central Valley could no longer be irrigated.

Food prices would rise to unprecedented levels . If

this sounds apocalyptic, it is . This is why we need to reduce emissions dramatically. President Obama has the power not only to deny tar sands oil additional access to Gulf Coast refining, which Canada desires in part for export markets, but also to encourage economic incentives to leave tar sands and other dirty fuels in the ground. The global warming signal is now louder than the noise of random weather, as I predicted would happen by now in the journal Science in 1981. Extremely hot summers have increased noticeably. We can say with high confidence that the recent heat waves in Texas and Russia, and the one in Europe in 2003, which killed tens of thousands, were not natural events they were caused by human-induced climate change.
We have known since the 1800s that carbon dioxide traps heat in the atmosphere. The right amount keeps the climate conducive to human life. But add too much, as we are doing now, and temperatures will inevitably rise too high. This is not the result of natural variability, as some argue. The earth is currently in the part of its long-term orbit cycle where temperatures would normally be cooling. But they are rising and its because we are forcing them higher with fossil fuel emissions. The concentration of carbon dioxide in the atmospher e has risen from 280 parts per million to 393 p.p.m. over the last 150 years. The tar sands contain enough carbon 240 gigatons to add 120 p.p.m. Tar shale, a close cousin of tar sands found mainly in the

If we turn to these dirtiest of fuels, instead of finding ways to phase out our addiction to fossil fuels, there is no hope of keeping carbon concentrations below 500 p.p.m. a level that would, as earths history shows, leave our children a climate system that is out of their control. We need to start reducing emissions significantly, not create new ways to increase them.
United States, contains at least an additional 300 gigatons of carbon.

Hegemony
First, Heg declining now- US wont recover short-term and lost long-term power Copley 12 (Gregory R., editor of Defense & Foreign Affairs Strategic Policy, Strategic Policy in an Age of Global Realignment, lexis)
3. Strategic Recovery by the US. The

US will not, in 2012 or 2013, show signs of any recovery of its global

strategic credibility or real strength. Its manufacturing and science and technology sectors will continue to suffer from low (even declining) productivity and difficulty in capital formation (for political reasons, primarily). A significant US recovery is not feasible in the timeframe given the present political and economic policies and impasse evident. US allies will increasingly look to their own needs while attempting to sustain their alliance relationship with the US to the extent feasible. Those outside the US alliance network, or peripheral to it, will increasingly disregard US political/diplomatic pressures , and will seek to accommodate the PRC or regional actors. The continued economic malaise of the US during 2012, even if disguised by modest nominal GDP growth, will make
economic (and therefore strategic) recovery more difficult and ensure that it will take longer.

Second, Hegemonic decline causes conflicthistory proves. Friedberg 11 Aaron L. Friedberg, Professor of Politics and International Affairs at Princeton
University, holds a Ph.D. from Harvard University, 2011 (Hegemony with Chinese Characteristics, The National Interest, June 21st, Available Online at http://nationalinterest.org/print/article/hegemonychinese-characteristics-5439, Accessed 09-15-2011) Throughout history, relations between dominant and rising states have been uneasyand often violent. Established powers tend to regard themselves as the defenders of an international order that they helped to create and from which they continue to benefit; rising powers feel constrained, even cheated, by the status quo and struggle against it to take what they think is rightfully theirs. Indeed, this story line, with its Shakespearean overtones of youth and age, vigor and decline, is among the oldest in recorded history . As far back as the fifth century BC the great Greek historian
Thucydides began his study of the Peloponnesian War with the deceptively simple observation that the wars deepest, truest cause was the growth of Athenian power and the fear which this caused in Sparta. The fact that the U.S.-China relationship is competitive, then, is simply no surprise. But these countries are not just any two great powers: Since the end of the Cold War the United States has been the richest and most powerful nation in the world; China is, by contrast, the state whose capabilities have been growing most rapidly. America is still number one, but China is fast gaining ground. The stakes are about as high as they can get, and the potential for conflict particularly fraught. At least insofar

as the dominant powers are concerned, rising states tend to be troublemakers. As a nations capabilities grow, its leaders generally define their interests more expansively and seek a greater degree of influence over what is going on around them. This means that those in ascendance typically attempt not only to secure their
borders but also to reach out beyond them, taking steps to ensure access to markets, materials and transportation routes; to protect their citizens far from home; to defend their foreign friends and allies; to promulgate their religious or ideological beliefs; and, in general, to have what they consider to be their rightful say in the affairs of their region and of the wider world.

As they begin to assert themselves, ascendant states typically feel impelled to challenge territorial boundaries, international institutions and hierarchies of prestige that were put in place when they were still relatively weak. Like Japan in the late nineteenth century, or Germany at the turn of the twentieth, rising powers want their place in the sun. This, of course, is what brings them into conflict with the established great powers the so-called status quo
stateswho are the architects, principal beneficiaries and main defenders of any existing international system.

The resulting clash of interests between the two sides has seldom been resolved peacefully . Recognizing the growing threat to their position, dominant powers (or a coalition of status quo states) have occasionally tried to attack and destroy a competitor before it can grow strong enough to become a threat. Othershoping to avoid warhave taken the opposite approach: attempting to appease potential challengers, they look for ways to satisfy their demands and ambitions and seek to
incorporate them peacefully into the existing international order.

But however sincere, these efforts have almost always ended in failure. Sometimes the reason clearly lies in the demands
of the rising state. As was true of Adolf Hitlers Germany, an aggressor may have ambitions that are so extensive as to be im possible for the

status quo powers to satisfy without effectively consigning themselves to servitude or committing national suicide. Even when the demands being made of them are less onerous, the dominant states are often either reluctant to make concessions, thereby fueling the frustrations and resentments of the rising power, or too eager to do so, feeding its ambitions and triggering a spiral of escalating demands. Successful policies of appeasement are conceivable in theory but in practice have proven devilishly difficult to implement. This

transition, when a new, ascending power begins to overtake the previously dominant state, war .

is why periods of have so often been marked by

Third, The pursuit of hegemony is inevitablethe only question is effectiveness. Tellis 9 Ashley J. Tellis, Senior Associate at the Carnegie Endowment for International Peace
specializing in international security, defense and Asian strategic issues, Research Director of the Strategic Asia program at NBRthe National Bureau of Asian Research, holds a Ph.D. from the University of Chicago, 2009 (Preserving Hegemony: The Strategic Tasks Facing the United States, Global Asia, Volume 4, Number 1, Available Online at http://globalasia.org/pdf/issue9/Ashley_J._Tellis.pdf, Accessed 09-13-2011, p. 54-55) This hegemony is by no means fated to end any time soon , however, given that the United States remains predominant by most conventional indicators of national power. The character of the United States hegemonic
behavior in the future will thus remain an issue of concern both within the domestic polity and internationally. Yet the juvenescence of the United States unipolar moment, combined with the disorientation produced by the September 11 attacks, ought to restrain an y premature generalization that the imperial activism begun by the Clinton administration, and which the Bush administration took to its most spirited apotheosis, would in some way come to define the permanent norm of US behavior in the global system. In all probability, it is much more likely that the limitations on US [end page 54] power witnessed in Afghanistan and Iraq will produce a more phlegmatic and accommodating United States over the longer term, despite the fact that the

traditional US pursuit of dominance understood as the quest to maintain a preponderance of power, neutralize threatening challengers, and protect freedom of action, goals that go back to the foundations of the republic is unlikely to be extinguished any time soon .
Precisely because

the desire for dominance is likely to remain a permanent feature of US geopolitical

ambitions even though how it is exercised will certainly change in comparison to the Bush years the central task facing the next administration will still pertain fundamentally to the issue of US power. This concern
manifests itself through the triune challenges of: redefining the United States role in the world, renewing the foundations of US strength, and recovering the legitimacy of US actions. In other words, the next administration faces the central task of clarifying the character of US hegemony, reinvigorating the material foundations of its power, and securing international support for its policies.

Fourth, private investment in Venezuelan oil production is key to hegemony forces our enemies to work with us Stokes AND Raphael 10
Global Energy Security and American Hegemony Doug Stokes; Professor in International Security and Strategy in the Department of Politics at the University of Exeter; and Sam Raphael; senior lecturer in International Relations at Kingston University, London and co-director of The Rendition Project; April 28, 2010; NCHO 06/17/2013 Energy security was a declared priority for the Bush adminstration and is a declared priority for the Obama administration. Of course, this is partly because of the immense energy requirements of the US economy, which is responsible for a significant proportion of the world's daily consumption. However, American concerns over energy security range far wider than this: in an era marked by a globalized economy that is heavily dependent upon plentiful supplies of energy - and upon oil in particular Washington has sought to control the conditions under which all core powers receive oil from the South. This is so because of the integrated nature of energy markets - where US energy security cannot be disaggregated from global energy security - and because such control provides Washington with structural power. By acting as the ultimate guarantor of global energy security, US hegemony over the international system is consolidated, with potential rivals to its position forced to be (and in

some instances content to be) reliant upon American power. These wider objectives characterize US statecraft in relation to oil; American planners are not just concerned with ensuring that enough foreign oil reaches US shores. In this light, the eventual destination of individual shipments is of less concern for planners than the smooth functioning of the global oil market. And given the preferred mode of wider global rule by Washington, this has led the United States to focus on the "free marketization" of oil-rich political economies in the South. Washington has worked, where possible, to create an environment conducive to the investment by private oil capital. That this capital is increasingly transnational in nature - with international oil companies owned and run by executives and shareholders from many countries - only goes to demonstrate the positive-sum characteristics of the US-led order. By "transnationalizing" oil-rich political economies and further integrating them into the global economy Washington plays a managerial role for the capitalist order as a whole. Yet, this is not a consequence of altruism on behalf of US planners. Nor is it, as some would have it, the result of fundamental changes in the structure of global politics, with the United States the lead example of an emerging "trans-national state," replacing the traditional "nation-state" and acting primarily on behalf of a "transnational capitalist class."1 Rather, US planners seek to affect this transnational outcome for distinctly national ends: it is through the management of a positive-sum liberal order, through the extension of that order to oil-rich zones, and through guaranteeing the provision of oil to all players within the order, that American hegemony over the international system is maintained. The overt drive to transnationalize the oil-rich South is central to Washington's strategy to cement its global hegemony.

Fifth, boosting Venezuelan oil production is key to hegemony our ability to confront challenges is dependent on developing new sources of oil Economides AND Cala 12
America's Blind Spot: Oil, Ch'avez, and US security Michael Economides; Professor of Chemical and Biomolecular Engineering at the University of Houston, US. One of America's leading energy analysts, he has done technical and managerial work in over 70 countries. He is the author with Ron Oligney of The Color of Oil: The History, the Money, and the Politics of the World's Biggest Business (2000), which looks at how petroleum dictates international politics and was nominated for a Pulitzer prize; and Andres Cala; journalist in Spain whose career spans three continents and over a dozen countries, specializing in geopolitics and energy. His work has been published by some of the world's leading pu blications, including The New York Times, The Wall Street Journal, Dow Jones Newswires, The Christian Science Monitor, and TIME Magazine. He is also the European correspondent of Energy Tribune; March 28, 2012 http://www.energytribune.com/10482/americas-blind-spot-oil-chavez-and-us-security

Venezuela was a pillar of Americas energy security last century, not only as a reliable supplier, but more critically as a shortstop for bullish global pressure on oil prices But along came the global economic crisis to expose a major shift in global energy trends that has been a longtime coming. The era of oil producers is only starting and the US, the worlds biggest oil consumer, did not plan well for it Basic oil supply and demand considerations will inevitably keep oil prices high Americas ability to confront challenges from a destabilizing Middle East, a rising China, and a resurgent Russia will depend on the resilience of its oil-dependent economic growth. alternatives such as solar and wind are naive and highly inadequate. The future of energy for the foreseeable time is still oil and natural gas. For the US and other OECD oil consumers, its simply urgent that oil prices fall in order to spur more economic
. Hugo Chavezs ascent to power in 1999 drastically changed that, but to be fair, the consequences were mute throughout most of last decade. Chavez was annoying at best and L atin America a distant concern while the US tackled its priorities in the Middle East, China, and Russia. . Iran, Sudan, or Venezuela. Notions expressed by many American intellectuals, headed by the Liberal-in-Chief President Barack Obama, that will reduce the countrys oil dependence

, and thats without factoring in more geopolitical tensions in

growth . That requires more global oil supplies , not as an alternative to other sources, but in addition to all current energy security measures Venezuela and Latin American as a region are the best places to quickly deliver on essential output gains on top of current expectations The US is diplomatically distancing itself from Latin America and companies are looking elsewhere to invest
, whether its boosting domestic oil and natural gas production or improving fuel efficiency measures. . But Americas idealist-driven regional policies -Republican and Democratic- are backfiring to threaten US security, not because China and Iran are moving in, but because not enough oil is coming out. cycle, .

, while the

rest of the world is happy to fill the political and economic vacuum left behind. Energy lies Obama, who set his own bar for improving American energy security, is missing the opportunity to level with the electorate on energy reality. Regardless what candidates promise in this election

US energy and national security in the short term is not about renewable energy, domestic oil production or so-called energy independence pipedreams Lowering imports is certainly welcome, but prices wont decrease as a result because there is little net change to the global supply and demand balance The Arab Spring has further complicated US calculations. Only Saudi Arabia has been able to raise output, despite supply disruption in Libya, Syria, and now Iran.
. Also, heightened investment risks continue to erode the regions output growth expectations, while the global oil price benchmark increased to over $100 from $75 a barrel in just five years as a result of rising costs. Why Latin America A little more than half of worlds oil is in the Middle East. Latin America, from Mexico to Argentina, comes in second with

what if Venezuela could reverse that trend from depleting fields Venezuela could conservatively add at least 2 million bpd on top of what its already expected to contribute Global oil production gains this decade could conceivably be a third higher, that is, closer to 12 million bpd if Venezuela and the rest of Latin America beat pessimistic expectations
around 18 percent, led by Venezuela, Brazil, and Mexico, in that order. The US and OECD are pessimistic about Venezuela, considering its track record under Chavez. But and the largely undeveloped Orinoco Belt? Assuming hyped up numbers, , although Chavez says he expects to double output of 3 million bpd to 6 million bpd by 2020. illustrate. Furthermore, Chavezs anti-American movement climaxed years ago and the region is following Brazils model and leadership, not Chavezs or Americas.

. Its technically possible, but whether the politics are in place to attract the massive foreign

investment required for such a feat is a different question, and ultimately the most impor tant one. Dealing with Chavez Three American presidents have failed to tame Chavez. From the discourse, it would seem that the best available policy is waiting to see how Chavezs cancer evolves following the removal of a second malign tumor earlier thi s year. Chavezs health will indeed be critical to Venezuela, especially with upcoming October elections that could extend his hold on power another six years. But Chavez should be irrelevant to the US. The ideological spat with the tongue-lashing populist demagogue should be secondary to US energy security interests in this juncture. That doesnt mean the US should sacrifice its democratic principles. America can pursue its interests, without defending what it stands for, as relations with China an d Russia

Chavez needs to move to the center not only to win the next elections, but more critically to attract foreign investment into the oil sector in order to pay for his lavish spending. Its an economic imperative, not a political choice. Even China, his biggest underwriter, is demanding it. The US, Chavez and any of his replacements in case he dies, share the goal of vastly increasing oil production in Venezuela the region is worried about economic growth and maintaining internal political stability
The best way to contain Chavez and to bring about democr atic reform in Venezuela, regardless of who is in power, is precisely through increased oil production. . But both Democrats and Republicans insist on enforcing idealist policies driven by immigration, drugs, and fighting back socialism or communism. In contrast, . Even Colombia, the top US ally in South America, has moved to improve relations with Chavez, containing him by intertwining the economic growth and political stability of both countries. In contrast, the Obama administration has been more hawkish and idealist than its predecessors, sanctioning Venezuelas oil company and widening the diplomatic divide with its southern neighbors over overhyped ties to terrorism that few deem threatening to the US. The trend can only be bucked by implementing realist policie s, ones that acknowledge Brazils regional leadership, Chavezs irrelevance, and Americas ideological estrangement.

Finally, Latin American stability is uniquely key to effective hegemony Rochlin 94


James Francis, Professor of Political Science at Okanagan University College. Discovering the Americas: the evolution of Canadian foreign policy towards Latin America, p. 130 -131 While there were economic motivations for Canadian policy in Central America, security considerations were perhaps more important. Canada possessed an interest in promoting stability in the face of a potential decline of U.S. hegemony in the Americas. Perceptions of declining U.S.

wildly inequitable divisions of wealth in Latin America, in addition to political repression, under-development, mounting external debt, anti-American sentiment and so on were linked to the prospect of explosive events occurring in the hemisphere. Hence, the Central American imbroglio was viewed as a fuse which could ignite a cataclysmic process throughout the region instability created by a regional war, beginning in Central America and spreading elsewhere in Latin America, might preoccupy Washington to the extent that the United States would be unable to perform adequately its important hegemonic role in the international arena such a predicament could generate increased global instability and perhaps even a hegemonic war .
influence in the region which had some credibility in 1979-1984 due to the some U.S. client states in produced by decades of subjugation to U.S. strategic and economic interests, . Analysts at the time worried that in a worst-case scenario, a concern expressed by the director of research for Canadas Standing Committee Report on Central America. It was feared that

Venezeula Oil 1AC V1


We begin with the plan: The United States federal government should substantially increase its economic engagement towards Venezuela by investing in Venezuelan oil infrastructure. We reserve the right to clarify intent.
Said Intent includes providing technical, financial, managerial expertise. This is also a partial privatization of the PDVSA

Contention One is the Venezuelan economy


First, the Venezuelan economy will collapse in the status quo A. Brink Lees 13
Venezuela's Controversial Election Results Are Only the Start of Its Troubles KEVIN LEES APRIL 15, 2013 http://www.newrepublic.com/article/112920/venezuela -elections-2013-close-results-are-defeat-chavismo#

Maduro immediately face an economic crisis, the hangover from a 14-year spending binge and an economy on the brink of collapse Venezuela's economy has precariously
was favored to win on Sunday and then . Since Chvez's reelection in October 2012,

slipped from troubled to tumbling

all while oil prices have surged to $103 a barrel. But Venezuela now also faces its Bush v. Gore moment, with Capriles demanding a recount of the vote in a late-night Sunday address to

the nation. Maduro, in his victory speech, claimed that Capriles had called to offer a pact, but Capriles angrily denounced Maduro as a liar. Capriles started the campaign by taunting Maduro, "No one elected you, kid," and in his speech, he argued that if Maduro was illegitimate before, he's just as illegitimate now. He stopped short of outright declaring victory himself, but he stated that the election result didn't reflect the truth of the Venezuelan electorate, and he made it all but clear that he expected a promised audit to show that he, in fact, was the real victor on Sunday. Venezuela will now confront a long and grueling battle in unprecedented territoryyou have to go back to December 1968 to find a presidential result that was even closer in Venezuela, a result that ended with Venezuela's first-ever peaceful transfer of power following an

the more acute economic problems continue, and may well accelerate, given that government policy for the past six months has been designed merely to get Maduro to the finish line of Sunday's election.
election. If Maduro holds on to his victory, however, he'll be crippled by nagging doubts over the legitimacy of his presidency, and the close result, barely a month after Chvez's funeral, was a stinging defeat for Chavismo. Meanwhile,

B. Failing oil sector Levisohn 13


Venezuelan Bonds Do the Collapse Ben Levisohn; former stock trader who has co vered financial markets for the Wall Street Journal, Bloomberg and BusinessWeek; April 16, 2013 http://blogs.barrons.com/emergingmarketsdaily/2013/04/16/venezuelan-bonds-do-the-collapse/

Barclays cut Venezuelan bonds noting that a weak presidency and high uncertainty are the main outcomes from this election and are the key drivers political gridlock can delay the implementation of the economic measures and could accelerate the deterioration of Venezuelas already fragile fundamentals Those risks are compounded by oils collapse , which could
, for instance, to neutral from overweight, in our change in stance. Its strategists also note that .

put Venezuela on an unsustainable path if they continue to fall

C. No foreign investment Toro 11


Foreign Investment in Venezuela: Mission Almost Impossible Francisco Toro; CaracasChronicles; March 28, 2011 http://www.whatsnextvenezuela.c om/expropriation/foreign-investment-in-venezuela-mission-almost-impossible/

With the largest oil reserves in the Western Hemisphere, Venezuela might appear like a natural candidate to attract major Direct Foreign Investment funds. But, as a direct result of Mr. Chvezs policy of marginalizing private sector capital, Foreign Direct Investment flows actually slammed into reverse in 2009 Venezuela continues to experience a net outflow of foreign direct investment to the tune of $3.1 billion a year
the latest for which ECLAC figures are available. United Nations 2009 Report ECLAC). in the process. Such startling figures are driven largely by the Chvez governments nationalization drive, since compensatio n for expropriated businesses is counted as negative Foreign Direct Investment. What does this tell us? Rather than seek out ne w foreign investors, the Venezuelan government is busily buying out those who stopped by in the past.

(page 53 of the report). Investors thinking of doing business in Venezuela should be aware that they are likely to lose money

The dearth of foreign investment not only slows economic growth now, it will also undermine the medium-to-long-term competitiveness of the Venezuelan economy each new foreign investor needs the plant equipment, technology and business services from data-banks to accounting other foreign companies offer. With investments flowing out of Venezuela at a record pace, new foreign investors find themselves between a rock and a hard place with next to none or few new investments coming into Venezuela outside the extractive sector, domestic firms arent enjoying any of the positive spillover effects from foreign investments whether it is the most advanced technology, added dynamism, or cutting-edge management practices Venezuela has one of the worlds most hostile environments for business as well as the tightest foreign exchange control regimes. Its labor market is exceptionally rigid. Venezuelas notoriously byzantine red-tape that characterizes any routine business operations is bewildering enough to confirm that it is intentional
. New businesses tend to flock together for a reason: in Chvezland. In addition, Seek advice on becoming a foreign investor in Venezuela these days and your enquiries are likely to be met with blank stares. The disincentives now facing potential foreign investors is formidable. Last but not least, . Remarkably, Venezuela has never officially rescinded the National Treatment provisions adopted during its short -lived economic reform experiment during the early 1990s. The provisions stipulate that foreign investors are not to be discriminated against vis--vis domestic investors.

It is, arguably, not foreign investment the government is concerned with short-circuiting, but rather private investment in
One can argue that it is a principle that the government has largely respected, but only in the sense that domestic investors face much of the same hardships as their international counterparts.

general, regardless of its source The one type of investment that is still flowing into the country in any significant quantity is investment in oil projects in Venezuelas rich but expensive to exploit Orinoco Tar Belt. To the extent that major Western companies are able to find investment opportunities in Venezuela, its almost always in the oil sector. That said, such investments are usually as minority partners in projects led by the state-owned PDVSA. However big the potential of the Orinoco Tar Belt might be, however, its nonetheless an enclave of this extractive industry, accounting for relativ ely few jobs and largely disconnected from much of the rest of Venezuelas economy. For the vast majority of Venezuelans, the companies they work for, buy from and contract are simply bereft of significant investment from abroad. And if this is a lost opportunity for international investors, in the long term, it will be an even bigger handicap to Venezuelas existing businesses and those interested in ever doing business there. Venezuelan firms are now cut off from not just foreign investment, but also from the technology foreign investment brings, and the cutting edge management techniques that come with it. Little by little, Venezuelas ability to host genuinely competitive, world-class firms is being eroded
. There, state-owned oil companies from ally countries often receive though not always most favored treatment. China has signed a $20 billion financing facility tied to a major investment by Sinopec Corp. in the region. Likewise, Russias Lukoil and Gazprom as well as Irans Petropars gas contractor have received lucrative development contracts there, a s has PetroVietnam. Petrleos de Venezuela, SA or Italys ENI, Japans Mitsubishi, Spains Repsol, and Chevron have managed to land such contracts in the Orinoco Tar Belt. In sectors like construction, light manufacturing, retail and services, .

D. Default Devereux 12
Venezuela Risks Default If Chavez Wins, Morgan Stanley said Charlie Devereux Sep 14, 2012 http://www.bloomberg.com/news/201 2-09-14/venezuela-faces-debt-crisis-if-chavez-wins-morgan-stanley-says.html

Venezuela could default on its debt as early as 2013 if fails to shore up the oil- producing nations increasingly fragile balance sheet One tipping point could be the $4.3 billion in external debt payments that come due between August and November 2013 Chavez has damaged Venezuelas balance sheet through the nationalization of key sectors of the economy, endemic inflation and a lack of fiscal discipline The policies are an unsustainable mix that heighten the risk of default on Venezuelas $110.6 billion stock of debt, especially if oil prices tumble Government actions may be taking
the second half of President Hugo Chavez wins re-election next month and , Morgan Stanley said. Volberg wrote in a note to clients today. Enlarge image Hugo , who is seeking to extend almost 14 years in power with another six-year term, of fiscal discipline, Volberg said. , Volberg wrote. the second half of

, Morgan Stanley analyst Daniel

, Morgan Stanley analyst Daniel Volberg said. Chavez, who is seeking to extend almost 14 years in power with another six-year term, has damaged Venezuelas balance sheet through the nationalization of key sectors of the economy, endemic inflation and a lack

Venezuela towards a crisis and potentially even a debt event that could come as early as 2013 At 11.6 percent of gross domestic product, Venezuela has the largest fiscal deficit in Latin America, while its international reserves have fallen by $17 billion since 2008 to $25.6 billion Output by state oil company Petroleos de Venezuela SA fell to 2.72 million barrels a day in 2011 from 3.48 million barrels in 1998
the report said. Venezuelas debt is no longer with large bank lenders as much as publicly traded bonds held by a dispersed group of creditors, which could make restructuring more challenging. , Volberg said. ,

according to British Petroleums statistical review. Bond Yields The yield on Venezuelas benchmark 9.25 percent bonds due in 2027 fell 11 basis points, or 0.11 percentage point, to 10.77 percent at 11:27 a.m. in Caracas, accord ing to data compiled by Bloomberg. The bonds price rose

The cost of insuring Venezuelan bonds against default for five years rose four basis points to 737 basis points
0.74 cent today to 88.80 cents on the dollar. , according to prices compiled by Bloomberg.

Second, Venezuelan economic downturn would collapse the region, consolidate power, and increase terrorism Wilson 5
Lieutenant Colonel Jeffrey K. ; United States Army War College Strategy; March 18, 200 PROMOTING STABILITY AND SECURITY IN VENEZUELA http://www.dtic.mil/cgi-bin/GetTRDoc?AD=ADA431740 NCHO

the Venezuela region remains on the brink of collapse Any down-turn in Venezuelas economic health could trigger a series of events that might lead to the end of democratic government. Chavez has already shown that he is willing to move away from democratic processes to consolidate his power in the executive branch
U.S. policy with respect to Venezuela is aligned with national interests and is fairly well balanced between the various elements of national power diplomatic, economic, military and informational, but it has not been effective in improving situation in . Over the past two decades, the U.S. has spent billions of dollars and significant manpower in the Andean region to stop t he flow of drugs into the U.S. and promote regional security, stability, free markets and human rights. Yet, the . In Venezuela specifically, a country with more than 40 years of democracy is in crisis and the situation seems to be worsening rather than improving. President . So, what is the path forward that the U.S. needs to follow to promote freedom, stability, security and economic prosperity in Venezuela? There are several possible alternative courses of action, including: staying on the current course (status quo); pulling back and letting the Chavez regime crumble from its own c orruption and flawed policies; taking unilateral action to cause regime change; or finding new, more effective ways to work multilaterally to support security, democratic processes and economic growth in Venezuela. Staying on the current course is not feasible because, as stated above, current policy is not working and the possible consequences of failure in Venezuela are too great.

If democracy in Venezuela collapses, it will probably become a failed state. This will

mean loss of freedom and democracy, increased poverty, increased drug trafficking, increased terror activity in ungoverned areas of the country, regional instability The U.S. government cannot risk the implosion of Venezuela simply because it does not want to support the Chavez regime. The disadvantages of this course of action include loss of international respect and loss of the opportunity to influence the future in Venezuela and the region this is more likely to result in the failure of Democracy in Venezuela and the U.S. would have to invest much more to repair a failed state than to prevent such a failure
and loss of oil imports to the U.S. This is also the wrong time for the U.S. to disengage from a leadership role in guiding Venezuela back onto the path of freedom and liberty. . Some would argue that an advantage of this course of action would be a short term savings in resources, but this is a false economy since .

Third, that creates multiple scenarios for extinction Manwaring 5, Marx G., Retired U.S. Army Colonel and an Adjunct Professor of International Politics at
Dickinson College, Venezuelas Huge Chvez, Bolivarian Socialism, and Asymmetric Warfare, 2005. The Issue of State Failure. - President Chvez also understands that the process leading to state failure is the most dangerous long-term security challenge facing the global community today. The argument in general is that
failing and failed state status is the breeding ground for instability, criminality, insurgency, regional conflict, and terrorism. These conditions breed massive humanitarian disasters and major refugee flows. They can host evil networks of all kinds, whether they involve criminal business enterprise, narco-trafficking, or some form of ideological crusade such as Bolivarianismo. More specifically, these conditions spawn all kinds of things people in general do not like such as murder, kidnapping, corruption, intimidation, and destruction of infrastructure. These means of coercion and persuasion can spawn further human rights violations, torture, poverty, starvation, disease, the recruitment and use of child soldiers, trafficking in women and body parts, trafficking and proliferation of conventional weapons systems and WMD, genocide, ethnic cleansing, warlordism, and criminal anarchy. At the same time, these actions are usually unconfined and spill over into regional syndromes of

poverty, destabilization, and conflict.62 Perus SenderoLuminoso calls violent and destructive activities that facilitate the
processes of state failure armed propaganda. Drug cartels operating throughout the Andean Ridge of South America and

elsewhere call these activities business incentives. Chvez considers these actions to be steps that must be taken to bring about
the political conditions necessary to establish Latin American socialism for the 21st century.63 Thus, in addition to helping to provide wider latitude to further their tactical and operational objectives, state and nonstate actors strategic efforts are aimed at prog ressively lessening a targeted regimes credibility and capability in terms of its ability and willingness to govern and develop its national territory and society.

Chvezs intent is to focus his primary attack politically and psychologically on selected Latin American governments ability and right to govern. In that context, he understands that popular perceptions of corruption, disenfranchisement,
poverty, and lack of upward mobility limit the right and the ability of a given regime to conduct the business of the state. Until a given populace generally perceives that its government is dealing with these and other basic issues of political, economic, and social injustice fairly and effectively, instability and the threat of subverting or destroying such a government are real.64 But failing and failed states simply do not go away. Virtually anyone can take advantage of such an unstable situation. The tendency is that the best motivated

and best armed organization on the scene will control that instability. As a consequence, failing and failed states become
dysfunctional states, rogue states, criminal states, narco-states, or new peoples democracies. In connection with the creation of new peoples democracies, one can rest assured that Chvez and his Bolivarian populist allies will be available to provide money, arms,

and leadership at any given opportunity. And, of course, the longer dysfunctional, rogue, criminal, and

narco-states and peoples democracies persist, the more they and their associated problems endanger global security, peace, and prosperity.65

Fourth, specifically nuclear prolif Ferkaluk 10


Latin America: Terrorist Actors on a Nuclear Stage Brian Ferkaluk; Diplomacy Department atNorwich University; Global Security Studies, Fall 2010, Volume l, Issue 3 http://globalsecuritystudies.com/Ferkaluk%20Latin%20America.pdf

The close relationship the US must maintain with Latin America is not only vital in the fight against domestic and international terrorism, but also in the fight to curtail nuclear proliferation Latin America could pose a serious threat of pursuing nuclear weapons in the coming years if the civilian-run governments of these states fall victim to revolutionaries Latin America has historically been active in both nuclear weapons development and nuclear power development. And given Latin Americas tendency toward military regimes the US cannot turn a blind eye to the possibility of nuclear activity in Latin America
immediate risk of in becoming a haven for a nuclear arms race, it leftist fact that junta (stratocracy), international conventions such as the Vienna Convention on Civil Liability for Nuclear Damage and not all adopt an Additional Protocol (AP) to their safeguards agreements with the International Atomic Energy Agency (IAEA). The region itself has been declared a nuclear-free zone

in the region. Although there is no

. Another factor to consider is the

. All Latin American countries are party to the NPT. Not all are members of

Brazil has not let the Treaty of Tlatelolco stand in the way of its own weapons development program in the late 1970s. And Venezuela today is not letting it stand in its way either. The most significant weakness of the treaty is the fact that it permits parties of the treaty to develop nuclear explosives for peaceful purposes. Therefore, Latin America has served as battlefield in the fight for non-proliferation.
according to the Treaty of Tlatelolco. It entered into force in 1969 and did not have all 33 Latin American states sign ont o it until Cuba added its name in 2002. However, the treaty itself has not served as an absolute ban of nuclear weapons in the region. , for instance,

Fifth, Venezuelan proliferation is the most likely scenario for global nuclear war multiple warrants
Border disputes, instability, unpredictable leaders, accidents, military coups, lower warning times, first strikes, arms race, technical accidents, physical security

Yusuf 8
Predicting Proliferation: The History of the Future of Nuclear Weapons Moeed Yusuf; Fellow at the Frederick S. Pardee Center for the Study of the Longer-Range Future at Boston University; January 2009 http://www.brookings.edu/~/media/research/files/papers/2009/1/nuclear%20proliferation%20yusuf/0 1_nuclear_proliferation_yusuf.pdf Michael Mandelbaum, earlier mentioned as someone who remained relatively comfortable about the ability of the superpowers to deter each other, was less optimistic regarding the capacity of developing countries to do so. He stressed that developing country proliferation would increase the likelihood of the use of nuclear weapons in conflicts.78 Ted Greenwood, an American academic who later advised the U.S. Department of Defense, pointed to the active border disputes of Nth states such as South Africa, Israel, and Taiwan to suggest an increased likelihood of nuclear war.79 Mentions of the possibility of weapons falling into the hands of irresponsible powers the mad ruler scenario were frequent. As French scholar, Thierry de Montbrial pointed out: there are many politically unstable countries whose leaders are not predictableand would not hesitate to use an atomic weapon, if they had one.80 Hinting at the same concern, the renowned French sociologist Raymond Aron argued that acquisition of nuclear weapons by developing countries could even result in a superpower conflict in the Cold War context due to a deliberate or inadvertent action of a small state.81 Moreover, in contrast to the relative stability within the borders of developed countries, Dunn and Overholt pointed to frequent military coups in countries like Argentina, Chile, Brazil, Greece, Indonesia, Iraq, Libya, Nigeria, Pakistan, South Korea, Syria, Turkey, Venezuela, and Zaire to emphasize the possibility of militaristic leaders wresting power and utilizing nuclear weapons as a means of coercing adversaries.82 A number of commentators anticipated that Nth powers would seek to create a first strike capability to preempt traditional rivals. Counterforce targeting strategies were considered likely, but also inherently destabilizing, especially for contiguous countries where warning times were diminished. Technical deficiencies in ensuring robust command and control and the security of the arsenal were taken for granted and used to further heighten fears of accidental or unauthorized use.83

Finally, the plan prevents a Venezuelan economic collapse, the key to the Venezuelan economy is improving their oil sector and increasing private investment Homan 13
EXPLORING THE NEXT GENERATION OFPROLIFERATORS Patrick Homan; Monterey Institute of International Studies, James Martin Center for Nonproliferation Studies; 26 Feb 2013. http://www.niu.edu/polisci/announcements/Grad%20attachments/Homan.pdf Despite being the worlds eighth-largest oil producer, Venezuela faces a host of economic issues. After recovering from a recession that began in 2009, the Venezuelan economy grew consistently from 201012, including 5 percent growth in 2012.59 However, much of this growth can be attributed to public

spending, as Chvezs main short-term solution to his countrys economic woes has been borrowing. As a result, net public debt rose from 14 percent of GDP in 2008 to 29 percent in 2010.60 In 2011, the International Monetary Fund reported Venezuelas public debt as 45.5 percent of GDP.61 Much of Chvezs borrowing has been from China. Between 2008 and 2010, China lent Venezuela $12 billion and is being repaid in oil shipments, which cuts even further into government revenues.62 Furthermore, inflation in Venezuela during 2012 was near 20 percent; as a result, the Venezuelan currency traded on the black market for a third of the official rate.63 While Chvezs near-term future seems safe with oil prices around $100 a barrel, there are growing long-term risks within the Venezuela economy. Any future decline in oil prices would send the Venezuelan economy into a tailspin and lead to a default on its obligations. Chvezs handling of his countrys oil sector is the chief cause of Venezuelas economic problems. Chvez pillaged Petrleos de Venezuela (PDVSA), the state-owned oil firm, by packing it with pro-Chvez loyalists, starving it of much needed investment, and using its profits for social spending. As a result, PDVSAs output has gone from 3.3 million barrels per day (b/d) in 1998 to its current level of around 2.25 million b/d, according to recent industry estimates.64 Of that, some 1 million b/d is sold at subsidized prices at home or to regional allies (such as Cuba), leaving just 1.25 million b/d for full-price exports.65 The declining state of its oil sector is having a large impact on the overall Venezuelan economy, as petroleum now accounts for 92 percent of its export revenue.66 This is an extremely troubling development for Chvezs government because its domestic support relies heavily on petrodollars for providing government subsidies and funding social welfare programs. Meanwhile, Chvezs harassment and hostility towards businesses and the private sector has devastated the rest of the Venezuelan economy. In his pursuit toward state socialism, Chvez nationalized hundreds of companies, seizing everything from steel companies and bottle makers to housing schemes.67 When workers have resisted, he has deployed the National Guard against them and trumped up charges against their owners. His efforts to accelerate the revolutionary process caused much of Venezuelas private sector to close or flee. The results are a significant amount of capital flight and a need to import many goods that it previously produced.

Contention Two is Hegemony


First, Heg declining now- US wont recover short-term and lost long-term power Copley 12 (Gregory R., editor of Defense & Foreign Affairs Strategic Policy, Strategic Policy in an Age of Global Realignment, lexis)
3. Strategic Recovery by the US. The

US will not, in 2012 or 2013, show signs of any recovery of its global

strategic credibility or real strength. Its manufacturing and science and technology sectors will continue to suffer from low (even declining) productivity and difficulty in capital formation (for political reasons, primarily). A significant US recovery is not feasible in the timeframe given the present political and economic policies and impasse evident. US allies will increasingly look to their own needs while attempting to sustain their alliance relationship with the US to the extent feasible. Those outside the US alliance network, or peripheral to it, will increasingly disregard US political/diplomatic pressures , and will seek to accommodate the PRC or regional actors. The continued economic malaise of the US during 2012, even if disguised by modest nominal GDP growth, will make
economic (and therefore strategic) recovery more difficult and ensure that it will take longer.

Second, Hegemonic decline causes conflicthistory proves. Friedberg 11 Aaron L. Friedberg, Professor of Politics and International Affairs at Princeton
University, holds a Ph.D. from Harvard University, 2011 (Hegemony with Chinese Characteristics, The National Interest, June 21st, Available Online at http://nationalinterest.org/print/article/hegemonychinese-characteristics-5439, Accessed 09-15-2011) Throughout history, relations between dominant and rising states have been uneasyand often violent. Established powers tend to regard themselves as the defenders of an international order that they helped to create and from which they continue to benefit; rising powers feel constrained, even cheated, by the status quo and struggle against it to take what they think is rightfully theirs. Indeed, this story line, with its Shakespearean overtones of youth and age, vigor and decline, is among the oldest in recorded history . As far back as the fifth century BC the great Greek historian
Thucydides began his study of the Peloponnesian War with the deceptively simple observation that the wars deepest, truest cause was the growth of Athenian power and the fear which this caused in Sparta. The fact that the U.S.-China relationship is competitive, then, is simply no surprise. But these countries are not just any two great powers: Since the end of the Cold War the United States has been the richest and most powerful nation in the world; China is, by contrast, the state whose capabilities have been growing most rapidly. America is still number one, but China is fast gaining ground. The stakes are about as high as they can get, and the potential for conflict particularly fraught. At least insofar

as the dominant powers are concerned, rising states tend to be troublemakers. As a nations capabilities grow, its leaders generally define their interests more expansively and seek a greater degree of influence over what is going on around them. This means that those in ascendance typically attempt not only to secure their
borders but also to reach out beyond them, taking steps to ensure access to markets, materials and transportation routes; to protect their citizens far from home; to defend their foreign friends and allies; to promulgate their religious or ideological beliefs; and, in general, to have what they consider to be their rightful say in the affairs of their region and of the wider world.

As they begin to assert themselves, ascendant states typically feel impelled to challenge territorial boundaries, international institutions and hierarchies of prestige that were put in place when they were still relatively weak. Like Japan in the late nineteenth century, or Germany at the turn of the twentieth, rising powers want their place in the sun. This, of course, is what brings them into conflict with the established great powers the so-called status quo
stateswho are the architects, principal beneficiaries and main defenders of any existing international system.

The resulting clash of interests between the two sides has seldom been resolved peacefully . Recognizing the growing threat to their position, dominant powers (or a coalition of status quo states) have occasionally tried to attack and destroy a competitor before it can grow strong enough to become a threat. Othershoping to avoid warhave taken the opposite approach: attempting to appease potential challengers, they look for ways to satisfy their demands and ambitions and seek to
incorporate them peacefully into the existing international order.

But however sincere, these efforts have almost always ended in failure. Sometimes the reason clearly lies in the demands
of the rising state. As was true of Adolf Hitlers Germany, an aggressor may have ambitions that are so extensive as to be im possible for the

status quo powers to satisfy without effectively consigning themselves to servitude or committing national suicide. Even when the demands being made of them are less onerous, the dominant states are often either reluctant to make concessions, thereby fueling the frustrations and resentments of the rising power, or too eager to do so, feeding its ambitions and triggering a spiral of escalating demands. Successful policies of appeasement are conceivable in theory but in practice have proven devilishly difficult to implement. This

transition, when a new, ascending power begins to overtake the previously dominant state, war .

is why periods of have so often been marked by

Third, The pursuit of hegemony is inevitablethe only question is effectiveness. Tellis 9 Ashley J. Tellis, Senior Associate at the Carnegie Endowment for International Peace
specializing in international security, defense and Asian strategic issues, Research Director of the Strategic Asia program at NBRthe National Bureau of Asian Research, holds a Ph.D. from the University of Chicago, 2009 (Preserving Hegemony: The Strategic Tasks Facing the United States, Global Asia, Volume 4, Number 1, Available Online at http://globalasia.org/pdf/issue9/Ashley_J._Tellis.pdf, Accessed 09-13-2011, p. 54-55) This hegemony is by no means fated to end any time soon , however, given that the United States remains predominant by most conventional indicators of national power. The character of the United States hegemonic
behavior in the future will thus remain an issue of concern both within the domestic polity and internationally. Yet the juvenescence of the United States unipolar moment, combined with the disorientation produced by the September 11 attacks, ought to restrain an y premature generalization that the imperial activism begun by the Clinton administration, and which the Bush administration took to its most spirited apotheosis, would in some way come to define the permanent norm of US behavior in the global system. In all probability, it is much more likely that the limitations on US [end page 54] power witnessed in Afghanistan and Iraq will produce a more phlegmatic and accommodating United States over the longer term, despite the fact that the

traditional US pursuit of dominance understood as the quest to maintain a preponderance of power, neutralize threatening challengers, and protect freedom of action, goals that go back to the foundations of the republic is unlikely to be extinguished any time soon .
Precisely because

the desire for dominance is likely to remain a permanent feature of US geopolitical

ambitions even though how it is exercised will certainly change in comparison to the Bush years the central task facing the next administration will still pertain fundamentally to the issue of US power. This concern
manifests itself through the triune challenges of: redefining the United States role in the world, renewing the foundations of US strength, and recovering the legitimacy of US actions. In other words, the next administration faces the central task of clarifying the character of US hegemony, reinvigorating the material foundations of its power, and securing international support for its policies.

Fourth, private investment in Venezuelan oil production is key to hegemony forces our enemies to work with us Stokes AND Raphael 10
Global Energy Security and American Hegemony Doug Stokes; Professor in International Security and Strategy in the Department of Politics at the University of Exeter; and Sam Raphael; senior lecturer in International Relations at Kingston University, London and co-director of The Rendition Project; April 28, 2010; NCHO 06/17/2013 Energy security was a declared priority for the Bush adminstration and is a declared priority for the Obama administration. Of course, this is partly because of the immense energy requirements of the US economy, which is responsible for a significant proportion of the world's daily consumption. However, American concerns over energy security range far wider than this: in an era marked by a globalized economy that is heavily dependent upon plentiful supplies of energy - and upon oil in particular Washington has sought to control the conditions under which all core powers receive oil from the South. This is so because of the integrated nature of energy markets - where US energy security cannot be disaggregated from global energy security - and because such control provides Washington with structural power. By acting as the ultimate guarantor of global energy security, US hegemony over the international system is consolidated, with potential rivals to its position forced to be (and in

some instances content to be) reliant upon American power. These wider objectives characterize US statecraft in relation to oil; American planners are not just concerned with ensuring that enough foreign oil reaches US shores. In this light, the eventual destination of individual shipments is of less concern for planners than the smooth functioning of the global oil market. And given the preferred mode of wider global rule by Washington, this has led the United States to focus on the "free marketization" of oil-rich political economies in the South. Washington has worked, where possible, to create an environment conducive to the investment by private oil capital. That this capital is increasingly transnational in nature - with international oil companies owned and run by executives and shareholders from many countries - only goes to demonstrate the positive-sum characteristics of the US-led order. By "transnationalizing" oil-rich political economies and further integrating them into the global economy Washington plays a managerial role for the capitalist order as a whole. Yet, this is not a consequence of altruism on behalf of US planners. Nor is it, as some would have it, the result of fundamental changes in the structure of global politics, with the United States the lead example of an emerging "trans-national state," replacing the traditional "nation-state" and acting primarily on behalf of a "transnational capitalist class."1 Rather, US planners seek to affect this transnational outcome for distinctly national ends: it is through the management of a positive-sum liberal order, through the extension of that order to oil-rich zones, and through guaranteeing the provision of oil to all players within the order, that American hegemony over the international system is maintained. The overt drive to transnationalize the oil-rich South is central to Washington's strategy to cement its global hegemony.

Fifth, boosting Venezuelan oil production is key to hegemony our ability to confront challenges is dependent on developing new sources of oil Economides AND Cala 12
America's Blind Spot: Oil, Ch'avez, and US security Michael Economides; Professor of Chemical and Biomolecular Engineering at the University of Houston, US. One of America's leading energy analysts, he has done technical and managerial work in over 70 countries. He is the author with Ron Oligney of The Color of Oil: The History, the Money, and the Politics of the World's Biggest Business (2000), which looks at how petroleum dictates international politics and was nominated for a Pulitzer prize; and Andres Cala; journalist in Spain whose career spans three continents and over a dozen countries, specializing in geopolitics and energy. His work has been published by some of the world's leading pu blications, including The New York Times, The Wall Street Journal, Dow Jones Newswires, The Christian Science Monitor, and TIME Magazine. He is also the European correspondent of Energy Tribune; March 28, 2012 http://www.energytribune.com/10482/americas-blind-spot-oil-chavez-and-us-security

Venezuela was a pillar of Americas energy security last century, not only as a reliable supplier, but more critically as a shortstop for bullish global pressure on oil prices But along came the global economic crisis to expose a major shift in global energy trends that has been a longtime coming. The era of oil producers is only starting and the US, the worlds biggest oil consumer, did not plan well for it Basic oil supply and demand considerations will inevitably keep oil prices high Americas ability to confront challenges from a destabilizing Middle East, a rising China, and a resurgent Russia will depend on the resilience of its oil-dependent economic growth. alternatives such as solar and wind are naive and highly inadequate. The future of energy for the foreseeable time is still oil and natural gas. For the US and other OECD oil consumers, its simply urgent that oil prices fall in order to spur more economic
. Hugo Chavezs ascent to power in 1999 drastically changed that, but to be fair, the consequences were mute throughout most of last decade. Chavez was annoying at best and L atin America a distant concern while the US tackled its priorities in the Middle East, China, and Russia. . Iran, Sudan, or Venezuela. Notions expressed by many American intellectuals, headed by the Liberal-in-Chief President Barack Obama, that will reduce the countrys oil dependence

, and thats without factoring in more geopolitical tensions in

growth . That requires more global oil supplies , not as an alternative to other sources, but in addition to all current energy security measures Venezuela and Latin American as a region are the best places to quickly deliver on essential output gains on top of current expectations The US is diplomatically distancing itself from Latin America and companies are looking elsewhere to invest
, whether its boosting domestic oil and natural gas production or improving fuel efficiency measures. . But Americas idealist-driven regional policies -Republican and Democratic- are backfiring to threaten US security, not because China and Iran are moving in, but because not enough oil is coming out. cycle, .

, while the

rest of the world is happy to fill the political and economic vacuum left behind. Energy lies Obama, who set his own bar for improving American energy security, is missing the opportunity to level with the electorate on energy reality. Regardless what candidates promise in this election

US energy and national security in the short term is not about renewable energy, domestic oil production or so-called energy independence pipedreams Lowering imports is certainly welcome, but prices wont decrease as a result because there is little net change to the global supply and demand balance The Arab Spring has further complicated US calculations. Only Saudi Arabia has been able to raise output, despite supply disruption in Libya, Syria, and now Iran.
. Also, heightened investment risks continue to erode the regions output growth expectations, while the global oil price benchmark increased to over $100 from $75 a barrel in just five years as a result of rising costs. Why Latin America A little more than half of worlds oil is in the Middle East. Latin America, from Mexico to Argentina, comes in second with

what if Venezuela could reverse that trend from depleting fields Venezuela could conservatively add at least 2 million bpd on top of what its already expected to contribute Global oil production gains this decade could conceivably be a third higher, that is, closer to 12 million bpd if Venezuela and the rest of Latin America beat pessimistic expectations
around 18 percent, led by Venezuela, Brazil, and Mexico, in that ord er. The US and OECD are pessimistic about Venezuela, considering its track record under Chavez. But and the largely undeveloped Orinoco Belt? Assuming hyped up numbers, , although Chavez says he expects to double output of 3 million bpd to 6 million bpd by 2020. illustrate. Furthermore, Chavezs anti-American movement climaxed years ago and the region is following Brazils model and leadership, not Chavezs or Americas.

. Its technically possible, but whether the politics are in place to attract the massive foreign

investment required for such a feat is a different question, and ultimately the most important one. Dealing with Chavez Three American presidents have failed to tame Chavez. From the discourse, it would seem that the best available policy is waiting to see how Chavezs cancer evolves following the removal of a second malign tumor earlier this year. Chavezs health will indeed be critical to Venezuela, especially with upcoming October elections that could extend his hold on power another six years. But Chavez should be irrelevant to the US. The ideological spat with the tongue-lashing populist demagogue should be secondary to US energy security interests in this juncture. That doesnt mean the US sho uld sacrifice its democratic principles. America can pursue its interests, without defending what it sta nds for, as relations with China and Russia

Chavez needs to move to the center not only to win the next elections, but more critically to attract foreign investment into the oil sector in order to pay for his lavish spending. Its an economic imperative, not a political choice. Even China, his biggest underwriter, is demanding it. The US, Chavez and any of his replacements in case he dies, share the goal of vastly increasing oil production in Venezuela the region is worried about economic growth and maintaining internal political stability
The best way to contain Chavez and to bring about democratic reform in Venezuela, regardless of who is in power, is precisely through increa sed oil production. . But both Democrats and Republicans insist on enforcing idealist policies driven by immigration, drugs, and fighting back socialism or communism. In contrast, . Even Colombia, the top US ally in South America, has moved to improve relations with Chavez, containing him by intertwining the economic growth and political stability of both countries. In contrast, the Obama administration has been more hawkish and idealist than its predecessors, sanctioning Venezuelas oil company and widening the diplomatic divide with its southe rn neighbors over overhyped ties to terrorism that few deem threatening to the US. The trend can only be bucked by implementing rea list policies, ones that acknowledge Brazils regional leadership, Chavezs irrelevance, and Americas ideological estrangem ent.

Finally, Latin American stability is uniquely key to effective hegemony Rochlin 94


James Francis, Professor of Political Science at Okanagan University College. Discovering the Americas: the evolution of Canadian foreign policy towards Latin America, p. 130-131 While there were economic motivations for Canadian policy in Central America, security considerations were perhaps more important. Canada possessed an interest in promoting stability in the face of a potential decline of U.S. hegemony in the Americas. Perceptions of declining U.S.

wildly inequitable divisions of wealth in Latin America, in addition to political repression, under-development, mounting external debt, anti-American sentiment and so on were linked to the prospect of explosive events occurring in the hemisphere. Hence, the Central American imbroglio was viewed as a fuse which could ignite a cataclysmic process throughout the region instability created by a regional war, beginning in Central America and spreading elsewhere in Latin America, might preoccupy Washington to the extent that the United States would be unable to perform adequately its important hegemonic role in the international arena such a predicament could generate increased global instability and perhaps even a hegemonic war .
influence in the region which had some credibility in 1979-1984 due to the some U.S. client states in produced by decades of subjugation to U.S. strategic and economic interests, . Analysts at the time worried that in a worst-case scenario, a concern expressed by the director of research for Canadas Standing Committee Report on Central America. It was feared that

Contention Three is Solvency


First, Maduro will accept the plan A. He needs foreign investment to fund Chavezs legacy of grand socialist programs thats key to his political legitimacy Thomas-Symonds 13
What After Chavez? Nick Thomas-Symonds; practicing barrister at Civitas Law, Cardiff, specializing in chancery and commercial law. He is also Lecturer in Politics at St. Edmund Hall, Oxford University. He teaches British Politics and Government Since 1900, Modern British Politics, Politics in Europe and US Politics. He also teaches Contemporary US Politics on Oxford Universitys Department of Continuing Education Foundations of Diplomacy course; April 18, 2013 http://www.e-ir.info/2013/04/18/what-after-chavez/

A major part of Mr Chavezs popular appeal was his willingness to stand up to what he characterized as imperialism. He accused the US of trying to bring him down. With Mr Chavezs death on 5 March 2013, there is an argument that things can only get better in diplomatic relations between the US and Venezuela. After all, even under Mr Chavez, Venezuela was still trading widely with the US. The United States is Venezuelas most important trading partner Oil dominates U.S. imports from Venezuela, which is one of the top four suppliers of foreign oil to the United States. About 500 U.S. companies are represented in Venezuela. U. S. foreign direct investment in Venezuela is concentrated largely in the petroleum, manufacturing and finance sectors. That is not to say, however, that the US desire for oil has made it a no-go area for US governments in their diplomatic relations with the Bolivarian Republic. Sanctions were imposed on the Venezuelan state oil company, PDVSA, in 2011, for making supplies to Iran To win the presidential election Maduro needed to present himself as continuing the work of Mr Chavez.
After all, El Comandante traced his heritage to another Latin American independence leader, Simon Bolivar. Mr Chavezs antipa thy had personal elements, too. To use just one example, a brief coup in 2002 temporarily removed him from power, and he openly accused the US of being respo nsible for it. The US Department of States fact sheet on US-Venezuela relations confirms the extent of this trade: . U.S. exports to Venezuela include machinery, organic chemicals, agricultural products, optical and medical instruments, autos and auto parts. It adds: . The demise of Mr Chavez is one thing, the position of his successor, Nicolas Maduro, on the US, quite another. , Mr , a former bus driver, As Mr Chavezs c hosen successor, and as the incumbent during the election, this may have seemed an easy task. However, Mr Maduro has taken this argument to extraordinary lengths. He not only declared himself the son of C havez but claimed Chavez lives! and even went so far as to argue that El Comandante appeared to him as a bird whilst praying. Mr Maduro has continued to plough Chavezs anti-US furrow. After all, he did serve for a substantial period as his foreign minister. An allegation that the dead president had been the subject of an attack by historic enemies led the US State Department to declare the notion that the US had played any part in

Mr Maduro won the presidential election on 14 April 2013 with 50.7% of the vote. His winning margin of 1.5% constitutes only 235,000 votes. His defeated rival, Henrique Capriles, has alleged electoral malpractice and asked for the votes to be counted again the narrow margin of Mr Maduros victory, particularly given the advantages of his links to Mr Chavez, may prove less durable than he may think. Protests against the result continue Mr Maduros policies matter. One of his first acts was to announce the continuation of funding of socialist programmes from oil revenues. The current policy of using the nations oil reserves to fund socialist programmes cannot continue without putting the stability of the nations economy at risk. On the other hand, the programmes cannot be scaled back without political and social unrest. It is here that there may be a small chink of light for US-Venezuela relations, even under Mr Maduro. Venezuela cannot afford to turn any investors away unnecessarily.
Chavezs death from cancer as absurd. step. However, the National Electoral Council has declared Mr Maduros victory irreversible. That said, Cabello, said the results require deep self-criticism. after all. For now at least, month that whoever was the President was in a Catch 22 situation. Even now, the US multi-national Chevron advertises that it is playing a part in six onshore and offshore projects.

. The US urged an audit of the result as an important, prudent and necessary

On Twitter, National Assembly, Head Mr Diosdado

. The outcome may yet prove unpredictable, and Mr Chavezs demise may have heralded something new in Venezuelan foreign pol icy

Even setting to one side the protests against his controversial presidential election victory, the International Atomic Energy (IEA) predicted last

B. 14 years of economic devastation Roberts AND Daga 13


Venezuela: U.S. Should Push President Maduro Toward Economic Freedom James M. Roberts; research fellow for economic freedom and growth at the Center for International Tr ade and Economics; and Sergio Daga; Heritage Foundation visiting senior policy analyst in economic freedom in Latin America; April 15, 2013 http://www.heritage.org/research/reports/2013/04/venezuela-us-should-push-president-maduro-toward-economic-freedom

Hugo Chavezs hand-picked successor, former trade union boss Nicols Maduro, appears to have defeated Capriles by a narrow margin in a contentious and hard-fought special election Venezuela is in such shambles after 14 years of seat-of-the-pants mismanagement that Maduro may ultimately be forced to pursue more moderate policies and seek help from the U.S. to restore stability The Obama Administration and Congress should exploit this opening by using U.S. leverage to push Venezuela to turn from Chavezs failed experiment in oil-cursed 21st-century socialism toward economic freedom
Governor Henrique victory is confirmed . [1] .

on April 14. assuming his

Second, the plan solves Roberts AND Daga 13


Venezuela: U.S. Should Push President Maduro Toward Economic Freedom James M. Roberts; research fellow for economic freedom and growth at the Center for International Trade and Economics; and Sergio Daga; Heritage Foundation visiting senior policy analyst in economic freedom in Latin America; April 15, 2013 http://www.heritage.org/research/reports/2013/04/venezuela-us-should-push-president-maduro-toward-economic-freedom

U.S. Policy Toward the New Maduro Government Washington should insist on strict conditionality before sending a new U.S. ambassador to Caracas or assenting to any new lending to Venezuela by international financial institutions until the new government Takes steps to privatize PDVSA to bring in international equity partners with the expertise and financial capacity to restore PDVSA to the high level of professional operational and managerial expertise for which it was widely respected prior to 1999
information for all Venezuelans. Use U.S. Leverage

: Produces a comprehensive plan for reform that reduces the size of the public sector, reverses nationalizations and

expropriations of land and enterprises with just compensation to owners, restores the independence of the central bank and judicial institutions, reforms the electoral system, and submits to an internationally supervised audit of the governments books during the Chavez years;

; Immediately stops all subsidies to Cuba and terminates wasteful and economically destabilizing subsidy programs such as

PetroCaribe and ALBA; Ceases cooperation with international state sponsors of terrorism (such as Iran) and joins the international communitys cooperative efforts in the fight against transnational crime, narco-trafficking, and terrorism; and Restores freedom of the press and access to

The foundations of economic freedom in Venezuela were severely weakened during the 14-year misrule by Chavez. Although Chavezs death may aggravate instability and further polarize Venezuela, it need not be that way. Venezuela is in need of immediate and sweeping reforms, but these changes will take time, effort, determination, and, above all, dedicated reformers in Venezuela The Obama Administration should step into the breach with active and forward-looking policies to bring Venezuela back into the globalized economic system
. .

Third, The Venezuelan oil sector needs investment to sustain itself inefficiences will destroy the industry in the status quo Gjelten 13
Venezuela's Next Leader Faces Tough Choice On Oil Program TOM GJELTEN; NPR Latin American Expert; April 11, 2013 http://www.npr.org/2013/04/11/176843567/venezue la-s-next-leader-faces-tough-choice-on-oil-program As

Venezuela's

president, Hugo Chavez thought in grandiose terms, and his country's vast oil riches enabled him to act on his vision. But Chavez died before he had to deal with the flaws in his model, and some hard choices await his successor. Key to Chavez's notion

oil reserves estimated by the Organization of Petroleum Exporting Countries to be the largest in the world are worth tens of billions of dollars a year in potential revenue During his presidency, Chavez diverted much of that potential wealth to Venezuelan consumers in the form of cheap gasoline He propped up the Castro regime in Cuba, and he offered Venezuelan oil on highly preferential terms to 18 Caribbean and Latin American countries through an energy alliance he called PetroCaribe Oil production in Venezuela declined sharply under the Chavez administration, however, largely due to inadequate investment in the energy infrastructure, inefficiencies in oil industry management, and the replacement of skilled oil technicians and managers with political loyalists
of "21st Century Socialism" was the redistribution of Venezuela's oil earnings. The country's . (18 cents per gallon or less). . . PetroCaribe Initiative The drop in oil production more than 7 percent just in the first quarter of 2013 is severe enough to call into question whether the Chavista oil welfare programs can be sustained. For the Caribbean and Latin American countries that have been benefiting from the PetroCaribe program, it is a time of great anxiety. Chavez saw the energy alliance as a way to free the member states from U.S. energy imperialism. "There's no one who can slow our ever-faster march toward our great historical goals," he said, defining PetroCaribe as "energy unity." For poor countries, the PetroCaribe deal was irresistible. Typically, they had to pay cash for only half the oil they received. The rest they got on credit, financed over 25 years at 1 percent. Among those who eagerly signed up for the program was Haiti. In reality, PD VSA makes money from only a small proportion of the oil it produces. Now, can that continue? I don't think so. - Roger Tissot, energy economist "Any country that would benefit from such a credit would take advantage of it," says Ren Jean-Jumeau, Haiti's minister of energy. "There's not even a need to justify this. Haiti is a struggling economy, and this is a great advantage for us. We consider it extremely important." In the Dominican Republic, PetroCaribe was key to the country's 2008-2009 financial stabilization program. "By allowing us to defer the oil payments, it was a big, big thing for the government," says Juan Carlos Russo of the Pontificia Universidad Catlica in Santo Domingo. To be sure, there were strings attached: Chavez wanted the PetroCaribe countries to support his ideological crusade against the U.S. Some did so enthusiastically. Others largely ignored the Chavista rhetoric. "A lot of these countries looked at this thing in a practical manner," says Jeremy Martin, director of the energy program for the Institute of the Americas at the University of California, San Diego. "They were able to stomach the ideology as long as they could get such a wonderful financial deal." For countries such as Haiti, Jamaica and the Dominican Republic, the cheap oil from Venezuela could not have come at a better time, with energy prices rising and the world economy in crisis. "Most of these countries have no domestic supplies of oil and gas," Martin notes. "If they do, it's minimal. These are energy-starved countries. And so they became absolutely addicted [to the PetroCaribe program]." What Does Venezuela Get? But whether the deal is good for Venezuela is another question. "In my economic mind, I would say, 'Why are they willing to sacrifice this much?' " says Russo. The Dominican Republic is repaying its oil debt to Venezuela partly in string beans. Jorge

To Venezuela, from a cash-flow point of view, this represents close to $5 billion a year of revenue that they're missing In reality, PDVSA makes money from only a small proportion of the oil it produces Venezuela's problem is that its oil production is declining, in part because of the lack of reinvestment and the politicization of PDVSA operations under the Chavez government. Unless oil prices move sharply higher, the country will face a significant loss of oil revenue In 1997, PDVSA was producing 3.5 million barrels a day Today they are about 2.8 million barrels a day. It shows you what a bad job the Venezuelan government has done in managing their national oil company Venezuela's next president won't be able to maintain the oil industry
Pion, who previously worked in Latin America for the Amoco and Shell companies, notes that all the oil that Venezuela provides on easy credit terms to other countries could have been sold for cash on the global market. " ," Pion says. The state-owned oil company Petroleos de Venezuela, S.A. also donated oil to low-income families in the United States. There were the oil subsidies for Cuba. Plus, there's all the oil that goes for cheap gasoline for Venezuelan drivers. " ," says independent energy economist Roger Tissot, who specializes in the Latin American energy market. "Now, can that continue? I don't think so." ." ," notes Pion, now an energy analyst at the University of Texas at Austin. " ." Chavez died before he had to confront the economic and political problems certain to plague his successor. , subsidize gasoline at home, spend oil revenue on social programs and share Venezuela's oil wealth with his Caribbean and Latin neighbors. Something has to give. If it's a choice between serving domestic needs and maintaining the sweetheart oil deals with other countries, the PetroCaribe nations may be in for a disappointment.

Fourth, Corruption, ineffeciencies, and a lack of transparency have made Venezuela one of the worst places to invest in Roberts AND Daga 13
Venezuela: U.S. Should Push President Maduro Toward Economic Freedom James M. Roberts; research fellow for economic freedom and growth at the Center for International Trade and Economics; and Sergio Daga; Heritage Foundation visiting senior policy analyst in economic freedom in Latin America; April 15, 2013 http://www.heritage.org/research/reports/2013/04/venezuela-us-should-push-president-maduro-toward-economic-freedom

political interference in Venezuelas judicial system has become routine, and corruption is rampant. The landscape in Caracas and elsewhere in the country is littered with half-finished, publicly funded infrastructure and housing projects. The government funds needed to complete them often disappear
As reported in the Index, . As government expanded under Chavez, corruption became institutionalized. Chavez doubled the size of the public sector, many of whose 2.4 million[7] employees have no real job other than to work to keep the regime in power. A World Economic Forum (WEF) survey found little trust among businesses, politicians, the judicial system, and the police in Venezuela.[8] The tragic result is that Venezuela is now one of the most dangerous countries of the world. According to the Venezuelan Violence Observatory, in 2012 nearly 22,000 people

An inefficient and non-transparent regulatory environment that is hostile to private foreign direct investment obstructs long-term development and hampers entrepreneurial growth. The investment regime is tightly controlled by the state and favors investors from China, Russia, Iran, and other democracy-challenged countries Investor protection in Venezuela is ranked at 140 out of 144 countries In 1998, before Chavez took power, there were more than 14,000 private industrial companies in Venezuela; in 2011, after 13 years of extensive nationalizations and expropriations, only about 9,000 remained
were murdered.[9] .[10] , according to the WEF report.[11] .[12]

Venezeula Oil 1AC V2


We begin with the plan: The United States federal government should substantially increase its economic engagement towards Venezuela by investing in Venezuelan oil infrastructure. We reserve the right to clarify intent.
Said Intent includes providing technical, financial, managerial expertise. This is also a partial privatization of the PDVSA

Contention One is the Venezuelan economy


First, the Venezuelan economy will collapse in the status quo A. Brink Lees 13
Venezuela's Controversial Election Results Are Only the Start of Its Troubles KEVIN LEES APRIL 15, 2013 http://www.newrepub lic.com/article/112920/venezuela-elections-2013-close-results-are-defeat-chavismo#

Maduro immediately face an economic crisis, the hangover from a 14-year spending binge and an economy on the brink of collapse Venezuela's economy has precariously
was favored to win on Sunday and then . Since Chvez's reelection in October 2012,

slipped from troubled to tumbling

all while oil prices have surged to $103 a barrel. But Venezuela now also faces its Bush v. Gore moment, with Capriles demanding a recount of the vote in a late-night Sunday address to

the nation. Maduro, in his victory speech, claimed that Capriles had called to offer a pact, but Capriles angrily denounced Maduro as a liar. Capriles started the campaign by taunting Maduro, "No one elected you, kid," and in his speech, he argued that if Maduro was illegitimate before, he's just as illegitimate now. He stopped short of outright declaring victory himself, but he stated that the election result didn't reflect the truth of the Venezuelan electorate, and he made it all but clear that he expected a promised audit to show that he, in fact, was the real victor on Sunday. Venezuela will now confront a long and grueling battle in unprecedented territory you have to go back to December 1968 to find a presidential result that was even closer in Venezuela, a result that ended with Venezuela's first-ever peaceful transfer of power following an

the more acute economic problems continue, and may well accelerate, given that government policy for the past six months has been designed merely to get Maduro to the finish line of Sunday's election.
election. If Maduro holds on to his victory, however, he'll be crippled by nagging doubts over the legitimacy of his presidency, and the close result, barely a month after Chvez's funeral, was a stinging defeat for Chavismo. Meanwhile,

B. Failing oil sector Levisohn 13


Venezuelan Bonds Do the Collapse Ben Levisohn; former stock trader who has covered financial markets for the Wall Street Journal, Bloomberg and BusinessWeek; April 16, 2013 http://blogs.barrons.com/emergingmarketsdaily/2013/04/16/venezuelan-bonds-do-the-collapse/

Barclays cut Venezuelan bonds noting that a weak presidency and high uncertainty are the main outcomes from this election and are the key drivers political gridlock can delay the implementation of the economic measures and could accelerate the deterioration of Venezuelas already fragile fundamentals Those risks are compounded by oils collapse , which could
, for instance, to neutral from overweight, in our change in stance. Its strategists also note that .

put Venezuela on an unsustainable path if they continue to fall

C. No foreign investment Toro 11


Foreign Investment in Venezuela: Mission Almost Impossible Francisco Toro; CaracasChronicles; March 28, 2011 http://www.whatsnextvenezuela.com/expropriation/foreign-investment-in-venezuelamission-almost-impossible/ With the largest oil reserves in the Western Hemisphere, Venezuela might appear like a natural candidate to attract major Direct Foreign Investment funds. But, as a direct result of Mr. Chvezs policy of marginalizing private sector capital, Foreign Direct Investment flows actually slammed into reverse in 2009 Venezuela continues to experience a net outflow of foreign direct investment to the tune of $3.1 billion a year
the latest for which ECLAC figures are available. United Nations 2009 Report ECLAC). in the process. Such startling figures are driven largely by the Chvez governments nationalization drive, since compensation for expropriated businesses is counted as negative Foreign Direct Investment. What does this tell us? Rather than seek out new foreign investors, the Venezuelan government is busily buying out those who stopped by in the past. . New businesses tend to

(page 53 of the report). Investors thinking of doing business in Venezuela should be aware that they are likely to lose money

The dearth of foreign investment not only slows economic growth now, it will also undermine the medium-to-long-term competitiveness of the Venezuelan economy each new foreign investor needs the plant equipment, technology and business services from data-banks to accounting other foreign companies offer. With investments flowing out of Venezuela at a record pace, new foreign investors find themselves between a rock and a hard place with next to none or few new investments coming into Venezuela outside the extractive sector, domestic firms arent enjoying any of the positive spillover effects from foreign investments whether it is the most advanced technology, added dynamism, or cutting-edge management practices Venezuela has one of the worlds most hostile environments for business as well as the tightest foreign exchange control regimes. Its labor market is exceptionally rigid. Venezuelas notoriously byzantine red-tape that characterizes any routine business operations is bewildering enough to confirm that it is intentional
flock together for a reason: in Chvezland. In addition, Seek advice on becoming a foreign investor in Venezuela these days and your enquiries are likely to be met with blank stares. The disincentives now facing potential foreign investors is formidable. Last but not least, .

Remarkably, Venezuela has never officially rescinded the National Treatment provisions adopted during its short -lived economic reform experiment during the early 1990s. The provisions stipulate that foreign investors are not to be discriminated against vis--vis domestic investors.

It is, arguably, not foreign investment the government is concerned with short-circuiting, but rather private investment in general, regardless of its source The one type of investment that is still flowing into the country in any significant quantity is investment in oil projects in Venezuelas rich but expensive to exploit Orinoco Tar Belt. To the extent that major Western companies are able to find investment opportunities in Venezuela, its almost always in the oil sector. That said, such investments are usually as minority partners in projects led by the state-owned PDVSA. However big the potential of the Orinoco Tar Belt might be, however, its nonetheless an enclave of this extractive industry, accounting for relatively few jobs and largely disconnected from much of the rest of Venezuelas economy. For the vast majority of Venezuelans, the companies they work for, buy from and contract are simply bereft of significant investment from abroad. And if this is a lost opportunity for international investors, in the long term, it will be an even bigger handicap to Venezuelas existing businesses and those interested in ever doing business there. Venezuelan firms are now cut off from not just foreign investment, but also from the technology foreign investment brings, and the cutting edge management techniques that come with it. Little by little, Venezuelas ability to host genuinely competitive, world-class firms is being eroded
One can argue that it is a principle that the government has largely respected, but only in the sense that domestic investors face much of the same hardships as their international counterparts. . There, state-owned oil companies from ally countries often receive though not always most favored treatment. China has signed a $20 billion financing facility tied to a major investment by Sinopec Corp. in the region. Likewise, Russias Lukoil and Gazprom as well as Irans Petropars gas contractor have received lucrative development contracts there, a s has PetroVietnam. Petrleos de Venezuela, SA or Italys ENI, Japans Mitsubishi, Spains Repsol, and Chevron have managed to land such contracts in the Orinoco Tar Belt. In sectors like construction, light manufacturing, retail and services, .

D. Default Devereux 12
Venezuela Risks Default If Chavez Wins, Morgan Stanley said Charlie Devereux Sep 14, 2012 http://www.bloomberg.com/news/2012-09-14/venezuela-faces-debt-crisis-if-chavez-wins-morgan-stanley-says.html

Venezuela could default on its debt as early as 2013 if fails to shore up the oil- producing nations increasingly fragile balance sheet One tipping point could be the $4.3 billion in external debt payments that come due between August and November 2013 Chavez has damaged Venezuelas balance sheet through the nationalization of key sectors of the economy, endemic inflation and a lack of fiscal discipline The policies are an unsustainable mix that heighten the risk of default on Venezuelas $110.6 billion stock of debt, especially if oil prices tumble Government actions may be taking
the second half of President Hugo Chavez wins re-election next month and , Morgan Stanley said. Volberg wrote in a note to clients today. Enlarge image Hugo , who is seeking to extend almost 14 years in power with another six-year term, of fiscal discipline, Volberg said. , Volberg wrote. the second half of

, Morgan Stanley analyst Daniel

, Morgan Stanley analyst Daniel Volberg said. Chavez, who is seeking to extend almost 14 years in power with another six-year term, has damaged Venezuelas balance sheet through the nationalization of key sectors of the economy, endemic inflation and a lack

Venezuela towards a crisis and potentially even a debt event that could come as early as 2013 At 11.6 percent of gross domestic product, Venezuela has the largest fiscal deficit in Latin America, while its international reserves have fallen by $17 billion since 2008 to $25.6 billion Output by state oil company Petroleos de Venezuela SA fell to 2.72 million barrels a day in 2011 from 3.48 million barrels in 1998
the report said. Venezuelas debt is no longer with large bank lenders as much as publicly traded bonds held by a dispersed group of creditors, which could make restructuring more challenging. , Volberg said. ,

according to British Petroleums statistical review. Bond Yields The yield on Venezuelas benchmark 9.25 percent bonds due in 2027 fell 11 basis points, or 0.11 percentage point, to 10.77 percent at 11:27 a.m. in Caracas, according to data comp iled by Bloomberg. The bonds price rose

The cost of insuring Venezuelan bonds against default for five years rose four basis points to 737 basis points
0.74 cent today to 88.80 cents on the dollar. , according to prices compiled by Bloomberg.

Second, Venezuelan economic downturn would collapse the region, consolidate power, and increase terrorism Wilson 5
Lieutenant Colonel Jeffrey K. ; United States Army War College Strategy; March 18, 200 PROMOTING STABILITY AND SECURITY IN VENEZUELA http://www.dtic.mil/cgi-bin/GetTRDoc?AD=ADA431740 NCHO

the Venezuela region remains on the brink of collapse Any down-turn in Venezuelas economic health could trigger a series of events that might lead to the end of democratic government. Chavez has already shown that he is willing to move away from
U.S. policy with respect to Venezuela is aligned with national interests and is fairly well balanced between the various elements of national power diplomatic, economic, military and informational, but it has not been effective in improving situation in . Over the past two decades, the U.S. has spent billions of dollars and significant manpower in the Andean region to stop the flow of drugs i nto the U.S. and promote regional security, stability, free markets and human rights. Yet, the . In Venezuela specifically, a country with more than 40 years of democracy is in crisis and the situation seems to be worsening rather than improving. President

democratic processes to consolidate his power in the executive branch


consequences of failure in Venezuela are too great.

. So, what is the path forward that the U.S. needs to follow to promote freedom,

stability, security and economic prosperity in Venezuela? There are several possible alternative courses of action, including: staying on the current course (status quo); pulling back and letting the Chavez regime crumble from its own corruption and flawed policies; taking unilateral action to cause regime change; or finding new, more effective ways to work multilaterally to support security, democratic processes and economic growth in Venezuela. Staying on the current course is not feasible because, as stated above, current policy is not working and the possible

If democracy in Venezuela collapses, it will probably become a failed state. This will mean loss of freedom and democracy, increased poverty, increased drug trafficking, increased terror activity in ungoverned areas of the country, regional instability The U.S. government cannot risk the implosion of Venezuela simply because it does not want to support the Chavez regime. The disadvantages of this course of action include loss of international respect and loss of the opportunity to influence the future in Venezuela and the region this is more likely to result in the failure of Democracy in Venezuela and the U.S. would have to invest much more to repair a failed state than to prevent such a failure
and loss of oil imports to the U.S. This is also the wrong time for the U.S. to disengage from a leadership role in guiding Venezuela back onto the path of freedom and liberty. . Some would argue that an advantage of this course of action would be a short term savings in resources, but this is a false economy since .

Third, that creates multiple scenarios for extinction Manwaring 5, Marx G., Retired U.S. Army Colonel and an Adjunct Professor of International Politics at
Dickinson College, Venezuelas Huge Chvez, Bolivarian Socialism, and Asymmetric Warfare, 2005. The Issue of State Failure. - President Chvez also understands that the process leading to state failure is the most dangerous long-term security challenge facing the global community today. The argument in general is that
failing and failed state status is the breeding ground for instability, criminality, insurgency, regional conflict, and terrorism. These conditions breed massive humanitarian disasters and major refugee flows. They can host evil networks of all kinds, whether they involve criminal business enterprise, narco-trafficking, or some form of ideological crusade such as Bolivarianismo. More specifically, these conditions spawn all kinds of things people in general do not like such as murder, kidnapping, corruption, intimidation, and destruction of infrastructure. These means of coercion and persuasion can spawn further human rights violations, torture, poverty, starvation, disease, the recruitment and use of child soldiers, trafficking in women and body parts, trafficking and proliferation of conventional weapons systems and WMD, genocide, ethnic cleansing, warlordism, and criminal anarchy. At the same time, these actions are usually unconfined and spill over into regional syndromes of

poverty, destabilization, and conflict.62 Perus SenderoLuminoso calls violent and destructive activities that facilitate the
processes of state failure armed propaganda. Drug cartels operating throughout the Andean Ridge of South America and

elsewhere call these activities business incentives. Chvez considers these actions to be steps that must be taken to bring about
the political conditions necessary to establish Latin American socialism for the 21st century.63 Thus, in addition to helping to provide wider latitude to further their tactical and operational objectives, state and nonstate actors strategic efforts are aimed at prog ressively lessening a targeted regimes credibility and capability in terms of its ability and willingness to govern and develop its national territory and society.

Chvezs intent is to focus his primary attack politically and psychologically on selected Latin American governments ability and right to govern. In that context, he understands that popular perceptions of corruption, disenfranchisement,
poverty, and lack of upward mobility limit the right and the ability of a given regime to conduct the business of the state. Until a given populace generally perceives that its government is dealing with these and other basic issues of political, economic, and social injustice fairly and effectively, instability and the threat of subverting or destroying such a government are real.64 But failing and failed states simply do not go away. Virtually anyone can take advantage of such an unstable situation. The tendency is that the best motivated

and best armed organization on the scene will control that instability. As a consequence, failing and failed states become
dysfunctional states, rogue states, criminal states, narco-states, or new peoples democracies. In connection with the creation of new peoples democracies, one can rest assured that Chvez and his Bolivarian populist allies will be available to provide money, arms,

and leadership at any given opportunity. And, of course, the longer dysfunctional, rogue, criminal, and

narco-states and peoples democracies persist, the more they and their associated problems endanger global security, peace, and prosperity.65

Fourth, specifically nuclear prolif Ferkaluk 10


Latin America: Terrorist Actors on a Nuclear Stage Brian Ferkaluk; Diplomacy Department atNorwich University; Global Securi ty Studies, Fall 2010, Volume l, Issue 3 http://globalsecuritystudies.com/Ferkaluk%20Latin%20America.pdf

The close relationship the US must maintain with Latin America is not only vital in the fight against domestic and international terrorism, but also in the fight to curtail nuclear proliferation Latin America could pose a serious threat of pursuing nuclear weapons in the coming years if the civilian-run governments of these states fall victim to revolutionaries Latin America has historically been active in both nuclear weapons development and nuclear
immediate risk of in becoming a haven for a nuclear arms race, it leftist fact that

in the region. Although there is no

. Another factor to consider is the

power development. And given Latin Americas tendency toward military regimes cannot turn a blind eye to the possibility of nuclear activity in Latin America
junta

(stratocracy),

the US
, for instance,

. All Latin American countries are party to the NPT. Not all are members of

international conventions such as the Vienna Convention on Civil Liability for Nuclear Damage and not all adopt an Additional Protocol (AP) to their safeguards agreements with the International Atomic Energy Agency (IAEA). The region itself has been declared a nuclear-free zone

Brazil has not let the Treaty of Tlatelolco stand in the way of its own weapons development program in the late 1970s. And Venezuela today is not letting it stand in its way either. The most significant weakness of the treaty is the fact that it permits parties of the treaty to develop nuclear explosives for peaceful purposes. Therefore, Latin America has served as battlefield in the fight for non-proliferation.
according to the Treaty of Tlatelolco. It entered into force in 1969 and did not have all 33 Latin American states sign onto it until Cuba added its name in 2002. However, the treaty itself has not served as an absolute ban of nuclear weapons in the region.

Fifth, Venezuelan proliferation is the most likely scenario for global nuclear war multiple warrants
Border disputes, instability, unpredictable leaders, accidents, military coups, lower warning times, first strikes, arms race, technical accidents, physical security

Yusuf 8
Predicting Proliferation: The History of the Future of Nuclear Weapons Moeed Yusuf; Fellow at the Frederick S. Pardee Center for the Study of the Longer-Range Future at Boston University; January 2009 http://www.brookings.edu/~/media/research/files/papers/2009/1/nuclear%20proliferation%20yusuf/0 1_nuclear_proliferation_yusuf.pdf Michael Mandelbaum, earlier mentioned as someone who remained relatively comfortable about the ability of the superpowers to deter each other, was less optimistic regarding the capacity of developing countries to do so. He stressed that developing country proliferation would increase the likelihood of the use of nuclear weapons in conflicts.78 Ted Greenwood, an American academic who later advised the U.S. Department of Defense, pointed to the active border disputes of Nth states such as South Africa, Israel, and Taiwan to suggest an increased likelihood of nuclear war.79 Mentions of the possibility of weapons falling into the hands of irresponsible powers the mad ruler scenario were frequent. As French scholar, Thierry de Montbrial pointed out: there are many politically unstable countries whose leaders are not predictableand would not hesitate to use an atomic weapon, if they had one.80 Hinting at the same concern, the renowned French sociologist Raymond Aron argued that acquisition of nuclear weapons by developing countries could even result in a superpower conflict in the Cold War context due to a deliberate or inadvertent action of a small state.81 Moreover, in contrast to the relative stability within the borders of developed countries, Dunn and Overholt pointed to frequent military coups in countries like Argentina, Chile, Brazil, Greece, Indonesia, Iraq, Libya, Nigeria, Pakistan, South Korea, Syria, Turkey, Venezuela, and Zaire to emphasize the possibility of militaristic leaders wresting power and utilizing nuclear weapons as a means of coercing adversaries.82 A number of commentators anticipated that Nth powers would seek to create a first strike capability to preempt traditional rivals. Counterforce targeting strategies were considered likely, but also inherently destabilizing, especially for contiguous countries where warning times were diminished. Technical deficiencies in ensuring robust command and control and the security of the arsenal were taken for granted and used to further heighten fears of accidental or unauthorized use.83

Finally, the plan prevents a Venezuelan economic collapse, the key to the Venezuelan economy is improving their oil sector and increasing private investment Homan 13
EXPLORING THE NEXT GENERATION OFPROLIFERATORS Patrick Homan; Monterey Institute of International Studies, James Martin Center for Nonproliferation Studies; 26 Feb 2013. http://www.niu.edu/polisci/announcements/Grad%20attachments/Homan.pdf

Despite being the worlds eighth-largest oil producer, Venezuela faces a host of economic issues. After recovering from a recession that began in 2009, the Venezuelan economy grew consistently from 201012, including 5 percent growth in 2012.59 However, much of this growth can be attributed to public spending, as Chvezs main short-term solution to his countrys economic woes has been borrowing. As a result, net public debt rose from 14 percent of GDP in 2008 to 29 percent in 2010.60 In 2011, the International Monetary Fund reported Venezuelas public debt as 45.5 percent of GDP.61 Much of Chvezs borrowing has been from China. Between 2008 and 2010, China lent Venezuela $12 billion and is being repaid in oil shipments, which cuts even further into government revenues.62 Furthermore, inflation in Venezuela during 2012 was near 20 percent; as a result, the Venezuelan currency traded on the black market for a third of the official rate.63 While Chvezs near-term future seems safe with oil prices around $100 a barrel, there are growing long-term risks within the Venezuela economy. Any future decline in oil prices would send the Venezuelan economy into a tailspin and lead to a default on its obligations. Chvezs handling of his countrys oil sector is the chief cause of Venezuelas economic problems. Chvez pillaged Petrleos de Venezuela (PDVSA), the state-owned oil firm, by packing it with pro-Chvez loyalists, starving it of much needed investment, and using its profits for social spending. As a result, PDVSAs output has gone from 3.3 million barrels per day (b/d) in 1998 to its current level of around 2.25 million b/d, according to recent industry estimates.64 Of that, some 1 million b/d is sold at subsidized prices at home or to regional allies (such as Cuba), leaving just 1.25 million b/d for full-price exports.65 The declining state of its oil sector is having a large impact on the overall Venezuelan economy, as petroleum now accounts for 92 percent of its export revenue.66 This is an extremely troubling development for Chvezs government because its domestic support relies heavily on petrodollars for providing government subsidies and funding social welfare programs. Meanwhile, Chvezs harassment and hostility towards businesses and the private sector has devastated the rest of the Venezuelan economy. In his pursuit toward state socialism, Chvez nationalized hundreds of companies, seizing everything from steel companies and bottle makers to housing schemes.67 When workers have resisted, he has deployed the National Guard against them and trumped up charges against their owners. His efforts to accelerate the revolutionary process caused much of Venezuelas private sector to close or flee. The results are a significant amount of capital flight and a need to import many goods that it previously produced.

Contention Two is Environment


High oil prices kill the environment results in tar sands and offshore drilling while failing to reduce demand FFF 12
Myth: High Oil Prices Are Good For The Environment Fuel Freedom Foundation January 2012 http://www.fuelfreedom.org/myth-high-oil-prices-are-good-for-the-environment/ THE REALITY: . Conventional wisdom says that high oil prices can reduce oil consumption and thus reduce pollution both at the source and from the tailpipe. In this scenario, high oil prices would increase

High prices make it possible to extract oil from unspoiled or environmentally sensitive areas

The price of gasoline has almost doubled since 2004. Since transportation accounted for 70% of U.S. oil use in 2008, we should have seen a very significant decline in oil consumption. Instead, global consumption has increased, despite a U.S. decrease of about 8%. In particular, the demand for gasoline decreased 8.5%. Amidst a period of stagnant growth and a lingering recession, such a rapid price increase should have resulted in a much larger drop in demand . On the other hand, price signal has a significant influence over the extracting industry. Higher oil prices not only generate higher profits, but also increase the economic viability of extracting oil from unconventional oil sources such as tar sands. The following graph charts the growth in oil production from the Alberta Tar Sands in Canada, in conjunction with the increasing price of oil in recent years: Tar Sands Production Graph MILLIONS OF BARRELS/DAY The signal of higher oil prices also enables oil production in more remote and technically challenging areas. These areas may be more environmentally sensitive and can introduce greater risk in extraction. For example, deep sea drilling is increasing along with oil prices, while the greater technical complexity of deep sea drilling increases the possibility of future disasters like the Deepwater Horizon spill in 2010. Gulf Of Mexico Oil Rigs DRILLING OVER THE YEARS Locations In summary, higher oil prices changes driving behavior only at the margins, while significantly increasing production from both environmentally sensitive areas and environmentally intensive extracting technologies.
gasoline prices, which would in turn reduce miles traveled and/or inspire a transition to smaller, more fuel-efficient vehicles.

Tar sands development causes extinction from global warming JAMES HANSEN; directs the NASA Goddard Institute for Space Studies; May 9, 2012 Game Over for the Climate http://www.nytimes.com/2012/05/10/opinion/game-over-forthe-climate.html?_r=0 NCHO GLOBAL warming isnt a prediction. It is happening. That is why I was so trouble d to read a recent interview with President Obama in Rolling Stone in which he said that Canada would exploit the oil in its vast tar sands reserves regardless of what we do.

If Canada proceeds, and we do nothing, it will be game over for

the climate. Canadas tar sands, deposits of sand saturated with bitumen, contain twice the amount of carbon dioxide emitted by global oil use in our entire history . If we were to fully exploit this new oil source, and continue to burn our conventional oil, gas and coal supplies, concentrations of carbon dioxide in the atmosphere eventually would reach levels higher than in the Pliocene era, more than 2.5 million years ago, when sea level was at least 50 feet higher than it is now. That level of heat-trapping gases would assure that the disintegration of the ice sheets would accelerate out of control. Sea levels would rise and destroy coastal cities. Global temperatures would become intolerable. Twenty to 50 percent of the planets species would be driven to extinction. Civilization would be at risk . That is the long-term outlook. But near-term, things will be bad enough. Over the next several decades, the Western United States and the semi-arid region from North Dakota to Texas will develop semi-permanent drought, with rain, when it does come, occurring in extreme events with heavy flooding. Economic losses would be incalculable . More and more of the
Midwest would be a dust bowl. Californias Central Valley could no longer be irrigated.

Food prices would rise to unprecedented levels . If

this sounds apocalyptic, it is . This is why we need to reduce emissions dramatically. President Obama has the power not only to deny tar sands oil additional access to Gulf Coast refining, which Canada desires in part for export markets, but also to encourage economic incentives to leave tar sands and other dirty fuels in the

ground. The global warming signal is now louder than the noise of random weather, as I predicted would happen by now in the journal Science in 1981. Extremely hot summers have increased noticeably. We can say with high confidence that the recent heat waves in Texas and Russia, and the one in Europe in 2003, which killed tens of thousands, were not natural events they were caused by human-induced climate change.
We have known since the 1800s that carbon dioxide traps heat in the atmosphere. The right amount keeps the climate conducive to human life. But add too much, as we are doing now, and temperatures will inevitably rise too high. This is not the result of natural variability, as some argue. The earth is currently in the part of its long-term orbit cycle where temperatures would normally be cooling. But they are rising and its because we are forcing them higher with fossil fuel emissions. The concentration of carbon dioxide in the atmosphere has risen from 280 parts per million to 393 p.p.m. over the last 150 years. The tar sands contain enough carbon 240 gigatons to add 120 p.p.m. Tar shale, a close cousin of tar sands found mainly in the

If we turn to these dirtiest of fuels, instead of finding ways to phase out our addiction to fossil fuels, there is no hope of keeping carbon concentrations below 500 p.p.m. a level that would, as earths history shows, leave our children a climate system that is out of their control. We need to start reducing emissions significantly, not create new ways to increase them.
United States, contains at least an additional 300 gigatons of carbon.

Offshore drilling destroys ocean ecosystems Waage AND Chase 9


Protecting Our Ocean and Coastal Economies: Avoid Unnecessary Risks from Offshore Drilling Melissa Waage AND Alison Chase; both NRDC; September 2009 http://www.nrdc.org/oceans/offshore/files/offshore.pdf

Offshore Drilling Poses Serious Environmental Risks Expanded offshore drilling poses the risk of oil spills ruining our beaches from Florida to Maine and along the Pacific Coast, bringing harm to those who live, work, and vacation along the coasts, as well as harming habitats critical to plants and animals. Oil spills can quickly traverse vast distances. For example, when powered by the Gulf of Mexicos Loop Current, an oil spill in the eastern Gulf of Mexico could affect Floridas Panhandle beaches and even travel around the Florida Keys to wreak havoc on estuaries and beaches from the Everglades to Cape Canaveral.1 Contamination from the massive 1989 Exxon Valdez oil spill reached shorelines nearly 600 miles away; if the spill had occurred on the East Coast,
it would have extended from Massachusetts to North Carolina.2 In September 2008, Hurricane Ike destroyed oil platforms, tanks, and pipelines throughout the Gulf of Mexico, releasing at least a half-million gallons of crude oil.3 During Hurricanes Katrina and Rita the re were 125 spills from platforms, rigs, and pipelines on the oceans Outer Continental Shelf, releasing almost 685,000 gallons of petroleum products.4 Worse yet, if you include the land-based infrastructure that supports offshore drilling, the damage from these two hurricanes includes 595 spills releasing millions of gallons of oil.5 Oil Spills Inflict Devastating Economic Losses Upon Coastal Communities Oil spills exact a serious toll on coastal economies, including our approximately $35 billion commercial fishing and $60 billion ocean and coastal tourism and recreation industries.6 The damage and clean up costs following the Exxon Valdez spill were so extensive that Exxon paid out more than one billion dollars to the federal and state governments for damages and clean up costs and still owes fishermen, Alaska Natives, business owners, and others a billion dollars to redress the spills harm.7 In another example of economic and environmental damage, a July 2008 accident between a chemical tanker and an oil barge discharged more than 270,000 gallons of fuel oil, closing a huge swath of the Lower Mississippi River to vessel traffic for several days. The Port of New Orleans, located at the center of the worlds busiest port complex, was shut down and residents were asked to conserve water when water intakes were closed to pre vent contamination

Oil Spills Have Lasting Ecological Impacts According to the National Academy of Sciences, current cleanup methods can only remove a small fraction of the oil spilled into the ocean, leaving the remaining oil to continue affecting ocean ecosystems over time.9 Scientists investigating the long-term impacts of the Exxon Valdez spill estimate that nearly 20,000 gallons of oil from that spill remain in Prince William Sound, continuing to harm threatened and endangered species and undermine their recovery.10 Marine mammals, sea birds, fish, shellfish, and other sea life are extremely vulnerable to oil pollution and the long-term toxic effects can impair reproductive success for generations. Studies have shown that tiny amounts of oilas little as one part per billioncan harm pink salmon and cause their eggs to fail.11 Spills Aside, Drilling Operations are a Major Source of Pollution In addition to environmental damage from oil spills, the routine operations associated with offshore drilling produce many toxic wastes and other forms of pollution. For example, each drill well generates tens of thousands of gallons of waste drilling muds (materials used to lubricate drill bits and maintain pressure) and cuttings.12 Drilling muds contain toxic metals such as mercury, lead, and cadmium that may bioaccumulate and biomagnify in marine organisms, including in our seafood supply.13 The water that is brought up from a given well along with oil and gas, referred to as produced water, contains its own toxic brew of benzene, arsenic, lead, toluene, and varying amounts of radioactive pollutants. Each oil platform can discharge hundreds of thousands of gallons of this produced water daily, contaminating both local waters and those down current from the discharge.14 An average oil and gas exploration well spews roughly 50 tons of nitrogen oxides, 13 tons of carbon monoxide, 6 tons of sulfur oxides, and 5 tons of volatile organic chemicals.15 Drilling Exploration Activities Harm Marine Life Seismic surveys designed to estimate the size of an oil and gas reserve generate their own environmental problems. To carry out such surveys, ships tow multiple airgun arrays that emit thousands of high-decibel explosive impulses to map the seafloor.16 The auditory assault from seismic surveys has been found to damage or kill fish eggs and larvae and to impair the hearing and health of fish, making them vulnerable to predators and leaving
of drinking water.8

them unable to locate prey or mates or communicate with each other. These disturbances disrupt and displace important migratory patterns, pushing marine life away from suitable habitats like nurseries and foraging, mating, spawning, and migratory corridors.17 In addition, seismic surveys have been implicated in whale beaching and stranding incidents.18

Ocean ecosystems are on the brink multiple warrants Levitt 13


Overfished and under-protected: Oceans on the brink of catastrophic collapse Tom Levitt; CNN; March 22, 2013 http://www.cnn.com/2013/03/22/world/oceans-overfishing-climatechange/index.html?iid=article_sidebar (CNN) -- As the human footprint has spread, the remaining wildernesses on our planet have retreated. However, dive just a few meters below the ocean surface and you will enter a world where humans very rarely venture. In many ways, it is the forgotten world on Earth. A ridiculous thought when you consider that

oceans make up 90% of the living

volume of the planet and are home to more than one million species, ranging from the largest animal on the planet -- the blue whale -- to one of the weirdest -- the blobfish. Remoteness, however, has not left the oceans and their inhabitants unaffected by humans, with overfishing, climate change and pollution destabilizing marine environments across the world. Many marine scientists consider overfishing to be the greatest of these threats. The Census of Marine Life, a decadelong international survey of ocean life completed in 2010, estimated that 90% of the big fish had disappeared from the world's oceans, victims primarily of overfishing. "Anywhere you go and try to harvest fish with a trawl you
are going to destroy any coral that lives there, and there is example after example of the damage that is done by trawlers Ron O'Dor, senior scientist on the Census of Marine Life Tens of thousands of bluefin tuna were caught every year in the North Sea in the 1930s and 1940s. Today, they have disappeared across the seas of Northern Europe. Halibut has suffered a similar

the collapse has spread to entire fisheries. The remaining fishing trawlers in the Irish Sea, for example, bring back nothing more than prawns and scallops, says marine biologist Callum Roberts, from the UK's York University. "Is a smear of protein the sort of marine environment we want or need? No, we need one with a variety of species, that is going to be more resistant to the conditions we can expect from climate change," Roberts said. The situation is even worse in south-east Asia. In Indonesia, people are now fishing for juvenile fish and protein that they can grind into fishmeal and use as feed for coastal prawn farms. "It's heading towards an end game ," laments Roberts. Trawling towards disaster One particualar type of
fate, largely vanishing from the North Atlantic in the 19th century. Opinion: Probing the ocean's undiscovered depths In some cases, fishing, bottom-trawling, is blamed for some of the worst and unnecessary damage. It involves dropping a large net, around 60 meters-wide in some cases, into the sea and dragging it along with heavy weights from a trawler. Marine conservationists compare it to a bulldozer, with the nets pulled for as far as 20km, picking up turtles, coral and anything else in their path. The

Upwards of one million sea turtles were estimated to have been killed as bycatch during the period 1990-2008, according to a report published in Conservation Letters in 2010, and many of the species are on the IUCN's list of threatened species. Campaigners, with the support of marine scientists, have repeatedly tried to persuade countries to agree to an international ban, arguing that the indiscriminate nature of bottom-trawling is causing irreversible damage to coral reefs and slow-growing fish species, which can take decades to reach maturity and are therefore slow to replenish their numbers. Opinion: Deep sea fishing is 'oceanocide' "It's akin to someone plowing up a wildflower meadow, just because
bycatch, unwanted fish and other ocean life thrown back into the sea, can amount to as much as 90% of a trawl's total catch. they can," says Roberts. Others have compared it to the deforestation of tropical rainforests. Bottom-trawling's knock-on impacts are best illustrated by the plight of the deep-sea fish, the

humans are having unrecognized impacts on every part of the ocean , and there is much we have not seen that will disappear before we ever get a chance Ron O'Dor, marine biologist Orange roughys are found on, or around, mineral-rich seamounts that often form
orange roughy (also known as slimeheads) whose populations have been reduced by more than 90%, according to marine scientists. "The disturbing truth is that coral and act as feeding and spawning hubs for a variety of marine life. "Anywhere you go and try to harvest fish with a trawl you are going to destroy any coral that lives there, and there is example after example of the damage that is done by trawlers," says Ron O'Dor, a senior scientist on the Census of Marine Life. "If I ruled the world, they would be banned, they're just such a destructive method of catching fish. Fishermen have other methods, such as long-line, that cause far less damage. "The disturbing truth is that humans are having unrecognized impacts on every part of the ocean, and there is much we have not seen that will disappear before we ever get a chance," says O'Dor, who is also a professor of marine biology at Dalhousie University in Halifax, Canada. Acid test for marine species

At the same time fisheries and vital marine ecosystems like coral are being

decimated , the oceans continue to provide vital services, absorbing up to one third of human carbon dioxide emissions while producing 50% of all the oxygen we breathe. Hi-res gallery: Extraordinary creatures of the Great Barrier Reef But absorbing increasing quantities of carbon dioxide (CO2) has come at a cost, increasing the acidity of the water. "The two worst things in my mind happening to oceans are global warming and ocean acidification," says O'Dor, "They're going to have terrible effects on coral reefs. Because of acidification essentially, the coral can't grow and it's going to dissolve away." The ocean has become 30% more acidic since the start of The Industrial Revolution in the 18th century and is predicted to be 150% more acidic by the end of this century, according to a UNESCO report published last year. "There's a coral reef off Norway that was discovered in
2007 and it's likely to be dead by 2020," says O'Dor. "The problem is that the acidification is worse near the Poles because low temperature water dissolves more acid. Starting from the Pole and working south these

reefs are going to suffer extensively." Currents estimates suggest 30% of coral reefs will be

endangered by 2050, says O'Dor, because of the effects of ocean acidification and global warming. Higher acidity also disrupts marine organisms' ability to grow, reproduce and respire. The Census of Marine Life reported that phytoplankton, the microscopic plants producing most of the oxygen from the oceans, have been declining by around 1% a year since 1900. "We need to fish less and in less destructive measures, waste less, pollute less and protect more Callum Roberts, Marine biologist The falling numbers of smaller, but lesser known species and plant life has significant impact further up the marine food chain. For example, seabirds which used to visit and breed on Spitsbergen -- a Norwegian island near the Arctic -are being wiped out because of changes in their previously abundant food sources. Bringing law and order to ocean
protection "There's a real lack of public and political awareness of these issues," says Alex Rogers, professor of conservation biology at the UK's Oxford University. "They're too big to understand in economic terms. We can put a value on the loss of fishing, but how can we put a value on oxygen production or the absorption of carbon dioxide?" he says. The problem is that most of the world's ocean is located outside of international law and legal control. Any attempts to implement rules and regulation come with the problem of enforcement, says Rogers, who is also scientific director of the International Program on State of the Ocean (IPSO). Marine conservationists estimate that at least 30% of the oceans need to be covered by marine protected areas, where fishing and the newly emerging deep-sea mining of valuable minerals on the seabed, is banned or restricted. Callum Roberts, who helped form the first network of marine protected areas in the high seas in 2010, says on their own they are not enough. "I could sum it up as: we need to fish less and in less destructive measures, waste less, pollute less and protect

This change of course will see us rebuild the abundance, variety and vitality of life in the sea which will give the oceans the resilience they need to weather the difficult times ahead. Without such action, our future is bleak."
more," says Roberts. "

Ocean ecosystem collapse causes extinction Craig 3, Robin, Associate Professor of Law at the Indiana University School of Law, 2003.
Biodiversity and ecosystem function arguments for conserving marine ecosystems also exist, just as they do for terrestrial ecosystems, but these arguments have thus far rarely been raised in political debates. For example, besides significant tourism values - the most economically valuable ecosystem service coral reefs provide, worldwide - coral reefs protect against storms and dampen other environmental fluctuations, services worth more than ten times the reefs val ue for food production. Waste treatment is another significant, non-extractive ecosystem function

ocean ecosystems play a major role in the global geochemical cyclingof elements that represent the basic building blocks of living organisms, carbon, nitrogen, oxygen, phosphorus, and sulfur, as well as other less abundant but necessary elements. In a very real and direct sense, therefore, human degradation of marine ecosystems impairs the planets ability to support life. Maintaining biodiversity is often critical to maintaining the functions of marine ecosystems. Current evidence shows that, in general, an ecosystems ability to keep functioning in the face of disturbance is strongly dependent on its biodiversity, indicating that more diverse ecosystems are more stable. Coral reef ecosystems are particularly dependent on their biodiversity.
that intact coral reef ecosystems provide. More generally, all the Most ecologists agree that the complexity of interactions and degree of interrelatedness among component species is higher on coral reefs than in any other marine environment. This implies that the ecosystem functioning that produces the most highly valued components is also complex and that many otherwise insignificant species have strong effects on sustaining the rest of the reef system. Thus, maintaining and restoring the biodiversity of marine ecosystems is critical to maintaining and restoring the ecosystem services that they provide. Non-use biodiversity values for marine ecosystems have been calculated in the wake of marine disasters, like the Exxon Valdez oil spill in Alaska. Similar calculations could derive preservation values for marine wilderness. However, economic value, or economic value equivalents, should not be the sole or even primary justification for conservation of ocean ecosystems. Ethical arguments also have

At the forefrontof such arguments should be a recognition of how little we know about the sea- and about the actual effect of human activities on marine ecosystems. The United States has traditionally failed to protect marine ecosystems because it was difficult to detect anthropogenic harm to the oceans, but wenow know that such harm is occurring - even though we are not completely sure about causation or about how to fix every problem. Ecosystems like the NWHI coral reef ecosystem should inspire lawmakers and policymakers to
considerable force and merit. admit that most of the time we really do not know what we are doing to the sea and hence should be preserving marine wilderness whenever we can - especially when the United States has

: if we kill the ocean we kill ourselves, and we will take most of the biosphere with us. The Black Sea is almost dead, its once-complex and
within its territory relatively pristine marine ecosystems that may be unique in the world. We may not know much about the sea, but we do know this much productive ecosystem almost entirely replaced by a monoculture of comb jellies, starving out fish and dolphins, emptying fishermens nets, and converting the web of life into brainless, wraith-like blobs of jelly. More importantly, the Black Sea is not necessarily unique. The Black Sea is a microcosm of what is happ ening to the ocean systems at large. The stresses piled up: overfishing, oil spills, industrial discharges, nutrient pollution, wetlands destruction, the introduction of an alien species. The sea weakened, slowly at first, then collapsed with shocking suddenness. The lessons of this tragedy should not be lost to the rest of us, because much of what happened here is being repeated all over the world. The ecological stresses imposed on the Black Sea were not unique to communism. Nor, sadly, was the failure of governments to respond to the emerging crisis. Oxygen-starved dead zones appear with increasing frequency off the

Ethics as well as enlightened self-interest thus suggest that the United States should protectfully-functioning marine ecosystems wherever possible- even if a few
coasts of major cities and major rivers, forcing marine animals to flee and killing all that cannot. fishers go out of business as a result.

Specifically, High oil prices lead to tar sands development Stockman 10


Tar Sands Oil Means High Gas Prices Lorne Stockman; Corporate Ethics International; May 2010 http://dirtyoilsands .org/reports/tar_sands_oil_means_high_gas_prices

Tar sands (also known as oil sands) oil production is the most expensive oil production in the world. The Keystone XL pipeline will create significant over capacity for tar sands crude into the U.S. raising pipeline tariffs and adding to the already high cost of tar sands production. The growth in tar sands production needed to fill the Keystone XL pipeline will only occur if oil prices keep rising. Tar sands production exerts little if any influence over global oil prices because it maintains no spare production capacity. Tar sands production is a symptom of high oil prices and not a basis for lower prices.

Additionally, High oil prices are saving offshore drilling from the brink of collapse we must develop new land sources of oil before 2014 to prevent the next wave of investment OConnell 12
Higher Oil Prices Boost Offshore Drilling Brian O'Connell May 10, 2012 http://www.epmag.com/Production-Drilling/Higher-Oil-Prices-Boost-Offshore-Drilling_100203

the offshore industry is making a big comeback on the back of high oil prices and depleted onshore resources, but which companies are benefitting most? Royal Dutch Shell and Chevron are good candidates, for starters. It wasnt so long ago that deep sea drillers were flat on their backs, victimized partly by their own hubris and hounded by Washington politicians and federal regulators. Offshore drillers have had it tough for the past few years, following the ban on offshore drilling in the Gulf of Mexico in the aftermath of the Deepwater Horizon spill. But that was then and this is now. A new report from the New York City-based Paragon Group said offshore drillers are rebounding nicely from that two-year term in regulatory purgatory, and the group is poised for stronger growth in 2012 and 2013. Nearly two years ago, the offshore-drilling industry was in danger of collapse under the pressure of lawmakers and regulators pushing to ban offshore drilling in reaction to BP's oil spill and Transoceans rig explosion, noted Paragon. The industry persevered and now seems to be in the midst of a comeback as rising oil prices and depleted resources are forcing major oil companies to focus on exploration and development of offshore oil and gas reserves. Paragon added that oil companies are once again turning to the high seas as those regulatory burdens abate. But even more so, deepwater drillers are rising in numbers as the rush to get oil and gas out of the ground may be losing some steam, just as oil demand is picking up steam . Offshore oil and gas reserves have been an increasing focus for energy companies as significant oil discoveries on land are becoming less common, explained Paragon. With recent offshore discoveries and the large number of underdeveloped oil and gas fields, demand for mobile offshore drilling units (MODUs) are expected to increase dramatically. Major energy
No question, companies such as Royal Dutch Shell and Chevron have already reinvested earnings in offshore ventures. The International Energy Agency (IEA) expects global oil demand will rise from 88 million barrels today to around 99 million barrels in 25 years' time. What do analysts see in both Royal Dutch Shell and Chevron as they kick-start drilling efforts in the Gulf? Great quarterly numbers, with reason to believe that outperformance will keep rolling on. Royal Dutch Shell The first quarter 2012 was a home run for Shell, with revenues and earnings both up, and significantly so, on a year-to-year basis. Revenues were up to $119.9 billion. Analysts at S&P capital had pegged revenue growth at $107.6 billion. Sales posted were 9% higher than the $109.9 billion earned in Q1 2011. Average earnings for Q2 2012 are expected to clock in at $111.61 billion, and estimated average earnings-per-share are $2.24. Average revenue earnings for 2013 are estimated to be $469 billion, with the outlook on earnings-per-share at $9.24. Analysts monitored by S&P Capital listed Shell as an outperform, and called for an average price target of $82 per share (it was trading at $71 per share as of May 1). Wall Street generally credits Shells sterling first q uarter to higher oil prices and income generated from new exploration and recovery projects -- areas that should improve as Shell re-commits to the Gulf of Mexico. According to Zacks Investment Research, Shells crude oil production contributed 47% to gross volumes, with total oil and gas output 4% higher than 2011. Zacks expects that trend to continue in 2012. The Hague -based group continues to make solid progress with its three-year strategic plan that commenced in 2010, said Zacks in an April research report. Shell has been able to boost return s and remain competitive by embarking on aggressive cost-reduction initiatives, exiting unprofitable markets, refocusing its efforts on emerging economies and streamlining the organization. Chevron Chevron is another deepwater oil producer that leveraged high crude oil prices to earn big first-quarter profits. Earnings-per-share rolled in at $3.39, above the Zacks estimate of $3.30, and adjusted 2011 profit of $3.17. Quarterly revenue rose by 0.6%, to $60 billion, which saw some dampening against expectations from the falling price of natural gas -- a big market for Chevron. U.S. crude oil output fell by 6.2% on a year-toyear basis, but its re-emergence in the Gulf should boost output in 2012 and 2013, analysts say. Chevron stock, which was trading at $106 per share on May 1, has a one-year target estimate of $125 per share, according to a survey of analysts by Thompson Financial Network. Despite the slight dip in Chevrons quarte rly volumes, we believe its production outlook remains one of the most robust in its peer group with a number of major initiatives scheduled to come online during the next few years, Zacks stated in an April research commentary on Chevron. Major start-ups during the last few months include the deepwater Usan project in Niger ia and the Caesar/Tonga project in the deepwater Gulf of Mexico. Deutsche Bank energy analyst Paul Sankey sees Chevron stock rising to $130 per share, about 22% ahead of the stocks current trading price. But he cautions inv estors to be patient about the comany -- possibly until 2014.

there are a multitude of waits. We are waiting for final capex spend to emerge on major projects; and we are waiting for volume growth to start in 2014. We are waiting for cash return from the $19 billion cash pile. We are waiting to be sure there are no acquisitions instead. We are waiting for the multiple to expand and reflect its high Brent leverage, short U.S. natural gas, high profitability, and its high returns. Slow and steady may win the race here, as offshore drillers like Shell and Chevron capitalize on high crude oil prices, and re-access into the oil-rich Gulf of Mexico.
Chevron is a waiting game, he noted in a recent research report. In fact,

Contention Three is Solvency


First, Maduro will accept the plan A. He needs foreign investment to fund Chavezs legacy of grand socialist programs thats key to his political legitimacy Thomas-Symonds 13
What After Chavez? Nick Thomas-Symonds; practicing barrister at Civitas Law, Cardiff, specializing in chancery and commercial law. He is also Lecturer in Politics at St. Edmund Hall, Oxford University. He teaches British Politics and Gover nment Since 1900, Modern British Politics, Politics in Europe and US Politics. He also teaches Contemporary US Politics on Oxford Universitys Department of Continuing Education Foundations of Diplomacy course; April 18, 2013 http://www.e -ir.info/2013/04/18/what-after-chavez/

A major part of Mr Chavezs popular appeal was his willingness to stand up to what he characterized as imperialism. He accused the US of trying to bring him down. With Mr Chavezs death on 5 March 2013, there is an argument that things can only get better in diplomatic relations between the US and Venezuela. After all, even under Mr Chavez, Venezuela was still trading widely with the US. The United States is Venezuelas most important trading partner Oil dominates U.S. imports from Venezuela, which is one of the top four suppliers of foreign oil to the United States. About 500 U.S. companies are represented in Venezuela. U. S. foreign direct investment in Venezuela is concentrated largely in the petroleum, manufacturing and finance sectors. That is not to say, however, that the US desire for oil has made it a no-go area for US governments in their diplomatic relations with the Bolivarian Republic. Sanctions were imposed on the Venezuelan state oil company, PDVSA, in 2011, for making supplies to Iran To win the presidential election Maduro needed to present himself as continuing the work of Mr Chavez.
After all, El Comandante traced his heritage to another Latin American independence leader, Simon Bolivar. Mr Chavezs antipa thy had personal elements, too. To use just one example, a brief coup in 2002 temporarily removed him from power, and he openly accused the US of being responsible for it. The US Department of States fact sheet on US-Venezuela relations confirms the extent of this trade: . U.S. exports to Venezuela include machinery, organic chemicals, agricultural products, optical and medical instruments, autos and auto parts. It adds: . The demise of Mr Chavez is one thing, the position of his successor, Nicolas Maduro, on the US, quite another. , Mr , a former bus driver, As Mr Chavezs chosen successor, and as the incumbent during the election, this may ha ve seemed an easy task. However, Mr Maduro has taken this argument to extraordinary lengths. He not only declared himself the son of C havez but claimed Chavez lives! and even went so far as to argue that El Comandante appeared to him as a bird whilst p raying. Mr Maduro has continued to plough Chavezs anti-US furrow. After all, he did serve for a substantial period as his foreign minister. An allegation that the dead president ha d been the subject of an attack by historic enemies led the US State Depa rtment to declare the notion that the US had played any part in

Mr Maduro won the presidential election on 14 April 2013 with 50.7% of the vote. His winning margin of 1.5% constitutes only 235,000 votes. His defeated rival, Henrique Capriles, has alleged electoral malpractice and asked for the votes to be counted again the narrow margin of Mr Maduros victory, particularly given the advantages of his links to Mr Chavez, may prove less durable than he may think. Protests against the result continue Mr Maduros policies matter. One of his first acts was to announce the continuation of funding of socialist programmes from oil revenues. The current policy of using the nations oil reserves to fund socialist programmes cannot continue without putting the stability of the nations economy at risk. On the other hand, the programmes cannot be scaled back without political and social unrest. It is here that there may be a small chink of light for US-Venezuela relations, even under Mr Maduro. Venezuela cannot afford to turn any investors away unnecessarily.
Chavezs death from cancer as absurd. step. However, the National Electoral Council has declared Mr Maduros victory irreversible. That said, Cabello, said the results require deep self-criticism. after all. For now at least, month that whoever was the President was in a Catch 22 situation. Even now, the US multi-national Chevron advertises that it is playing a part in six onshore and offshore projects.

. The US urged an audit of the result as an important, prudent and necessary

On Twitter, National Assembly, Head Mr Diosdado

. The outcome may yet prove unpredictable, and Mr Chavezs demise may have heralded something new in Venezuelan for eign policy

Even setting to one side the protests against his controversial presidential election victory, the International Atomic Energy (IEA) predicted last

B. 14 years of economic devastation Roberts AND Daga 13


Venezuela: U.S. Should Push President Maduro Toward Economic Freedom James M. Roberts; research fellow for economic freedom and growth at the Center for Interna tional Trade and Economics; and Sergio Daga; Heritage Foundation visiting senior policy analyst in economic freedom in Latin America; April 15, 2013 http://www.heritage.org/research/reports/2013/04/venezuela-us-should-push-president-maduro-toward-economic-freedom

Hugo Chavezs hand-picked successor, former trade union boss Nicols Maduro, appears to have defeated Capriles by a narrow margin in a contentious and hard-fought special election Venezuela is in such shambles after 14 years of seat-of-the-pants mismanagement that Maduro may ultimately be forced to pursue more moderate policies and seek help from the U.S. to restore stability The Obama Administration and Congress should exploit this opening by using U.S. leverage to push Venezuela to turn from Chavezs failed experiment in oil-cursed 21st-century socialism toward economic freedom
Governor Henrique victory is confirmed . [1] .

on April 14. assuming his

Second, the plan solves Roberts AND Daga 13


Venezuela: U.S. Should Push President Maduro Toward Economic Freedom James M. Roberts; research fellow for economic freedom and growth at the Center for International Trade and Economics; and Sergio Daga; Heritage Foundation visiting senior policy analyst in economic freedom in Latin America; April 15, 2013 http://www.heritage.org/research/reports/2013/04/venezuela-us-should-push-president-maduro-toward-economic-freedom

U.S. Policy Toward the New Maduro Government Washington should insist on strict conditionality before sending a new U.S. ambassador to Caracas or assenting to any new lending to Venezuela by international financial institutions until the new government Takes steps to privatize PDVSA to bring in international equity partners with the expertise and financial capacity to restore PDVSA to the high level of professional operational and managerial expertise for which it was widely respected prior to 1999
information for all Venezuelans. Use U.S. Leverage

: Produces a comprehensive plan for reform that reduces the size of the public sector, reverses nationalizations and

expropriations of land and enterprises with just compensation to owners, restores the independence of the central bank and judicial institutions, reforms the electoral system, and submits to an internationally supervised audit of the governments books during the Chavez years;

; Immediately stops all subsidies to Cuba and terminates wasteful and economically destabilizing subsidy programs such as

PetroCaribe and ALBA; Ceases cooperation with international state sponsors of terrorism (such as Iran) and joins the internat ional communitys cooperative efforts in the fight against transnational crime, narco -trafficking, and terrorism; and Restores freedom of the press and access to

The foundations of economic freedom in Venezuela were severely weakened during the 14-year misrule by Chavez. Although Chavezs death may aggravate instability and further polarize Venezuela, it need not be that way. Venezuela is in need of immediate and sweeping reforms, but these changes will take time, effort, determination, and, above all, dedicated reformers in Venezuela The Obama Administration should step into the breach with active and forward-looking policies to bring Venezuela back into the globalized economic system
. .

Third, The Venezuelan oil sector needs investment to sustain itself inefficiences will destroy the industry in the status quo Gjelten 13
Venezuela's Next Leader Faces Tough Choice On Oil Program TOM GJELTEN; NPR Latin American Expert; April 11, 2013 http://www.npr.org/2 013/04/11/176843567/venezuela-s-next-leader-faces-tough-choice-on-oil-program As

Venezuela's

president, Hugo Chavez thought in grandiose terms, and his country's vast oil riches enabled him to act on his vision. But Chavez died before he had to deal with the flaws in his model, and some hard choices await his successor. Key to Chavez's notion

oil reserves estimated by the Organization of Petroleum Exporting Countries to be the largest in the world are worth tens of billions of dollars a year in potential revenue During his presidency, Chavez diverted much of that potential wealth to Venezuelan consumers in the form of cheap gasoline He propped up the Castro regime in Cuba, and he offered Venezuelan oil on highly preferential terms to 18 Caribbean and Latin American countries through an energy alliance he called PetroCaribe Oil production in Venezuela declined sharply under the Chavez administration, however, largely due to inadequate investment in the energy infrastructure, inefficiencies in oil industry management, and the replacement of skilled oil technicians and managers with political loyalists
of "21st Century Socialism" was the redistribution of Venezuela's oil earnings. The country's . (18 cents per gallon or less). . . PetroCaribe Initiative The drop in oil production more than 7 percent just in the first quarter of 2013 is severe enough to call into question whether the Chavista oil welfare programs can be sustained. For the Caribbean and Latin American countries that have been benefiting from the PetroCaribe program, it is a time of great anxiety. Chavez saw the energy alliance as a way to free the member states from U.S. energy imperialism. "There's no one who can slow our ever-faster march toward our great historical goals," he said, defining PetroCaribe as "energy unity." For poor countries, the PetroCaribe deal was irresistible. Typically, they had to pay cash for only half the oil they received. The rest they got on credit, financed over 25 years at 1 percent. Among those who eagerly signed up for the program was Haiti. In reality, PD VSA makes money from only a small proportion of the oil it produces. Now, can that continue? I don't think so. - Roger Tissot, energy economist "Any country that would benefit from such a credit would take advantage of it," says Ren Jean-Jumeau, Haiti's minister of energy. "There's not even a need to justify this. Haiti is a struggling economy, and this is a great advantage for us. We consider it extremely important." In the Dominican Republic, PetroCaribe was key to the country's 2008-2009 financial stabilization program. "By allowing us to defer the oil payments, it was a big, big thing for the government," says Juan Carlos Russo of the Pontificia Universidad Catlica in Santo Domingo. To be sure, there were strings attached: Chavez wanted the PetroCaribe countries to support his ideological crusade against the U.S. Some did so enthusiastically. Others largely ignored the Chavista rhetoric. "A lot of these countries looked at this thing in a practical manner, " says Jeremy Martin, director of the energy program for the Institute of the Americas at the University of California, San Diego. "They were able to stomach the ideology as long as they could get such a wonderful financial deal." For countries such as Haiti, Jamaica and the Dominican Republic, the cheap oil from Venezuela could not have come at a better time, with energy prices rising and the world economy in crisis. "Most of these countries have no domestic supplies of oil and gas," Martin notes. "If they do, it's minimal. These are energy-starved countries. And so they became absolutely addicted [to the PetroCaribe program]." What Does Venezuela Get? But whether the deal is good for Venezuela is another question. "In my economic mind, I would say, 'Why are they willing to sacrifice this much?' " says Russo. The Dominican Republic is repaying its oil debt to Venezuela partly in string beans. Jorge

To Venezuela, from a cash-flow point of view, this represents close to $5 billion a year of revenue that they're missing In reality, PDVSA makes money from only a small proportion of the oil it produces Venezuela's problem is that its oil production is declining, in part because of the lack of reinvestment and the politicization of PDVSA operations under the Chavez government. Unless oil prices move sharply higher, the country will face a significant loss of oil revenue In 1997, PDVSA was producing 3.5 million barrels a day Today they are about 2.8 million barrels a day. It shows you what a bad job the Venezuelan government has done in managing their national oil company Venezuela's next president won't be able to maintain the oil industry
Pion, who previously worked in Latin America for the Amoco and Shell companies, notes that all the oil that Venezuela provides on easy credit terms to other countries could have been sold for cash on the global market. " ," Pion says. The state-owned oil company Petroleos de Venezuela, S.A. also donated oil to low-income families in the United States. There were the oil subsidies for Cuba. Plus, there's all the oil that goes for cheap gasoline for Venezuelan drivers. " ," says independent energy economist Roger Tissot, who specializes in the Latin American energy market. "Now, can that continue? I don't think so." ." ," notes Pion, now an energy analyst at the University of Texas at Austin. " ." Chavez died before he had to confront the economic and political problems certain to plague his successor. , subsidize gasoline at home, spend oil revenue on social programs and share Venezuela's oil wealth with his Caribbean and Latin neighbors. Something has to give. If it's a choice between serving domestic needs and maintaining the sweetheart oil deals with other countries, the PetroCaribe nations may be in for a disappointment.

Fourth, Corruption, ineffeciencies, and a lack of transparency have made Venezuela one of the worst places to invest in Roberts AND Daga 13
Venezuela: U.S. Should Push President Maduro Toward Economic Freedom James M. Roberts; research fellow for economic freedom and growth at the Center for International Trade and Economics; and Sergio Daga; Heritage Foundation visiting senior policy a nalyst in economic freedom in Latin America; April 15, 2013 http://www.heritage.org/research/reports/2013/04/venezuela-us-should-push-president-maduro-toward-economic-freedom

political interference in Venezuelas judicial system has become routine, and corruption is rampant. The landscape in Caracas and elsewhere in the country is littered with half-finished, publicly funded infrastructure and housing projects. The government funds needed to complete them often disappear
As reported in the Index, . As government expanded under Chavez, corruption became institutionalized. Chavez doubled the size of the public sector, many of whose 2.4 million[7] employees have no real job other than to work to keep the regime in power. A World Economic Forum (WEF) survey found little trust among businesses, politicians, the judicial system, and the police in Venezuela.[8] The tragic result is that Venezuela is now one of the most dangerous countries of the world. According to the Venezuelan Violence Observatory, in 2012 nearly 22,000 people

An inefficient and non-transparent regulatory environment that is hostile to private foreign direct investment obstructs long-term development and hampers entrepreneurial growth. The investment regime is tightly controlled by the state and favors investors from China, Russia, Iran, and other democracy-challenged countries Investor protection in Venezuela is ranked at 140 out of 144 countries In 1998, before Chavez took power, there were more than 14,000 private industrial companies in Venezuela; in 2011, after 13 years of extensive nationalizations and expropriations, only about 9,000 remained
were murdered.[9] .[10] , according to the WEF report.[11] .[12]

Venezuela Oil 1AC V3


We begin with the plan: The United States federal government should substantially increase its economic engagement towards Venezuela by investing in Venezuelan oil infrastructure. We reserve the right to clarify intent.
Said Intent includes providing technical, financial, managerial expertise. This is a partial privatization of the PDVSA as American firms would have partial shares in the PDVSA Note: the PDVSA is the Venezuelan oil company owned by their government

Contention One is the Venezuelan economy


First, the Venezuelan economy will collapse in the status quo A. Brink Lees 13
Venezuela's Controversial Election Results Are Only the Start of Its Troubles KEVIN LEES APRIL 15, 2013 http://www.newrepub lic.com/article/112920/venezuela-elections-2013-close-results-are-defeat-chavismo#

Maduro immediately face an economic crisis, the hangover from a 14-year spending binge and an economy on the brink of collapse Venezuela's economy has precariously
was favored to win on Sunday and then . Since Chvez's reelection in October 2012,

slipped from troubled to tumbling

all while oil prices have surged to $103 a barrel. But Venezuela now also faces its Bush v. Gore moment, with Capriles demanding a recount of the vote in a late-night Sunday address to

the nation. Maduro, in his victory speech, claimed that Capriles had called to offer a pact, but Capriles angrily denounced Maduro as a liar. Capriles started the campaign by taunting Maduro, "No on e elected you, kid," and in his speech, he argued that if Maduro was illegitimate before, he's just as illegitimate now. He stopped short of outright declaring victory himself, but he stated that the election result didn't reflect the truth of the Venezuelan electorate, and he made it all but clear that he expected a promised audit to show that he, in fact, was the real victor on Sunday. Venezuela will now confront a long and grueling battle in unprecedented territory you have to go back to December 1968 to find a presidential result that was even closer in Venezuela, a result that ended with Venezuela's first-ever peaceful transfer of power following an

the more acute economic problems continue, and may well accelerate, given that government policy for the past six months has been designed merely to get Maduro to the finish line of Sunday's election.
election. If Maduro holds on to his victory, however, he'll be crippled by nagging doubts over the legitimacy of his presidency, and the close result, barely a month after Chvez's funeral, was a stinging defeat for Chavismo. Meanwhile,

B. Failing oil sector Levisohn 13


Venezuelan Bonds Do the Collapse Ben Levisohn; former stock trader who has covered financial markets for the Wall Street Jo urnal, Bloomberg and BusinessWeek; April 16, 2013 http://blogs.barrons.com/emergingmarketsdaily/2013/04/16/venezuelan-bonds-do-the-collapse/

Barclays cut Venezuelan bonds noting that a weak presidency and high uncertainty are the main outcomes from this election and are the key drivers political gridlock can delay the implementation of the economic measures and could accelerate the deterioration of Venezuelas already fragile fundamentals Those risks are compounded by oils collapse , which could
, for instance, to neutral from overweight, in our change in stance. Its strategists also note that .

put Venezuela on an unsustainable path if they continue to fall

C. No foreign investment Toro 11


Foreign Investment in Venezuela: Mission Almost Impossible Francisco Toro; CaracasChronicles; March 28, 2011 http://www.whatsnextvenezuela.com/expropriation/foreign-investment-in-venezuela-mission-almost-impossible/

With the largest oil reserves in the Western Hemisphere, Venezuela might appear like a natural candidate to attract major Direct Foreign Investment funds. But, as a direct result of Mr. Chvezs policy of marginalizing private sector capital, Foreign Direct Investment flows actually slammed into reverse in 2009 Venezuela continues to experience a net outflow of foreign direct investment to the tune of $3.1 billion a year
the latest for which ECLAC figures are available. United Nations 2009 Report ECLAC). in the process. Such startling figures are driven largely by the Chvez governments nationalization drive, since compensation for expropriated businesses is counted as negative Foreign Direct Investment. What does this tell us? Rather than seek out new foreign investors , the Venezuelan government is busily buying out those who stopped by in the past.

(page 53 of the report). Investors thinking of doing business in Venezuela should be aware that they are likely to lose money

The dearth of foreign investment not only slows economic growth now, it will also undermine the medium-to-long-term competitiveness of the Venezuelan economy each new foreign investor needs the plant equipment, technology and business services from data-banks to accounting other foreign companies offer. With investments flowing out of Venezuela at a record pace, new foreign investors find themselves between a rock and a hard place with next to none or few new investments coming into Venezuela outside the extractive sector, domestic firms arent enjoying any of the positive spillover effects from foreign investments whether it is the most advanced technology, added dynamism, or cutting-edge management practices Venezuela has one of the worlds most hostile environments for business as well as the tightest foreign exchange control regimes. Its labor market is exceptionally rigid. Venezuelas notoriously byzantine red-tape that characterizes any routine business operations is bewildering enough to confirm that it is intentional
. New businesses tend to flock together for a reason: in Chvezland. In addition, Seek advice on becoming a foreign investor in Venezuela these days and your enquiries are likely to be met with blank stares. The disincentives now facing potential foreign investors is formidable. Last but not least, . Remarkably, Venezuela has never officially rescinded the National Treatment provisions adopted during its s hort-lived economic reform experiment during the early 1990s. The provisions stipulate that foreign investors are not to be discriminated against vis--vis domestic investors.

It is, arguably, not foreign investment the government is concerned with short-circuiting, but rather private investment in
One can argue that it is a principle that the government has largely respected, but only in the sense that domestic investors face much of the same hardships as their international counterparts.

general, regardless of its source The one type of investment that is still flowing into the country in any significant quantity is investment in oil projects in Venezuelas rich but expensive to exploit Orinoco Tar Belt. To the extent that major Western companies are able to find investment opportunities in Venezuela, its almost always in the oil sector. That said, such investments are usually as minority partners in projects led by the state-owned PDVSA. However big the potential of the Orinoco Tar Belt might be, however, its nonetheless an enclave of this extractive industry, accounting for relatively few jobs and largely disconnected from much of the rest of Venezuelas economy. For the vast majority of Venezuelans, the companies they work for, buy from and contract are simply bereft of significant investment from abroad. And if this is a lost opportunity for international investors, in the long term, it will be an even bigger handicap to Venezuelas existing businesses and those interested in ever doing business there. Venezuelan firms are now cut off from not just foreign investment, but also from the technology foreign investment brings, and the cutting edge management techniques that come with it. Little by little, Venezuelas ability to host genuinely competitive, world-class firms is being eroded
. There, state-owned oil companies from ally countries often receive though not always most favored treatment. China has signed a $20 billion financing facility tied to a major investment by Sinopec Corp. in the region. Likewise, Russias Lukoil and Gazprom as well as Irans Petropars gas contrac tor have received lucrative development contracts there, as has PetroVietnam. Petrleos de Venezuela, SA or Italys ENI, Japans Mitsubishi, Spains Repsol, and Chevron have managed to land such contracts in the Orinoco Tar Belt. In sectors like construction, light manufacturing, retail and services, .

D. Default Devereux 12
Venezuela Risks Default If Chavez Wins, Morgan Stanley said Charlie Devereux Sep 14, 2012 http://ww w.bloomberg.com/news/2012-09-14/venezuela-faces-debt-crisis-if-chavez-wins-morgan-stanley-says.html

Venezuela could default on its debt as early as 2013 if fails to shore up the oil- producing nations increasingly fragile balance sheet One tipping point could be the $4.3 billion in external debt payments that come due between August and November 2013 Chavez has damaged Venezuelas balance sheet through the nationalization of key sectors of the economy, endemic inflation and a lack of fiscal discipline The policies are an unsustainable mix that heighten the risk of default on Venezuelas $110.6 billion stock of debt, especially if oil prices tumble Government actions may be taking
the second half of President Hugo Chavez wins re-election next month and , Morgan Stanley said. Volberg wrote in a note to clients today. Enlarge image Hugo , who is seeking to extend almost 14 years in power with another six-year term, of fiscal discipline, Volberg said. , Volberg wrote. the second half of

, Morgan Stanley analyst Daniel

, Morgan Stanley analyst Daniel Volberg said. Chavez, who is seeking to extend almost 14 years in power with another six-year term, has damaged Venezuelas balance sheet through the nationalization of key sectors of the economy, endemic inflation and a lack

Venezuela towards a crisis and potentially even a debt event that could come as early as 2013 At 11.6 percent of gross domestic product, Venezuela has the largest fiscal deficit in Latin America, while its international reserves have fallen by $17 billion since 2008 to $25.6 billion Output by state oil company Petroleos de Venezuela SA fell to 2.72 million barrels a day in 2011 from 3.48 million barrels in 1998
the report said. Venezuelas debt is no longer with large bank lenders as much as publicly traded bonds held by a dispersed group of creditors, which could make restructuring more challenging. , Volberg said. ,

according to British Petroleums statistical review. Bond Yields The yield on Venezuelas benchmar k 9.25 percent bonds due in 2027 fell 11 basis points, or 0.11 percentage point, to 10.77 percent at 11:27 a.m. in Caracas, a ccording to data compiled by Bloomberg. The bonds price rose

The cost of insuring Venezuelan bonds against default for five years rose four basis points to 737 basis points
0.74 cent today to 88.80 cents on the dollar. , according to prices compiled by Bloomberg.

Second, Venezuelan economic downturn would collapse the region Wilson 5


Lieutenant Colonel Jeffrey K. ; United States Army War College Strategy; March 18, 200

PROMOTING STABILITY AND SECURITY IN VENEZUELA http://www.dtic.mil/cgi-bin/GetTRDoc?AD=ADA431740 NCHO

the Venezuela region remains on the brink of collapse Any down-turn in Venezuelas economic health could trigger a series of events that might lead to the end of democratic government. Chavez has already shown that he is willing to move away from democratic processes to consolidate his power in the executive branch
U.S. policy with respect to Venezuela is aligned with national interests and is fairly well balanced between the various elements of national power diplomatic, economic, military and informational, but it has not been effective in improving situation in . Over the past two decades, the U.S. has spent billions of dollars and significant manpower in the Andean region to stop the flow of drugs into the U.S. and promote regional security, stability, free markets and human rights. Yet, the . In Venezuela specifically, a country with more than 40 years of democracy is in crisis and the situation seems to be worsening rather than improving. President . So, what is the path forward that the U.S. needs to follow to promote freedom, stability, security and economic prosperity in Venezuela? There are several possible alternative courses of action, including: staying on the current course (status quo); pulling back and letting the Chavez regime crumble from its own corruption and flawed policies; taking unilateral action to cause regime change; or finding new, more effective ways to work multilaterally to support security, democratic processes and economic growth in Venezuela. Staying on the current course is not feasible because, as stated above, current policy is not working and the possible

If democracy in Venezuela collapses, it will probably become a failed state. This will mean loss of freedom and democracy, increased poverty, increased drug trafficking, increased terror
consequences of failure in Venezuela are too great.

activity in ungoverned areas of the country, regional instability The U.S. government cannot risk the implosion of Venezuela simply because it does not want to support the Chavez regime. The disadvantages of this course of action include loss of international respect and loss of the opportunity to influence the future in Venezuela and the region this is more likely to result in the failure of Democracy in Venezuela and the U.S. would have to invest much more to repair a failed state than to prevent such a failure
and loss of oil imports to the U.S. This is also the wrong time for the U.S. to disengage from a leadership role in guiding Venezuela back onto the path of freedom and liberty. . Some would argue that an advantage of this course of action would be a short term savings in resources, but this is a false economy since .

Third, that creates multiple scenarios for extinction Manwaring 5, Marx G., Retired U.S. Army Colonel and an Adjunct Professor of International Politics at
Dickinson College, Venezuelas Huge Chvez, Bolivarian Socialism, and Asymmetric Warfare, 2005. The Issue of State Failure. - President Chvez also understands that the process leading to state failure is the most dangerous long-term security challenge facing the global community today. The argument in general is that
failing and failed state status is the breeding ground for instability, criminality, insurgency, regional conflict, and terrorism. These conditions breed massive humanitarian disasters and major refugee flows. They can host evil networks of all kinds, whether they involve criminal business enterprise, narco-trafficking, or some form of ideological crusade such as Bolivarianismo. More specifically, these conditions spawn all kinds of things people in general do not like such as murder, kidnapping, corruption, intimidation, and destruction of infrastructure. These means of coercion and persuasion can spawn further human rights violations, torture, poverty, starvation, disease, the recruitment and use of child soldiers, trafficking in women and body parts, trafficking and proliferation of conventional weapons systems and WMD, genocide, ethnic cleansing, warlordism, and criminal anarchy. At the same time, these actions are usually unconfined and spill over into regional syndromes of

poverty, destabilization, and conflict.62 Perus SenderoLuminoso calls violent and destructive activities that facilitate the
processes of state failure armed propaganda. Drug cartels operating throughout the Andean Ridge of South America and

elsewhere call these activities business incentives. Chvez considers these actions to be steps that must be taken to bring about
the political conditions necessary to establish Latin American socialism for the 21st century.63 Thus, in addition to helping to provide wider latitude to further their tactical and operational objectives, state and nonstate actors strategic efforts are aimed at prog ressively lessening a targeted regimes credibility and capability in terms of its ability and willingness to govern and develop its national territory and society.

Chvezs intent is to focus his primary attack politically and psychologically on selected Latin American governments ability and right to govern. In that context, he understands that popular perceptions of corruption, disenfranchisement,
poverty, and lack of upward mobility limit the right and the ability of a given regime to conduct the business of the state. Until a given populace generally perceives that its government is dealing with these and other basic issues of political, economic, and social injustice fairly and effectively, instability and the threat of subverting or destroying such a government are real.64 But failing and failed states simply do not go away. Virtually anyone can take advantage of such an unstable situation. The tendency is that the best motivated

and best armed organization on the scene will control that instability. As a consequence, failing and failed states become
dysfunctional states, rogue states, criminal states, narco-states, or new peoples democracies. In connection with the creation of new peoples democracies, one can rest assured that Chvez and his Bolivarian populist allies will be available to provide money, arms,

and leadership at any given opportunity. And, of course, the longer dysfunctional, rogue, criminal, and

narco-states and peoples democracies persist, the more they and their associated problems endanger global security, peace, and prosperity.65

Fourth, specifically nuclear prolif Ferkaluk 10


Latin America: Terrorist Actors on a Nuclear Stage Brian Ferkaluk; Diplomacy Department atNorwich University; Global Securi ty Studies, Fall 2010, Volume l, Issue 3 http://globalsecuritystudies.com/Ferkaluk%20Latin%20America.pdf

The close relationship the US must maintain with Latin America is not only vital in the fight against domestic and international terrorism, but also in the fight to curtail nuclear proliferation Latin America could pose a serious threat of pursuing nuclear weapons in the coming years if the civilian-run governments of these states fall victim to revolutionaries Latin America has historically been active in both nuclear weapons development and nuclear power development. And given Latin Americas tendency toward military regimes the US cannot turn a blind eye to the possibility of nuclear activity in Latin America
immediate risk of in becoming a haven for a nuclear arms race, it leftist fact that junta (stratocracy), international conventions such as the Vienna Convention on Civil Liability for Nuclear Damage and not all adopt an Additional Protocol (AP) to their safeguards agreements with the International Atomic Energy Agency (IAEA). The region itself has been declared a nuclear-free zone according to the Treaty of Tlatelolco. It entered into force in 1969 and did not have all 33 Latin American states sign onto it until Cuba added its name in 2002. However, the treaty itself has not served as an absolute ban of nuclear weapons in the region.

in the region. Although there is no

. Another factor to consider is the

. All Latin American countries are party to the NPT. Not all are members of

Brazil

, for instance,

has not let the Treaty of Tlatelolco stand in the way of its own weapons development program in the late 1970s. And Venezuela today is not letting it stand in its way either. The most significant weakness of the treaty is the fact that it permits parties of the treaty to develop nuclear explosives for peaceful purposes. Therefore, Latin America has served as battlefield in the fight for non-proliferation.

Fifth, Venezuelan proliferation is the most likely scenario for global nuclear war multiple warrants
Border disputes, instability, unpredictable leaders, accidents, military coups, lower warning times, first strikes, arms race, technical accidents, physical security

Yusuf 8
Predicting Proliferation: The History of the Future of Nuclear Weapons Moeed Yusuf; Fellow at the Frederick S. Pardee Center for the Study of the Longer-Range Future at Boston University; January 2009 http://www.brookings.edu/~/media/research/files/papers/2009/1/nuclear%20proliferation%20yusuf/0 1_nuclear_proliferation_yusuf.pdf Michael Mandelbaum, earlier mentioned as someone who remained relatively comfortable about the ability of the superpowers to deter each other, was less optimistic regarding the capacity of developing countries to do so. He stressed that developing country proliferation would increase the likelihood of the use of nuclear weapons in conflicts.78 Ted Greenwood, an American academic who later advised the U.S. Department of Defense, pointed to the active border disputes of Nth states such as South Africa, Israel, and Taiwan to suggest an increased likelihood of nuclear war.79 Mentions of the possibility of weapons falling into the hands of irresponsible powers the mad ruler scenario were frequent. As French scholar, Thierry de Montbrial pointed out: there are many politically unstable countries whose leaders are not predictableand would not hesitate to use an atomic weapon, if they had one.80 Hinting at the same concern, the renowned French sociologist Raymond Aron argued that acquisition of nuclear weapons by developing countries could even result in a superpower conflict in the Cold War context due to a deliberate or inadvertent action of a small state.81 Moreover, in contrast to the relative stability within the borders of developed countries, Dunn and Overholt pointed to frequent military coups in countries like Argentina, Chile, Brazil, Greece, Indonesia, Iraq, Libya, Nigeria, Pakistan, South Korea, Syria, Turkey, Venezuela, and Zaire to emphasize the possibility of militaristic leaders wresting power and utilizing nuclear weapons as a means of coercing adversaries.82 A number of commentators anticipated that Nth powers would seek to create a first strike capability to preempt traditional rivals. Counterforce targeting strategies were considered likely, but also inherently destabilizing, especially for contiguous countries where warning times were diminished. Technical deficiencies in ensuring robust command and control and the security of the arsenal were taken for granted and used to further heighten fears of accidental or unauthorized use.83

Finally, the plan prevents a Venezuelan economic collapse, the key to the Venezuelan economy is improving their oil sector and increasing private investment Homan 13
EXPLORING THE NEXT GENERATION OFPROLIFERATORS Patrick Homan; Monterey Institute of International Studies, James Martin Center for Nonproliferation Studies; 26 Feb 2013. http://www.niu.edu/polisci/announcements/Grad%20attachments/Homan.pdf Despite being the worlds eighth-largest oil producer, Venezuela faces a host of economic issues. After recovering from a recession that began in 2009, the Venezuelan economy grew consistently from 201012, including 5 percent growth in 2012.59 However, much of this growth can be attributed to public spending, as Chvezs main short-term solution to his countrys economic woes has been borrowing.

As a result, net public debt rose from 14 percent of GDP in 2008 to 29 percent in 2010.60 In 2011, the International Monetary Fund reported Venezuelas public debt as 45.5 percent of GDP.61 Much of Chvezs borrowing has been from China. Between 2008 and 2010, China lent Venezuela $12 billion and is being repaid in oil shipments, which cuts even further into government revenues.62 Furthermore, inflation in Venezuela during 2012 was near 20 percent; as a result, the Venezuelan currency traded on the black market for a third of the official rate.63 While Chvezs near-term future seems safe with oil prices around $100 a barrel, there are growing long-term risks within the Venezuela economy. Any future decline in oil prices would send the Venezuelan economy into a tailspin and lead to a default on its obligations. Chvezs handling of his countrys oil sector is the chief cause of Venezuelas economic problems. Chvez pillaged Petrleos de Venezuela (PDVSA), the state-owned oil firm, by packing it with pro-Chvez loyalists, starving it of much needed investment, and using its profits for social spending. As a result, PDVSAs output has gone from 3.3 million barrels per day (b/d) in 1998 to its current level of around 2.25 million b/d, according to recent industry estimates.64 Of that, some 1 million b/d is sold at subsidized prices at home or to regional allies (such as Cuba), leaving just 1.25 million b/d for full-price exports.65 The declining state of its oil sector is having a large impact on the overall Venezuelan economy, as petroleum now accounts for 92 percent of its export revenue.66 This is an extremely troubling development for Chvezs government because its domestic support relies heavily on petrodollars for providing government subsidies and funding social welfare programs. Meanwhile, Chvezs harassment and hostility towards businesses and the private sector has devastated the rest of the Venezuelan economy. In his pursuit toward state socialism, Chvez nationalized hundreds of companies, seizing everything from steel companies and bottle makers to housing schemes.67 When workers have resisted, he has deployed the National Guard against them and trumped up charges against their owners. His efforts to accelerate the revolutionary process caused much of Venezuelas private sector to close or flee. The results are a significant amount of capital flight and a need to import many goods that it previously produced.

Contention Two is Refining


First, American demand is key - declining Venezuelan production is shifting that demand to Canadian tar sands without Venezuela, tar sands output will multiply twenty-fold Hussain 13
Growing Canadian oil exports to U.S. bittersweet for producers as price discount bites Yadullah Hussain 07/02/13 http://business.financialpost.com/2013/02/07/growing-canadian-oil-exports-to-u-sbittersweet-for-producers-as-price-discount-bites/?__lsa=0861-4749 But a deeper dive into the data shows Canadian oil exports to the United States have actually risen over the past decade in real and percentage terms. In 2002, Canadian crude accounted for just less than 16% of all U.S. imports, a figure estimated to have reached 28% by the end of 2012. While overall U.S. oil imports have declined, Canadian crude shipments south of the border have risen by a third. Growing Canadian imports from oil sands projects effectively pushed out waterborne imports of heavy crude oil from less stable regions, such as Mexico or Venezuela , said Sabine Schels, analyst at Bank of America Merrill Lynch. This is bittersweet for Canadian companies. Cornering the U.S. market has come at a heavy price in the shape of depressed prices fetched by the Western Canada Select, the heavy Canadian crude. The discounts on Canadian heavy crude are forcing companies including Suncor Energy Inc. to delay plans worth billions of dollars and depressing their bottom lines. In a desperate effort to escape the dreaded $30 discount they must offer U.S. refiners, Alberta-based companies are seeking ways to ship their crude out of Alaska, Atlantic and B.C. But Canadian producers know their biggest market remains the United States. Overall the U.S. Gulf Coast is a huge crude oil market nearly equivalent to all of China today , IHS CERA, an energy research consultancy, said in a report. Consequently, the U.S. Gulf Coast will be a critical part of the future for oil sands , particularly for bitumen blends. TransCanada Corp.s CEO Russ Girling knows this, which is why proposes a pipeline to the Atlantic to take Alberta crude not just to global markets, but back into the United States. Scott Eells/BloombergRuss Girling, chief executive officer of TransCanada Corp. Its not a Plan B, its a Plan A, and it will go if the market supports it, along with Keystone, Mr. Girling told Bloomberg. Once you get on tidewater, you can get anywhere, and you dont need a presidential permit to bring oil into the Gulf Coast. IHS expects oil sands volumes to the Gulf Coast to increase considerably as more than two million barrels per day of new pipeline capacity planned is expected to connect Western Canada to the Gulf Coast in the next three years that is assuming it is approved and gets built. Clearly, Canadian producers are caught in the U.S. orbit and will remain in its vortex for the foreseeable future . It could have been much worse. Unlike their natural gas counterparts who have been dealt a double blow of plunging exports to the U.S and plummeting prices, Canadian crude is popular among U.S. refiners and theres more to it than just being the cheapest crude on earth. Many U.S. Gulf Coast refiners are addicted to heavier crudes, and dont have a taste for the lighter crude churned out from Texas and North Dakota shale plays. Which is why while light blends from places like Nigeria and Angola have declined dramatically, Canadian heavy has been in the ascendancy. John Powell, senior petroleum analyst with the U.S. Department of Energy, expects more sweet crude to be replaced by home-grown blends from places like Eagle Ford, but heavier crude imports will hold their own. In 2013, we see imports, wherever they come from, probably going to get heavier, he said. The Canadian surge has come as other sources of heavy crude face structural issues. Mexican heavy supply is

expected to decline, and there is uncertainty around future supply from Venezuela, IHS said. If oil sands could displace most of the Mexican and Venezuelan imports, the opportunity for bitumen blends would be about 1.5 million barrels per day . U.S. tight oil will grow, but it is still going to leave a lot of room for other suppliers, said Jackie Forrest, senior director at IHS CERA. Canada is specifically well placed. The heavy crude refiners are still going to make more money running heavy crude than the light sweet crude, so they are going to prefer Canadian supply, said Ms. Forrest. While that does not mean Canadian producers should stop exploring other markets to diversify their revenue streams, Canadian crude will not disappear in the U.S. anytime soon, even without Keystone XL pipeline being built. Over time, though, there are concerns that U.S. refiners may move toward lighter crude to meet the needs of rising U.S. shale plays, which produce lighter crude. But is it easy for refiners to flip the switch from heavy crude to light crude? Probably not, says Bill Simpkins, Atlantic Canada representative of the Canadian Fuels Association, which represents many refiners in Canada. Mainly because once you have a refinery and its purpose-built for particular crude and slate of products, they are probably always sourcing that type of crude. And the market for heavier crude is likely to only get bigger. Because of the dwindling supply of conventional sweeter crudes, and their higher costs, you are more likely to see older refineries to move into producing heavier crudes , said Mr. Simpkins. Gulf Coast refiners such as Marathon Petroleum Corp. and Valero Energy Corp. are strong advocates of Keystone XL and are keen to get Canadian crude to the Gulf market.

Second, Canada is capturing American demand now, but investment in Venezuela gives them the advantage Hussain 13
Life after Chavez: Americas oil gains could be Canadas loss Yadullah Hussain 06/03/13 http://business.financialpost.com/2013/03/06/life-after-chavez-venezuela-u-s-oil-industries-arenaturally-attractive-trading-partners/?__lsa=0861-4749 Brent crude prices didnt move much as traders absorbed the death of Hugo Chavez who ruled the worlds sixth largest OPEC producer, but it may mask a long-term shift that could impact North American energy trading patterns. Over the longer term, changes in policy towards the energy sector might eventually allow Venezuelas oil production to return to the much higher levels seen in the late 1990s, said Tom Pugh, commodities economist at Capital Economics. However, any such recovery would take many years. Venezuela is home to the worlds largest proven oil reserves of around 296.5 billion barrels, but its production has steadily fallen under Mr. Chavez who diverted Venezuelas oil revenues to his pet projects and weakened the state-owned Petrleos de Venezuela, which is responsible for developing the countrys enormous riches. Even as 40% of Venezuelan oil exports headed towards the United States, Mr. Chavez despised Washingtons policies and was actively pursuing a policy to shift exports to China, the Caribbean, Central America and other Asian markets. U.S. imports of Venezuelan petroleum products peaked in 1997, at 379,000 bbl/d, and have since fallen to as low as 23,000 bbl/d in October 2012, the U.S. Department of Energy said in a January note. Despite severe disagreements, the two countries oil industries are naturally attractive oil trading partners due to their proximity , according to the U.S. Department of Energy. The robust trade in crude oil from Venezuela to the United States is due to the compatibility between the configuration of some U.S. refineries and the quality characteristics of Venezuelan crude, which is predominately sour and medium or heavy. This is a worrying development for Canadian crude producers, which offer similar type of heavy crude to the U.S. Gulf Coast refineries, and may lose out if Venezuela reforms its oil industry . Despite shrinking U.S. oil imports, Canada is now it southern neighbours largest

supplier of crude, accounting for nearly 30% of all U.S. imports last year. Much of these gains were at the expense of heavier crudes from Venezuela and Mexico. A long-term reversal in Venezuela oil production could compete with Canada in the United States and even China and Asian markets. Its too soon to say what Hugo Chavezs death means for oil prices, but it is certainly true that oil prices are what made Hugo Chavez possible, Daniel Yergin, the chairman of IHS Cambridge Energy Research Associates, said in an email to Bloomberg. Declining crude prices brought Chavez to rise to power and rising prices gave him the funds needed to sustain state spending and consolidate power, Yergin told the newswire. The countrys crude export stood at 1.7 million bpd in 2011, according to the International Energy Agency, similar to Libyas crude production, which was completely shut down during its bloody civil war in 2011. 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 .

Third, Venezuelan oil production steals the US market from Canada prevents development of tar sands McKenna 13
The secret threat to Canadas oil sands BARRIE MCKENNA; The Globe and Mail; May. 02 2013 http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/the-secretthreat-canadas-oil-sands/article11597201/ OTTAWA Natural Resources Minister Joe Oliver likes to pick on Venezuela when he sells the virtues of Canadian oil to Americans. Buy from a loyal ally, not from less friendly, less stable countries with shoddy environmental records, Mr. Oliver warned bluntly in a speech last week in Washington. Unfortunately, Venezuelan oil has a lot more in common with Canadian oil sands crude than Mr. Oliver cares to admit. Oil is a commodity, after all. And price typically trumps virtue and a smiling face. The bottom line is that Canada and Venezuela produce the same kind of heavy crude thats now sought by re-engineered U.S. petroleum refineries along the Gulf of Mexico. So does Mexico. In recent years, Canada has been winning the competitive battle to feed those refineries. Alberta oil has steadily displaced Mexican and Venezuelan crude in the U.S. market. But there is no certainty that shift will continue. Indeed, Venezuela and Mexico are showing tentative signs of getting their energy act together. Canada has benefited from the ineptitude of its energy producing rivals in the hemisphere. The state-run oil industries in Venezuela and Mexico are hobbled by inefficiencies, poor technology and under-investment in exploration. In spite of vast reserves, the two countries are producing less oil now than they did five years ago. U.S. imports of Venezuelan crude, for example, have dropped to less than a million barrels a day from 1.7 million barrels a day in 1997. Oil imports from Mexico have shrunk nearly 30 cent since 2006. New drilling technology and foreign investment cash could change all that . An often overlooked risk for Canadas oil patch is the possibility that both these underperforming competitors could start ramping up production and exports again. That would exacerbate the already-significant price discount on Canadian crude in the U.S. market. It would also ratchet up pressure on Canadian producers to access alternative markets in China and India via pipelines to the West Coast. Politics and economics have held back Venezuela and Mexico. But the landscape in both countries is shifting. Hugo Chavez was an unexpected gift to the oil sands. Now that hes gone,

Venezuela has a much greater chance of shedding its image as an unstable and inefficient supplier of oil to the U.S. Venezuela has proven oil reserves of 211 billion barrels, eclipsing Canadas 175 billion barrels, according to the U.S. Energy Information Administration. And in Mexico, newly installed President Enrique Pena Nieto is vowing to reform the countrys troubled oil industry and attract private investment, particularly to help develop deep offshore and shale reserves in the Gulf of Mexico. Mexico has nearly 11 billion barrels of proven oil reserves, but roughly twice that including potential unconventional and deepwater sources. Mexico is unlikely to privatize Petroleos Mexicanos the stateowned oil company known as Pemex. But Finance Minister Luis Videgaray acknowledged recently that Mexico cant do everything itself and there might be opportunities for private investors in unconventional oil and gas projects where Pemex clearly doesnt have either the capital or the expertise. Venezuela and Mexico have a long way to go to right their energy industries, and some tough political decisions to make. But if, and when, they do, Canada could be the biggest loser. More Venezuelan and Mexican oil coming into the U.S. would likely lead to an even larger discount on oil sands crude, which is already hampered by high extraction costs and limited pipeline capacity. The threat of new and more productive rivals underscores why projects such as the Keystone XL and Northern Gateway pipelines are so vital to Canada. The industry needs access to markets before there is a gusher of rival capacity in the neighbourhood oil thats free of the extraction, transportation and environmental challenges of the oil sands.

Fourth, American demand is key to oil sands development keystone put it on the brink Johnson AND Dawson 13
Pipeline Called Key to Canada Oil Sands KEITH JOHNSON in Washington and CHESTER DAWSON in Calgary, Alberta June 7, 2013 http://online.wsj.com/article/SB10001424127887324069104578531713102125222.html 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. GS +1.22% 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., TRP.T +0.42% 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. But market experts said blocking Keystone would at most temporarily sidetrack Alberta's development plans.

Fifth, US market key to oil sands Daly 13


Hard sell? Canada Doubles PR Budget to Promote Tar Sands in U.S. John Daly May 2013 http://oilprice.com/Energy/Crude-Oil/Hard-sell-Canada-Doubles-PR-Budget-to-Promote-Tar-Sands-inU.S.html Canada is, according to the U.S. Energy Administration, the leading source of United States crude oil imports, which average 9.033 million barrels per day (mbpd), with Canada sending 2.666 mbpd southwards to the U.S. Mexico is second with 1.319 mbpd and Saudi Arabia third with 1.107 mbpd. The EIA notes, Canada is one of the world's five largest energy producers and is the principal source of U.S. energy imports. Just as the United States depends on Canada for much of its energy needs, so is Canada profoundly dependent on the United States as an export market . The EIA continues, Canada is the world's sixth-largest oil producer, and virtually all of its crude oil exports are directed to U.S. refineries . Long a major onshore and offshore producer of conventional crude, the recent growth in its liquids production has been driven by bitumen and upgraded synthetic crude oil produced from the oil sands of Alberta. The vast majority of Canada's reserves and the expected future growth in Canada's liquids production will derive from unconventional resources .

Sixth, Time is key US refineries will cut off Venezuela soon, unless their oil exports increase Ladislaw AND Verrastro 13
Post-Chavez Outlook for Venezuelan Oil Production Sarah O. Ladislaw; co-director and senior fellow with the Energy and National Security Program at the Center for Strategic and International Studies (CSIS) in Washington, D.C.; Frank Verrastro; senior vice president and James R. Schlesinger Chair for Energy & Geopolitics at CSIS; MAR 6, 2013 http://csis.org/publication/post-chavez-outlook-venezuelanoil-production U.S. refineries in the Gulf Coast are specifically designed to process Venezuelas sour and medium to heavy crude and serves as its natural market. Despite oil production being down, the United States still imports just under a million barrels of crude per day from Venezuela (down from a peak of 1.4 mmbd in 1997) and, as stated earlier, the government of Venezuela is highly dependent on those revenues for their ongoing stability, especially as revenue from other exports and domestic consumption decline. As we look ahead to another period of transition in Venezuela it is important to be mindful of the potential for disruption and to look for ways to mitigate the impacts of such disruption, but it is equally important to remember the trade ties that bind the two countries for the time being and to find opportunities to drive change in a positive direction. Time may be limited in this regard because the U.S. domestic

production outlook is changing thanks to tight oil development in the United States and the influx of Canadian oil sands, both of which are giving U.S. refiners more options in terms of the crudes they use and more decisions to make about how they want to configure their refineries going forward. A future in which Venezuela is no longer as competitive in its natural market in the United States would change the outlook for Venezuelan crude marketing decisions. The long-term outlook for Venezuelas continued oil market production is changing both in commercial and political terms .

Seventh, Tar sands development causes extinction JAMES HANSEN; directs the NASA Goddard Institute for Space Studies; May 9, 2012 Game Over for the Climate http://www.nytimes.com/2012/05/10/opinion/game-over-forthe-climate.html?_r=0 NCHO GLOBAL warming isnt a prediction. It is happening. That is why I was so troubled to read a recent interview with President Obama in Rolling Stone in which he said that Canada would exploit the oil in its vast tar sands reserves regardless of what we do.

If Canada proceeds, and we do nothing, it will be game over for

the climate. Canadas tar sands, deposits of sand saturated with bitumen, contain twice the amount of carbon dioxide emitted by global oil use in our entire history . If we were to fully exploit this new oil source, and continue to burn our conventional oil, gas and coal supplies, concentrations of carbon dioxide in the atmosphere eventually would reach levels higher than in the Pliocene era, more than 2.5 million years ago, when sea level was at least 50 feet higher than it is now. That level of heat-trapping gases would assure that the disintegration of the ice sheets would accelerate out of control. Sea levels would rise and destroy coastal cities. Global temperatures would become intolerable. Twenty to 50 percent of the planets species would be driven to extinction. Civilization would be at risk . That is the long-term outlook. But near-term, things will be bad enough. Over the next several decades, the Western United States and the semi-arid region from North Dakota to Texas will develop semi-permanent drought, with rain, when it does come, occurring in extreme events with heavy flooding. Economic losses would be incalculable . More and more of the
Midwest would be a dust bowl. Californias Central Valley could no longer be irrigated.

Food prices would rise to unprecedented levels . If

this sounds apocalyptic, it is . This is why we need to reduce emissions dramatically. President Obama has the power not only to deny tar sands oil additional access to Gulf Coast refining, which Canada desires in part for export markets, but also to encourage economic incentives to leave tar sands and other dirty fuels in the ground. The global warming signal is now louder than the noise of random weather, as I predicted would happen by now in the journal Science in 1981. Extremely hot summers have increased noticeably. We can say with high confidence that the recent heat waves in Texas and Russia, and the one in Europe in 2003, which killed tens of thousands, were not natural events they were caused by human-induced climate change.
We have known since the 1800s that carbon dioxide traps heat in the atmosphere. The right amount keeps the climate conducive to human life. But add too much, as we are doing now, and temperatures will inevitably rise too high. This is not the result of natural variability, as some argue. The earth is currently in the part of its long-term orbit cycle where temperatures would normally be cooling. But they are rising and its because we are forcing them higher with fossil fuel emissions. The concentration of carbon dioxide in the atmosphere has risen from 280 parts per million to 393 p.p.m. over the last 150 years. The tar sands contain enough carbon 240 gigatons to add 120 p.p.m. Tar shale, a close cousin of tar sands found mainly in the

If we turn to these dirtiest of fuels, instead of finding ways to phase out our addiction to fossil fuels, there is no hope of keeping carbon concentrations below 500 p.p.m. a level that would, as earths history shows, leave our children a climate system that is out of their control. We need to start reducing emissions significantly, not create new ways to increase them.
United States, contains at least an additional 300 gigatons of carbon.

Contention Three is Solvency


First, Maduro will accept the plan A. He needs foreign investment to fund Chavezs legacy of grand socialist programs thats key to his political legitimacy Thomas-Symonds 13
What After Chavez? Nick Thomas-Symonds; practicing barrister at Civitas Law, Cardiff, specializing in chancery and commercial law. He is also Lecturer in Politics at St. Edmund Hall, Oxford University. He teaches British Politics and Government Since 1900, Modern British Politics, Politics in Europe and US Politics. He also teaches Contemporary US Politics on Oxford Universitys Department of Continuing Education Foundations of Diplomacy course; April 18, 2013 http://www.e-ir.info/2013/04/18/what-after-chavez/

A major part of Mr Chavezs popular appeal was his willingness to stand up to what he characterized as imperialism. He accused the US of trying to bring him down. With Mr Chavezs death on 5 March 2013, there is an argument that things can only get better in diplomatic relations between the US and Venezuela. After all, even under Mr Chavez, Venezuela was still trading widely with the US. The United States is Venezuelas most important trading partner Oil dominates U.S. imports from Venezuela, which is one of the top four suppliers of foreign oil to the United States. About 500 U.S. companies are represented in Venezuela. U. S. foreign direct investment in Venezuela is concentrated largely in the petroleum, manufacturing and finance sectors. That is not to say, however, that the US desire for oil has made it a no-go area for US governments in their diplomatic relations with the Bolivarian Republic. Sanctions were imposed on the Venezuelan state oil company, PDVSA, in 2011, for making supplies to Iran To win the presidential election Maduro needed to present himself as continuing the work of Mr Chavez.
After all, El Comandante traced his heritage to another Latin American independence leader, Simon Bolivar. Mr Chavezs antipa thy had personal elements, too. To use just one example, a brief coup in 2002 temporarily removed him from power, and he openly accused the US of being respo nsible for it. The US Department of States fact sheet on US-Venezuela relations confirms the extent of this trade: . U.S. exports to Venezuela include machinery, organic chemicals, agricultural products, optical and medical instruments, autos and auto parts. It adds: . The demise of Mr Chavez is one thing, the position of his successor, Nicolas Maduro, on the US, quite another. , Mr , a former bus driver, As Mr Chavezs chosen successor, and as the incumbent during the election, this may have seemed an easy task. However, Mr Maduro has taken this argument to extraordinary lengths. He not only declared himself the son of C havez but claimed Chavez lives! and even went so far as to argue that El Comandante appeared to him as a bird whilst praying. Mr Maduro has continued to plough Chavezs anti-US furrow. After all, he did serve for a substantial period as his foreign minister. An allegation that the dead president had been the subject of an attack by historic enemies led the US State Department to declare the notion that the US had played any par t in

Mr Maduro won the presidential election on 14 April 2013 with 50.7% of the vote. His winning margin of 1.5% constitutes only 235,000 votes. His defeated rival, Henrique Capriles, has alleged electoral malpractice and asked for the votes to be counted again the narrow margin of Mr Maduros victory, particularly given the advantages of his links to Mr Chavez, may prove less durable than he may think. Protests against the result continue Mr Maduros policies matter. One of his first acts was to announce the continuation of funding of socialist programmes from oil revenues. The current policy of using the nations oil reserves to fund socialist programmes cannot continue without putting the stability of the nations economy at risk. On the other hand, the programmes cannot be scaled back without political and social unrest. It is here that there may be a small chink of light for US-Venezuela relations, even under Mr Maduro. Venezuela cannot afford to turn any investors away unnecessarily.
Chavezs death from cancer as absurd. step. However, the National Electoral Council has declared Mr Maduros victory irreversible. That said, Cabello, said the results require deep self-criticism. after all. For now at least, month that whoever was the President was in a Catch 22 situation. Even now, the US multi-national Chevron advertises that it is playing a part in six onshore and offshore projects.

. The US urged an audit of the result as an important, prudent and necessary

On Twitter, National Assembly, Head Mr Diosdado

. The outcome may yet prove unpredictable, and Mr Chavezs demise may have heralded something new in Venezuelan foreign polic y

Even setting to one side the protests against his controversial presidential election victory, the International Atomic Energy (IEA) predicted last

B. 14 years of economic devastation Roberts AND Daga 13


Venezuela: U.S. Should Push President Maduro Toward Economic Freedom James M. Roberts; research fellow for economic freedom and growth at the Center for International Trade and Economics; and Sergio Daga; Heritage Foundation visiting senior policy analyst in economic freedom in Latin America; April 15, 2013 http://www.heritage.org/research/reports/2013/04/venezuela-us-should-push-president-maduro-toward-economic-freedom

Hugo Chavezs hand-picked successor, former trade union boss Nicols Maduro, appears to have defeated Capriles by a narrow margin in a contentious and hard-fought special election Venezuela is in such shambles after 14 years of seat-of-the-pants mismanagement that Maduro may ultimately be forced to pursue more moderate policies and seek help from the U.S. to restore stability The Obama Administration and Congress should exploit this opening by using U.S. leverage to push Venezuela to turn from Chavezs failed experiment in oil-cursed 21st-century socialism toward economic freedom
Governor Henrique victory is confirmed . [1] .

on April 14. assuming his

Second, the plan solves Roberts AND Daga 13


Venezuela: U.S. Should Push President Maduro Toward Economic Freedom James M. Roberts; research fellow for economic freedom and growth at the Center for International Trade and Economics; and Sergio Daga; Heritage Foundation visiting senior policy analyst in economic freedom in Latin America; April 15, 2013 http://www.heritage.org/research/reports/2013/04/venezuela-us-should-push-president-maduro-toward-economic-freedom

U.S. Policy Toward the New Maduro Government Washington should insist on strict conditionality before sending a new U.S. ambassador to Caracas or assenting to any new lending to Venezuela by international financial institutions until the new government Takes steps to privatize PDVSA to bring in international equity partners with the expertise and financial capacity to restore PDVSA to the high level of professional operational and managerial expertise for which it was widely respected prior to 1999
information for all Venezuelans. Use U.S. Leverage

: Produces a comprehensive plan for reform that reduces the size of the public sector, reverses nationalizations and

expropriations of land and enterprises with just compensation to owners, restores the independence of the central bank and judicial institutions, reforms the electoral system, and submits to an internat ionally supervised audit of the governments books during the Chavez years;

; Immediately stops all subsidies to Cuba and terminates wasteful and economically destabilizing subsidy programs such as

PetroCaribe and ALBA; Ceases cooperation with international state sponsors of terrorism (such as Iran) and joins the internat ional communitys cooperative efforts in the fight against transnation al crime, narco-trafficking, and terrorism; and Restores freedom of the press and access to

The foundations of economic freedom in Venezuela were severely weakened during the 14-year misrule by Chavez. Although Chavezs death may aggravate instability and further polarize Venezuela, it need not be that way. Venezuela is in need of immediate and sweeping reforms, but these changes will take time, effort, determination, and, above all, dedicated reformers in Venezuela The Obama Administration should step into the breach with active and forward-looking policies to bring Venezuela back into the globalized economic system
. .

Third, The Venezuelan oil sector needs investment to sustain itself inefficiences will destroy the industry in the status quo Gjelten 13
Venezuela's Next Leader Faces Tough Choice On Oil Program TOM GJELTEN; NPR Latin American Expert; April 11, 2013 http://www .npr.org/2013/04/11/176843567/venezuela-s-next-leader-faces-tough-choice-on-oil-program As

Venezuela's

president, Hugo Chavez thought in grandiose terms, and his country's vast oil riches enabled him to act on his vision. But Chavez died before he had to deal with the flaws in his model, and some hard choices await his successor. Key to Chavez's notion

oil reserves estimated by the Organization of Petroleum Exporting Countries to be the largest in the world are worth tens of billions of dollars a year in potential revenue During his presidency, Chavez diverted much of that potential wealth to Venezuelan consumers in the form of cheap gasoline He propped up the Castro regime in Cuba, and he offered Venezuelan oil on highly preferential terms to 18 Caribbean and Latin American countries through an energy alliance he called PetroCaribe Oil production in Venezuela declined sharply under the Chavez administration, however, largely due to inadequate investment in the energy infrastructure, inefficiencies in oil industry management, and the replacement of skilled oil technicians and managers with political loyalists
of "21st Century Socialism" was the redistribution of Venezuela's oil earnings. The country's . (18 cents per gallon or less). . . PetroCaribe Initiative The drop in oil production more than 7 percent just in the first quarter of 2013 is severe enough to call into question whether the Chavista oil welfare programs can be sustained. For the Caribbean and Latin American countries that have been benefiting from the PetroCaribe program, it is a time of great anxiety. Chavez saw the energy alliance as a way to free the member states from U.S. energy imperialism. "There's no one who can slow our ever-faster march toward our great historical goals," he said, defining PetroCaribe as "energy unity." For poor countries, the PetroCaribe deal was irresistible. Typically, they had to pay cash for only half the oil they received. The rest they got on credit, financed over 25 years at 1 percent. Among those who eagerly signed up for the program was Haiti. In reality, PD VSA makes money from only a small proportion of the oil it produces. Now, can that continue? I don't think so. - Roger Tissot, energy economist "Any country that would benefit from such a credit would take advantage of it," says Ren Jean-Jumeau, Haiti's minister of energy. "There's not even a need to justify this. Haiti is a struggling economy, and this is a great advantage for us. We consider it extremely important." In the Dominican Republic, PetroCaribe was key to the country's 2008-2009 financial stabilization program. "By allowing us to defer the oil payments, it was a big, big thing for the government," says Juan Carlos Russ o of the Pontificia Universidad Catlica in Santo Domingo. To be sure, there were strings attached: Chavez wanted the PetroCaribe countries to support his ideological crusade against the U.S. Some did so enthusiastically. Others largely ignored the Chavista rhetoric. "A lot of these countries looked at this thing in a practical manner," says Jeremy Martin, director of the energy program for the Institute of the Americas at the University of California, San Diego. "They were able to stomach the ideology as long as they could get such a wonderful financial deal." For countries such as Haiti, Jamaica and the Dominican Republic, the chea p oil from Venezuela could not have come at a better time, with energy prices rising and the world economy in crisis. "Most of these countries have no domestic s upplies of oil and gas," Martin notes. "If they do, it's minimal. These are energy-starved countries. And so they became absolutely addicted [to the PetroCaribe program]." What Does Venezuela Get? But whether the deal is good for Venezuela is another question. "In my economic mind, I w ould say, 'Why are they willing to sacrifice this much?' " says Russo. The Dominican Republic is repaying its oil debt to Venezuela partly in string beans. Jorge

To Venezuela, from a cash-flow point of view, this represents close to $5 billion a year of revenue that they're missing In reality, PDVSA makes money from only a small proportion of the oil it produces Venezuela's problem is that its oil production is declining, in part because of the lack of reinvestment and the politicization of PDVSA operations under the Chavez government. Unless oil prices move sharply higher, the country will face a significant loss of oil revenue In 1997, PDVSA was producing 3.5 million barrels a day Today they are about 2.8 million barrels a day. It shows you what a bad job the Venezuelan government has done in managing their national oil company Venezuela's next president won't be able to maintain the oil industry
Pion, who previously worked in Latin America for the Amoco and Shell companies, notes that all the oil that Venezuela provides on easy credit terms to other countries could have been sold for cash on the global market. " ," Pion says. The state-owned oil company Petroleos de Venezuela, S.A. also donated oil to low-income families in the United States. There were the oil subsidies for Cuba. Plus, there's all the oil that goes for cheap gasoline for Venezuelan drivers. " ," says independent energy economist Roger Tissot, who specializes in the Latin American energy market. "Now, can that continue? I don't think so." ." ," notes Pion, now an energy analyst at the University of Texas at Austin. " ." Chavez died before he had to confront the economic and political problems certain to plague his successor. , subsidize gasoline at home, spend oil revenue on social programs and share Venezuela's oil wealth with his Caribbean and Latin neighbors. Something has to give. If it's a choice between serving domestic needs and maintaining the sweetheart oil deals with other countries, the PetroCaribe nations may be in for a disappointment.

Fourth, American firms are eager to invest delays in funding kill their industry Peixe 13
Venezuela Sees Foreign Investment in Oil Fall in Political Vacuum Left by Chavez Joao Peixe 27 January 2013 http://oilprice.com/Latest-Energy-News/World-News/Venezuela-Sees-Foreign-Investment-in-OilFall-in-Political-Vacuum-Left-by-Chavez.html Due to the political vacuum left by Hugo Chavezs absence whilst he battles cancer behind closed doors, Venezuelas oil industry has experienced the first decline in foreign investment in five years . No new credit lines have been announced from China, the largest foreign contributor to Venezuelas oil industry, since April last year, and both Russian and Indian companies are withholding their planned investments until the political situation becomes more stable and transparent. This lack of investment from foreign governments is contrasted by the private sector where investors are eager to buy into Venezuelan assets , believing that Chavezs successor will reduce the states grip on the economy. Matt Ferchen, a scholar at the Carnegie Tsinghua Centre for Global Policy, explained that there There is simply nowhere in the world, outside of China, where the CDB has built up such a huge financial presence. Even if Chavez wasnt the easiest partner for China, he was their man, and now they dont know who is in charge. Vice President Nicholas Maduro is currently running the country, but Chavezs political opposition have called for Maduro to stand down temporarily and cede power to their party whilst Chavez is ill, in order to increase the political stability in the country and give investors some assurance. Current delays to the funding threaten the ability of one of the most oil rich countries in the world to reverse its declining output. Oil production in Venezuela has fallen 13 percent since Chavez first took power in 1999 to just 2.7 million barrels a day.

Fifth, American technical expertise is the best managerial practices, corporate knowledge, and financial assets Fryklund 10
Independents Transforming U.S. Resource Play Expertise Into International Success Robert Bob Fryklund; vice president of research for IHS CERA. He joined the company in July 2006 after serving as Libya president and Brazil country manager for ConocoPhillips. With more than 30 years of both international and domestic industry experience, Fryklund also has held senior leadership positions with British Borneo, Union Texas and Amerada Hess. Based in Houston, he focuses on strategic solutions for the upstream arena and advises national oil companies, independent, majors and investors. He also serves on several boards and committees within the industry, including the Independent Petroleum Association of America and the American Association of Petroleum Geologists. Fryklund holds a bachelors from Hamilton College and an advanced certificate in management. He also has completed advanced studies in business and geology from the University of Houston and the University of Tulsa; April 2010 http://www.aogr.com/index.php/magazine/editors-choice/independents-transforming-u.s.resource-play-expertise-international HOUSTONThe development of onshore unconventional resources has shifted the trend lines on future U.S. natural gas supply projections and has dramatically changed the game in domestic exploration, drilling and production. Independent companies have led the charge into the unconventional oil and gas frontier in North America, and the skill sets they have acquired position them to be strong players in international resource play opportunities. Multinational supermajors and national oil companies are looking to U.S. independent operators like never before to leverage technological expertise and best practices developed through years of experimentation in lower-48 unconventional plays. Independents with large acreage positions in North American shale gas plays and successful track

records in developing those resources are in demand for their corporate knowledge as much as their assets .

Venezuela Oil 1AC V4 Long


We begin with the plan: The United States federal government should substantially increase its economic engagement towards Venezuela by investing in Venezuelan oil infrastructure. We reserve the right to clarify intent.
Said Intent includes providing technical, financial, managerial expertise. This is a partial privatization of the PDVSA as American firms would have partial shares in the PDVSA Note: the PDVSA is the Venezuelan oil company owned by their government

Contention One is the Venezuelan economy


First, the Venezuelan economy will collapse in the status quo A. Brink Lees 13
Venezuela's Controversial Election Results Are Only the Start of Its Troubles KEVIN LEES APRIL 15, 2013 http://www.newrepub lic.com/article/112920/venezuela-elections-2013-close-results-are-defeat-chavismo#

Maduro immediately face an economic crisis, the hangover from a 14-year spending binge and an economy on the brink of collapse Venezuela's economy has precariously
was favored to win on Sunday and then . Since Chvez's reelection in October 2012,

slipped from troubled to tumbling

all while oil prices have surged to $103 a barrel. But Venezuela now also faces its Bush v. Gore moment, with Capriles demanding a recount of the vote in a late-night Sunday address to

the nation. Maduro, in his victory speech, claimed that Capriles had called to offer a pact, but Capriles angrily denounced Maduro as a liar. Capriles started the campaign by taunting Maduro, "No one elected you, kid," and in his speech, he argued that if Maduro was illegitimate before, he's just as illegitimate now. He stopped short of outright declaring victory himself, but he stated that the election result didn't reflect the truth of the Venezuelan electorate, and he made it all but clear that he expected a promised audit to show that he, in fact, was the real victor on Sunday. Venezuela will now confront a long and grueling battle in unprecedented territory you have to go back to December 1968 to find a presidential result that was even closer in Venezuela, a result that ended with Venezuela's first-ever peaceful transfer of power following an

the more acute economic problems continue, and may well accelerate, given that government policy for the past six months has been designed merely to get Maduro to the finish line of Sunday's election.
election. If Maduro holds on to his victory, however, he'll be crippled by nagging doubts over the legitimacy of his presidency, and the close result, barely a month after Chvez's funeral, was a stinging defeat for Chavismo. Meanwhile,

B. Failing oil sector Levisohn 13


Venezuelan Bonds Do the Collapse Ben Levisohn; former stock trader who has covered financial markets for the Wall Street Jo urnal, Bloomberg and BusinessWeek; April 16, 2013 http://blogs.barrons.com/emergingmarketsdaily/2013/04/16/venezuelan-bonds-do-the-collapse/

Barclays cut Venezuelan bonds noting that a weak presidency and high uncertainty are the main outcomes from this election and are the key drivers political gridlock can delay the implementation of the economic measures and could accelerate the deterioration of Venezuelas already fragile fundamentals Those risks are compounded by oils collapse , which could
, for instance, to neutral from overweight, in our change in stance. Its strategists also note that .

put Venezuela on an unsustainable path if they continue to fall

C. No foreign investment Toro 11


Foreign Investment in Venezuela: Mission Almost Impossible Francisco Toro; CaracasChronicles; March 28, 2011 http://www.wha tsnextvenezuela.com/expropriation/foreign-investment-in-venezuela-mission-almost-impossible/

With the largest oil reserves in the Western Hemisphere, Venezuela might appear like a natural candidate to attract major Direct Foreign Investment funds. But, as a direct result of Mr. Chvezs policy of marginalizing private sector capital, Foreign Direct Investment flows actually slammed into reverse in 2009 Venezuela continues to experience a net outflow of foreign direct investment to the tune of $3.1 billion a year
the latest for which ECLAC figures are available. United Nations 2009 Report ECLAC). in the process. Such startling figures are driven largely by the Chvez governments nationalization drive, since compensatio n for expropriated businesses is counted as negative Foreign Direct Investment. What does this tell us? Rather than seek out ne w foreign investors, the Venezuelan government is busily buying out those who stopped by in the past.

(page 53 of the report). Investors thinking of doing business in Venezuela should be aware that they are likely to lose money

The dearth of foreign investment not only slows economic growth now, it will also undermine the medium-to-long-term competitiveness of the Venezuelan economy each new foreign investor needs the plant equipment, technology and business services from data-banks to accounting other foreign companies offer. With investments flowing out of Venezuela at a record pace, new foreign investors find themselves between a rock and a hard place with next to none or few new investments coming into Venezuela outside the extractive sector, domestic firms arent enjoying any of the positive spillover effects from foreign investments whether it is the most advanced technology, added dynamism, or cutting-edge management practices Venezuela has one of the worlds most hostile environments for business as well as the tightest foreign exchange control regimes. Its labor market is exceptionally rigid. Venezuelas notoriously byzantine red-tape that characterizes any routine business operations is bewildering enough to confirm that it is intentional
. New businesses tend to flock together for a reason: in Chvezland. In addition, Seek advice on becoming a foreign investor in Venezuela these days and your enquiries are likely to be met with blank stares. The disincentives now facing potential foreign investors is formidable. Last but not least, . Remarkably, Venezuela has never officially rescinded the National Treatment provisions adopted during its short -lived economic reform experiment during the early 1990s. The provisions stipulate that foreign investors are not to be discriminated against vis--vis domestic investors.

It is, arguably, not foreign investment the government is concerned with short-circuiting, but rather private investment in
One can argue that it is a principle that the government has largely respected, but only in the sense that domestic investors face much of the same hardships as their international counterparts.

general, regardless of its source The one type of investment that is still flowing into the country in any significant quantity is investment in oil projects in Venezuelas rich but expensive to exploit Orinoco Tar Belt. To the extent that major Western companies are able to find investment opportunities in Venezuela, its almost always in the oil sector. That said, such investments are usually as minority partners in projects led by the state-owned PDVSA. However big the potential of the Orinoco Tar Belt might be, however, its nonetheless an enclave of this extractive industry, accounting for relativ ely few jobs and largely disconnected from much of the rest of Venezuelas economy. For the vast majority of Venezuelans, the companies they work for, buy from and contract are simply bereft of significant investment from abroad. And if this is a lost opportunity for international investors, in the long term, it will be an even bigger handicap to Venezuelas existing businesses and those interested in ever doing business there. Venezuelan firms are now cut off from not just foreign investment, but also from the technology foreign investment brings, and the cutting edge management techniques that come with it. Little by little, Venezuelas ability to host genuinely competitive, world-class firms is being eroded
. There, state-owned oil companies from ally countries often receive though not always most favored treatment. China has signed a $20 billion financing facility tied to a major investment by Sinopec Corp. in the region. Likewise, Russias Lukoil and Gazprom as well as Irans Petropars gas contractor have received lucrative development contracts there, a s has PetroVietnam. Petrleos de Venezuela, SA or Italys ENI, Japans Mitsubishi, Spains Repsol, and Chevron have managed to land such contracts in the Orinoco Tar Belt. In sectors like construction, light manufacturing, retail and services, .

D. Default Devereux 12
Venezuela Risks Default If Chavez Wins, Morgan Stanley said Charlie Devereux Sep 14, 2012 http://www.bloomberg.com/news/201 2-09-14/venezuela-faces-debt-crisis-if-chavez-wins-morgan-stanley-says.html

Venezuela could default on its debt as early as 2013 if fails to shore up the oil- producing nations increasingly fragile balance sheet One tipping point could be the $4.3 billion in external debt payments that come due between August and November 2013 Chavez has damaged Venezuelas balance sheet through the nationalization of key sectors of the economy, endemic inflation and a lack of fiscal discipline The policies are an unsustainable mix that heighten the risk of default on Venezuelas $110.6 billion stock of debt, especially if oil prices tumble Government actions may be taking
the second half of President Hugo Chavez wins re-election next month and , Morgan Stanley said. Volberg wrote in a note to clients today. Enlarge image Hugo , who is seeking to extend almost 14 years in power with another six-year term, of fiscal discipline, Volberg said. , Volberg wrote. the second half of

, Morgan Stanley analyst Daniel

, Morgan Stanley analyst Daniel Volberg said. Chavez, who is seeking to extend almost 14 years in power with another six-year term, has damaged Venezuelas balance sheet through the nationalization of key sectors of the economy, endemic inflation and a lack

Venezuela towards a crisis and potentially even a debt event that could come as early as 2013 At 11.6 percent of gross domestic product, Venezuela has the largest fiscal deficit in Latin America, while its international reserves have fallen by $17 billion since 2008 to $25.6 billion Output by state oil company Petroleos de Venezuela SA fell to 2.72 million barrels a day in 2011 from 3.48 million barrels in 1998
the report said. Venezuelas debt is no longer with large bank lenders as much as publicly traded bonds held by a dispersed group of creditors, which could make restructuring more challenging. , Volberg said. ,

according to British Petroleums statistical review. Bond Yields The yield on Venezuelas benchmark 9.25 percent bonds due in 2027 fell 11 basis points, or 0.11 percentage point, to 10.77 percent at 11:27 a.m. in Caracas, accord ing to data compiled by Bloomberg. The bonds price rose

The cost of insuring Venezuelan bonds against default for five years rose four basis points to 737 basis points
0.74 cent today to 88.80 cents on the dollar. , according to prices compiled by Bloomberg.

Second, the Venezuelan economy is key to the Brazilian economy A. Market access on the brink Israel 13
Brazilian firms root for Chavez's man in Venezuela vote Esteban Israel Mar 21, 2013 http://www.reuters.com/article/2013/03/21/us-venezuela-brazil-business-idUSBRE92K0ZY20130321 Brazil, the world's seventh largest economy, has emerged as regional powerbroker in Latin America with moderate center-left policies that it hopes can influence more stridently left-wing neighbors such as Venezuela. With Brazil's economy slowing to a crawl, the last thing its entrepreneurs want to do is forfeit growing markets. Over the past decade, Brazil's exports to Venezuela soared by 533 percent to some $5 billion, making it Brazil's second largest market in Latin America after Argentina, both major

buyers of Brazilian manufactured goods. Economists say Brazil's investments in Venezuela are around $20 billion. Venezuela, an oil producing nation that imports some 70 percent of its food, is now the third largest consumer of Brazilian beef and an important buyer of its chicken. Key infrastructure projects launched during the 14 years of Chavez's government, from the Caracas metro expansion to bridges across the Orinoco river that divides Venezuela, are run by Brazilian firms like Odebrecht.

B. Manufacturing Daudelin 13
Why Venezuela matters for Brazil Jean Daudelin; The Norman Paterson School of International Affairs (NPSIA); April 20, 2013 http://npsia.wordpress.com/2013/04/20/why-venezuela-matters-for-brazil/ I think the answer lies deeper than ideology or even security preoccupations and reaches to the very core of the Brazilian governments economic model, which is still rooted in old and increasingly farfetched dreams of industrialization. The ten-year-long Golden Age of Lulas presidency was based on low inflation and the effective redistribution of reasonably high growth. The axis of that growth, however, has lied in growing exports of primary products, primarily agricultural. For twenty years now, Brazil has been quickly de-industrializing. The fast decline of its manufacturing sector has taken place in the face of strenuous efforts of the government, particularly under the PT, to shore up and protect what a half-century of state efforts had produced, until the brief neo-liberal opening of the early 1990s triggered a debacle that Chinas rise, and the primary goods bonanza it produced, only deepened. Much of Brazils industry is not competitive globally. Domestic protection and support for national champions have consequently been crucial to its survival, but so has regional integration, particularly Mercosur. Hiding its industries behind a common tariff with even less competitiveand even keener protectionistArgentina, ensured that a market would be found for Brazilian products. Bringing Venezuela on board was an even better deal: with no industry to speak of, Venezuela brought no competition within the bloc but putting its sizeable market behind the tariff wall broadened the reach of Brazils uncompetitive manufactured products. Deepening economic instability in Argentina is now threatening the whole scheme. Cristina Kirchners attempts to protect her own industrial sector by imposing barriers to Brazilian products, along with declining demand in Argentina, is hurting Brazilian manufacturing exports to that country which, in the first three months of this year, have declined by 10%.[2] With mass protests against Kirchner in the streets of Buenos Aires and most of the countrys major cities last week, continuing high inflation and falling confidence, things are not looking up. In such a context, what export market is left for Brazils industrial goods but troubled Venezuela, whose oil revenues protect from economic collapse? Mercosur is a raw deal for Venezuelan consumers, who would be much better off importing from the cheapest world producers, but the chavista mix of ideological blindness and economic incompetence is proving to be a boon for Brazil. In that context, quickly recognizing Maduro and keeping a clearer-eyed opposition out of power was a no-brainer.

Third, Brazilian economic stability is critical to avert Brazilian proliferation Shultz 2K


Donald SHULTZ, Research Professor of National Security Policy at US Army War College, THE UNITED STATES AND LATIN AMERICA: SHAPING AN ELUSIVE FUTURE, March, 2000, pg. Online @ http://www.carlisle.army.mil/ssi/pdffiles/PUB31.pdf While we are in a speculative mode, it may be useful to raise the issue of whether, two or three decades from now, the United States might have to deal with a regional hegemon or peer competitor. The most obvious candidate for such a role would be Brazil, which already accounts for almost half of Latin Americas economic production and has by far the largest armed forces in the region (313,250 active troops).53 That country could very well assume a more commanding political and military role in the

decades ahead. Until recently, the primary U.S. concern about Brazil has been that it might acquire nuclear weapons and delivery systems. In the 1970s, the Brazilian military embarked on a secret program to develop an atom bomb. By the late 1980s, both Brazil and Argentina were aggressively pursuing nuclear development programs that had clear military spin-offs.54 There were powerful military and civilian advocates of developing nuclear weapons and ballistic missiles within both countries. Today, however, the situation has changed. As a result of political leadership transitions in both countries, Brazil and Argentina now appear firmly committed to restricting their nuclear programs to peaceful purposes. They have entered into various nuclear-related agreements with each othermost notably the quadripartite comprehensive safeguards agreement (1991), which permits the inspection of all their nuclear installations by the International Atomic Energy Agencyand have joined the Missile Technology Control Regime. Even so, no one can be certain about the future. As Scott Tollefson has observed: . . . the military application of Brazils nuclear and space programs depends less on technological considerations than on political will. While technological constraints present a formidable barrier to achieving nuclear bombs and ballistic missiles, that barrier is not insurmountable. The critical element, therefore, in determining the applications of Brazils nuclear and space technologies will be primarily political.55 Put simply, if changes in political leadership were instrumental in redirecting Brazils nuclear program towards peaceful purposes, future political upheavals could still produce a reversion to previous orientations. Civilian supremacy is not so strong that it could not be swept away by a coup, especially if the legitimacy of the current democratic experiment were to be undermined by economic crisis and growing poverty/inequality. Nor are civilian leaders necessarily less militaristic or more committed to democracy than the military. The example of Perus Fujimori comes immediately to mind. How serious a threat might Brazil potentially be? It has been estimated that if the nuclear plant at Angra dos Reis (Angra I) were only producing at 30 percent capacity, it could produce five 20-kiloton weapons a year. If production from other plants were included, Brazil would have a capability three times greater than India or Pakistan. Furthermore, its defense industry already has a substantial missile producing capability. On the other hand, the country has a very limited capacity to project its military power via air and sealift or to sustain its forces over long distances. And though a 1983 law authorizes significant military manpower increases (which could place Brazil at a numerical level slightly higher than France, Iran and Pakistan), such growth will be restricted by a lack of economic resources. Indeed, the development of all these military potentials has been, and will continue to be, severely constrained by a lack of money. (Which is one reason Brazil decided to engage in arms control with Argentina in the first place.) 56 In short, a restoration of Brazilian militarism, imbued with nationalistic ambitions for great power status, is not unthinkable, and such a regime could present some fairly serious problems. That government would probably need foreign as well as domestic enemies to help justify its existence. One obvious candidate would be the United States, which would presumably be critical of any return to dictatorial rule. Beyond this, moreover, the spectre of a predatory international community, covetous of the riches of the Amazon, could help rally political support to the regime. For years, some Brazilian military officers have been warning of foreign intervention. Indeed, as far back as 1991 General Antenor de Santa Cruz Abreu, then chief of the Military Command of the Amazon, threatened to transform the region into a new Vietnam if developed countries tried to internationalize the Amazon. Subsequently, in 1993, U.S.-Guyanese combined military exercises near the Brazilian border provoked an angry response from many high-ranking Brazilian officers. 57 Since then, of course, U.S.-Brazilian relations have improved considerably. Nevertheless, the basic U.S./ international concerns over the Amazonthe threat to the regions ecology through burning and deforestation, the presence of narcotrafficking activities, the Indian question, etc.have not disappeared, and some may very well intensify in the years ahead. At the same time, if the growing trend towards subregional economic groupingsin particular, MERCOSURcontinues, it is likely to increase competition between Southern Cone and NAFTA countries. Economic conflicts, in turn, may be

expected to intensify political differences, and could lead to heightened politico-military rivalry between different blocs or coalitions in the hemisphere. Even so, there continue to be traditional rivalries and conflicts within MERCOSUR, especially between Brazil and its neighbors, and these will certainly complicate the groups evolution. Among other things, the past year witnessed a serious deterioration of relations between Brazil and Argentina, the product partly of the formers January 1999 currency devaluation, which severely strained economic ties between the two countries. In part, too, these conflicts were aggravated by Argentinas (unsuccessful) bid to join the North Atlantic Treaty Organization (NATO), which Brazilians interpreted as an attempt to gain strategic advantage. The upshot was that relations soured to the extent where questions have been raised as to the continued viability of MERCOSUR itself. In light of these problems, one cannot but wonder what impact a resurgence of Brazilian authoritarianism, combined with a push for regional hegemonic status, would have on Argentina, currently a non-NATO ally of the United States.

Fourth, Brazilian proliferation is the most likely scenario for global nuclear war multiple warrants
Border disputes, instability, unpredictable leaders, accidents, military coups, lower warning times, first strikes, arms race, technical accidents, physical security

Yusuf 8
Predicting Proliferation: The History of the Future of Nuclear Weapons Moeed Yusuf; Fellow at the Frederick S. Pardee Center for the Study of the Longer-Range Future at Boston University; January 2009 http://www.brookings.edu/~/media/research/files/papers/2009/1/nuclear%20proliferation%20yusuf/0 1_nuclear_proliferation_yusuf.pdf Michael Mandelbaum, earlier mentioned as someone who remained relatively comfortable about the ability of the superpowers to deter each other, was less optimistic regarding the capacity of developing countries to do so. He stressed that developing country proliferation would increase the likelihood of the use of nuclear weapons in conflicts.78 Ted Greenwood, an American academic who later advised the U.S. Department of Defense, pointed to the active border disputes of Nth states such as South Africa, Israel, and Taiwan to suggest an increased likelihood of nuclear war.79 Mentions of the possibility of weapons falling into the hands of irresponsible powers the mad ruler scenario were frequent. As French scholar, Thierry de Montbrial pointed out: there are many politically unstable countries whose leaders are not predictableand would not hesitate to use an atomic weapon, if they had one.80 Hinting at the same concern, the renowned French sociologist Raymond Aron argued that acquisition of nuclear weapons by developing countries could even result in a superpower conflict in the Cold War context due to a deliberate or inadvertent action of a small state.81 Moreover, in contrast to the relative stability within the borders of developed countries, Dunn and Overholt pointed to frequent military coups in countries like Argentina, Chile, Brazil, Greece, Indonesia, Iraq, Libya, Nigeria, Pakistan, South Korea, Syria, Turkey, Venezuela, and Zaire to emphasize the possibility of militaristic leaders wresting power and utilizing nuclear weapons as a means of coercing adversaries.82 A number of commentators anticipated that Nth powers would seek to create a first strike capability to preempt traditional rivals. Counterforce targeting strategies were considered likely, but also inherently destabilizing, especially for contiguous countries where warning times were diminished. Technical deficiencies in ensuring robust command and control and the security of the arsenal were taken for granted and used to further heighten fears of accidental or unauthorized use.83

Finally, the plan prevents a Venezuelan economic collapse, the key to the Venezuelan economy is improving their oil sector and increasing private investment Homan 13
EXPLORING THE NEXT GENERATION OFPROLIFERATORS Patrick Homan; Monterey Institute of International Studies, James Martin Center for Nonproliferation Studies; 26 Feb 2013. http://www.niu.edu/polisci/announcements/Grad%20attachments/Homan.pdf Despite being the worlds eighth-largest oil producer, Venezuela faces a host of economic issues. After recovering from a recession that began in 2009, the Venezuelan economy grew consistently from 201012, including 5 percent growth in 2012.59 However, much of this growth can be attributed to public spending, as Chvezs main short-term solution to his countrys economic woes has been borrowing. As a result, net public debt rose from 14 percent of GDP in 2008 to 29 percent in 2010.60 In 2011, the International Monetary Fund reported Venezuelas public debt as 45.5 percent of GDP.61 Much of Chvezs borrowing has been from China. Between 2008 and 2010, China lent Venezuela $12 billion and is being repaid in oil shipments, which cuts even further into government revenues.62 Furthermore, inflation in Venezuela during 2012 was near 20 percent; as a result, the Venezuelan currency traded on the black market for a third of the official rate.63 While Chvezs near-term future seems safe with oil prices around $100 a barrel, there are growing long-term risks within the Venezuela economy. Any future decline in oil prices would send the Venezuelan economy into a tailspin and lead to a default on its obligations. Chvezs handling of his countrys oil sector is the chief cause of Venezuelas economic problems. Chvez pillaged Petrleos de Venezuela (PDVSA), the state-owned oil firm, by packing it with pro-Chvez loyalists, starving it of much needed investment, and using its profits for social spending. As a result, PDVSAs output has gone from 3.3 million barrels per day (b/d) in 1998 to its current level of around 2.25 million b/d, according to recent industry estimates.64 Of that, some 1 million b/d is sold at subsidized prices at home or to regional allies (such as Cuba), leaving just 1.25 million b/d for full-price exports.65 The declining state of its oil sector is having a large impact on the overall Venezuelan economy, as petroleum now accounts for 92 percent of its export revenue.66 This is an extremely troubling development for Chvezs government because its domestic support relies heavily on petrodollars for providing government subsidies and funding social welfare programs. Meanwhile, Chvezs harassment and hostility towards businesses and the private sector has devastated the rest of the Venezuelan economy. In his pursuit toward state socialism, Chvez nationalized hundreds of companies, seizing everything from steel companies and bottle makers to housing schemes.67 When workers have resisted, he has deployed the National Guard against them and trumped up charges against their owners. His efforts to accelerate the revolutionary process caused much of Venezuelas private sector to close or flee. The results are a significant amount of capital flight and a need to import many goods that it previously produced.

Contention Two is Refining


First, declining Venezuelan production is shifting critical American demand to Canadian tar sands without Venezuela, tar sands output will multiply twenty-fold Hussain 13
Growing Canadian oil exports to U.S. bittersweet for producers as price discount bites Yadullah Hussain 07/02/13 http://business.financialpost.com/2013/02/07/growing-canadian-oil-exports-to-u-sbittersweet-for-producers-as-price-discount-bites/?__lsa=0861-4749 But a deeper dive into the data shows Canadian oil exports to the United States have actually risen over the past decade in real and percentage terms. In 2002, Canadian crude accounted for just less than 16% of all U.S. imports, a figure estimated to have reached 28% by the end of 2012. While overall U.S. oil imports have declined, Canadian crude shipments south of the border have risen by a third. Growing Canadian imports from oil sands projects effectively pushed out waterborne imports of heavy crude oil from less stable regions, such as Mexico or Venezuela , said Sabine Schels, analyst at Bank of America Merrill Lynch. This is bittersweet for Canadian companies. Cornering the U.S. market has come at a heavy price in the shape of depressed prices fetched by the Western Canada Select, the heavy Canadian crude. The discounts on Canadian heavy crude are forcing companies including Suncor Energy Inc. to delay plans worth billions of dollars and depressing their bottom lines. In a desperate effort to escape the dreaded $30 discount they must offer U.S. refiners, Alberta-based companies are seeking ways to ship their crude out of Alaska, Atlantic and B.C. But Canadian producers know their biggest market remains the United States. Overall the U.S. Gulf Coast is a huge crude oil market nearly equivalent to all of China today , IHS CERA, an energy research consultancy, said in a report. Consequently, the U.S. Gulf Coast will be a critical part of the future for oil sands , particularly for bitumen blends. TransCanada Corp.s CEO Russ Girling knows this, which is why proposes a pipeline to the Atlantic to take Alberta crude not just to global markets, but back into the United States. Scott Eells/BloombergRuss Girling, chief executive officer of TransCanada Corp. Its not a Plan B, its a Plan A, and it will go if the market supports it, along with Keystone, Mr. Girling told Bloomberg. Once you get on tidewater, you can get anywhere, and you dont need a presidential permit to bring oil into the Gulf Coast. IHS expects oil sands volumes to the Gulf Coast to increase considerably as more than two million barrels per day of new pipeline capacity planned is expected to connect Western Canada to the Gulf Coast in the next three years that is assuming it is approved and gets built. Clearly, Canadian producers are caught in the U.S. orbit and will remain in its vortex for the foreseeable future . It could have been much worse. Unlike their natural gas counterparts who have been dealt a double blow of plunging exports to the U.S and plummeting prices, Canadian crude is popular among U.S. refiners and theres more to it than just being the cheapest crude on earth. Many U.S. Gulf Coast refiners are addicted to heavier crudes, and dont have a taste for the lighter crude churned out from Texas and North Dakota shale plays. Which is why while light blends from places like Nigeria and Angola have declined dramatically, Canadian heavy has been in the ascendancy. John Powell, senior petroleum analyst with the U.S. Department of Energy, expects more sweet crude to be replaced by home-grown blends from places like Eagle Ford, but heavier crude imports will hold their own. In 2013, we see imports, wherever they come from, probably going to get heavier, he said. The Canadian surge has come as other sources of heavy crude face structural issues. Mexican heavy supply is expected to decline, and there is uncertainty around future supply from Venezuela, IHS said. If oil

sands could displace most of the Mexican and Venezuelan imports, the opportunity for bitumen blends would be about 1.5 million barrels per day . U.S. tight oil will grow, but it is still going to leave a lot of room for other suppliers, said Jackie Forrest, senior director at IHS CERA. Canada is specifically well placed. The heavy crude refiners are still going to make more money running heavy crude than the light sweet crude, so they are going to prefer Canadian supply, said Ms. Forrest. While that does not mean Canadian producers should stop exploring other markets to diversify their revenue streams, Canadian crude will not disappear in the U.S. anytime soon, even without Keystone XL pipeline being built. Over time, though, there are concerns that U.S. refiners may move toward lighter crude to meet the needs of rising U.S. shale plays, which produce lighter crude. But is it easy for refiners to flip the switch from heavy crude to light crude? Probably not, says Bill Simpkins, Atlantic Canada representative of the Canadian Fuels Association, which represents many refiners in Canada. Mainly because once you have a refinery and its purpose-built for particular crude and slate of products, they are probably always sourcing that type of crude. And the market for heavier crude is likely to only get bigger. Because of the dwindling supply of conventional sweeter crudes, and their higher costs, you are more likely to see older refineries to move into producing heavier crudes , said Mr. Simpkins. Gulf Coast refiners such as Marathon Petroleum Corp. and Valero Energy Corp. are strong advocates of Keystone XL and are keen to get Canadian crude to the Gulf market.

Second, Venezuelan oil production outcompetes Canada Hussain 13


Life after Chavez: Americas oil gains could be Canadas loss Yadullah Hussain 06/03/13 http://business.financialpost.com/2013/03/06/life-after-chavez-venezuela-u-s-oil-industries-arenaturally-attractive-trading-partners/?__lsa=0861-4749 Brent crude prices didnt move much as traders absorbed the death of Hugo Chavez who ruled the worlds sixth largest OPEC producer, but it may mask a long-term shift that could impact North American energy trading patterns. Over the longer term, changes in policy towards the energy sector might eventually allow Venezuelas oil production to return to the much higher levels seen in the late 1990s, said Tom Pugh, commodities economist at Capital Economics. However, any such recovery would take many years. Venezuela is home to the worlds largest proven oil reserves of around 296.5 billion barrels, but its production has steadily fallen under Mr. Chavez who diverted Venezuelas oil revenues to his pet projects and weakened the state-owned Petrleos de Venezuela, which is responsible for developing the countrys enormous riches. Even as 40% of Venezuelan oil exports headed towards the United States, Mr. Chavez despised Washingtons policies and was actively pursuing a policy to shift exports to China, the Caribbean, Central America and other Asian markets. U.S. imports of Venezuelan petroleum products peaked in 1997, at 379,000 bbl/d, and have since fallen to as low as 23,000 bbl/d in October 2012, the U.S. Department of Energy said in a January note. Despite severe disagreements, the two countries oil industries are naturally attractive oil trading partners due to their proximity , according to the U.S. Department of Energy. The robust trade in crude oil from Venezuela to the United States is due to the compatibility between the configuration of some U.S. refineries and the quality characteristics of Venezuelan crude, which is predominately sour and medium or heavy. This is a worrying development for Canadian crude producers, which offer similar type of heavy crude to the U.S. Gulf Coast refineries, and may lose out if Venezuela reforms its oil industry . Despite shrinking U.S. oil imports, Canada is now it southern neighbours largest supplier of crude, accounting for nearly 30% of all U.S. imports last year. Much of these gains were at the expense of heavier crudes from Venezuela and Mexico. A long-term reversal in Venezuela oil

production could compete with Canada in the United States and even China and Asian markets. Its too soon to say what Hugo Chavezs death means for oil prices, but it is certainly true that oil prices are what made Hugo Chavez possible, Daniel Yergin, the chairman of IHS Cambridge Energy Research Associates, said in an email to Bloomberg. Declining crude prices brought Chavez to rise to power and rising prices gave him the funds needed to sustain state spending and consolidate power, Yergin told the newswire. The countrys crude export stood at 1.7 million bpd in 2011, according to the International Energy Agency, similar to Libyas crude production, which was completely shut down during its bloody civil war in 2011. 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 .

Third, if theres a market for oil sands theyll be developed - economic viability of the oil sands is on the brink Johnson AND Dawson 13
Pipeline Called Key to Canada Oil Sands KEITH JOHNSON in Washington and CHESTER DAWSON in Calgary, Alberta June 7, 2013 http://online.wsj.com/article/SB10001424127887324069104578531713102125222.html 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. GS +1.22% 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., TRP.T +0.42% 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. But market experts said blocking Keystone would at most temporarily sidetrack Alberta's development plans.

Fourth, Venezuelan oil production steals the US market from Canada pushes oil sands over the brink McKenna 13
The secret threat to Canadas oil sands BARRIE MCKENNA; The Globe and Mail; May. 02 2013 http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/the-secretthreat-canadas-oil-sands/article11597201/ OTTAWA Natural Resources Minister Joe Oliver likes to pick on Venezuela when he sells the virtues of Canadian oil to Americans. Buy from a loyal ally, not from less friendly, less stable countries with shoddy environmental records, Mr. Oliver warned bluntly in a speech last week in Washington. Unfortunately, Venezuelan oil has a lot more in common with Canadian oil sands crude than Mr. Oliver cares to admit. Oil is a commodity, after all. And price typically trumps virtue and a smiling face. The bottom line is that Canada and Venezuela produce the same kind of heavy crude thats now sought by re-engineered U.S. petroleum refineries along the Gulf of Mexico. So does Mexico. In recent years, Canada has been winning the competitive battle to feed those refineries. Alberta oil has steadily displaced Mexican and Venezuelan crude in the U.S. market. But there is no certainty that shift will continue. Indeed, Venezuela and Mexico are showing tentative signs of getting their energy act together. Canada has benefited from the ineptitude of its energy producing rivals in the hemisphere. The state-run oil industries in Venezuela and Mexico are hobbled by inefficiencies, poor technology and under-investment in exploration. In spite of vast reserves, the two countries are producing less oil now than they did five years ago. U.S. imports of Venezuelan crude, for example, have dropped to less than a million barrels a day from 1.7 million barrels a day in 1997. Oil imports from Mexico have shrunk nearly 30 cent since 2006. New drilling technology and foreign investment cash could change all that . An often overlooked risk for Canadas oil patch is the possibility that both these underperforming competitors could start ramping up production and exports again. That would exacerbate the already-significant price discount on Canadian crude in the U.S. market. It would also ratchet up pressure on Canadian producers to access alternative markets in China and India via pipelines to the West Coast. Politics and economics have held back Venezuela and Mexico. But the landscape in both countries is shifting. Hugo Chavez was an unexpected gift to the oil sands. Now that hes gone, Venezuela has a much greater chance of shedding its image as an unstable and inefficient supplier of oil to the U.S. Venezuela has proven oil reserves of 211 billion barrels, eclipsing Canadas 175 billion barrels, according to the U.S. Energy Information Administration. And in Mexico, newly installed President Enrique Pena Nieto is vowing to reform the countrys troubled oil industry and attract private investment, particularly to help develop deep offshore and shale reserves in the Gulf of Mexico. Mexico has nearly 11 billion barrels of proven oil reserves, but roughly twice that including potential unconventional and deepwater sources. Mexico is unlikely to privatize Petroleos Mexicanos the stateowned oil company known as Pemex. But Finance Minister Luis Videgaray acknowledged recently that Mexico cant do everything itself and there might be opportunities for private investors in unconventional oil and gas projects where Pemex clearly doesnt have either the capital or the

expertise. Venezuela and Mexico have a long way to go to right their energy industries, and some tough political decisions to make. But if, and when, they do, Canada could be the biggest loser. More Venezuelan and Mexican oil coming into the U.S. would likely lead to an even larger discount on oil sands crude, which is already hampered by high extraction costs and limited pipeline capacity. The threat of new and more productive rivals underscores why projects such as the Keystone XL and Northern Gateway pipelines are so vital to Canada. The industry needs access to markets before there is a gusher of rival capacity in the neighbourhood oil thats free of the extraction, transportation and environmental challenges of the oil sands.

Fifth, Time is key US refineries will cut off Venezuela soon, unless their oil exports increase Ladislaw AND Verrastro 13
Post-Chavez Outlook for Venezuelan Oil Production Sarah O. Ladislaw; co-director and senior fellow with the Energy and National Security Program at the Center for Strategic and International Studies (CSIS) in Washington, D.C.; Frank Verrastro; senior vice president and James R. Schlesinger Chair for Energy & Geopolitics at CSIS; MAR 6, 2013 http://csis.org/publication/post-chavez-outlook-venezuelanoil-production U.S. refineries in the Gulf Coast are specifically designed to process Venezuelas sour and medium to heavy crude and serves as its natural market. Despite oil production being down, the United States still imports just under a million barrels of crude per day from Venezuela (down from a peak of 1.4 mmbd in 1997) and, as stated earlier, the government of Venezuela is highly dependent on those revenues for their ongoing stability, especially as revenue from other exports and domestic consumption decline. As we look ahead to another period of transition in Venezuela it is important to be mindful of the potential for disruption and to look for ways to mitigate the impacts of such disruption, but it is equally important to remember the trade ties that bind the two countries for the time being and to find opportunities to drive change in a positive direction. Time may be limited in this regard because the U.S. domestic production outlook is changing thanks to tight oil development in the United States and the influx of Canadian oil sands, both of which are giving U.S. refiners more options in terms of the crudes they use and more decisions to make about how they want to configure their refineries going forward. A future in which Venezuela is no longer as competitive in its natural market in the United States would change the outlook for Venezuelan crude marketing decisions. The long-term outlook for Venezuelas continued oil market production is changing both in commercial and political terms .

Scenario one for extinction is the climate JAMES HANSEN; directs the NASA Goddard Institute for Space Studies; May 9, 2012 Game Over for the Climate http://www.nytimes.com/2012/05/10/opinion/game-over-forthe-climate.html?_r=0 NCHO GLOBAL warming isnt a prediction. It is happening. That is why I was so troubled to read a recent interview with President O bama in Rolling Stone in which he said that Canada would exploit the oil in its vast tar sands reserves regardless of what we do.

If Canada proceeds, and we do nothing, it will be game over for

the climate. Canadas tar sands, deposits of sand saturated with bitumen, contain twice the amount of carbon dioxide emitted by global oil use in our entire history . If we were to fully exploit this new oil source, and continue to burn our conventional oil, gas and coal supplies, concentrations of carbon dioxide in the atmosphere eventually would reach levels higher than in the Pliocene era, more than 2.5 million years ago, when sea level was at least 50 feet higher than it is now. That level of heat-trapping gases would assure that the disintegration of the ice sheets would accelerate out of control. Sea levels would rise and destroy coastal cities. Global temperatures would become intolerable. Twenty to 50 percent of the planets species would be driven to extinction. Civilization would be at risk . That is the long-term outlook.

But near-term, things will be bad enough. Over the next several decades, the Western United States and the semi-arid region from North Dakota to Texas will develop semi-permanent drought, with rain, when it does come, occurring in extreme events with heavy flooding. Economic losses would be incalculable . More and more of the
Midwest would be a dust bowl. Californias Central Valley could no longer be irrigated.

Food prices would rise to unprecedented levels . If

this sounds apocalyptic, it is . This is why we need to reduce emissions dramatically. President Obama has the power not only to deny tar sands oil additional access to Gulf Coast refining, which Canada desires in part for export markets, but also to encourage economic incentives to leave tar sands and other dirty fuels in the ground. The global warming signal is now louder than the noise of random weather, as I predicted would happen by now in the journal Science in 1981. Extremely hot summers have increased noticeably. We can say with high confidence that the recent heat waves in Texas and Russia, and the one in Europe in 2003, which killed tens of thousands, were not natural events they were caused by human-induced climate change.
We have known since the 1800s that carbon dioxide traps heat in the atmosphere. The right amount keeps the climate conducive to human life. But add too much, as we are doing now, and temperatures will inevitably rise too high. This is not the result of natural variability, as some argue. The earth is currently in the part of its long-term orbit cycle where temperatures would normally be cooling. But they are rising and its because we are forcing them higher with fossil fuel emissions. The concentration of carbon dioxide in the atmosphere has risen from 280 parts per million to 393 p.p.m. over the last 150 years. The tar sands contain enough carbon 240 gigatons to add 120 p.p.m. Tar shale, a close cousin of tar sands found mainly in the

If we turn to these dirtiest of fuels, instead of finding ways to phase out our addiction to fossil fuels, there is no hope of keeping carbon concentrations below 500 p.p.m. a level that would, as earths history shows, leave our children a climate system that is out of their control. We need to start reducing emissions significantly, not create new ways to increase them.
United States, contains at least an additional 300 gigatons of carbon.

Scenario two is the Canadian economy First, Oil sands kill the Canadian economy A. Dutch Disease Weyler 13
Why more tar sands pipelines will only bring disaster for B.C. and Canada REX WEYLER; journalist, author and an activist with Tanker Free B.C.; MAY 8, 2013 http://rabble.ca/news/2013/05/why-more-tar-sands-pipelines-will-only-bring-disaster-bc-and-canada Digging up a natural resource and selling it for cash might sound like a good idea, but it is never that simple. The first financial blow to any resource colony arrives with the now-famous economic "Dutch disease," named in the Netherlands during the North Sea oil boom. Dutch disease is simple: When a nation with a healthy manufacturing sector exploits a cheap resource for cash, its national currency rises in value. This increase in exchange-rates makes all of its exports more expensive to customers, who turn elsewhere. The former manufacturing sector erodes. The country loses jobs and economic stability , so when the resource boom is over, or when commodity prices drop, the nation is worse off, not better. That's Dutch disease. And Canada has it bad . The tar sands boom over the last decade pushed up the Canadian dollar value, and right on cue, Canadian manufacturing declined. Last year, the global trade watchdog, the Organization for Economic Co-operation and Development (OECD) warned that the tar sands boom and commodity price fluctuations has left Canada with a floundering economy. "The export-oriented manufacturing sector had by 2011 shrunk sharply," the OECD reported. The OECD encouraged Canada to restore its non-resource economy to maintain high employment and equitable wealth distribution. They noted that while Alberta was making money from the tar sands, the rest of Canada suffered from a hollowed-out manufacturing and export sector. Now however, since commodity prices have dropped, even Alberta is suffering the curse of Dutch disease. In March this year, the Alberta government announced that it would cut spending and borrow billions to cope with declining revenues, due to falling crude oil prices, exactly as Dutch disease warns. Alberta -- only a decade after former premier Ralph Klein paid off the province's $23-billion debt -- is in debt again and

going deeper. Alberta expects to borrow $12.7-billion over the next three years. In the same month that Alberta promised more debt, Canada lost 54,500 jobs, the biggest job decline in four years. Half those lost jobs disappeared from the manufacturing sector, once again, just as Dutch disease predicts. Meanwhile, to ship oil to China and America, Canada risks oil spills that would cost billions of dollars to clean up, destroy the $14-billion annual west coast tourism industry, obliterate a healthy fishing industry, and shut down our ports. A single oil spill near Vancouver or Victoria harbours could cost this region $40 billion dollars.

B. Forests Nikiforuk 10
15 billion-fold damage How the Tar Sands Threaten Canada's Economic Fate Andrew Nikiforuk, 13 Aug 2010 http://thetyee.ca/Opinion/2010/08/13/TarSandsEconomicFate/ British Columbia has been affected, too. In a 2008 presentation to the Canada West Foundation, Jock Finlayson of the Business Council of British Columbia noted that every one cent rise in the Canada's petro dollar subtracted $150-$160-million from the forestry sector; and another $50-million from the mining sector . Since 2007 alone B.C.'s forestry sector has lost $2.5 billion due to Canada's wonky petro dollar.

C. Tech competitiveness Nikiforuk 10


How the Tar Sands Threaten Canada's Economic Fate Andrew Nikiforuk, 13 Aug 2010 http://thetyee.ca/Opinion/2010/08/13/TarSandsEconomicFate/ Daniel Drache, a political economist at York University, also doesn't think Canada's rapid deindustrialization is smart or sustainable. "Hollowing out of the manufacturing in Ontario and Quebec is a massive price to pay even if the resource Canada is booming... Canada's share of technology intensive industries -- auto production, aerospace, advanced economic software and other high valueadded industries -- is much smaller than a decade ago, and this has left its factory economy structurally and competitively weakened. Most of all, the transfer of power to the resource giants and the financial sector is troubling and problematic."

D. No offense every tar sands job comes from somewhere else Nikiforuk 10
How the Tar Sands Threaten Canada's Economic Fate Andrew Nikiforuk, 13 Aug 2010 http://thetyee.ca/Opinion/2010/08/13/TarSandsEconomicFate/ Serge Coulombe, an economy professor at the University of Ottawa, and two European colleagues recently asked just how much of the manufacturing losses could be attributed to the petro dollar and rapid tar sands development. In the end Coulombe calculated that 53 per cent of the manufacturing employment loss (a total of 322,000 jobs) was directly related to a petro dollar and "Dutch disease phenomenon." That means for every job created in the tar sands (approximately 100,000) another job has died in the country's manufacturing sector due to bad public policy.

Second, Growth is key to Canadas legitimacy as a global middle power Bothwell 11


*Alice. International Studies at Univ of Stellenbosch. Can Canada Still be Considered a Middle Power? March 2011 http://scholar.sun.ac.za/handle/10019.1/6698//Cal-JV]

Canada between 1945 and 2010 has been classified as a prominent " middle power ." At the same time its relative standing among nations has been declining and it has less regard in the world than it once did. Middle power theory seeks to classify those nations who in the wake of the Second World War were neither great powers nor non- great powers. The idea of middlepowermanship greatly appealed to Canadians and they undertook initiatives to separate themselves from the non-great powers. Canada is often seen as the exemplary case for observing middle power status. Through the post war era and the Cold War Canada was both economically and politically powerful. By getting involved in a plethora of multi-lateral bodies such as the United Nations and the Commonwealth while promoting peacekeeping and mediation, Canada was able to exert its growing influence on the world order . Throughout this time
Canada worked hard to build its reputation as a mediator and specialized in ending quarrels. This is true of Canadas involvement in the Commonwealth in the 1960s and 1970s with regard to the Rhodesian question. On two separate occasions it was the Canadian contingents that prevented the Commonwealth from dissipating. This further bolstered Canadas rise to prominence in the world order. Over the years ,

as Canada took on more initiatives resources became very thinly spread. With an economic slow down and new commitments to national policies (universal healthcare and pensions) the Canadian budget was rearranged and priorities changed. No longer were there the same resources available to middle power initiatives or the military. This has greatly impacted Canadas ability to participate in international projects. Recently, Canadas position in the world has come into question, asking whether or not it truly is still a middle power. By looking at various traditional middle power elements including the economy, peacekeeping, official development assistance and involvement in prominence is waning. Using the case study of Zimbabwean/ Canadian relations through the 20th and 21st centuries, the decline of Canadas mi ddle power performance can be traced. Combining these different themes with hard and soft power theory it is clear to see that Canada no longer holds the same position of middle power it once did. It also shows that Canadians are holding onto an image of Canada, which is dated, and it is time to redefine Canadas position within the world order. multilateral bodies
it can be seen that Canadas

Third, Canadas standing as a middle power is a controlling impact necessary to mediate otherwise-inevitable great power conflict Bothwell 11
[Alice. International Studies at Univ of Stellenbosch. Can Canada Still be Considered a Middle Power? March 2011 http://scholar.sun.ac.za/handle/10019.1/6698//Cal-JV] Robert Cox in his 1989 article Middlepowermanship, Japan and the Future World Order poses a valid question what is the essence of the middle powers functional relationship to the world order? (Cox, 1989:825). Before delving into the theory behind middle powers it is impo rtant to understand why they are so

Middle powers have acted as a stabiliser and neutraliser , especially during the Cold War, middle power countries acted within the interests of their bloc to neutralise the tension, or urging restraint on the alliance leader, or resisting renewed 21 tendencies towards isolationism on the part of the bloc leader(Cooper et al. 1993:20). The middle-power role is to affirm the principle of adherence to acceptable rules of conduct by all powers, great and small (Cox, 1989:834). Middle powers are able to affirm this world order through various international institutions based on a post- Westphalian political structure and a
important in the world.

decentralization of global hegemony (Cox, 1989:835). In the era after the Second World War when the Great Powers had been decimated country like Canada who was very involved in the war through industry, finance, technology and manpower came out on the other side with a new place in the global order. No longer was Canada a former colony or a nation pretending to be its own country; rather, as a nation Canada had an
a new grouping of powers began to emerge. A

important impact . Perhaps most importantly, the Canadian economy was stronger than ever at the end of the war. Since Canada was not a great power like the United States or Britain but was no longer a small power a new place in the world order needed to be sought out. This is where the evolution of middle powers began. After the Cold War ended there were new opportunities for middle powers. They were not needed to try and keep a stable world order; there were new initiatives they were able to
participate in. Since the Soviet Union and the United States were no longer caught in a constant power struggle and there was no longer the same divide

between east and west and as a result,

middle powers had greater freedom of action thrust upon them in terms of

their diplomacy (Cooper et al.1993: 21). Middle powers have the ability to come together through multilateral bodies such as NATO and the UN to uphold the norms and rules of the international system and perform certain tasks to maintain and strengthen that system (Cooper et al. 1993: 21). Throughout the 1980s with the United States declining resources middle powers were poised to take on a more active role in the international arena (Cooper et al.1993: 21).

Scenario three is global biodiversity First, Tar sands destroy the Boreal Forest Hansen 9
Guest Columnist: President's trip to Canada defines critical carbon moment JAMES E. HANSEN; director of NASA Goddard Institute for Space Studies; February 17, 2009 http://www.seattlepi.com/local/opinion/article/Guest-Columnist-President-s-trip-to-Canada1300396.php The tar sands of Canada constitute one of our planet's greatest threats . They are a double-barreled threat. First, producing oil from tar sands emits two to three times the global warming pollution of conventional oil. But the process also diminishes one of the best carbon reduction tools on the planet -- Canada's Boreal Forest. This forest plays a key role in the global carbon equation by serving as a major storehouse for terrestrial carbon -- indeed, it is believed to store more carbon per hectare than any other ecosystem on Earth. When this pristine forest is strip-mined for tar sands development, much of its stored carbon is lost. Canada's Boreal Forest is also the reservoir for a large fraction of North America's clean, fresh water, home to about 5 billion migratory birds, and some of the largest remaining populations of caribou, moose, bear and wolves on the planet.

Second, Boreal development threatens global biodiversity NRDC 4


The Boreal Forest: Earth's Green Crown Natural Resources Defense Council 2004 http://www.nrdc.org/land/forests/boreal/intro.asp Canada's vast boreal forest is among the largest intact forest ecosystems left on earth, and must be preserved. In the far-north latitudes, just below the treeless tundra of the polar region, a forest of evergreen trees encircles the earth. This is the boreal forest, and it is the biggest terrestrial ecosystem in the world. It is also largely intact, free of roads and industrial development -- especially in Canada, where more than 1.3 billion pristine acres are found. The global boreal forests are larger than even the Amazon rainforest. Like the Amazon, the boreal forest is of critical importance to all living things. Its trees and peatlands comprise one of the world's largest "carbon reservoirs"; carbon stored in this way is carbon not released into the atmosphere, where it would trap heat and accelerate global warming. Its wetlands filter millions of gallons of water each day. And as a vast and intact forest ecosystem, it still supports a natural food web, complete with large carnivores like bears, wolves and lynx along with thousands of other species of plants, mammals, birds and insects. The boreal forest is also home to hundreds of First Nations communities, many of which rely on fishing, hunting and trapping for their livelihoods. Despite its global significance, Canada's boreal forest is in great danger today. Large industries -- timber, mining, oil, gas, and hydropower companies -- are eyeing it for development, and less than 8 percent of the boreal forest is protected from large-scale industrial development.

Third, Biodiversity loss causes extinction Diner 94


Major David Diner, JAG Corps, United States Army, Winter 1994, Military Law Review, 143 Mil. L. Rev. 161, p. 170-173 1. Why Do We Care? -- No species has ever dominated its fellow species as man has. In most cases, people have assumed the God-like power of life and death -- extinction or survival -- over the plants and animals of the world. For most of history, mankind pursued this domination with a single-minded determination to master the world, tame the wilderness, and exploit nature for the maximum benefit of the human race. In past mass extinction episodes, as many as ninety percent of the existing species perished, and yet the world moved forward, and new species replaced the old. So why should the world be concerned now? The prime reason is the worlds survival. Like all animal life, humans live off of other species. At some point, the number of species could decline to the point at which the ecosystem fails, and then humans also would become extinct. No one knows how many species the world needs to support human life, and to find out -- by allowing certain species to become extinct -- would not be sound policy. In addition to food, species offer many direct and indirect benefits to mankind. 2. Ecological Value. -- Ecological value is the value that species have in maintaining the environment. Pest, erosion, and flood control are prime benefits certain species provide to man. Plants and animals also provide additional ecological services -- pollution control, oxygen production, sewage treatment, and biodegradation. 3. Scientific and Utilitarian Value. -- Scientific value is the use of species for research into the physical processes of the world. Without plants and animals, a large portion of basic scientific research would be impossible. Utilitarian value is the direct utility humans draw from plants and animals. Only a fraction of the earths species have been examined, and mankind may someday desperately need the species that it is exterminating today. To accept that the snail darter, harelip sucker, or Dismal Swamp southeastern shrew could save mankind may be difficult for some. Many, if not most, species are useless to man in a direct utilitarian sense. Nonetheless, they may be critical in an indirect role, because their extirpations could affect a directly useful species negatively. In a closely interconnected ecosystem, the loss of a species affects other species dependent on it. Moreover, as the number of species decline, the effect of each new extinction on the remaining species increases dramatically. 4. Biological Diversity. -- The main premise of species preservation is that diversity is better than simplicity. As the current mass extinction has progressed, the worlds biological diversity generally has decreased. This trend occurs within ecosystems by reducing the number of species, and within species by reducing the number of individuals. Both trends carry serious future implications. Biologically diverse ecosystems are characterized by a large number of specialist species, filling narrow ecological niches. These ecosystems inherently are more stable than less diverse systems. The more complex the ecosystem, the more successfully it can resist a stress. . . . [l]ike a net, in which each knot is connected to others by several strands, such a fabric can resist collapse better than a simple, unbranched circle of threads -- which if cut anywhere breaks down as a whole. By causing widespread extinctions, humans have artificially simplified many ecosystems. As biologic simplicity increases, so does the risk of ecosystem failure. The spreading Sahara Desert in Africa, and the dustbowl conditions of the 1930s in the United States are relatively mild examples of what might be expected if this trend continues. Theoretically, each new animal or plant extinction, with all its dimly perceived and intertwined affects, could cause total ecosystem collapse and human extinction. Each new extinction increases the risk of disaster. Like a mechanic removing, one by one, the rivets from an aircrafts wings, mankind [humankind] may be edging closer to the abyss.

Contention Three is Solvency


First, Maduro will accept the plan A. He needs foreign investment to fund Chavezs legacy of grand socialist programs thats key to his political legitimacy Thomas-Symonds 13
What After Chavez? Nick Thomas-Symonds; practicing barrister at Civitas Law, Cardiff, specializing in chancery and commercial law. He is also Lecturer in Politics at St. Edmund Hall, Oxford University. He teaches British Politics and Government Since 1900, Modern British Politics, Politics in Europe and US Politics. He also teaches Contemporary US Politics on Oxford Universitys Department of Continuing Education Foundations of Diplomacy course; April 18, 2013 http://www.e -ir.info/2013/04/18/what-after-chavez/

A major part of Mr Chavezs popular appeal was his willingness to stand up to what he characterized as imperialism. He accused the US of trying to bring him down. With Mr Chavezs death on 5 March 2013, there is an argument that things can only get better in diplomatic relations between the US and Venezuela. After all, even under Mr Chavez, Venezuela was still trading widely with the US. The United States is Venezuelas most important trading partner Oil dominates U.S. imports from Venezuela, which is one of the top four suppliers of foreign oil to the United States. About 500 U.S. companies are represented in Venezuela. U. S. foreign direct investment in Venezuela is concentrated largely in the petroleum, manufacturing and finance sectors. That is not to say, however, that the US desire for oil has made it a no-go area for US governments in their diplomatic relations with the Bolivarian Republic. Sanctions were imposed on the Venezuelan state oil company, PDVSA, in 2011, for making supplies to Iran To win the presidential election Maduro needed to present himself as continuing the work of Mr Chavez.
After all, El Comandante traced his heritage to another Latin American independence leader, Simon Bolivar. Mr Chavezs antipa thy had personal elements, too. To use just one example, a brief coup in 2002 temporarily removed him from power, and he openly accused the US of being responsible for it. The US Department of States fact sheet on US-Venezuela relations confirms the extent of this trade: . U.S. exports to Venezuela include machinery, organic chemicals, agricultural products, optical and medical instruments, autos and auto parts. It adds: . The demise of Mr Chavez is one thing, the position of his successor, Nicolas Maduro, on the US, quite another. , Mr , a former bus driver, As Mr Chavezs chosen successor, and as the incumbent during the election, this may have seemed an easy task. However, Mr Maduro has taken this argument to extraordinary lengths. He not only declared himself the son of C havez but claimed Chavez lives! and even went so far as to argue that El Comandante appeared to him as a bird whilst prayi ng. Mr Maduro has continued to plough Chavezs anti-US furrow. After all, he did serve for a substantial period as his foreign minister. An allegation that the dead president ha d been the subject of an attack by historic enemies led the US State Department to declare the notion that the US had played any part in

Mr Maduro won the presidential election on 14 April 2013 with 50.7% of the vote. His winning margin of 1.5% constitutes only 235,000 votes. His defeated rival, Henrique Capriles, has alleged electoral malpractice and asked for the votes to be counted again the narrow margin of Mr Maduros victory, particularly given the advantages of his links to Mr Chavez, may prove less durable than he may think. Protests against the result continue Mr Maduros policies matter. One of his first acts was to announce the continuation of funding of socialist programmes from oil revenues. The current policy of using the nations oil reserves to fund socialist programmes cannot continue without putting the stability of the nations economy at risk. On the other hand, the programmes cannot be scaled back without political and social unrest. It is here that there may be a small chink of light for US-Venezuela relations, even under Mr Maduro. Venezuela cannot afford to turn any investors away unnecessarily.
Chavezs death from cancer as absurd. step. However, the National Electoral Council has declared Mr Maduros victory irreversible. That said, Cabello, said the results require deep self-criticism. after all. For now at least, month that whoever was the President was in a Catch 22 situation. Even now, the US multi-national Chevron advertises that it is playing a part in six onshore and offshore projects.

. The US urged an audit of the result as an important, prudent and necessary

On Twitter, National Assembly, Head Mr Diosdado

. The outcome may yet prove unpredictable, and Mr Chavezs demise may have heralded something new in Venezuelan foreign polic y

Even setting to one side the protests against his controversial presidential election victory, the International Atomic Energy (IEA) predicted last

B. 14 years of economic devastation Roberts AND Daga 13


Venezuela: U.S. Should Push President Maduro Toward Economic Freedom James M. Roberts; research fellow for economic freedo m and growth at the Center for International Trade and Economics; and Sergio Daga; Heritage Foundation visiting senior policy analyst in economic freedom in Latin America; April 15, 2013 http://www.heritage.org/research/reports/2013/04/venezuela-us-should-push-president-maduro-toward-economic-freedom

Hugo Chavezs hand-picked successor, former trade union boss Nicols Maduro, appears to have defeated Capriles by a narrow margin in a contentious and hard-fought special election Venezuela is in such shambles after 14 years of seat-of-the-pants mismanagement that Maduro may ultimately be forced to pursue more moderate policies and seek help from the U.S. to restore stability The Obama Administration and Congress should exploit this opening by using U.S. leverage to push Venezuela to turn from Chavezs failed experiment in oil-cursed 21st-century socialism toward economic freedom
Governor Henrique victory is confirmed . [1] .

on April 14. assuming his

Second, the plan solves Roberts AND Daga 13


Venezuela: U.S. Should Push President Maduro Toward Economic Freedom James M. Roberts; research fellow for economic freedom and growth at th e Center for International Trade and Economics; and Sergio Daga; Heritage Foundation visiting senior policy analyst in economic freedom in Latin America; April 15, 2013 http://www.heritage.org/research/reports/2013/04/venezuela-us-should-push-president-maduro-toward-economic-freedom

U.S. Policy Toward the New Maduro Government Washington should insist on strict conditionality before sending a new U.S. ambassador to Caracas or assenting to any new lending to Venezuela by international financial institutions until the new government Takes steps to privatize PDVSA to bring in international equity partners with the expertise and financial capacity to restore PDVSA to the high level of professional operational and managerial expertise for which it was widely respected prior to 1999
information for all Venezuelans. Use U.S. Leverage

: Produces a comprehensive plan for reform that reduces the size of the public sector, reverses nationalizations and

expropriations of land and enterprises with just compensation to owners, restores the independence of the central bank and ju dicial institutions, reforms the electoral system, and submits to an internationally supervised audit of the governments books during the Chavez years;

; Immediately stops all subsidies to Cuba and terminates wasteful and economically destabilizing subsidy programs such as

PetroCaribe and ALBA; Ceases cooperation with international state sponsors of terrorism (such as Iran) and j oins the international communitys cooperative efforts in the fight against transnational crime, narco -trafficking, and terrorism; and Restores freedom of the press and access to

The foundations of economic freedom in Venezuela were severely weakened during the 14-year misrule by Chavez. Although Chavezs death may aggravate instability and further polarize Venezuela, it need not be that way. Venezuela is in need of immediate and sweeping reforms, but these changes will take time, effort, determination, and, above all, dedicated reformers in Venezuela The Obama Administration should step into the breach with active and forward-looking policies to bring Venezuela back into the globalized economic system
. .

Third, The Venezuelan oil sector needs investment to sustain itself inefficiences will destroy the industry in the status quo Gjelten 13
Venezuela's Next Leader Faces Tough Choice On Oil Program TOM GJELTEN; NPR Latin American Expert; April 11, 2013 ht tp://www.npr.org/2013/04/11/176843567/venezuela-s-next-leader-faces-tough-choice-on-oil-program As

Venezuela's

president, Hugo Chavez thought in grandiose terms, and his country's vast oil riches enabled him to act on his vision. But Chavez died before he had to deal with the flaws in his model, and some hard choices await his successor. Key to Chavez's notion

oil reserves estimated by the Organization of Petroleum Exporting Countries to be the largest in the world are worth tens of billions of dollars a year in potential revenue During his presidency, Chavez diverted much of that potential wealth to Venezuelan consumers in the form of cheap gasoline He propped up the Castro regime in Cuba, and he offered Venezuelan oil on highly preferential terms to 18 Caribbean and Latin American countries through an energy alliance he called PetroCaribe Oil production in Venezuela declined sharply under the Chavez administration, however, largely due to inadequate investment in the energy infrastructure, inefficiencies in oil industry management, and the replacement of skilled oil technicians and managers with political loyalists
of "21st Century Socialism" was the redistribution of Venezuela's oil earnings. The country's . (18 cents per gallon or less). . . PetroCaribe Initiative The drop in oil production more than 7 percent just in the first quarter of 2013 is severe enough to call into question whether the Chavista oil welfare programs can be sustained. For the Caribbean and Latin American countries that have been benefiting from the PetroCaribe program, it is a time of great anxiety. Chavez saw the energy alliance as a way to free th e member states from U.S. energy imperialism. "There's no one who can slow our ever-faster march toward our great historical goals," he said, defining PetroCaribe as "energy unity." For poor countries, the PetroCaribe deal was irresistible. Typically, they had to pay cash for only half the oil they received. The rest they got on credit, financed over 25 years at 1 percent. Among those who eagerly signed up for the program was Haiti. In reality, PDVSA makes money from only a small proportion of the oil it p roduces. Now, can that continue? I don't think so. - Roger Tissot, energy economist "Any country that would benefit from such a credit would take advantage of it," says Ren Jean-Jumeau, Haiti's minister of energy. "There's not even a need to justify this. Haiti is a struggling economy, and this is a great advantage for us. We consider it extremely important." In the Dominican Republic, PetroCaribe was key to the country's 2008-2009 financial stabilization program. "By allowing us to defer the oil payments, it was a big, big thing for the government," says Juan Carlos Russo of the Pontificia Universidad Catlica in Santo Domingo. To be sure, there were strings attached: Chavez wanted the PetroCaribe countries to support his ideological crusade against the U.S. Some did so enthusiastically. Others largely ignored the Chavista rhetoric. "A lot of these countries looked at this thing in a practical manner," says Jeremy Martin, director of the energy program for the Institute of the Americas at the University of California, San Diego. "They were able to stomach the ideology as long as they could get such a wonderful financial deal." For countries such as Haiti, Jamaica and the Dominican Republic, the cheap oil from Venezuela could not have come at a better time, with energy prices rising and the world economy in crisis. "Most of these countries have no domestic s upplies of oil and gas," Martin notes. "If they do, it's minimal. These are energy-starved countries. And so they became absolutely addicted [to the PetroCaribe program]." What Does Venezuela Get? But whether the deal is good for Venezuela is another question. "In my economic mind, I would say, 'Why are they willing to sacrifice this much?' " says Russo. The Dominican Republic is repaying its oil debt to Ve nezuela partly in string beans. Jorge

To Venezuela, from a cash-flow point of view, this represents close to $5 billion a year of revenue that they're missing In reality, PDVSA makes money from only a small proportion of the oil it produces Venezuela's problem is that its oil production is declining, in part because of the lack of reinvestment and the politicization of PDVSA operations under the Chavez government. Unless oil prices move sharply higher, the country will face a significant loss of oil revenue In 1997, PDVSA was producing 3.5 million barrels a day Today they are about 2.8 million barrels a day. It shows you what a bad job the Venezuelan government has done in managing their national oil company Venezuela's next president won't be able to maintain the oil industry
Pion, who previously worked in Latin America for the Amoco and Shell companies, notes that all the oil that Venezuela provides on easy credit terms to other countries could have been sold for cash on the global market. " ," Pion says. The state-owned oil company Petroleos de Venezuela, S.A. also donated oil to low-income families in the United States. There were the oil subsidies for Cuba. Plus, there's all the oil that goes for cheap gasoline for Venezuelan drivers. " ," says independent energy economist Roger Tissot, who specializes in the Latin American energy market. "Now, can that continue? I don't think so." ." ," notes Pion, now an energy analyst at the University of Texas at Austin. " ." Chavez died before he had to confront the economic and political problems certain to plague his successor. , subsidize gasoline at home, spend oil revenue on social programs and share Venezuela's oil wealth with his Caribbean and Latin neighbors. Something has to give. If it's a choice between serving domestic needs and maintaining the sweetheart oil deals with other countries, the PetroCaribe nations may be in for a disappointment.

Fourth, American firms are eager to invest delays in funding kill their industry Peixe 13
Venezuela Sees Foreign Investment in Oil Fall in Political Vacuum Left by Chavez Joao Peixe 27 January 2013 http://oilprice.com/Latest-Energy-News/World-News/Venezuela-Sees-Foreign-Investment-in-OilFall-in-Political-Vacuum-Left-by-Chavez.html Due to the political vacuum left by Hugo Chavezs absence whilst he battles cancer behind closed doors, Venezuelas oil industry has experienced the first decline in foreign investment in five years. No new credit lines have been announced from China, the largest foreign contributor to Venezuelas oil industry, since April last year, and both Russian and Indian companies are withholding their planned investments until the political situation becomes more stable and transparent. This lack of investment from foreign governments is contrasted by the private sector where investors are eager to buy into Venezuelan assets , believing that Chavezs successor will reduce the states grip on the economy. Matt Ferchen, a scholar at the Carnegie Tsinghua Centre for Global Policy, explained that there There is simply nowhere in the world, outside of China, where the CDB has built up such a huge financial presence. Even if Chavez wasnt the easiest partner for China, he was their man, and now they dont know who is in charge. Vice President Nicholas Maduro is currently running the country, but Chavezs political opposition have called for Maduro to stand down temporarily and cede power to their party whilst Chavez is ill, in order to increase the political stability in the country and give investors some assurance. Current delays to the funding threaten the ability of one of the most oil rich countries in the world to reverse its declining output. Oil production in Venezuela has fallen 13 percent since Chavez first took power in 1999 to just 2.7 million barrels a day.

Fifth, American technical expertise is the best managerial practices, corporate knowledge, and financial assets Fryklund 10
Independents Transforming U.S. Resource Play Expertise Into International Success Robert Bob Fryklund; vice president of research for IHS CERA. He joined the company in July 2006 after serving as Libya president and Brazil country manager for ConocoPhillips. With more than 30 years of both international and domestic industry experience, Fryklund also has held senior leadership positions with British Borneo, Union Texas and Amerada Hess. Based in Houston, he focuses on strategic solutions for the upstream arena and advises national oil companies, independent, majors and investors. He also serves on several boards and committees within the industry, including the Independent Petroleum Association of America and the American Association of Petroleum Geologists. Fryklund holds a bachelors from Hamilton College and an advanced certificate in management. He also has completed advanced studies in business and geology from the University of Houston and the University of Tulsa; April 2010 http://www.aogr.com/index.php/magazine/editors-choice/independents-transforming-u.s.resource-play-expertise-international HOUSTONThe development of onshore unconventional resources has shifted the trend lines on future U.S. natural gas supply projections and has dramatically changed the game in domestic exploration, drilling and production. Independent companies have led the charge into the unconventional oil and gas frontier in North America, and the skill sets they have acquired position them to be strong players in international resource play opportunities. Multinational supermajors and national oil companies are looking to U.S. independent operators like never before to leverage technological expertise and best practices developed through years of experimentation in lower-48 unconventional plays. Independents with large acreage positions in North American shale gas plays and successful track

records in developing those resources are in demand for their corporate knowledge as much as their assets .

Venezuela Oil 1AC V4 Short


We begin with the plan: The United States federal government should substantially increase its economic engagement towards Venezuela by investing in Venezuelan oil infrastructure. We reserve the right to clarify intent.
Said Intent includes providing technical, financial, managerial expertise. This is a partial privatization of the PDVSA as American firms would have partial shares in the PDVSA Note: the PDVSA is the Venezuelan oil company owned by their government

Contention One is the Venezuelan economy


First, American investment in Venezuelan oil is key to avert economic collapse Homan 13
EXPLORING THE NEXT GENERATION OFPROLIFERATORS Patrick Homan; Monterey Institute of International Studies, James Martin Center for Nonproliferation Studies; 26 Feb 2013. http://www.niu.edu/polisci/announcements/Grad%20attachments/Homan.pdf Despite being the worlds eighth-largest oil producer, Venezuela faces a host of economic issues. After recovering from a recession that began in 2009, the Venezuelan economy grew consistently from 201012, including 5 percent growth in 2012.59 However, much of this growth can be attributed to public spending, as Chvezs main short-term solution to his countrys economic woes has been borrowing. As a result, net public debt rose from 14 percent of GDP in 2008 to 29 percent in 2010.60 In 2011, the International Monetary Fund reported Venezuelas public debt as 45.5 percent of GDP.61 Much of Chvezs borrowing has been from China. Between 2008 and 2010, China lent Venezuela $12 billion and is being repaid in oil shipments, which cuts even further into government revenues.62 Furthermore, inflation in Venezuela during 2012 was near 20 percent; as a result, the Venezuelan currency traded on the black market for a third of the official rate.63 While Chvezs near-term future seems safe with oil prices around $100 a barrel, there are growing long-term risks within the Venezuela economy. Any future decline in oil prices would send the Venezuelan economy into a tailspin and lead to a default on its obligations. Chvezs handling of his countrys oil sector is the chief cause of Venezuelas economic problems. Chvez pillaged Petrleos de Venezuela (PDVSA), the state-owned oil firm, by packing it with pro-Chvez loyalists, starving it of much needed investment, and using its profits for social spending. As a result, PDVSAs output has gone from 3.3 million barrels per day (b/d) in 1998 to its current level of around 2.25 million b/d, according to recent industry estimates.64 Of that, some 1 million b/d is sold at subsidized prices at home or to regional allies (such as Cuba), leaving just 1.25 million b/d for full-price exports.65 The declining state of its oil sector is having a large impact on the overall Venezuelan economy, as petroleum now accounts for 92 percent of its export revenue.66 This is an extremely troubling development for Chvezs government because its domestic support relies heavily on petrodollars for providing government subsidies and funding social welfare programs. Meanwhile, Chvezs harassment and hostility towards businesses and the private sector has devastated the rest of the Venezuelan economy. In his pursuit toward state socialism, Chvez nationalized hundreds of companies, seizing everything from steel companies and bottle makers to housing schemes.67 When workers have resisted, he has deployed the National Guard against them and trumped up charges against their owners. His efforts to accelerate the revolutionary process caused much of Venezuelas private sector to close or flee. The results are a significant amount of capital flight and a need to import many goods that it previously produced.

Second, Venezuelas economy is on the brink Lees 13


Venezuela's Controversial Election Results Are Only the Start of Its Troubles KEVIN LEES APRIL 15, 2013 http://www.newrepub lic.com/article/112920/venezuela-elections-2013-close-results-are-defeat-chavismo#

Maduro immediately face an economic crisis, the hangover from a 14-year spending binge and an economy on the brink of collapse Venezuela's economy has precariously
was favored to win on Sunday and then . Since Chvez's reelection in October 2012,

slipped from troubled to tumbling

all while oil prices have surged to $103 a barrel. But Venezuela now also faces its Bush v. Gore moment, with Capriles demanding a recount of the vote in a late-night Sunday address to

the nation. Maduro, in his victory speech, claimed that Capriles had called to offer a pact, but Capriles angrily denounced Maduro as a liar. Capriles started the campaign by taunting Maduro, "No one elected you, kid," and in his speech, he argued that if Maduro was illegitimate before, he's just as illegitimate now. He stopped short of outright declaring victory himself, but he stated that the election result didn't reflect the truth of the Venezuelan electorate, and he made it all but clear that he expected a promised audit to show that he, in fact, was the real victor on Sunday. Venezuela will now confront a long and grueling battle in unprecedented territory you have to go back to December 1968 to find a presidential result that was even closer in Venezuela, a result that ended with Venezuela's first-ever peaceful transfer of power following an election. If Maduro holds on to his victory, however, he'll be crippled by nagging doubts over the legitimacy of his presidency, and the close result, barely a month after Chvez's funeral, was a stinging defeat for Chavismo. Meanwhile,

the more acute

economic problems continue, and may well accelerate, given that government policy for the past six months has been designed merely to get Maduro to the finish line of Sunday's election.

Third, the Venezuelan economy is key to the Brazilian economy A. Market access on the brink Israel 13
Brazilian firms root for Chavez's man in Venezuela vote Esteban Israel Mar 21, 2013 http://www.reuters.com/article/2013/03/21/us-venezuela-brazil-business-idUSBRE92K0ZY20130321 Brazil, the world's seventh largest economy, has emerged as regional powerbroker in Latin America with moderate center-left policies that it hopes can influence more stridently left-wing neighbors such as Venezuela. With Brazil's economy slowing to a crawl, the last thing its entrepreneurs want to do is forfeit growing markets. Over the past decade, Brazil's exports to Venezuela soared by 533 percent to some $5 billion, making it Brazil's second largest market in Latin America after Argentina, both major buyers of Brazilian manufactured goods. Economists say Brazil's investments in Venezuela are around $20 billion. Venezuela, an oil producing nation that imports some 70 percent of its food, is now the third largest consumer of Brazilian beef and an important buyer of its chicken. Key infrastructure projects launched during the 14 years of Chavez's government, from the Caracas metro expansion to bridges across the Orinoco river that divides Venezuela, are run by Brazilian firms like Odebrecht.

B. Manufacturing Daudelin 13
Why Venezuela matters for Brazil Jean Daudelin; The Norman Paterson School of International Affairs (NPSIA); April 20, 2013 http://npsia.wordpress.com/2013/04/20/why-venezuela-matters-for-brazil/ I think the answer lies deeper than ideology or even security preoccupations and reaches to the very core of the Brazilian governments economic model, which is still rooted in old and increasingly farfetched dreams of industrialization. The ten-year-long Golden Age of Lulas presidency was based on low inflation and the effective redistribution of reasonably high growth. The axis of that growth, however, has lied in growing exports of primary products, primarily agricultural. For twenty years now, Brazil has been quickly de-industrializing. The fast decline of its manufacturing sector has taken place in the face of strenuous efforts of the government, particularly under the PT, to shore up and protect what a half-century of state efforts had produced, until the brief neo-liberal opening of the early 1990s triggered a debacle that Chinas rise, and the primary goods bonanza it produced, only deepened. Much of Brazils industry is not competitive globally. Domestic protection and support for national champions have consequently been crucial to its survival, but so has regional integration, particularly Mercosur. Hiding its industries behind a common tariff with even less competitiveand even keener protectionistArgentina, ensured that a market would be found for Brazilian products. Bringing Venezuela on board was an even better deal: with no industry to speak of, Venezuela brought no competition within the bloc but putting its sizeable market behind the tariff wall broadened the reach of Brazils uncompetitive manufactured products. Deepening economic instability in Argentina is now threatening the whole scheme. Cristina Kirchners attempts to protect her own industrial sector by imposing barriers to Brazilian products, along with declining demand in Argentina, is hurting Brazilian manufacturing exports to that country which, in the first three months of this year, have declined by 10%.[2] With mass protests against Kirchner in the streets of Buenos Aires and most of the countrys major cities last week, continuing high inflation and falling confidence, things are not looking up. In such a context, what export market is left for Brazils industrial goods but troubled Venezuela, whose oil revenues protect from economic collapse? Mercosur is a raw deal for Venezuelan consumers, who would be much better off importing from the cheapest world producers,

but the chavista mix of ideological blindness and economic incompetence is proving to be a boon for Brazil. In that context, quickly recognizing Maduro and keeping a clearer-eyed opposition out of power was a no-brainer.

Fourth, Brazilian economic stability is critical to avert Brazilian proliferation Shultz 2K


Donald SHULTZ, Research Professor of National Security Policy at US Army War College, THE UNITED STATES AND LATIN AMERICA: SHAPING AN ELUSIVE FUTURE, March, 2000, pg. Online @ http://www.carlisle.army.mil/ssi/pdffiles/PUB31.pdf While we are in a speculative mode, it may be useful to raise the issue of whether, two or three decades from now, the United States might have to deal with a regional hegemon or peer competitor. The most obvious candidate for such a role would be Brazil, which already accounts for almost half of Latin Americas economic production and has by far the largest armed forces in the region (313,250 active troops).53 That country could very well assume a more commanding political and military role in the decades ahead. Until recently, the primary U.S. concern about Brazil has been that it might acquire nuclear weapons and delivery systems. In the 1970s, the Brazilian military embarked on a secret program to develop an atom bomb. By the late 1980s, both Brazil and Argentina were aggressively pursuing nuclear development programs that had clear military spin-offs.54 There were powerful military and civilian advocates of developing nuclear weapons and ballistic missiles within both countries. Today, however, the situation has changed. As a result of political leadership transitions in both countries, Brazil and Argentina now appear firmly committed to restricting their nuclear programs to peaceful purposes. They have entered into various nuclear-related agreements with each othermost notably the quadripartite comprehensive safeguards agreement (1991), which permits the inspection of all their nuclear installations by the International Atomic Energy Agencyand have joined the Missile Technology Control Regime. Even so, no one can be certain about the future. As Scott Tollefson has observed: . . . the military application of Brazils nuclear and space programs depends less on technological considerations than on political will. While technological constraints present a formidable barrier to achieving nuclear bombs and ballistic missiles, that barrier is not insurmountable. The critical element, therefore, in determining the applications of Brazils nuclear and space technologies will be primarily political.55 Put simply, if changes in political leadership were instrumental in redirecting Brazils nuclear program towards peaceful purposes, future political upheavals could still produce a reversion to previous orientations. Civilian supremacy is not so strong that it could not be swept away by a coup, especially if the legitimacy of the current democratic experiment were to be undermined by economic crisis and growing poverty/inequality. Nor are civilian leaders necessarily less militaristic or more committed to democracy than the military. The example of Perus Fujimori comes immediately to mind. How serious a threat might Brazil potentially be? It has been estimated that if the nuclear plant at Angra dos Reis (Angra I) were only producing at 30 percent capacity, it could produce five 20-kiloton weapons a year. If production from other plants were included, Brazil would have a capability three times greater than India or Pakistan. Furthermore, its defense industry already has a substantial missile producing capability. On the other hand, the country has a very limited capacity to project its military power via air and sealift or to sustain its forces over long distances. And though a 1983 law authorizes significant military manpower increases (which could place Brazil at a numerical level slightly higher than France, Iran and Pakistan), such growth will be restricted by a lack of economic resources. Indeed, the development of all these military potentials has been, and will continue to be, severely constrained by a lack of money. (Which is one reason Brazil decided to engage in arms control with Argentina in the first place.) 56 In short, a restoration of Brazilian militarism, imbued with nationalistic ambitions for great power status, is not unthinkable, and such a regime could present some fairly serious problems. That government would probably need foreign as well as domestic

enemies to help justify its existence. One obvious candidate would be the United States, which would presumably be critical of any return to dictatorial rule. Beyond this, moreover, the spectre of a predatory international community, covetous of the riches of the Amazon, could help rally political support to the regime. For years, some Brazilian military officers have been warning of foreign intervention. Indeed, as far back as 1991 General Antenor de Santa Cruz Abreu, then chief of the Military Command of the Amazon, threatened to transform the region into a new Vietnam if developed countries tried to internationalize the Amazon. Subsequently, in 1993, U.S.-Guyanese combined military exercises near the Brazilian border provoked an angry response from many high-ranking Brazilian officers. 57 Since then, of course, U.S.-Brazilian relations have improved considerably. Nevertheless, the basic U.S./ international concerns over the Amazonthe threat to the regions ecology through burning and deforestation, the presence of narcotrafficking activities, the Indian question, etc.have not disappeared, and some may very well intensify in the years ahead. At the same time, if the growing trend towards subregional economic groupingsin particular, MERCOSURcontinues, it is likely to increase competition between Southern Cone and NAFTA countries. Economic conflicts, in turn, may be expected to intensify political differences, and could lead to heightened politico-military rivalry between different blocs or coalitions in the hemisphere. Even so, there continue to be traditional rivalries and conflicts within MERCOSUR, especially between Brazil and its neighbors, and these will certainly complicate the groups evolution. Among other things, the past year witnessed a serious deterioration of relations between Brazil and Argentina, the product partly of the formers January 1999 currency devaluation, which severely strained economic ties between the two countries. In part, too, these conflicts were aggravated by Argentinas (unsuccessful) bid to join the North Atlantic Treaty Organization (NATO), which Brazilians interpreted as an attempt to gain strategic advantage. The upshot was that relations soured to the extent where questions have been raised as to the continued viability of MERCOSUR itself. In light of these problems, one cannot but wonder what impact a resurgence of Brazilian authoritarianism, combined with a push for regional hegemonic status, would have on Argentina, currently a non-NATO ally of the United States.

Fifth, Brazilian proliferation is the most likely scenario for global nuclear war multiple warrants
Border disputes, instability, unpredictable leaders, accidents, military coups, lower warning times, first strikes, arms race, technical accidents, physical security

Yusuf 8
Predicting Proliferation: The History of the Future of Nuclear Weapons Moeed Yusuf; Fellow at the Frederick S. Pardee Center for the Study of the Longer-Range Future at Boston University; January 2009 http://www.brookings.edu/~/media/research/files/papers/2009/1/nuclear%20proliferation%20yusuf/0 1_nuclear_proliferation_yusuf.pdf Michael Mandelbaum, earlier mentioned as someone who remained relatively comfortable about the ability of the superpowers to deter each other, was less optimistic regarding the capacity of developing countries to do so. He stressed that developing country proliferation would increase the likelihood of the use of nuclear weapons in conflicts.78 Ted Greenwood, an American academic who later advised the U.S. Department of Defense, pointed to the active border disputes of Nth states such as South Africa, Israel, and Taiwan to suggest an increased likelihood of nuclear war.79 Mentions of the possibility of weapons falling into the hands of irresponsible powers the mad ruler scenario were frequent. As French scholar, Thierry de Montbrial pointed out: there are many politically unstable countries whose leaders are not predictableand would not hesitate to use an atomic weapon, if they had one.80 Hinting at the same concern, the renowned French sociologist Raymond Aron argued that acquisition of nuclear weapons by developing countries could even result in a

superpower conflict in the Cold War context due to a deliberate or inadvertent action of a small state.81 Moreover, in contrast to the relative stability within the borders of developed countries, Dunn and Overholt pointed to frequent military coups in countries like Argentina, Chile, Brazil, Greece, Indonesia, Iraq, Libya, Nigeria, Pakistan, South Korea, Syria, Turkey, Venezuela, and Zaire to emphasize the possibility of militaristic leaders wresting power and utilizing nuclear weapons as a means of coercing adversaries.82 A number of commentators anticipated that Nth powers would seek to create a first strike capability to preempt traditional rivals. Counterforce targeting strategies were considered likely, but also inherently destabilizing, especially for contiguous countries where warning times were diminished. Technical deficiencies in ensuring robust command and control and the security of the arsenal were taken for granted and used to further heighten fears of accidental or unauthorized use.83

Contention Two is Refining


First, declining Venezuelan production is shifting critical American demand to Canadian tar sands without Venezuela, tar sands output will multiply twenty-fold Hussain 13
Growing Canadian oil exports to U.S. bittersweet for producers as price discount bites Yadullah Hussain 07/02/13 http://business.financialpost.com/2013/02/07/growing-canadian-oil-exports-to-u-sbittersweet-for-producers-as-price-discount-bites/?__lsa=0861-4749 But a deeper dive into the data shows Canadian oil exports to the United States have actually risen over the past decade in real and percentage terms. In 2002, Canadian crude accounted for just less than 16% of all U.S. imports, a figure estimated to have reached 28% by the end of 2012. While overall U.S. oil imports have declined, Canadian crude shipments south of the border have risen by a third. Growing Canadian imports from oil sands projects effectively pushed out waterborne imports of heavy crude oil from less stable regions, such as Mexico or Venezuela , said Sabine Schels, analyst at Bank of America Merrill Lynch. This is bittersweet for Canadian companies. Cornering the U.S. market has come at a heavy price in the shape of depressed prices fetched by the Western Canada Select, the heavy Canadian crude. The discounts on Canadian heavy crude are forcing companies including Suncor Energy Inc. to delay plans worth billions of dollars and depressing their bottom lines. In a desperate effort to escape the dreaded $30 discount they must offer U.S. refiners, Alberta-based companies are seeking ways to ship their crude out of Alaska, Atlantic and B.C. But Canadian producers know their biggest market remains the United States. Overall the U.S. Gulf Coast is a huge crude oil market nearly equivalent to all of China today , IHS CERA, an energy research consultancy, said in a report. Consequently, the U.S. Gulf Coast will be a critical part of the future for oil sands , particularly for bitumen blends. TransCanada Corp.s CEO Russ Girling knows this, which is why proposes a pipeline to the Atlantic to take Alberta crude not just to global markets, but back into the United States. Scott Eells/BloombergRuss Girling, chief executive officer of TransCanada Corp. Its not a Plan B, its a Plan A, and it will go if the market supports it, along with Keystone, Mr. Girling told Bloomberg. Once you get on tidewater, you can get anywhere, and you dont need a presidential permit to bring oil into the Gulf Coast. IHS expects oil sands volumes to the Gulf Coast to increase considerably as more than two million barrels per day of new pipeline capacity planned is expected to connect Western Canada to the Gulf Coast in the next three years that is assuming it is approved and gets built. Clearly, Canadian producers are caught in the U.S. orbit and will remain in its vortex for the foreseeable future . It could have been much worse. Unlike their natural gas counterparts who have been dealt a double blow of plunging exports to the U.S and plummeting prices, Canadian crude is popular among U.S. refiners and theres more to it than just being the cheapest crude on earth. Many U.S. Gulf Coast refiners are addicted to heavier crudes, and dont have a taste for the lighter crude churned out from Texas and North Dakota shale plays. Which is why while light blends from places like Nigeria and Angola have declined dramatically, Canadian heavy has been in the ascendancy. John Powell, senior petroleum analyst with the U.S. Department of Energy, expects more sweet crude to be replaced by home-grown blends from places like Eagle Ford, but heavier crude imports will hold their own. In 2013, we see imports, wherever they come from, probably going to get heavier, he said. The Canadian surge has come as other sources of heavy crude face structural issues. Mexican heavy supply is expected to decline, and there is uncertainty around future supply from Venezuela, IHS said. If oil

sands could displace most of the Mexican and Venezuelan imports, the opportunity for bitumen blends would be about 1.5 million barrels per day . U.S. tight oil will grow, but it is still going to leave a lot of room for other suppliers, said Jackie Forrest, senior director at IHS CERA. Canada is specifically well placed. The heavy crude refiners are still going to make more money running heavy crude than the light sweet crude, so they are going to prefer Canadian supply, said Ms. Forrest. While that does not mean Canadian producers should stop exploring other markets to diversify their revenue streams, Canadian crude will not disappear in the U.S. anytime soon, even without Keystone XL pipeline being built. Over time, though, there are concerns that U.S. refiners may move toward lighter crude to meet the needs of rising U.S. shale plays, which produce lighter crude. But is it easy for refiners to flip the switch from heavy crude to light crude? Probably not, says Bill Simpkins, Atlantic Canada representative of the Canadian Fuels Association, which represents many refiners in Canada. Mainly because once you have a refinery and its purpose-built for particular crude and slate of products, they are probably always sourcing that type of crude. And the market for heavier crude is likely to only get bigger. Because of the dwindling supply of conventional sweeter crudes, and their higher costs, you are more likely to see older refineries to move into producing heavier crudes, said Mr. Simpkins. Gulf Coast refiners such as Marathon Petroleum Corp. and Valero Energy Corp. are strong advocates of Keystone XL and are keen to get Canadian crude to the Gulf market.

Second, Venezuelan oil production outcompetes Canada Hussain 13


Life after Chavez: Americas oil gains could be Canadas loss Yadullah Hussain 06/03/13 http://business.financialpost.com/2013/03/06/life-after-chavez-venezuela-u-s-oil-industries-arenaturally-attractive-trading-partners/?__lsa=0861-4749 Brent crude prices didnt move much as traders absorbed the death of Hugo Chavez who ruled the worlds sixth largest OPEC producer, but it may mask a long-term shift that could impact North American energy trading patterns. Over the longer term, changes in policy towards the energy sector might eventually allow Venezuelas oil production to return to the much higher levels seen in the late 1990s, said Tom Pugh, commodities economist at Capital Economics. However, any such recovery would take many years. Venezuela is home to the worlds largest proven oil reserves of around 296.5 billion barrels, but its production has steadily fallen under Mr. Chavez who diverted Venezuelas oil revenues to his pet projects and weakened the state-owned Petrleos de Venezuela, which is responsible for developing the countrys enormous riches. Even as 40% of Venezuelan oil exports headed towards the United States, Mr. Chavez despised Washingtons policies and was actively pursuing a policy to shift exports to China, the Caribbean, Central America and other Asian markets. U.S. imports of Venezuelan petroleum products peaked in 1997, at 379,000 bbl/d, and have since fallen to as low as 23,000 bbl/d in October 2012, the U.S. Department of Energy said in a January note. Despite severe disagreements, the two countries oil industries are naturally attractive oil trading partners due to their proximity , according to the U.S. Department of Energy. The robust trade in crude oil from Venezuela to the United States is due to the compatibility between the configuration of some U.S. refineries and the quality characteristics of Venezuelan crude, which is predominately sour and medium or heavy. This is a worrying development for Canadian crude producers, which offer similar type of heavy crude to the U.S. Gulf Coast refineries, and may lose out if Venezuela reforms its oil industry . Despite shrinking U.S. oil imports, Canada is now it southern neighbours largest supplier of crude, accounting for nearly 30% of all U.S. imports last year. Much of these gains were at the expense of heavier crudes from Venezuela and Mexico. A long-term reversal in Venezuela oil

production could compete with Canada in the United States and even China and Asian markets. Its too soon to say what Hugo Chavezs death means for oil prices, but it is certainly true that oil prices are what made Hugo Chavez possible, Daniel Yergin, the chairman of IHS Cambridge Energy Research Associates, said in an email to Bloomberg. Declining crude prices brought Chavez to rise to power and rising prices gave him the funds needed to sustain state spending and consolidate power, Yergin told the newswire. The countrys crude export stood at 1.7 million bpd in 2011, according to the International Energy Agency, similar to Libyas crude production, which was completely shut down during its bloody civil war in 2011. 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 .

Third, if theres a market for oil sands theyll be developed - economic viability of the oil sands is on the brink Johnson AND Dawson 13
Pipeline Called Key to Canada Oil Sands KEITH JOHNSON in Washington and CHESTER DAWSON in Calgary, Alberta June 7, 2013 http://online.wsj.com/article/SB10001424127887324069104578531713102125222.html 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. GS +1.22% 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., TRP.T +0.42% 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. But market experts said blocking Keystone would at most temporarily sidetrack Alberta's development plans.

Fourth, Venezuelan oil production steals the US market from Canada pushes oil sands over the brink McKenna 13
The secret threat to Canadas oil sands BARRIE MCKENNA; The Globe and Mail; May. 02 2013 http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/the-secretthreat-canadas-oil-sands/article11597201/ OTTAWA Natural Resources Minister Joe Oliver likes to pick on Venezuela when he sells the virtues of Canadian oil to Americans. Buy from a loyal ally, not from less friendly, less stable countries with shoddy environmental records, Mr. Oliver warned bluntly in a speech last week in Washington. Unfortunately, Venezuelan oil has a lot more in common with Canadian oil sands crude than Mr. Oliver cares to admit. Oil is a commodity, after all. And price typically trumps virtue and a smiling face. The bottom line is that Canada and Venezuela produce the same kind of heavy crude thats now sought by re-engineered U.S. petroleum refineries along the Gulf of Mexico. So does Mexico. In recent years, Canada has been winning the competitive battle to feed those refineries. Alberta oil has steadily displaced Mexican and Venezuelan crude in the U.S. market. But there is no certainty that shift will continue. Indeed, Venezuela and Mexico are showing tentative signs of getting their energy act together. Canada has benefited from the ineptitude of its energy producing rivals in the hemisphere. The state-run oil industries in Venezuela and Mexico are hobbled by inefficiencies, poor technology and under-investment in exploration. In spite of vast reserves, the two countries are producing less oil now than they did five years ago. U.S. imports of Venezuelan crude, for example, have dropped to less than a million barrels a day from 1.7 million barrels a day in 1997. Oil imports from Mexico have shrunk nearly 30 cent since 2006. New drilling technology and foreign investment cash could change all that . An often overlooked risk for Canadas oil patch is the possibility that both these underperforming competitors could start ramping up production and exports again. That would exacerbate the already-significant price discount on Canadian crude in the U.S. market. It would also ratchet up pressure on Canadian producers to access alternative markets in China and India via pipelines to the West Coast. Politics and economics have held back Venezuela and Mexico. But the landscape in both countries is shifting. Hugo Chavez was an unexpected gift to the oil sands. Now that hes gone, Venezuela has a much greater chance of shedding its image as an unstable and inefficient supplier of oil to the U.S. Venezuela has proven oil reserves of 211 billion barrels, eclipsing Canadas 175 billion barrels, according to the U.S. Energy Information Administration. And in Mexico, newly installed President Enrique Pena Nieto is vowing to reform the countrys troubled oil industry and attract private investment, particularly to help develop deep offshore and shale reserves in the Gulf of Mexico. Mexico has nearly 11 billion barrels of proven oil reserves, but roughly twice that including potential unconventional and deepwater sources. Mexico is unlikely to privatize Petroleos Mexicanos the stateowned oil company known as Pemex. But Finance Minister Luis Videgaray acknowledged recently that Mexico cant do everything itself and there might be opportunities for private investors in unconventional oil and gas projects where Pemex clearly doesnt have either the capital or the

expertise. Venezuela and Mexico have a long way to go to right their energy industries, and some tough political decisions to make. But if, and when, they do, Canada could be the biggest loser. More Venezuelan and Mexican oil coming into the U.S. would likely lead to an even larger discount on oil sands crude, which is already hampered by high extraction costs and limited pipeline capacity. The threat of new and more productive rivals underscores why projects such as the Keystone XL and Northern Gateway pipelines are so vital to Canada. The industry needs access to markets before there is a gusher of rival capacity in the neighbourhood oil thats free of the extraction, transportation and environmental challenges of the oil sands.

Fifth, Time is key US refineries will cut off Venezuela soon, unless their oil exports increase Ladislaw AND Verrastro 13
Post-Chavez Outlook for Venezuelan Oil Production Sarah O. Ladislaw; co-director and senior fellow with the Energy and National Security Program at the Center for Strategic and International Studies (CSIS) in Washington, D.C.; Frank Verrastro; senior vice president and James R. Schlesinger Chair for Energy & Geopolitics at CSIS; MAR 6, 2013 http://csis.org/publication/post-chavez-outlook-venezuelanoil-production U.S. refineries in the Gulf Coast are specifically designed to process Venezuelas sour and medium to heavy crude and serves as its natural market. Despite oil production being down, the United States still imports just under a million barrels of crude per day from Venezuela (down from a peak of 1.4 mmbd in 1997) and, as stated earlier, the government of Venezuela is highly dependent on those revenues for their ongoing stability, especially as revenue from other exports and domestic consumption decline. As we look ahead to another period of transition in Venezuela it is important to be mindful of the potential for disruption and to look for ways to mitigate the impacts of such disruption, but it is equally important to remember the trade ties that bind the two countries for the time being and to find opportunities to drive change in a positive direction. Time may be limited in this regard because the U.S. domestic production outlook is changing thanks to tight oil development in the United States and the influx of Canadian oil sands, both of which are giving U.S. refiners more options in terms of the crudes they use and more decisions to make about how they want to configure their refineries going forward. A future in which Venezuela is no longer as competitive in its natural market in the United States would change the outlook for Venezuelan crude marketing decisions. The long-term outlook for Venezuelas continued oil market production is changing both in commercial and political terms.

Scenario one for extinction is the climate JAMES HANSEN; directs the NASA Goddard Institute for Space Studies; May 9, 2012 Game Over for the Climate http://www.nytimes.com/2012/05/10/opinion/game-over-forthe-climate.html?_r=0 NCHO GLOBAL warming isnt a prediction. It is happening. That is why I was so troubled to read a recent interview with President O bama in Rolling Stone in which he said that Canada would exploit the oil in its vast tar sands reserves regardless of what we do.

If Canada proceeds, and we do nothing, it will be game over for

the climate. Canadas tar sands, deposits of sand saturated with bitumen, contain twice the amount of carbon dioxide emitted by global oil use in our entire history . If we were to fully exploit this new oil source, and continue to burn our conventional oil, gas and coal supplies, concentrations of carbon dioxide in the atmosphere eventually would reach levels higher than in the Pliocene era, more than 2.5 million years ago, when sea level was at least 50 feet higher than it is now. That level of heat-trapping gases would assure that the disintegration of the ice sheets would accelerate out of control. Sea levels would rise and destroy coastal cities. Global temperatures would become intolerable. Twenty to 50 percent of the planets species would be driven to extinction. Civilization would be at risk . That is the long-term outlook.

But near-term, things will be bad enough. Over the next several decades, the Western United States and the semi-arid region from North Dakota to Texas will develop semi-permanent drought, with rain, when it does come, occurring in extreme events with heavy flooding. Economic losses would be incalculable . More and more of the
Midwest would be a dust bowl. Californias Central Valley could no longer be irrigated.

Food prices would rise to unprecedented levels . If

this sounds apocalyptic, it is . This is why we need to reduce emissions dramatically. President Obama has the power not only to deny tar sands oil additional access to Gulf Coast refining, which Canada desires in part for export markets, but also to encourage economic incentives to leave tar sands and other dirty fuels in the ground. The global warming signal is now louder than the noise of random weather, as I predicted would happen by now in the journal Science in 1981. Extremely hot summers have increased noticeably. We can say with high confidence that the recent heat waves in Texas and Russia, and the one in Europe in 2003, which killed tens of thousands, were not natural events they were caused by human-induced climate change.
We have known since the 1800s that carbon dioxide traps heat in the atmosphere. The right amount keeps the climate conducive to human life. But add too much, as we are doing now, and temperatures will inevitably rise too high. This is not the result of natural variability, as some argue. The earth is currently in the part of its long-term orbit cycle where temperatures would normally be cooling. But they are rising and its because we are forcing them higher with fossil fuel emissions. The concentration of carbon dioxide in the atmospher e has risen from 280 parts per million to 393 p.p.m. over the last 150 years. The tar sands contain enough carbon 240 gigatons to add 120 p.p.m. Tar shale, a close cousin of tar sands found mainly in the

If we turn to these dirtiest of fuels, instead of finding ways to phase out our addiction to fossil fuels, there is no hope of keeping carbon concentrations below 500 p.p.m. a level that would, as earths history shows, leave our children a climate system that is out of their control. We need to start reducing emissions significantly, not create new ways to increase them.
United States, contains at least an additional 300 gigatons of carbon.

Scenario two is the Canadian economy First, Oil sands are killing the Canadian economy - Dutch Disease Weyler 13
Why more tar sands pipelines will only bring disaster for B.C. and Canada REX WEYLER; journalist, author and an activist with Tanker Free B.C.; MAY 8, 2013 http://rabble.ca/news/2013/05/why-more-tar-sands-pipelines-will-only-bring-disaster-bc-and-canada Digging up a natural resource and selling it for cash might sound like a good idea, but it is never that simple. The first financial blow to any resource colony arrives with the now-famous economic "Dutch disease," named in the Netherlands during the North Sea oil boom. Dutch disease is simple: When a nation with a healthy manufacturing sector exploits a cheap resource for cash, its national currency rises in value. This increase in exchange-rates makes all of its exports more expensive to customers, who turn elsewhere. The former manufacturing sector erodes. The country loses jobs and economic stability , so when the resource boom is over, or when commodity prices drop, the nation is worse off, not better. That's Dutch disease. And Canada has it bad . The tar sands boom over the last decade pushed up the Canadian dollar value, and right on cue, Canadian manufacturing declined. Last year, the global trade watchdog, the Organization for Economic Co-operation and Development (OECD) warned that the tar sands boom and commodity price fluctuations has left Canada with a floundering economy. "The export-oriented manufacturing sector had by 2011 shrunk sharply," the OECD reported. The OECD encouraged Canada to restore its non-resource economy to maintain high employment and equitable wealth distribution. They noted that while Alberta was making money from the tar sands, the rest of Canada suffered from a hollowed-out manufacturing and export sector. Now however, since commodity prices have dropped, even Alberta is suffering the curse of Dutch disease. In March this year, the Alberta government announced that it would cut spending and borrow billions to cope with declining revenues, due to falling crude oil prices, exactly as Dutch disease warns. Alberta -- only a decade after former premier Ralph Klein paid off the province's $23-billion debt -- is in debt again and going deeper. Alberta expects to borrow $12.7-billion over the next three years. In the same month that Alberta promised more debt, Canada lost 54,500 jobs, the biggest job decline in four years. Half those

lost jobs disappeared from the manufacturing sector, once again, just as Dutch disease predicts. Meanwhile, to ship oil to China and America, Canada risks oil spills that would cost billions of dollars to clean up, destroy the $14-billion annual west coast tourism industry, obliterate a healthy fishing industry, and shut down our ports. A single oil spill near Vancouver or Victoria harbours could cost this region $40 billion dollars.

Second, Growth is key to Canadas legitimacy as a global middle power Bothwell 11


*Alice. International Studies at Univ of Stellenbosch. Can Canada Still be Considered a Middle Power? March 2011 http://scholar.sun.ac.za/handle/10019.1/6698//Cal-JV]

Canada between 1945 and 2010 has been classified as a prominent " middle power ." At the same time its relative standing among nations has been declining and it has less regard in the world than it once did. Middle power theory seeks to classify those nations who in the wake of the Second World War were neither great powers nor non- great powers. The idea of middlepowermanship greatly appealed to Canadians and they undertook initiatives to separate themselves from the non-great powers. Canada is often seen as the exemplary case for observing middle power status. Through the post war era and the Cold War Canada was both economically and politically powerful. By getting involved in a plethora of multi-lateral bodies such as the United Nations and the Commonwealth while promoting peacekeeping and mediation, Canada was able to exert its growing influence on the world order . Throughout this time
Canada worked hard to build its reputation as a mediator and specialized in ending quarrels. This is true of Canadas invol vement in the Commonwealth in the 1960s and 1970s with regard to the Rhodesian question. On two separate occasions it was the Canadian contingents that prevented the Commonwealth from dissipating. This further bolstered Canadas rise to prominence in the world order . Over the years,

as Canada took on more initiatives resources became very thinly spread. With an economic slow down and new commitments to national policies (universal healthcare and pensions) the Canadian budget was rearranged and priorities changed. No longer were there the same resources available to middle power initiatives or the military. This has greatly impacted Canadas ability to participate in international projects. Recently, Canadas position in the world has come into question, asking whether or not it truly is still a middle power. By looking at various traditional middle power elements including the economy, peacekeeping, official development assistance and involvement in prominence is waning. Using the case study of Zimbabwean/ Canadian relations through the 20th and 21st centuries, the decline of Canadas middle power performance can be traced. Combining these different themes with hard and soft power theory it is clear to see that Canada no longer holds the same position of middle power it once did. It also shows that Canadians are holding onto an image of Canada, which is dated, and it is time to redefine Canadas position within the world order. multilateral bodies
it can be seen that Canadas

Third, Canadas standing as a middle power is a controlling impact necessary to mediate otherwise-inevitable great power conflict Bothwell 11
*Alice. International Studies at Univ of Stellenbosch. Can Canada Still be Considered a Middle Power? March 2011 http://scholar.sun.ac.za/handle/10019.1/6698//Cal-JV] Robert Cox in his 1989 article Middlepowermanship, Japan and the Future World Order poses a valid question what is the essence of the middle powers functional relationship to the world order? (Cox, 1989:825). Before delving into the theory behind middle powers it is important to understand why they are so

Middle powers have acted as a stabiliser and neutraliser , especially during the Cold War, middle power countries acted within the interests of their bloc to neutralise the tension, or urging restraint on the alliance leader, or resisting renewed 21 tendencies towards isolationism on the part of the bloc leader(Cooper et al. 1993:20). The middle-power role is to affirm the principle of adherence to acceptable rules of conduct by all powers, great and small (Cox, 1989:834). Middle powers are able to affirm this world order through various international institutions based on a post- Westphalian political structure and a
important in the world.

decentralization of global hegemony (Cox, 1989:835). In the era after the Second World War when the Great Powers had been decimated a new grouping of powers began to emerge. A country like Canada who was very involved in the war through industry, finance, technology and manpower came out on the other side with a new place in the global order. No longer was Canada a former colony or a nation pretending to be its own country; rather, as a nation Canada had an important impact . Perhaps most importantly, the Canadian economy was stronger than ever at the end of the war. Since Canada was not a great power like the United States or Britain but was no longer a small power a new place in the world order needed to be sought out. This is where the evolution of middle powers began. After the Cold War ended there were new opportunities for middle powers. They were not needed to try and keep a stable world order; there were new initiatives they were able to
participate in. Since the Soviet Union and the United States were no longer caught in a constant power struggle and there was no longer the same divide between east and west and as a result,

middle powers had greater freedom of action thrust upon them in terms of

their diplomacy (Cooper et al.1993: 21). Middle powers have the ability to come together through multilateral bodies such as NATO and the UN to uphold the norms and rules of the international system and perform certain tasks to maintain and strengthen that system (Cooper et al. 1993: 21). Throughout the 1980s with the powers were poised to take on a more active role in the international arena (Cooper et al.1993: 21).
United States declining resources middle

Scenario three is global biodiversity First, Tar sands destroy the Boreal Forest Hansen 9
Guest Columnist: President's trip to Canada defines critical carbon moment JAMES E. HANSEN; director of NASA Goddard Institute for Space Studies; February 17, 2009 http://www.seattlepi.com/local/opinion/article/Guest-Columnist-President-s-trip-to-Canada1300396.php The tar sands of Canada constitute one of our planet's greatest threats . They are a double-barreled threat. First, producing oil from tar sands emits two to three times the global warming pollution of conventional oil. But the process also diminishes one of the best carbon reduction tools on the planet -- Canada's Boreal Forest. This forest plays a key role in the global carbon equation by serving as a major storehouse for terrestrial carbon -- indeed, it is believed to store more carbon per hectare than any other ecosystem on Earth. When this pristine forest is strip-mined for tar sands development, much of its stored carbon is lost. Canada's Boreal Forest is also the reservoir for a large fraction of North America's clean, fresh water, home to about 5 billion migratory birds, and some of the largest remaining populations of caribou, moose, bear and wolves on the planet.

Second, Boreal development threatens global biodiversity NRDC 4


The Boreal Forest: Earth's Green Crown Natural Resources Defense Council 2004 http://www.nrdc.org/land/forests/boreal/intro.asp Canada's vast boreal forest is among the largest intact forest ecosystems left on earth, and must be preserved. In the far-north latitudes, just below the treeless tundra of the polar region, a forest of evergreen trees encircles the earth. This is the boreal forest, and it is the biggest terrestrial ecosystem in the world. It is also largely intact, free of roads and industrial development -- especially in Canada, where more than 1.3 billion pristine acres are found. The global boreal forests are larger than even the Amazon rainforest. Like the Amazon, the boreal forest is of critical importance to all living things. Its trees and peatlands comprise one of the world's largest "carbon reservoirs"; carbon stored in this

way is carbon not released into the atmosphere, where it would trap heat and accelerate global warming. Its wetlands filter millions of gallons of water each day. And as a vast and intact forest ecosystem, it still supports a natural food web, complete with large carnivores like bears, wolves and lynx along with thousands of other species of plants, mammals, birds and insects. The boreal forest is also home to hundreds of First Nations communities, many of which rely on fishing, hunting and trapping for their livelihoods. Despite its global significance, Canada's boreal forest is in great danger today. Large industries -- timber, mining, oil, gas, and hydropower companies -- are eyeing it for development, and less than 8 percent of the boreal forest is protected from large-scale industrial development.

Third, Biodiversity loss causes extinction Diner 94


Major David Diner, JAG Corps, United States Army, Winter 1994, Military Law Review, 143 Mil. L. Rev. 161, p. 170-173 1. Why Do We Care? -- No species has ever dominated its fellow species as man has. In most cases, people have assumed the God-like power of life and death -- extinction or survival -- over the plants and animals of the world. For most of history, mankind pursued this domination with a single-minded determination to master the world, tame the wilderness, and exploit nature for the maximum benefit of the human race. In past mass extinction episodes, as many as ninety percent of the existing species perished, and yet the world moved forward, and new species replaced the old. So why should the world be concerned now? The prime reason is the worlds survival. Like all animal life, humans live off of other species. At some point, the number of species could decline to the point at which the ecosystem fails, and then humans also would become extinct. No one knows how many species the world needs to support human life, and to find out -- by allowing certain species to become extinct -- would not be sound policy. In addition to food, species offer many direct and indirect benefits to mankind. 2. Ecological Value. -- Ecological value is the value that species have in maintaining the environment. Pest, erosion, and flood control are prime benefits certain species provide to man. Plants and animals also provide additional ecological services -- pollution control, oxygen production, sewage treatment, and biodegradation. 3. Scientific and Utilitarian Value. -- Scientific value is the use of species for research into the physical processes of the world. Without plants and animals, a large portion of basic scientific research would be impossible. Utilitarian value is the direct utility humans draw from plants and animals. Only a fraction of the earths species have been examined, and mankind may someday desperately need the species that it is exterminating today. To accept that the snail darter, harelip sucker, or Dismal Swamp southeastern shrew could save mankind may be difficult for some. Many, if not most, species are useless to man in a direct utilitarian sense. Nonetheless, they may be critical in an indirect role, because their extirpations could affect a directly useful species negatively. In a closely interconnected ecosystem, the loss of a species affects other species dependent on it. Moreover, as the number of species decline, the effect of each new extinction on the remaining species increases dramatically. 4. Biological Diversity. -- The main premise of species preservation is that diversity is better than simplicity. As the current mass extinction has progressed, the worlds biological diversity generally has decreased. This trend occurs within ecosystems by reducing the number of species, and within species by reducing the number of individuals. Both trends carry serious future implications. Biologically diverse ecosystems are characterized by a large number of specialist species, filling narrow ecological niches. These ecosystems inherently are more stable than less diverse systems. The more complex the ecosystem, the more successfully it can resist a stress. . . . [l]ike a net, in which each knot is connected to others by several strands, such a fabric can resist collapse better than a simple, unbranched circle of threads -- which if cut anywhere breaks down as a whole. By causing widespread extinctions, humans have artificially simplified many ecosystems. As biologic simplicity

increases, so does the risk of ecosystem failure. The spreading Sahara Desert in Africa, and the dustbowl conditions of the 1930s in the United States are relatively mild examples of what might be expected if this trend continues. Theoretically, each new animal or plant extinction, with all its dimly perceived and intertwined affects, could cause total ecosystem collapse and human extinction. Each new extinction increases the risk of disaster. Like a mechanic removing, one by one, the rivets from an aircrafts wings, mankind [humankind] may be edging closer to the abyss.

Contention Three is Solvency


First, Maduro will accept the plan C. He needs foreign investment to fund Chavezs legacy of grand socialist programs thats key to his political legitimacy Thomas-Symonds 13
What After Chavez? Nick Thomas-Symonds; practicing barrister at Civitas Law, Cardiff, specializing in chancery and commercial law. He is also Lecturer in Politics at St. Edmund Hall, Oxford University. He teaches British Politics and Government Since 1900, Modern British Politics, Politics in Europe and US Politics. He also teaches Contemporary US Politics on Oxford Universitys Department of Continuing Education Foundations of Diplomacy course; April 18, 2013 http://www.e -ir.info/2013/04/18/what-after-chavez/

A major part of Mr Chavezs popular appeal was his willingness to stand up to what he characterized as imperialism. He accused the US of trying to bring him down. With Mr Chavezs death on 5 March 2013, there is an argument that things can only get better in diplomatic relations between the US and Venezuela. After all, even under Mr Chavez, Venezuela was still trading widely with the US. The United States is Venezuelas most important trading partner Oil dominates U.S. imports from Venezuela, which is one of the top four suppliers of foreign oil to the United States. About 500 U.S. companies are represented in Venezuela. U. S. foreign direct investment in Venezuela is concentrated largely in the petroleum, manufacturing and finance sectors. That is not to say, however, that the US desire for oil has made it a no-go area for US governments in their diplomatic relations with the Bolivarian Republic. Sanctions were imposed on the Venezuelan state oil company, PDVSA, in 2011, for making supplies to Iran To win the presidential election Maduro needed to present himself as continuing the work of Mr Chavez.
After all, El Comandante traced his heritage to another Latin American independence leader, Simon Bolivar. Mr Chavezs antipathy had personal elements, too. To use just one example, a brief coup in 2002 temporarily removed him from power, and he openly accused the US of being respo nsible for it. The US Department of States fact sheet on US-Venezuela relations confirms the extent of this trade: . U.S. exports to Venezuela include machinery, organic chemicals, agricultural products, optical and medical instruments, autos and auto parts. It adds: . The demise of Mr Chavez is one thing, the position of his successor, Nicolas Maduro, on the US, quite another. , Mr , a former bus driver, As Mr Chavezs chosen successor, and as the incumbent during the election, this may have seemed an easy task. However, Mr Maduro has taken this argument to extraordinary lengths. He not only de clared himself the son of Chavez but claimed Chavez lives! and even went so far as to argue that El Comandante appeared t o him as a bird whilst praying. Mr Maduro has continued to plough Chavezs anti-US furrow. After all, he did serve for a substantia l period as his foreign minister. An allegation that the dead president had been the subject of an attack by historic enemies led the US State Department to declare the notion that the US had played any part in

Mr Maduro won the presidential election on 14 April 2013 with 50.7% of the vote. His winning margin of 1.5% constitutes only 235,000 votes. His defeated rival, Henrique Capriles, has alleged electoral malpractice and asked for the votes to be counted again the narrow margin of Mr Maduros victory, particularly given the advantages of his links to Mr Chavez, may prove less durable than he may think. Protests against the result continue Mr Maduros policies matter. One of his first acts was to announce the continuation of funding of socialist programmes from oil revenues. The current policy of using the nations oil reserves to fund socialist programmes cannot continue without putting the stability of the nations economy at risk. On the other hand, the programmes cannot be scaled back without political and social unrest. It is here that there may be a small chink of light for US-Venezuela relations, even under Mr Maduro. Venezuela cannot afford to turn any investors away unnecessarily.
Chavezs death from cancer as absurd. step. However, the National Electoral Council has declared Mr Maduros victory irreversible. That said, Cabello, said the results require deep self-criticism. after all. For now at least, month that whoever was the President was in a Catch 22 situation. Even now, the US multi-national Chevron advertises that it is playing a part in six onshore and offshore projects.

. The US urged an audit of the result as an important, prudent and necessary

On Twitter, National Assembly, Head Mr Diosdado

. The outcome may yet prove unpredictable, a nd Mr Chavezs demise may have heralded something new in Venezuelan foreign policy

Even setting to one side the protests against his controversial presidential election victory, the International Atomic Energy (IEA) predicted last

D. 14 years of economic devastation Roberts AND Daga 13


Venezuela: U.S. Should Push President Maduro Toward Economic Freedom James M. Roberts; research fellow for economic freedom and growth at the Center for International Trade and Economics; and Sergio Daga; Heritage Foundation visiting senior policy analyst in economic freedom in Latin America; April 15, 2013 http://www.heritage.org/research/reports/2013/04/venezuela-us-should-push-president-maduro-toward-economic-freedom

Hugo Chavezs hand-picked successor, former trade union boss Nicols Maduro, appears to have defeated Capriles by a narrow margin in a contentious and hard-fought special election Venezuela is in such shambles after 14 years of seat-of-the-pants mismanagement that Maduro may ultimately be forced to pursue more moderate policies and seek help from the U.S. to restore stability The Obama Administration and Congress should exploit this opening by using U.S. leverage to push Venezuela to turn from Chavezs failed experiment in oil-cursed 21st-century socialism toward economic freedom
Governor Henrique victory is confirmed . [1] .

on April 14. assuming his

Second, the plan solves Roberts AND Daga 13


Venezuela: U.S. Should Push President Maduro Toward Economic Freedom James M. Roberts; research fellow for ec onomic freedom and growth at the Center for International Trade and Economics; and Sergio Daga; Heritage Foundation visiting senior policy analyst in economic freedom in Latin America; April 15, 2013 http://www.heritage.org/research/reports/2013/04/venezuela-us-should-push-president-maduro-toward-economic-freedom

U.S. Policy Toward the New Maduro Government Washington should insist on strict conditionality before sending a new U.S. ambassador to Caracas or assenting to any new lending to Venezuela by international financial institutions until the new government Takes steps to privatize PDVSA to bring in international equity partners with the expertise and financial capacity to restore PDVSA to the high level of professional operational and managerial expertise for which it was widely respected prior to 1999
information for all Venezuelans. Use U.S. Leverage

: Produces a comprehensive plan for reform that reduces the size of the public sector, reverses nationalizations and

expropriations of land and enterprises with just compensation to owners, restores the independence of the central bank and judicial institutions, reforms the electoral system, and submits to an internationally supervised audit of the governments books during the Chavez years;

; Immediately stops all subsidies to Cuba and terminates wasteful and economically destabilizing subsidy programs such as

PetroCaribe and ALBA; Ceases cooperation with international state sponsors of terrorism (such as Iran) and joins the internat ional communitys cooperative efforts in the fight against transnational crime, narco-trafficking, and terrorism; and Restores freedom of the press and access to

The foundations of economic freedom in Venezuela were severely weakened during the 14-year misrule by Chavez. Although Chavezs death may aggravate instability and further polarize Venezuela, it need not be that way. Venezuela is in need of immediate and sweeping reforms, but these changes will take time, effort, determination, and, above all, dedicated reformers in Venezuela The Obama Administration should step into the breach with active and forward-looking policies to bring Venezuela back into the globalized economic system
. .

Third, The Venezuelan oil sector needs investment to sustain itself inefficiences will destroy the industry in the status quo Gjelten 13
Venezuela's Next Leader Faces Tough Choice On Oil Program TOM GJELTEN; NPR Latin American Expert; April 11, 2013 http://www .npr.org/2013/04/11/176843567/venezuela-s-next-leader-faces-tough-choice-on-oil-program As

Venezuela's

president, Hugo Chavez thought in grandiose terms, and his country's vast oil riches enabled him to act on his vision. But Chavez died before he had to deal with the flaws in his model, and some hard choices await his successor. Key to Chavez's notion

oil reserves estimated by the Organization of Petroleum Exporting Countries to be the largest in the world are worth tens of billions of dollars a year in potential revenue During his presidency, Chavez diverted much of that potential wealth to Venezuelan consumers in the form of cheap gasoline He propped up the Castro regime in Cuba, and he offered Venezuelan oil on highly preferential terms to 18 Caribbean and Latin American countries through an energy alliance he called PetroCaribe Oil production in Venezuela declined sharply under the Chavez administration, however, largely due to inadequate investment in the energy infrastructure, inefficiencies in oil industry management, and the replacement of skilled oil technicians and managers with political loyalists
of "21st Century Socialism" was the redistribution of Venezuela's oil earnings. The country's . (18 cents per gallon or less). . . PetroCaribe Initiative The drop in oil production more than 7 percent just in the first quarter of 2013 is severe enough to call into question whether the Chavista oil welfare programs can be sustained. For the Caribbean and Latin American countries that have been benefiting from the PetroCaribe program, it is a time of great anxiety. Chavez saw the energy alliance as a way to free the member states from U.S. energy imperialism. "There's no one who can slow our ever-faster march toward our great historical goals," he said, defining PetroCaribe as "energy unity." For poor countries, the PetroCaribe deal was irresistible. Typically, they had to pay cash for only half the oil they received. The rest they got on credit, financed over 25 years at 1 percent. Among those who eagerly signed up for the program was Haiti. In reality, PD VSA makes money from only a small proportion of the oil it produces. Now, can that continue? I don't think so. - Roger Tissot, energy economist "Any country that would benefit from such a credit would take advantage of it," says Ren Jean-Jumeau, Haiti's minister of energy. "There's not even a need to justify this. Haiti is a struggling economy, and this is a great advantage for us. We consider it extremely important." In the Dominican Republic, PetroCaribe was key to the country's 2008-2009 financial stabilization program. "By allowing us to defer the oil payments, it was a big, big thing for the government," says Juan Carlos Russo of the Pontificia Universidad Catlica in Santo Domingo. To be sure, there were strings attached: Chavez wanted the PetroCaribe countries to support his ideological crusade against the U.S. Some did so enthusiastically. Others largely ignored the Chavista rhetoric. "A lot of these countries looked at this thing in a practical manner," says Jeremy Martin, director of the energy program for the Institute of the Americas at the University of California, San Diego. "They were able to stomach the ideology as long as they could get such a wonderful financial deal." For countries such as Haiti, Jamaica and the Dominican Republic, the cheap oil from Venezuela could not have come at a better time, with energy prices rising and the world economy in crisis. "Most of these countries have no domestic s upplies of oil and gas," Martin notes. "If they do, it's minimal. These are energy-starved countries. And so they became absolutely addicted [to the PetroCaribe program]." What Does Venezuela Get? But whether the deal is good for Venezuela is another question. "In my economic mind, I w ould say, 'Why are they willing to sacrifice this much?' " says Russo. The Dominican Republic is repaying its oil debt to Venezuela partly in string beans. Jorge

To Venezuela, from a cash-flow point of view, this represents close to $5 billion a year of revenue that they're missing In reality, PDVSA makes money from only a small proportion of the oil it produces Venezuela's problem is that its oil production is declining, in part because of the lack of reinvestment and the politicization of PDVSA operations under the Chavez government. Unless oil prices move sharply higher, the country will face a significant loss of oil revenue In 1997, PDVSA was producing 3.5 million barrels a day Today they are about 2.8 million barrels a day. It shows you what a bad job the Venezuelan government has done in managing their national oil company Venezuela's next president won't be able to maintain the oil industry
Pion, who previously worked in Latin America for the Amoco and Shell companies, notes that all the oil that Venezuela provides on easy credit terms to other countries could have been sold for cash on the global market. " ," Pion says. The state-owned oil company Petroleos de Venezuela, S.A. also donated oil to low-income families in the United States. There were the oil subsidies for Cuba. Plus, there's all the oil that goes for cheap gasoline for Venezuelan drivers. " ," says independent energy economist Roger Tissot, who specializes in the Latin American energy market. "Now, can that continue? I don't think so." ." ," notes Pion, now an energy analyst at the University of Texas at Austin. " ." Chavez died before he had to confront the economic and political problems certain to plague his successor. , subsidize gasoline at home, spend oil revenue on social programs and share Venezuela's oil wealth with his Caribbean and Latin neighbors. Something has to give. If it's a choice between serving domestic needs and maintaining the sweetheart oil deals with other countries, the PetroCaribe nations may be in for a disappointment.

Fourth, American firms are eager to invest delays in funding kill their industry Peixe 13
Venezuela Sees Foreign Investment in Oil Fall in Political Vacuum Left by Chavez Joao Peixe 27 January 2013 http://oilprice.com/Latest-Energy-News/World-News/Venezuela-Sees-Foreign-Investment-in-OilFall-in-Political-Vacuum-Left-by-Chavez.html Due to the political vacuum left by Hugo Chavezs absence whilst he battles cancer behind closed doors, Venezuelas oil industry has experienced the first decline in foreign investment in five years . No new credit lines have been announced from China, the largest foreign contributor to Venezuelas oil industry, since April last year, and both Russian and Indian companies are withholding their planned investments until the political situation becomes more stable and transparent. This lack of investment from foreign governments is contrasted by the private sector where investors are eager to buy into Venezuelan assets , believing that Chavezs successor will reduce the states grip on the economy. Matt Ferchen, a scholar at the Carnegie Tsinghua Centre for Global Policy, explained that there There is simply nowhere in the world, outside of China, where the CDB has built up such a huge financial presence. Even if Chavez wasnt the easiest partner for China, he was their man, and now they dont know who is in charge. Vice President Nicholas Maduro is currently running the country, but Chavezs political opposition have called for Maduro to stand down temporarily and cede power to their party whilst Chavez is ill, in order to increase the political stability in the country and give investors some assurance. Current delays to the funding threaten the ability of one of the most oil rich countries in the world to reverse its declining output. Oil production in Venezuela has fallen 13 percent since Chavez first took power in 1999 to just 2.7 million barrels a day.

Fifth, American technical expertise is the best managerial practices, corporate knowledge, and financial assets Fryklund 10
Independents Transforming U.S. Resource Play Expertise Into International Success Robert Bob Fryklund; vice president of research for IHS CERA. He joined the company in July 2006 after serving as Libya president and Brazil country manager for ConocoPhillips. With more than 30 years of both international and domestic industry experience, Fryklund also has held senior leadership positions with British Borneo, Union Texas and Amerada Hess. Based in Houston, he focuses on strategic solutions for the upstream arena and advises national oil companies, independent, majors and investors. He also serves on several boards and committees within the industry, including the Independent Petroleum Association of America and the American Association of Petroleum Geologists. Fryklund holds a bachelors from Hamilton College and an advanced certificate in management. He also has completed advanced studies in business and geology from the University of Houston and the University of Tulsa; April 2010 http://www.aogr.com/index.php/magazine/editors-choice/independents-transforming-u.s.resource-play-expertise-international HOUSTONThe development of onshore unconventional resources has shifted the trend lines on future U.S. natural gas supply projections and has dramatically changed the game in domestic exploration, drilling and production. Independent companies have led the charge into the unconventional oil and gas frontier in North America, and the skill sets they have acquired position them to be strong players in international resource play opportunities. Multinational supermajors and national oil companies are looking to U.S. independent operators like never before to leverage technological expertise and best practices developed through years of experimentation in lower-48 unconventional plays. Independents with large acreage positions in North American shale gas plays and successful track

records in developing those resources are in demand for their corporate knowledge as much as their assets .

Venezuelan Coltan 1AC


We begin with the plan: The United States federal government should substantially increase its economic engagement towards Venezuela by investing in Venezuelan coltan mining infrastructure. We reserve the right to clarify intent.
Said Intent includes providing technical, financial, managerial expertise. This is partial privatization. Coltan = Columbinite Tantalum, its the ore in Venezuela where tantalum can be extracted. For the purposes of the aff, they are essentially synonyms. DRC war and Electronics advantage?

Contention One is Colombian war


First, Venezuelan black market coltan supplies are escalating violence between Venezuela and Colombia government stepping in solves this Gmez et al. 12
Venezuela emerges as new source of conflict minerals Emilia Diaz-Struck, Joseph Poliszuk, Ignacio Gmez, Marcelo Soares, and Nari Kim March 4, 2012 http://www.publicintegrity.org/2012/03/04/8288/venezuela-emerges-new-source-conflict-minerals coltan ore enables electronic capacitors to perform superbly in an array of devices, like smart phones Refined into a powder and applied to solar panels, coltan increases energy efficiency. And as a strategic mineral, Coltan carries weight because it allows guidance controls in smart bombs to work in extreme climate conditions. Venezuelan coltan has raised concerns in Washington as the government of President Hugo Chvez has selected Iranian, Chinese and Russian firms to explore minerals and is looking to develop future supplies of different ores
Its worth the backaches and sweat, Ramn said, rolling a near -black rock in the palm of his hand. He said he earns good money supplying brokers with stones that hold . Applied to microchips, the metal in the pockets of more and more consumers. Because of that, , D.C., . Today it is illegal to mine coltan in Venezuela. But thanks to the likes of Ramn, Venezuelan coltan is already coming on to the international minerals market as black-market contraband. In government documents in several countries, police and military reports and interviews with miners and r esidents in South Americas northern Amazon jungl es, the International Consortium of Investigative Journalists found a robust,

drug smugglers and armed gangs that have been smuggling ore. Illicit Venezuelan coltan is likely being mixed with legitimate minerals in smelters around the world, and then sent to high-tech manufacturers Venezuela could emerge as a big problem because it represents another source of conflict coltan, coming from an area where there is no regulation, no transparency and no security for the people working in the mines consumer-driven demand for everyday electronics may be supporting criminal gangs and organized crime in an illicit market for valuable minerals in South America Much of coltan territory in Venezuela hugs the border with Colombia an area of inaccessible jungle and meandering rivers and streams where armed paramilitaries and drug smugglers for years have been recognized as powerful forces. Cross-border violence is on the rise in the area, turning the zone into a flashpoint in an increasingly tense relationship between the anti-American Chvez and the pro-U.S. government of Colombia This is why American national security experts have noted the proliferation of black-market coltan, while Chvez plans the future coltan trade with the help of Iran
illicit trade in coltan and growing risk for small-scale miners chasing ore. Children, women and vulnerable native Indians are exposed to dangerous work conditions, , experts said, . Alarm bells in Washington There is concern tha t while theres a regulatory vacuum in Venezuela there are no rules, even for miners who want to legitimately mine coltan it will be difficult to keep illicit coltan out of the global minerals supply stream. , said Aaron Hall, an analyst with the Washington, D.C. -based Enough Project. This means that . In Colombia, for example, police recently confiscated 83 tons of coltan and other minerals from an operation reportedly run by smugglers who, according to U.S. law enforcement officials, also supply cocaine to Mexicos powerful Sinaloa drug cartel. . . The Iranian government is assisting in soil and mineral studies and the mapping of mining regions. Sadra, an Iraniangovernment-owned industrial company, operates a Latin American subsidiary and maintains an office in Caracas. In 2010 it participated in a conference in Venezuela to show Irans capabilities in the country and hosted a meeting of local and Iranian diplomats and gover nment officials, including Jos Salamat Khan, Venezuelas mining minister. Later, Khan confirmed that

Venezuela was working with Iranian mining experts

. We decided to work with the Iranian brothers in

the exploration of mines in Bolvar State, Khan said. Sadras parent company, Khatam al -Anbiya, is on the U.S. Treasury Departments list of entities subject to sanctions because of Irans nuclear programs. China, which uses most of the worlds coltan supply, recently pledged mining -

In the fall of 2009, President Hugo Chvez announced the discovery of huge coltan reserves in Venezuelas Amazon jungle Chvez outlawed private mining and launched Operation Blue Gold: 15,000 troops deployed to pursue smugglers he said were sneaking ore into Colombia The action heightened tensions between the two countries in an area where cross-border violence was already on the rise Venezuelas Amazon military patrols have failed to stop coltan smuggling and the government has been silent on new rules for prospectors Other factors have made it easy for black-market coltan to flourish: In the global coltan trade there is no public commodity price index. Most deals are shrouded in secrecy in the high-quality coltan sector, about a fifth of the global marketplace comes from black-market sources in conflict zones The metals pivotal role in high-tech manufacturing became clear in 2001, when Sony delayed the rollout of new video
industry support to Chvez and to Brazil, one of the biggest exporters of processed coltan. An instant black market . Chvezs proclamation came despite coltans long existence on a list of valuable elements known to rest in abundance in Venezuela. For a time one company was even allowed to legally prospect for coltan. Nonetheless, . . Since Chvezs announcement, however, . Colombia or Brazil get this big business because the exploitation of minerals is official there, or at least is not illegal, Liborio Guarulla, governor of Venezuelas Amazonas state, told ICIJ. Venezuelan mining officials declined requests from ICIJ to talk about coltan. are not openly traded. Purchase contracts are confidential between buyer and seller, notes a USGS advisory. Still, some ana lysts have reviewed industry statistics and established that $150 million-a-year , mostly in Central Africa. Smugglers there sneak coltan from the Democratic Republic of Co ngo to Rwanda, where it is relabeled and sold to the global market. Central Africa, Brazil and Australia are the worlds lea ding suppliers of coltan.

. Coltan is a composite of metals primarily columbite and tantalite a nd moves through the supply chain as tantalum or niobium. Tantalum and niobium materials

game players because of a shortage of coltan Since 2007 the growing smart phone market has fueled more mining of high-quality coltan About 1.1 million pounds each year are used by U.S. manufacturers who apply it to high-tech microchips and to an array of other products, from industrial turbines to synthetic hip replacements
. Prices at the time reached an estimated $300 a pound. , at an estimated rate of 3 million pounds per year. . The coltan price has been on a rollercoaster since the 2001 shortage, due mainly to ramped up production in Central Africa, a decision by the U.S. in 2007 to unload its reserves on the open market, and the shuttering of one of the worlds biggest mines, in Australia. With more coltan on the market today, the overall pr ice for high-quality material has hovered around $50 a pound of late. Today coltan from Central Africa mostly feeds a global spot market that manufacturers tap when long-term contracts with legitimate suppliers are not enough. The spot-market supply has grown in recent years. But because minerals and metals from different sources are routinely mixed in spot-market supply lines, analysts say its almost impossible to tell good coltan from the bad. Today there is no accurate test o f origin for coltan ore geo-fingerprinting like there is for diamonds. One pilot study in Germany is exploring a geo-fingerprint for coltan, measuring mineral concentrations, soil type and radiation levels surrounding an ore sample, to identify the ground where it was pulled from. And theres talk of applying pressure on producers via the U.S. governments Dodd -Frank Act of 2010, which bars American manufacturers from

Experts believe the global spot market is where illicit coltan from Venezuela and Colombia may be destined. Theyre concerned the illicit trade in South America will grow and mimic the business in Congo, where coltan profits have helped sustain factional violence a lot of Venezuelan coltan is being dug up in a conflict zone in what the industry calls artisanal mining. Artisanal mining tends to be hazardous for laborers, with tough and unsafe conditions, poor pay and likely environmental damage as waste is discarded into streams When artisanal mining occurs where it is not supposed to, such as in national parks, or where there are bans on private mining like in Venezuela, a black market will inevitably develop if there is someone willing to buy the ore
buying natural resources extracted in territory controlled by organized crime or terrorists. Artisanal mining before Chvez outlawed all coltan private mining. What is clear is that , a bit at a time, This scale of mining is essential to a black market. , said coltan researcher Michael Nest. coltan and plenty of buyers. Residents said that in mid-2010, after Chvez outlawed private mining, a group of businessmen arrived and promised that jobs and houses would follow if they signed petitions to the federal government in support of legitimate coltan extraction. The government ignored the petition and the businessmen never came back, said Flandes, a Parguaza miner who didnt want his full name used, fearing reprisals from authorities and smugglers. But

. Government research on smuggled minerals in the two countries is limited, but some police and military reports reviewed by ICIJ show that authorities have confiscated about 190,000 pounds of coltan since 2009 some of it taken without proper permits even

. In places like the town of Parguaza, on the banks of the Orinoco River in southern Venezuela, theres a buzz about

buyers still arrive in search of

coltan

. Local land owners told ICIJ that mineral brokers have come from neighboring Colombia and far-off Australia and South Korea. Despite the traffic, Amazon miners remain wary of outsiders. After several requests a group eventually met with ICIJ in Parguaza. They

offered only single names like Flandes, Efran, Ramn and Camilo. They described a difficult but potentially rewarding life in coltan mines. Their claims are far from roadways and roving military patrols. Walking is the only way in, so once theyre sure no one is watching, they pack their picks and take to hidden trails. Because of coltans growing popularity, Venezuelan miners said they no longer have to tote heavy bags of ore along clandestine trails into Colombian territory. Now the Colombian buyers cross into Venezuelan territory and haul off the minerals. Colombians are the ones who move this stone here. They are the ones who are taking it and giving life to the business, Flandes said. As cars dont enter in this region, *buyers+ come with motorbikes and then go to the port of El Burro, where they take a motorboat that leaves them in

Coltan in Venezuelas Amazon jungle is often found in small rocks close to the surface. A coltan plot might yield other minerals like tin or titanium ore also wanted by high-tech manufacturers so a new mine attracts dozens of would-be prospectors.
Puerto Carreo, just a 15-minute trip across the Orinoco River from Venezuela. Like generations of small-scale miners in this region, Flandes once hunted for gold and diamonds. Now hes interested in coltan because its easier to find and earns him good money.

One lucky miner said he found a coltan-filled rock, weighing almost seven pounds, which fetched $23. Thats good money in remote Venezuela, but prices

can go up to about $55 a pound as coltan reaches manufacturers, according to the Venezuelan Ministry of Basic Industries and Mining. Dealing with the military Another miner, Camilo, remembered that soldiers recently arrested two women and some children who were working a claim. They took the minerals from them, he said, adding that the women and kids didnt know what experienced miners have learned: splitting coltan loads with soldiers is a good way to avoid being jailed. Locals including church leaders and area government officials quietly complained of military involvement in smuggling. Few reports have been pursued, however, as people whisper that its unsafe t o accuse an officer. In 2009, the Foundation for Science and Technology Development in Amazonas State investigated rumors of Colombian smugglers moving Venezuelan coltan. This followed the governments first acknowledgement that the ore had become cross -border contraband: coltan traces and mining equipment were found on an isolated farm in Bolvar state. Court records show that 3,960 pounds of mined material containing coltan was seized by Venezuelan border guards between 2009 and 2011. The suspects including a 30-year-old woman, four men, a Colombian citizen and a 16-year-old native Indian were charged with illegal trafficking of metals, precious stones, strategic materials and its products or derivatives. In September, 2009, another 54 tons of ore containing an unspecified amount of coltan were confiscated from a Colombian citizen. Ch vezs announcement followed a month later: A strategic mineral called coltan has appeared now, and we have militarized the zone because people have been taking coltan to Colombia and exploiting it illegally. A cross -border threat Since then, local leaders said, children have been found working at family-run mines in Venezuela and Colombia, with little attention to safety. Miners said they accept the risks

coltan is one of the few work options in this poor region. In the regions huge rural tracts, the only real private-sector work is subsistence farming or fishing.
because countrys almost 30 million people. The territory is hard to get to and difficult for outsiders to navigate; well-suited to multinational smuggling, especially along the 1,350-mile Orinoco River which marks part of the border between Venezuela and Colombia. One suspected destination for

Venezuelas Amazonas state, ro ughly three-quarters the size of the United Kingdom, is home to 144 thousand of the

coltan is Brazil, the second-largest exporter of the metal. Its also home to a number of smelters that process ore imported from around the world. Brazilian mining law experts have urged politicians and the countrys growing high -tech manufacturing business to tighten controls on mining. They said inadequate, outdated laws have allowed a black market to grow in the countrys northern Amazonian provinces. Legislation is the same as 40 years ago, said Sergio Rocha Brito Marques, a lawyer who reviewed Brazils coltan trade for ICIJ. The result is mining chaos near Brazils borders with Colombia and Venezuela where prospectors have no clues on global prices for ore and buyers dont demand proof of origin for coltan. Internet market Despite Venezuelas crackdown, willing coltan traders some of them Colombian have been found on Internet sites that offer buyers and sellers private space to negotiate deals. Korea TPC Development de Venezuela, a subsidiary of a South Korea-based shipping and construction company, has boasted online of having offices in Venezuela and of its ability to move minerals, including coltan. Clients can interact directly with every major global exchange while maintaining control of their order flow in a c onflict-free, anonymous environment, the firm says on its pages at tradeboss.com. The company promised quick delivery. Korea TPC was registered on July 29th, 2010, in Valencia, Venezuelas leading industrial city, describing itself as involved in construction of bioenergy and gas plants. But theres little p hysical evidence of Korea TPC in Venezuela. The company lists offices and phone numbers in an upscale hotel and apartment building in Caracas. Yet visits to the addresses yielded shrugs from residents who said they knew nothing about the company. After I CIJ began inquiring about Korea TPCs interest in Venezuelan mining, its website went silent. Business registration documents list Moiss Gonzalez as Korea TPCs Venezuelan partner, but ICIJ could not find him, although he is listed as the target of civil actions claiming he did not deliver on lease payments for office space. In a drab office in an industrial park south of Seoul, Korea TPC President Ha-Young Yang told ICIJ hed given up on the Venezuelan coltan business in 2010 because supply deals with his Caracas contact never materialized. Yang said he was misled by Gonzalez. Other Internet sites such as Alibaba.com and tradetag.com offer coltan for sale and list offices in Venezuela. But those offices do not appear in Venezuelan commercial registries. One company, Florida-based Global Impact USA, lists Aribel Ojeda as its Venezuelan contact, with a contact phone number thats also listed for ano ther online coltan broker, Hawk Enterprises. A person who answered a call to that phone refused to talk

The opaque marketplace for Venezuelan coltan is a symptom of a problem that the Chvez government must resolve The consequence of inaction is a black market that will grow more dangerous and unmanageable theres potential for Venezuelas strong central government to do it right and create market order for coltan, instead of a black market
about the Venezuelan coltan business. Global Impact did not return calls seeking comment. , said researcher Raimund Bleischwitz, of Germanys Wupper tal Institute for Climate, Environment and Energy. want to deal with bandits, Bleischwitz said. Central Africa is a problem because there is no strong government with whom we can negotiate a stable market and transparency. Thats where

. Manufacturers dont

Second, Columbian conflict escalates Shifter, 3 --- vice president for policy at the Inter-American Dialogue (7/16/2003, Michael, Why
Venezuela Matters, http://nationalinterest.org/article/why-venezuela-matters-2388?page=1, JMP) For the United States, Venezuela is not just another Latin American country in turmoil. It is, after all, the fourth largest oil supplier to the U nited S tates, accounting for 15 percent of its oil imports. Senior US officials point to oil as the overriding interest in Venezuela. In the wake of US military action in Iraq, and the tremendous uncertainty in the Middle East, one would think that Venezuela would acquire even greater urgency for the United States. Oil works both ways, however. Shrewdly, the

Chavez government allows the oil to flow precisely to avoid antagonizing foreign operations and, especially, the United States. Oil aside, there are other key U.S. interests at play in Venezuela, though these are less widely recognized. Regional stability and security top the list. The five countries that make up the Andean region of South America are particularly convulsed. Continued chaos and escalating violence in Venezuela would not only inflict damage on the country itself, but could well undermine the ability of neighboring countries to achieve and maintain social peace. In this regard, Colombia deserves special mention. The United States has long sought to bolster the Colombian government's efforts to extend state authority and control. Since 1999, Colombia has received some $2.5 billion in security aid from the United States, making it the largest beneficiary outside of the Middle East. Yet, there has been increasing violence on the Colombia/Venezuela border involving Colombian guerrilla and paramilitary forces - and even Venezuela's armed forces. Should the Venezuelan crisis become a military conflagration , the resulting instability would be detrimental to longstanding US policy objectives. The conditions are combustible, and the risks are growing.

Third, Venezuela-Colombia conflict would pull in the US Richani 12, Nazih, ssociate Professor of political science and Director of Latin American studies at
Kean University in Union, New Jersey, The Increasing Americanization of the Colombian Conflict, April 3, 2012. (https://nacla.org/blog/2012/4/3/increasing-%E2%80%98americanization%E2%80%99-colombianconflict. JMC.) Accessed 7/11/12. First, U.S. generals David Petraeus and Stanley A. McChrystal played a pivotal role in designing Colombias new counterinsurgency strategy to target the mid-level command structures of the Revolutionary Armed Forced of Colombia (FARC). Now, U.S. Army general Martin Dempsey, Chairman of the Joint Chief of Staff, is further increasing military ties between Colombia and the United States. Colombian president Juan Manuel Santos and U.S. general Martin Dempsey (patriagrande.com.ve)Last week Dempsey visited Colombia, which may be on the road to becoming the third theater of U.S. military operations after Afghanistan and Iraq. Dempsey revealed that Army and perhaps Marine Corps colonels that have commanded combat brigades in Iraq and Afghanistan will be arriving to Colombia in a few weeks to share their experiences with the Colombian military. The move is an effort to improve the counterinsurgency performance of the Colombian armed forces. We learned how to defeat al-Qaida by attacking the network along its entire length, Dempsey told reporters during the trip. Now in that case we did most, if not all, of the heavy lifting. The question here [in South America] would be, can we take the same paradigm in how to attack a networkbut not do it ourselves?" The U.S. personnel will be housed in the strategic Larandia military base in the department of Caqueta, which has been core to the offensive against the FARC. It is reported that Larandia also housed Israeli military personnel and private security contractors such as Dyncorp. The increasing U.S. intervention sheds light on the growing importance of Colombia for the U.S. military strategy in the Pacific-Atlantic-Amazon triangle. The region is a key node for U.S. hemisphere security, and an important reason that the United States is not keen about the growing assertiveness of regional players such as Brazil and Venezuela. Colombia has become the most reliable satellite for the U.S. hemispheric security strategy. As Venezuelan president Hugo Chvez once said, Colombia has become the Israel of Latin America, with the largest military in the region, on par with Brazil. For the United States, defeating the Marxist insurgency in Colombia has become an imperative in order to set up the U.S. hemispheric security regime. Given the training, aid, and experiences that the Colombian armed forces have gained over the countrys nearly

50-year civil, they could even be put at the service of the U.S. global conflicts, ranging from fighting drugs in Central America to insurgencies in Africa, Asia, or in the Middle East.

Fourth, Venezuela has biological weapons Taylor 5


Remember the Maine? CLINTON W. TAYLOR; The American Spectator; 4.11.05 http://spectator.org/archives/2005/04/11/remember-the-maine/ According to a Spanish news agency, Hugo Chavez's Venezuela has purchased biological and nerve agents. Spains Europa Press news agency reports that Venezuela purchased biological and nerve agents as well as dual-use materials from Spain sometime during the first half of 2004. According to a report about defense expenditures obtained by Europa Press, Venezuela was the only country listed under the category of states to which chemical warfare agents and radioactive materials were sold. An English translation appears here. The accusation comes in the wake of Spains announcement that it will sell conventional weaponry military transport planes and and patrol boats to Venezuela. I found the story through Iberian blogger Barcepundit, who notes that If Rumsfeld was reportedly angry about the sale of planes and boats, boy I can only imagine what hell think about this. The amount of biological or nerve agents probably isnt large Europa Press sets the purchase price at 30,000 Euros, which isnt out of line with the price of a single kilogram of South American heroin. Im not familiar with the going rates on the WMD black market, but hopefully doomsday weapons are scarcer and therefore more expensive than heroin. (A further 1.6 million Euros was spent on the dual-use materials which might be legitimately destined for the petroleum and leather-tanning industries.) But any amount of WMD in the hands of the Castroite Chavez regime is too much. President Chavez may be a thuggish autocrat, but he isnt stupid enough to use chemical or biological weapons against American civilians, at least directly. He may see them as insurance against the possibility of an American invasion; however, the United States demonstrated in Iraq that threats of chemical retaliation will not deter us should we decide to invade. A more likely scenario is the use of these WMDs for international extortion against South American governments. Chavezs alleged links to Colombias narcoterrorist FARC and to Evo Moraless cocaleros in Bolivia suggest he could find a vector for the weapons should he need one. The implicit threat of arming insurgent groups with WMDs may compel these governments especially the precarious democracy in Bolivia to accommodate Venezuelas policies or to reject ours.

Fifth, That means conflict escalates into major biological warfare Connor 2
Chavez bio-weapons lab in Venezuela for Saddam and Castro Shane Connor; Civil Defense Researcher; 12/19/02 http://www.freerepublic.com/focus/news/809354/posts Remember a brief mention in the media recently about accusations that Castro had a bio-weapon lab in Cuba? Well, don't bother looking for it there anymore. It was airlifted out by a Chavez C-130 in a rush/hush mission shortly after the news story broke. It's in Venezuela now, in San Antonio Los Altos near Caracas. It is still largely crated and being watched, awaiting final destination along with Cuban technicians that came with it. The Chavez-Castro axis is preparing a Caribbean Terror: biological weapons. In May 2002 Fidel Castro personally went to Iran, which the U.S. labels as the world's most active supporter of terrorism. He was received by that country's leader, Ayatollah Ali Khamenei, who declared that "U.S. grandeur can be broken," and that if it is, "it will be a service rendered to mankind and even the American people." Not to be outdone, Castro told the Iranians, according to the Associated Press, that the U.S. is an "imperialist king" that "will finally fall, just as your king was overthrown." In July, Castro then sent his close confidant Rodrigo Alvarez Cambras - a congressman and the head of the Cuban-Iraqi Friendship Society - to Iraq as an envoy. This was after Venezuelan strongman Hugo Chavez had already been to Iraq himself, to pave the way for a Latin American Castro-

Chavez pact with Saddam Hussein. As BBC reports from Iraqi TV and Iraq Radio in Baghdad, Alvarez Cambras met with Saddam Hussein to convey a "verbal message" on behalf of Castro and also with Deputy Prime Minister Tariq Aziz. The message was that Castro and Chavez wanted to work with Saddam on developing new bioweapons for use against the United States. U.S. intelligence already have proof. Carl Ford Jr. is assistant secretary for intelligence and research at the State Department. He deals regularly with the CIA and other U.S. intelligence bodies. On June 5 2002, Ford told a subcommittee of the Senate Foreign Relations Committee that "Cuba has provided dual-use technology to rogue states. Such technology could support bioweapons programs in those states." Ford also said "We feel very confident about saying that they're working and have been working on an effort that would give them a BW--limited BW offensive capability. And that's serious enough to tell you about it." Cuba already possesses very sophisticated recombinant technology, which Hugo Chavez discussed eagerly in personal visits with Chavez. Airforce Major Juan Diaz Castillo, the private pilot of Venezuela's Presidential Airbus, has flown Chavez to Cuba on more than a dozen such visits. Today, he is one of the resisters in permanent civil disobedience in Plaza Altamira, Caracas. Says Diaz Castillo: " - With Castro, Chavez always discussed U.S. world dominance and how it could be contained. Of the solutions discussed, the most recurring centered on biological weapons." As a result, Cuba is today - through Venezuela - engaged in illicit biological weapons research, production, weaponization and stockpiling. They have the facilities to do medical, biotechnological research, and the facilities to build a biological weapon. There are clear West Nile virus links between Saddam, Chavez and Castro. To the trio's delight, Saddam's remake of the West Nile Virus causes a 97% fatality rate. And now, with the Cubalab safely hidden with Hugo Chavez, even more is at stake. Given the military liaisons between Cuba and Chavez, the biological warfare aspects of their mutual exchanges, their connections with Khaddafi and Saddam Hussein, and their connections to FARC, the outcome is chilling. Consider, as one Chavez insider has already done, how easily one could introduce a bioweapon to the US by contaminating cocaine. Just thinking about these implications made Major Juan Diaz Castillo walk out and join Venezuela's opposition in calling for free and democratic elections to remove Chavez from power. " - If Chavez stays, it will not just be dangerous for Venezuela," says Major Diaz Castillo. "It will be dangerous for the whole world."

Sixth, extinction Ochs 02


(Richard Ochs, Chemical Weapons Working Group Member, 2002 Biological Weapons must be Abolished Immediately, June 9, http://www.freefromterror.net/other_articles/abolish.html)

Of all the weapons of mass destruction, the genetically engineered biological weapons, many without a known cure or vaccine, are an extreme danger to the continued survival of life on earth. Any perceived military value or deterrence pales in comparison to the great risk these weapons pose just sitting in vials in laboratories. While a "nuclear winter," resulting from a massive exchange of nuclear weapons, could also kill off most of life on earth and severely compromise the health of future generations, they are easier to control. Biological weapons, on the other hand, can get out of control very easily, as the recent anthrax attacks has demonstrated. There is no way to guarantee the security of these doomsday weapons because very tiny amounts can be stolen or accidentally released and then grow or be grown to horrendous proportions. The Black Death of the Middle Ages would be small in comparison to the potential damage bioweapons could cause. Abolition of chemical weapons is less of a priority because, while they can also kill millions of people outright, their persistence in the environment would be less than nuclear or biological agents or more localized. Hence, chemical weapons would have a lesser effect on future generations of innocent people and the natural environment. Like the Holocaust, once a localized chemical extermination is over, it is over. With nuclear and biological weapons, the killing will probably never end. Radioactive elements last tens of thousands of years and

will keep causing cancers virtually forever. Potentially worse than that, bio-engineered agents by the hundreds with no known cure could wreck even greater calamity on the human race than could persistent radiation. AIDS and ebola viruses are just a small example of recently emerging plagues with no known cure or vaccine. Can we imagine hundreds of such plagues? HUMAN EXTINCTION IS NOW POSSIBLE.

Contention Two is Dutch Disease


First, Venezuelan oil decline is inevitable, diversification is key to save the economy Monge 13
Oil in Post-Chvez Venezuela Carlos Monge; RWI Latin America Regional Coordinator; 12 March 2013 http://www.revenuewatch.org/news/blog/oil-post-ch%C3%A1vez-venezuela Hugo Chvez has died and Venezuela readies for a fast track political succession with general elections taking place next month. While the debate these days is focused on the outcome of the electionsdoes Henrique Capriles stand a chance against now-President Nicolas Maduro? some looming long-term questions have to do with oil. During the Chvez administration, oil production was nationalized under Petroleos de Venezuela (PDVSA) and PDVSA itself was put in charge of handling a large chunk of the oil income via the social programs called "misiones," aimed at improving literacy, health and education, and social security standards. Subsidies and special funds have been other important mechanisms for handling the oil money in response to an internal social agenda and for building a national and regional political basis of support. As a result, poverty has indeed declined and Venezuela became a player in a region shifting to the left, but the country depends heavily on the capacity of the state to pump money into the economy and into politics. And while the oil economy and the subsidies generate a demand for consumer goods, it becomes cheaper to import them than to produce them locally thanks to the appreciation of the bolvar against the dollar. As a result, Venezuela has only increased its traditional dependence on oil, which now accounts for 15 to 25 percent of its GNP, 80 to 90 percent of its exports and close to 50 percent of its national budget. After an intense exploration campaign, Venezuela now has between the first- and third-largest oil reserves in the world, so that its long-term role as an oil supplier to the U.S. and China- seems assured. In the short termassuming Maduro is electedthe new administration will probably maintain Chvezs oil policies, as it will need to secure the loyalty of the popular sectors and sustain its regional geopolitical alliances. But the mid and long term, certain critical issues will need to be addressed. One is that of economic diversification . The sustainability of Venezuelas oil nationalism critically depends on the continuity of U.S. and China demand. But the U.S. needs less imported oil because it is increasing its domestic energy supplies, and Chinese demand has decreased due to lower levels of growth. In this scenario, heavy dependence on oil exports can lead to too much exposure to short-term price volatility, which may lead to long-term decline.

Second, Venezuelan market diversity is key to their economy Noormohamed 11


The Effects of Oil Dependence on the Venezuelan Economy Shereen Noormohamed May 8, 2011 http://aquinascasa.blogspot.com/2011/05/effects-of-oil-dependence-on-venezuelan.html As a single crop-farmer who is dependent upon a single crop to make a living, Venezuela is dependent upon oil for the survival of its economy . This type of a dependency could sometimes be beneficial, but in many instances could also be detrimental. Ever since 1999, when Hugo Chavez took power, there has been a 28 percent decline in oil production, putting the Venezuelan oil company into a state of debt and causing many foreign oil partners to pull out from the company.(Future of Venezuelan Oil Company) In 2002, the Venezuelan economy experienced a significant downturn following a failed military coup to overthrow Chavez and a two-month strike by the state-run oil company PDVSA. (Lapper) However, in later years, the rise in international oil prices has helped the economy to recover. This serves to show that since there is no variety in the Venezuelan market, the stability of

the oil industry is extremely crucial to the survival of the country . Therefore, a fluctuation in oil prices drastically impacts their economy, either making it very strong or very weak, just as the failure or success of a crop impacts the farmer. When looking into the political sphere, the oil wealth has turned Venezuela into what Terry Lynn Karl, a political scientist, refers to as a pacted democracy. The term pacted democracy describes a democracy which is held together via an agreement among different elite groups. It is a kind of truce among opposing powerful interest groups in the society, so as to maintain their privileges.(Wilpert) Chavez has been increasingly focused on maintaining control over the production of oil. Because of its possession of this valuable resource, many other countries, including the U.S., have been exploiting Venezuelan oil. Although there are social, economic and political effects of Venezuelas reliance on oil, the most devastating of the three seems to be the economic effects. Solely relying on oil puts the economy of Venezuela in a risky situation. If the oil fails them, the Venezuelan people do not have any other major product to turn to in order to safeguard and recover their economy. Therefore, as in any case, when the economy of a country fails, the power of the political leader and the lifestyle of the people are also negatively impacted. So, if the economic status of Venezuela declines, Chavezs power will in turn decline. In addition, living conditions will worsen for the people because a lack of money leads to increased unemployment and poverty. Therefore, since the economic status of Venezuela, as in any other country, directly impacts the political and social sphere, the economic effects are the most devastating of the three.

Third, foreign investment in Venezuelan mining is specifically key MacSween 9


NOW is the time to get Venezuela mining resources back on track! Todd MacSween; VHeadline guest commentarist and gold investor; 3/5/2009 http://www.opednews.com/articles/NOW-is-the-time-toget-Ven-by-Todd-MacSween-090302-115.html In today's worldwide market and the financial crisis, the creation of employment would appear to be the major focus of each country. That's why NOW is the time to get all mineral and natural resources that Venezuela is famous for back on track to production at full tilt. If indeed Venezuela has waited and delayed the new mining law due to President Chavez' political focus and quest for continued re-election ... if indeed Venezuela has delayed due to reviewing all of the concessions granted by past political administrations ... NOW of all times, with the Executive branch in charge and control of projects already reviewed and approved, it's time to put these projects to work for the good of Venezuela.. In the worldwide financial crisis NOW is NOT the time to add even more strain to companies needing finance to proceed further into production. Within the mining industry, specifically, there are equipment shortages and order backlogs which make production an even greater challenge. Professional economists have also been predicting the economy will get much worse with an even greater recession than most politicians fear. As an investor in Venezuelan gold, I have great faith in the investments that Venezuela has to offer. It's apparent that Venezuela will be a force within the entire mining investment world ... but, over the last few years, the Government of Venezuela has given out mixed messages as far as their intentions with regard to transnational investment. In some instances, they are welcoming with great public statements and at other with threats... As an investor, I can see the need for company diversity in order to survive tough environments but the thought of individuality and total assimilation as an entire system will simply not succeed. As an investor, I can see projects such as las Brisas and Las Cristinas will eventually come to a conclusion. It's only all too transparent as to the intention other companies have with regard to Venezuela, and their timing and circumstances are in favor of hostile attempts to steal companies for half their value. This play on public opinion is common throughout the investment world and NOT just isolated to one region ... a hostile political atmosphere is always the best

place for other companies to attempt to improve their own agenda. When it comes to the steel industry, common sense, as well, indicates a need for coal and coal production and open pit mining ... in Venezuela's case, there's also a need for massive infrastructure replacement which in future will require both industries at full production. It would make no economic sense to import a commodity which is presently in surplus within Venezuela's own region. Kaolin, and other minerals far too numerous to mention, are priority to improve the economic stability of Venezuela. Oil has been a priority for years, and will continue to be so ... however fluctuations in oil prices can vary greatly (as can be seen now) and will decline in time with improvements in alternative energy currently being conceived.

Fourth, the Venezuelan economy is key to the Brazilian economy E. Market access on the brink Israel 13
Brazilian firms root for Chavez's man in Venezuela vote Esteban Israel Mar 21, 2013 http://www.reuters.com/article/2013/03/21/us-venezuela-brazil-business-idUSBRE92K0ZY20130321 Brazil, the world's seventh largest economy, has emerged as regional powerbroker in Latin America with moderate center-left policies that it hopes can influence more stridently left-wing neighbors such as Venezuela. With Brazil's economy slowing to a crawl, the last thing its entrepreneurs want to do is forfeit growing markets. Over the past decade, Brazil's exports to Venezuela soared by 533 percent to some $5 billion, making it Brazil's second largest market in Latin America after Argentina, both major buyers of Brazilian manufactured goods. Economists say Brazil's investments in Venezuela are around $20 billion. Venezuela, an oil producing nation that imports some 70 percent of its food, is now the third largest consumer of Brazilian beef and an important buyer of its chicken. Key infrastructure projects launched during the 14 years of Chavez's government, from the Caracas metro expansion to bridges across the Orinoco river that divides Venezuela, are run by Brazilian firms like Odebrecht.

F. Manufacturing Daudelin 13
Why Venezuela matters for Brazil Jean Daudelin; The Norman Paterson School of International Affairs (NPSIA); April 20, 2013 http://npsia.wordpress.com/2013/04/20/why-venezuela-matters-for-brazil/ I think the answer lies deeper than ideology or even security preoccupations and reaches to the very core of the Brazilian governments economic model, which is still rooted in old and increasingly farfetched dreams of industrialization. The ten-year-long Golden Age of Lulas presidency was based on low inflation and the effective redistribution of reasonably high growth. The axis of that growth, however, has lied in growing exports of primary products, primarily agricultural. For twenty years now, Brazil has been quickly de-industrializing. The fast decline of its manufacturing sector has taken place in the face of strenuous efforts of the government, particularly under the PT, to shore up and protect what a half-century of state efforts had produced, until the brief neo-liberal opening of the early 1990s triggered a debacle that Chinas rise, and the primary goods bonanza it produced, only deepened. Much of Brazils industry is not competitive globally. Domestic protection and support for national champions have consequently been crucial to its survival, but so has regional integration, particularly Mercosur. Hiding its industries behind a common tariff with even less competitiveand even keener protectionistArgentina, ensured that a market would be found for Brazilian products. Bringing Venezuela on board was an even better deal: with no industry to speak of, Venezuela brought no competition within the bloc but putting its sizeable market behind the tariff wall broadened the reach of Brazils uncompetitive manufactured products. Deepening economic instability in Argentina is now threatening the whole scheme. Cristina Kirchners attempts to protect her own industrial sector by imposing barriers to Brazilian products, along with declining demand in

Argentina, is hurting Brazilian manufacturing exports to that country which, in the first three months of this year, have declined by 10%.[2] With mass protests against Kirchner in the streets of Buenos Aires and most of the countrys major cities last week, continuing high inflation and falling confidence, things are not looking up. In such a context, what export market is left for Brazils industrial goods but troubled Venezuela, whose oil revenues protect from economic collapse? Mercosur is a raw deal for Venezuelan consumers, who would be much better off importing from the cheapest world producers, but the chavista mix of ideological blindness and economic incompetence is proving to be a boon for Brazil. In that context, quickly recognizing Maduro and keeping a clearer-eyed opposition out of power was a no-brainer.

Fifth, Brazilian economic stability is critical to avert Brazilian proliferation Shultz 2K


Donald SHULTZ, Research Professor of National Security Policy at US Army War College, THE UNITED STATES AND LATIN AMERICA: SHAPING AN ELUSIVE FUTURE, March, 2000, pg. Online @ http://www.carlisle.army.mil/ssi/pdffiles/PUB31.pdf While we are in a speculative mode, it may be useful to raise the issue of whether, two or three decades from now, the United States might have to deal with a regional hegemon or peer competitor. The most obvious candidate for such a role would be Brazil, which already accounts for almost half of Latin Americas economic production and has by far the largest armed forces in the region (313,250 active troops).53 That country could very well assume a more commanding political and military role in the decades ahead. Until recently, the primary U.S. concern about Brazil has been that it might acquire nuclear weapons and delivery systems. In the 1970s, the Brazilian military embarked on a secret program to develop an atom bomb. By the late 1980s, both Brazil and Argentina were aggressively pursuing nuclear development programs that had clear military spin-offs.54 There were powerful military and civilian advocates of developing nuclear weapons and ballistic missiles within both countries. Today, however, the situation has changed. As a result of political leadership transitions in both countries, Brazil and Argentina now appear firmly committed to restricting their nuclear programs to peaceful purposes. They have entered into various nuclear-related agreements with each othermost notably the quadripartite comprehensive safeguards agreement (1991), which permits the inspection of all their nuclear installations by the International Atomic Energy Agencyand have joined the Missile Technology Control Regime. Even so, no one can be certain about the future. As Scott Tollefson has observed: . . . the military application of Brazils nuclear and space programs depends less on technological considerations than on political will. While technological constraints present a formidable barrier to achieving nuclear bombs and ballistic missiles, that barrier is not insurmountable. The critical element, therefore, in determining the applications of Brazils nuclear and space technologies will be primarily political.55 Put simply, if changes in political leadership were instrumental in redirecting Brazils nuclear program towards peaceful purposes, future political upheavals could still produce a reversion to previous orientations. Civilian supremacy is not so strong that it could not be swept away by a coup, especially if the legitimacy of the current democratic experiment were to be undermined by economic crisis and growing poverty/inequality. Nor are civilian leaders necessarily less militaristic or more committed to democracy than the military. The example of Perus Fujimori comes immediately to mind. How serious a threat might Brazil potentially be? It has been estimated that if the nuclear plant at Angra dos Reis (Angra I) were only producing at 30 percent capacity, it could produce five 20-kiloton weapons a year. If production from other plants were included, Brazil would have a capability three times greater than India or Pakistan. Furthermore, its defense industry already has a substantial missile producing capability. On the other hand, the country has a very limited capacity to project its military power via air and sealift or to sustain its forces over long distances. And though a 1983 law authorizes significant military manpower increases (which could place Brazil at a

numerical level slightly higher than France, Iran and Pakistan), such growth will be restricted by a lack of economic resources. Indeed, the development of all these military potentials has been, and will continue to be, severely constrained by a lack of money. (Which is one reason Brazil decided to engage in arms control with Argentina in the first place.) 56 In short, a restoration of Brazilian militarism, imbued with nationalistic ambitions for great power status, is not unthinkable, and such a regime could present some fairly serious problems. That government would probably need foreign as well as domestic enemies to help justify its existence. One obvious candidate would be the United States, which would presumably be critical of any return to dictatorial rule. Beyond this, moreover, the spectre of a predatory international community, covetous of the riches of the Amazon, could help rally political support to the regime. For years, some Brazilian military officers have been warning of foreign intervention. Indeed, as far back as 1991 General Antenor de Santa Cruz Abreu, then chief of the Military Command of the Amazon, threatened to transform the region into a new Vietnam if developed countries tried to internationalize the Amazon. Subsequently, in 1993, U.S.-Guyanese combined military exercises near the Brazilian border provoked an angry response from many high-ranking Brazilian officers. 57 Since then, of course, U.S.-Brazilian relations have improved considerably. Nevertheless, the basic U.S./ international concerns over the Amazonthe threat to the regions ecology through burning and deforestation, the presence of narcotrafficking activities, the Indian question, etc.have not disappeared, and some may very well intensify in the years ahead. At the same time, if the growing trend towards subregional economic groupingsin particular, MERCOSURcontinues, it is likely to increase competition between Southern Cone and NAFTA countries. Economic conflicts, in turn, may be expected to intensify political differences, and could lead to heightened politico-military rivalry between different blocs or coalitions in the hemisphere. Even so, there continue to be traditional rivalries and conflicts within MERCOSUR, especially between Brazil and its neighbors, and these will certainly complicate the groups evolution. Among other things, the past year witnessed a serious deterioration of relations between Brazil and Argentina, the product partly of the formers January 1999 currency devaluation, which severely strained economic ties between the two countries. In part, too, these conflicts were aggravated by Argentinas (unsuccessful) bid to join the North Atlantic Treaty Organization (NATO), which Brazilians interpreted as an attempt to gain strategic advantage. The upshot was that relations soured to the extent where questions have been raised as to the continued viability of MERCOSUR itself. In light of these problems, one cannot but wonder what impact a resurgence of Brazilian authoritarianism, combined with a push for regional hegemonic status, would have on Argentina, currently a non-NATO ally of the United States.

Sixth, Brazilian proliferation is the most likely scenario for global nuclear war multiple warrants
Border disputes, instability, unpredictable leaders, accidents, military coups, lower warning times, first strikes, arms race, technical accidents, physical security

Yusuf 8
Predicting Proliferation: The History of the Future of Nuclear Weapons Moeed Yusuf; Fellow at the Frederick S. Pardee Center for the Study of the Longer-Range Future at Boston University; January 2009 http://www.brookings.edu/~/media/research/files/papers/2009/1/nuclear%20proliferation%20yusuf/0 1_nuclear_proliferation_yusuf.pdf Michael Mandelbaum, earlier mentioned as someone who remained relatively comfortable about the ability of the superpowers to deter each other, was less optimistic regarding the capacity of developing countries to do so. He stressed that developing country proliferation would increase the likelihood of the use of nuclear weapons in conflicts.78 Ted Greenwood, an American academic who later advised the U.S. Department of Defense, pointed to the active border disputes of Nth states such

as South Africa, Israel, and Taiwan to suggest an increased likelihood of nuclear war.79 Mentions of the possibility of weapons falling into the hands of irresponsible powers the mad ruler scenario were frequent. As French scholar, Thierry de Montbrial pointed out: there are many politically unstable countries whose leaders are not predictableand would not hesitate to use an atomic weapon, if they had one.80 Hinting at the same concern, the renowned French sociologist Raymond Aron argued that acquisition of nuclear weapons by developing countries could even result in a superpower conflict in the Cold War context due to a deliberate or inadvertent action of a small state.81 Moreover, in contrast to the relative stability within the borders of developed countries, Dunn and Overholt pointed to frequent military coups in countries like Argentina, Chile, Brazil, Greece, Indonesia, Iraq, Libya, Nigeria, Pakistan, South Korea, Syria, Turkey, Venezuela, and Zaire to emphasize the possibility of militaristic leaders wresting power and utilizing nuclear weapons as a means of coercing adversaries.82 A number of commentators anticipated that Nth powers would seek to create a first strike capability to preempt traditional rivals. Counterforce targeting strategies were considered likely, but also inherently destabilizing, especially for contiguous countries where warning times were diminished. Technical deficiencies in ensuring robust command and control and the security of the arsenal were taken for granted and used to further heighten fears of accidental or unauthorized use.83

Contention Three is Military Power


First, major coltan shortages now A. 95% of supplies were just cut off Robinson 12
Tantalum Supplies Tighten MICHAEL A. ROBINSON 2012 http://www.defensemedianetwork.com/stories/tantalum-supplies-tighten/ A little-known provision of the sweeping Dodd-Frank financial reform law that passed the U.S. Congress last year has aggravated a growing shortage of a critical metal used in a wide range of products vital for defense and aerospace. Beginning in April 2011, the Conflict Minerals Act tucked inside the massive bill significantly increases the reporting requirements for U.S. companies. They must demonstrate the tantalum they buy directly or that is included in components used in final assembly do not contain any metal sourced from the Democratic Republic of the Congo. That nation has been linked to widespread violence and atrocities that include the murder of millions of civilians and the mass rape of women. In an attempt to address civil war and violence in the Congo, the United Nations Security Council in recent years approved nearly 60 conflict mineral resolutions. The idea behind DoddFrank and the U.N. resolutions is to cut off tantalum sales used to finance both Congolese government troops and guerrilla fighters from neighboring Rwanda. The legislation and resolutions also seek to disrupt the Congolese governments use of forced labor at tantalum mines. For the last several years, the Congo has served as a major tantalum source. It is estimated that the Wests advanced economies supplied virtually all their own tantalum in the year 2000. But competing in part through lower prices, the Congo accounted for 50 percent of global supplies by 2008, the last year for which good statistics are available, industry analysts say. Currently, the U.S. has no appreciable domestic supplies of tantalum. No significant mine production has been reported since 1959. Moreover, analysts note, the U.S. Defense Logistics Agency sold off the last of its tantalum supplies in 2007. Under Dodd-Frank, U.S. corporations must report the sources of their tantalum to the Securities and Exchange Commission, the federal agency that regulates publicly traded companies. Industry observers say this provision applies to all major electronics suppliers, such as Dell, Cisco, Hewlett-Packard and Research-in-Motion, maker of the popular Blackberry smart phone. Discovered in 1802, tantalum is a rare, hard metal that is bluegray in color and known for its exceedingly high melting point. Tantalum also possesses excellent capacity to store and release an electrical charge, is highly corrosion-resistant and is a great conductor for electricity. Thus, it finds its way into a wide range of electronics products such as personal computers and smart phones. It also is widely employed in nuclear reactors, jet engines, automotive and truck navigation systems, missile parts and radar antennas. Tantalum is often incorrectly lumped in with rare earths, a group of 17 elements also used for defense, aerospace and electronics applications. Nevertheless, analysts say both tantalum and rare earths will face enormous buying pressures for at least the next five years. Indeed, several major tantalum suppliers have exited the market rather than deal with the increased reporting requirements or the bad publicity surrounding the conflict mineral. For instance, Talison Tantalum of Australia and Tanco of Canada, who together accounted for 45 percent of global supplies, quit producing tantalum in roughly the past two years.

B. No Domestic US production Wirtz 13


Mays Metals of the Month the Three Ts: Tungsten, Tin and Tantalum Sandra Wirtz May 8, 2013 http://americanresources.org/mays-metals-of-the-month-the-three-ts-tungsten-tin-and-tantalum/

Tantalum Tantalum stands out through the following characteristics: superconductivity, corrosion resistance, very high melting temperatures, a high coefficient of capacitance, bio-compatibility. Because of its properties, a large percentage of tantalum production goes into tantalum chemicals, and the manufacture of metallurgical grade powers. End uses include chemical processing equipment, military applications and gas turbine blades, industrial high-speed cutting and boring tools and drill bits, electronics, medical devices and specialty glass and structural ceramics. The U.S. import dependency rate for Tantalum is 100 percent .

Second, Coltan is key to the US military A. Directly required for aircraft, missiles, and communications Cunningham 3
COLUMBIUM (NIOBIUM) AND TANTALUM Larry D. Cunningham 2003 http://minerals.usgs.gov/minerals/pubs/commodity/niobium/niobmyb01.pdf Columbium [niobium (Nb)] is vital as an alloying element in steels and in superalloys for aircraft turbine engines and is in greatest demand in industrialized countries. It is critical to the United States because of its defense-related uses in the aerospace, energy, and transportation industries. Substitutes are available for some columbium applications, but, in most cases, they are less desirable. Tantalum (Ta) is a refractory metal that is ductile, easily fabricated, highly resistant to corrosion by acids, a good conductor of heat and electricity, and has a high melting point. It is critical to the United States because of its defense-related applications in aircraft, missiles, and radio communications. Substitution for tantalum is made at either a performance or economic penalty in most applications. Neither columbium nor tantalum was mined domestically because U.S. resources are of low grade. Some resources are mineralogically complex, and most are not currently (2001) recoverable. The last significant mining of columbium and tantalum in the United States was during the Korean Conflict, when increased military demand resulted in columbium and tantalum ore shortages.

B. Key to electronics its 3 times as efficient as the only other alternative and independently key to military Sprague 5
Tantalum Capacitors Vishay Sprague; pioneer and leader in capacitor technology; June 14, 2005 http://www.itiomar.it/pubblica/Telecomunicaz/lezioni/3_anno/Cap-Ta-1.pdf Tantalum electrolytic capacitors are the preferred choice in applications where volumetric efficiency, stable electrical parameters, high reliability, and long service life are primary considerations. The stability and resistance to elevated temperatures of the tantalum/tantalum oxide/manganese dioxide system make solid tantalum capacitors an appropriate choice for today's surface mount assembly technology. Vishay Sprague has been a pioneer and leader in this field, producing a large variety of tantalum capacitor types for consumer, industrial, automotive, military, and aerospace electronic applications. Tantalum is not found in its pure state. Rather, it is commonly found in a number of oxide minerals, often in combination with Columbium ore. This combination is known as "tantalite" when its contents are more than one-half tantalum. Important sources of tantalite include Australia, Brazil, Canada, China, and several African countries. Synthetic tantalite concentrates produced from tin slags in Thailand, Malaysia, and Brazil are also a significant raw material for tantalum production. Electronic applications, and particularly capacitors, consume the largest share of world tantalum production. Other important applications for tantalum include cutting tools (tantalum carbide), high temperature super alloys, chemical processing equipment, medical implants, and military ordnance. Vishay Sprague is a major user of tantalum materials in the form of powder and wire for capacitor elements and rod and

sheet for high temperature vacuum processing. THE BASICS OF TANTALUM CAPACITORS Most metals form crystalline oxides which are non-protecting, such as rust on iron or black oxide on copper. A few metals form dense, stable, tightly adhering, electrically insulating oxides. These are the so-called "valve" metals and include titanium, btzirconium, niobium, tantalum, hafnium, and aluminum. Only a few of these permit the accurate control of oxide thickness by electrochemical means. Of these, the most valuable for the electronics industry are aluminum and tantalum. Capacitors are basic to all kinds of electrical equipment, from radios and television sets to missile controls and automobile ignitions. Their function is to store an electrical charge for later use. Capacitors consist of two conducting surfaces, usually metal plates, whose function is to conduct electricity. They are separated by an insulating material or dielectric. The dielectric used in all tantalum electrolytic capacitors is tantalum pentoxide. Tantalum pentoxide compound possesses high-dielectric strength and a high-dielectric constant. As capacitors are being manufactured, a film of tantalum pentoxide is applied to their electrodes by means of an electrolytic process. The film is applied in various thicknesses and at various voltages and although transparent to begin with, it takes on different colors as light refracts through it. This coloring occurs on the tantalum electrodes of all types of tantalum capacitors. Rating for rating, tantalum capacitors tend to have as much as three times better capacitance/volume efficiency than aluminum electrolytic capacitors. An approximation of the capacitance/volume efficiency of other types of capacitors may be inferred from the following table, which shows the dielectric constant ranges of the various materials used in each type. Note that tantalum pentoxide has a dielectric constant of 26, some three times greater than that of aluminum oxide. This, in addition to the fact that extremely thin films can be deposited during the electrolytic process mentioned earlier, makes the tantalum capacitor extremely efficient with respect to the number of microfarads available per unit volume.

C. Technology is key to military power Drezner 1


Daniel Drezner; professor of international politics at The Fletcher School of Law and Diplomacy at Tufts University; 2001 http://www.danieldrezner.com/research/tech.pdf The importance of technological innovation to economic growth is similarly undisputed by economists.2 Logically, technological leadership is a linchpin of great-power status in the world, a fact recognized by long-cycle theorists.3 However, despite the obvious importance of innovation to power, and despite a large literature on how the state should be organized to maximize the extraction of societal resources, there has been very little written in international political economy on the states role in fostering technological leadership. The relationship between innovation and the nation-state has been discussed in international relations, but the debates that touch on the subject mention it only in passing. In the late seventies, there was a great deal of discussion about state strength vis--vis society as a way of determining foreign economic policies, including industrial policies.4 One of the implicit arguments in this literature was that strong states would pursue more enlightened economic policies. However, the strong state/weak state typology has been criticized as vague, and this literature has moved away from the study of economic issues, focusing more on security policies.5 In this decade, proponents of globalization argue that because information and capital are mobile, the location of innovation has been rendered unimportant.6 While this notion has some popular appeal, the globalization thesis lacks theoretical or empirical support. Theoretically, even in a world of perfect information and perfect capital mobility, economists have shown that the location of technological innovation matters.7 Empirically, the claims of globalization proponents have been far-fetched. Capital is not perfectly mobile, and increased economic exchange does not lead to a seamless transfer of technology from one country to another.8 The location of innovation still matters. Long-cycle theorists have paid the most attention to the link between technological innovation, economic growth,

and the rise and fall of hegemons.9 They argue that the past ve hundred years of the global political economy can be explained by the waxing and waning of hegemonic powers. Countries acquire hegemonic status because they are the rst to develop a cluster of technologies in leading sectors. These innovations generate spillover effects to the rest of the lead economy, and then to the global economy. Over time, these technological hegemons fail to maintain the rate of innovations, leading to a period of strife until a new hegemon is found. While this literature has done an excellent job at describing the link between innovation, economic growth, and global stability, it cannot explain why technological hegemons lose their lead over time.

Third, decline of US military power risks global nuclear war Goure 13


How U.S. Military Power Holds the World Together Daniel Goure; President of The Lexington Institute; Summer 2013 http://www.jewishpolicycenter.org/4397/us-military-power There are three fundamental problems with the argument in favor of abandoning America's security role in the world. The first problem is that the United States cannot withdraw without sucking the air out of the system. U.S. power and presence have been the central structural feature that holds the present international order together. It flavors the very air that fills the sphere that is the international system. Whether it is the size of the U.S. economy, its capacity for innovation, the role of the dollar as the world's reserve currency or the contribution of U.S. military power to the stability and peace of the global commons, the present world order has "Made in the USA" written all over it. The international system is not a game of Jenga where the worst thing that can happen is that one's tower collapses. Start taking away the fundamental building blocks of the international order, particularly American military power, and the results are all but certain to be major instability, increased conflict rates, rapid proliferation of nuclear weapons, economic dislocation and, ultimately, serious and growing threats to security at home. The second problem is the presumption that the country's global security posture was created and maintained to serve others. In reality, the United States built a global security architecture and the world's best military because it served our interests. Our network of security ties and treaties, most notably NATO, were instituted to serve a number of functions: prevent another war among the Western powers, deter the Soviet Union and its allies, and ensure that the major economic regions remain free and that global trade flowed. In the 1970s, based on the experience of the oil embargo, the U.S. focused more on the security of the Persian Gulf because of the growing importance of Middle East oil to the national economy and that of the entire industrialized world. While the Soviet Union is no more, the essential self-interestedness of America's military role in the world remains. Any oil expert would say that even though the U.S. is less dependent than a decade ago on foreign oil, a cutoff of the flow from the Middle East would cause oil prices to go through the ceiling. A war across the Taiwan Straits or between the two Koreas will cost us hundreds of billions in lost trade and investment income, not to mention that it would cut off most of the world's supply of computer chips and consumer electronics. The world's economy and America's well being depend on the independence of a relative handful of nations, most of whom are allies. The third problem with the case for abandoning America's role as the security linchpin of a democratic world order and an international free trade system is simply this: while this country can run, it cannot hide. The U.S. is still the largest economyat worst it will be number two behind China some day. America's major companies are global, have hundreds of billions of dollars invested overseas, and millions of citizens working or traveling abroad. American culture permeatesforeign extremists would say pollutesthe world. To truly avoid international entanglements this nation would have to behave like a cloistered monk with vows of poverty and silence. Too Late to Hide Even if America runs, as the far left and right propose, it is too late to hide. Those who choose to be enemies can come after the United States. This is the lesson of 9-11. It also is the message that North Korea sent with its latest tests of a

nuclear weapon and long-range ballistic missile. China, one of America's largest trading partners and the holder of a trillion dollars in U.S. debt, is conducting a massive and continuous cyber assault on the nation's private companies, infrastructure, and military facilities. To what mountaintop can America withdraw, how small must it become, and how meekly will it have to behave in order to ensure its security? The irony is that the cost of the U.S. military had for decades represented a small and declining percentage of both overall GDP and total federal spending. Today, defense spending is about 4 percent of GDP and less than 20 percent of federal spending. For this relatively small sum the U.S. had to deter major warsincluding nuclear attacks on the homelandcontain innumerable local conflicts, create an environment in which a community of democratic nations emerged, grown, and flourished, and secured literally trillions of dollars of overseas investments, trade flows, and natural resources. It is a tragedy of epic proportions that all this should be put at risk.

Contention Four is Solvency


First, Maduro says yes Venezuela is the best source of coltan - he needs to take charge or risk wars Bruno 13
The post-Chavez Venezuela era begins: the regional, oil and mining implications Alessandro Bruno; Senior Editor at ProEdgeWire, he holds a BA, MA. Alessandro has worked for the United Nations in Libya and specialized in Middle Eastern, African, and South American affairs, Alessandro has worked as an industry analyst; March 6, 2013 http://investorintel.com/gold-silver-intel/what-does-a-post-chavez-venezuela-mean-for-its-politics-oiland-mining/#sthash.nwSMAx73.dpuf Without Chavezs charisma and with few resources on hand, the new president will face ever rising bouts of nationwide unrest in the form of road blockades, arson against property and confrontations between the people and security forces. The only tool available to avert this scenario is to improve the oil and mining regulatory framework. The government will inevitably need to ease the fiscal terms in the sector in order to encourage a rise in production. The mining nationalizations started later. In 2011, Chavez targeted the gold industry issuing a decree that allows the state to collect a 13% royalty on gold mining; smaller operations are only being subject to a 3% tax. Military zones were also established to crack down on illegal mining operations. Gold companies wanting to do business in Venezuela, therefore, were forced to enter into minority partnerships with the government, which is another key issue that the new president may wish to reverse. Apart from gold, Venezuela is also rich in coltan (columbite-tantalum). Five years ago, a large deposit of coltan was discovered in the Venezuelan Amazon. The government militarized the area to control an illegal trade that sprouted between Venezuela and Colombia as traffickers and speculators traded the precious mineral across the region. Coltan is an important mineral for the manufacture of electronic devices such as cell phones, computers, plasma televisions, video games, MP3, MP4, GPS, satellites and electronic systems for highprecision weapons, such as the so-called smart missiles. Tantalum is essential because it is used in construction and miniaturization of electrolytic capacitors. Strategic reserves of coltan have led to wars in Africa and there are few sources the Democratic Republic of Congo is said to have 80% of it. Venezuela could have some of the worlds finest. The rest of the reserves of coltan are located in a strategic area at the turn of Brazil, Colombia and Venezuela. There is some extraction in Colombia but much of it has been of the illegal variety, because it is based in areas controlled by FARC or other guerrilla groups. There are rumors coltan can command some USD 60,000/ton when smuggled. In Brazil, the coltan deposits are near a number of native reserves and highly politically sensitive. Venezuela is the best area for development . Multinational companies operating in Venezuela, not content with the mining regulations, have been asking for increased shares of their extracted minerals to be exported. Eager to diversify the economy, Chavez started to move in this direction in the last full year of his presidency (2011) and this suggests that even if the next president shall be a full-fledged Chavista, some business and investment friendly changes will be inevitable .

Second, 14 years of economic devastation forces moderation Roberts AND Daga 13


Venezuela: U.S. Should Push President Maduro Toward Economic Freedom James M. Roberts; research fellow for economic freedom and growth at the Center for International Trade and Economics; and Sergio Daga; Heritage Foundation visiting senior policy analyst in economic freedom in Latin America; April 15, 2013 http://www.heritage.org/research/reports/2013/04/venezuela-us-should-push-president-maduro-toward-economic-freedom

Hugo Chavezs hand-picked successor, former trade union boss Nicols Maduro, appears to have defeated Capriles by a narrow margin in a contentious and hard-fought special election
Governor Henrique

on April 14.

Venezuela is in such shambles after 14 years of seat-of-the-pants mismanagement that Maduro may ultimately be forced to pursue more moderate policies and seek help from the U.S. to restore stability The Obama Administration and Congress should exploit this opening by using U.S. leverage to push Venezuela to turn from Chavezs failed experiment in oil-cursed 21st-century socialism toward economic freedom
victory is confirmed . [1] .

assuming his

Third, Venezuelans support moving away from oil to mining Bruno 13


The post-Chavez Venezuela era begins: the regional, oil and mining implications Alessandro Bruno; Senior Editor at ProEdgeWire, he holds a BA, MA. Alessandro has worked for the United Nations in Libya and specialized in Middle Eastern, African, and South American affairs, Alessandro has worked as an industry analyst; March 6, 2013 http://investorintel.com/gold-silver-intel/what-does-a-post-chavez-venezuela-mean-for-its-politics-oiland-mining/#sthash.nwSMAx73.dpuf Chavezs chosen successor Maduro, should he manage to win the presidency in the next elections, doesnt have the cards to last. Chavez could mask Venezuelas problems under his undeniable charisma. Maduro only has ideology on his side and rivals itching for power at an arms length. He will face a very difficult presidency and will not be able to manage in the interest of all Venezuelans, especially the many opposition supporters. Capriles, meanwhile, has proposed a program aimed at developing Venezuelas economy beyond crude oil production, which still accounts for some 90% of the countrys foreign exchange earnings. The mining sector is a clear candidate for greater investment and the next Venezuelan government, regardless of its colors, will have to consider setting, rather than unsettling, the conditions to facilitate investment this time around. The experience of President Ollanta Humala of Peru is instructive in this sense. He too won the presidential election in 2011 on a strongly interventionist and nationalist platform. At a year and a half since being elected, Humala has continued to promote the business friendly model set by his predecessors, angering some of the very constituencies that brought him to power in the first place.

Fourth, U.S. resources and expertise are key Farnsworth, 13 --- vice president of the Council of the Americas and Americas Society (4/11/2013,
Eric, ENERGY SECURITY OPPORTUNITIES IN LATIN AMERICA AND THE CARIBBEAN, HEARING BEFORE THE HOUSE COMMITTEE ON FOREIGN AFFAIRS SUBCOMMITTEE ON THE WESTERN HEMISPHERE, http://docs.house.gov/meetings/FA/FA07/20130411/100622/HHRG113-FA07-Wstate-FarnsworthE-20130411.pdf, JMP) More broadly, the U nited S tates has a strategic interest in working with willing nations in the hemisphere to develop their own energy resources effectively, while promoting models that reduce the negative if unintended consequences of regional energy development, including a lack of transparency and official corruption, the distorting impact of consumption subsidies, an over-reliance on a single commodity or sector, environmental concerns, and a concentration of wealth and political power around the sector. In order to develop their respective industries, nations need U.S. technology , management expertise, and investment dollars. They need our education system to develop their engineers and seismologists, they need help to understand regulatory, tax, and policy models that work, they need to be exposed to best practices in environmental mitigation, and they need our technical assistance to improve the investment climate and the rule of law.

Venezuela Counternarcotics 1AC

Contention One is Cocaine Trafficking


First, Venezuela is key to cocaine trafficking A. Status Quo Neuman 12
Cocaines Flow Is Unchecked in Venezuela WILLIAM NEUMAN July 26, 2012 http://www.nytimes.com/2012/07/27/world/americas/venezuela-is-cocaine-hub-despite-itsclaims.html?pagewanted=all The White House Office of National Drug Control Policy estimates that as much as 24 percent of the cocaine shipped out of South America in 2010 passed through Venezuela, accounting for more than 200 tons. More than half of that left from the hidden airfields in Apure, analysts say. They say that Venezuelas central role as a transit point for drug shipments began after Mr. Chvez halted cooperation with the United States Drug Enforcement Administration in 2005, accusing its agents of spying. Around the same time, Colombia, with assistance from the United States, began to tighten control of its airspace. As a result, the traffickers jumped across the border to Apure, where an airstrip can be fashioned on the flat prairie in a few hours by dragging a log behind a pickup truck to smooth the ground.

B. Increasing rapidly GAO 9


Drug Control: U.S. Counternarcotics Cooperation with Venezuela Has Declined United States Government Accountability Office Report to the Ranking Member, Committee on Foreign Relations, U.S. Senate July 2009 http://www.gao.gov/htext/d09806.html Venezuela Is a Major Drug Transit Country. Flow of Cocaine through Venezuela Has Significantly Increased. In 2008, ONDCP reported that the estimated flow of cocaine transiting Venezuela toward the United States, West Africa, and Europe increased more than fourfold from about 60 metric tons in 2004 to about 260 metric tons in 2007, as shown in figure 1. According to ONDCPs October 2008 Interagency Assessment of Cocaine Movement (IACM), this represented about 17 percent of the cocaine estimated to have been produced in 2007 (primarily in Colombia) and flowing from Venezuela toward the United States and Europe.9

C. Venezuela is the gap in our strategy Neuman 12


Cocaines Flow Is Unchecked in Venezuela WILLIAM NEUMAN July 26, 2012 http://www.nytimes.com/2012/07/27/world/americas/venezuela-is-cocaine-hub-despite-itsclaims.html?pagewanted=all For years, the United States has been working with friendly governments in Colombia, Mexico, Honduras, Guatemala and other countries in Latin America, spending billions of dollars to disrupt the flow of drugs northward. But because of antagonistic relations with President Hugo Chvez of Venezuela, the reach of American drug agents, and the aid that comes with them, does not extend here.

Second, reducing trafficking is the best way to reduce cocaine production A. Most effective Meja and Restrepo 11
War on Drugs under Plan Colombia Daniel Meja; Universidad de los Andes; 2011 http://www.ycsg.yale.edu/center/forms/plan-colombia19-32.pdf There are three main reasons that help explain the relatively large difference between the two marginal costs (eradication and interdiction). The first one is that we estimate the Colombian armed forces are much more effective in the conflict with the drug traffickers over the control of the drug routes than in the conflict with the drug producers over the control of arable land. Second, the factor currently being targeted by the war against drug production (land) is much less important than the factor being targeted in the war against drug trafficking (drug routes). And third, we estimate that the drug producers capacity to counteract anti-drug policies is much larger than the capacity of drug traffickers to do so. In other words, the strategic responses implemented by drug producers in order to counteract aerial and manual eradication campaigns (higher density of coca crops per hectare, better and stronger varieties of coca plants, genetic modifications of coca varieties that make it resistant to glyphosate, etc.) are relatively extensive and in some cases end up rendering these policies completely ineffective in reducing cocaine production.

B. No backlash Chalk 11
(Peter Chalk, senior political scientist at the RAND Corporation The Latin American Drug Trade: Scope, Dimensions, Impact, and Response RAND, 2011) That said, Washingtons overall counternarcotics assistance program has yet to significantly reduce or undermine the Latin American drug trade. Colombia still constitutes the principal source of cocaine for both the U.S. and global markets, accounting for 90 and 80 percent of respective consumption. There is no sign that overall volumes shipped from the country will drop any time soon, with the projected yield for 2009 standing at 54 MT; as noted, if achieved, this would represent the highest output since 2003. Such an outcome might appear counterintuitive given the vast areas of coca leaf that have been destroyed through aerial and manual eradication efforts. However, it is merely indicative of the ease with which crops can be regrown, many of which are capable of surviving in a wide range of climatic conditions. Just as importantly, it is now evident that farmers are planting higher-yield bushes, which means that output can be maintained with smaller acreages.16 Indeed, the very use of crop eradication is questionable. As noted above, the projected cost of manual and aerial fumigation programs is expected to surge to $1.5 billion by 2013. The fact that this might not result in any meaningful decline in production obviously calls into question the wisdom of this investment. Crop spraying has also been linked to various adverse health effects. Roundup, for instance, has resulted in fever, eye irritation, gastrointestinal complaints, skin rashes, and dizziness.17 Moreover, fumigation is essentially an indiscriminate counternarcotics measure in the sense that it can destroy both licit and illicit crops. Taken together, these outcomes can have a highly detrimental impact on popular support for the government, driving local producers into the hands of insurgents and legitimating their rhetoric that the government is engaged in a rapacious drive to destroy peasant livelihoods.18 Such an outcome could hand FARC a boon of popular support precisely at a time when it is otherwise reeling from critical leadership losses. There has also been no diminution in drug players operating in Colombia. Although weaker as an insurgent force, FARC remains a prominent and threatening drug-producing and -trafficking entity19 and could yet benefit from government eradication efforts that inadvertently alienate local farmers; former paramilitaries have

reemerged as straight crime syndicates; there are signs that the ELN is increasingly moving into the cocaine business; and at least 350 baby cartels continue to play a significant role in internal distribution and refining activities. In Mexico, the situation is even worse, with the northern border provinces now in the throes of what amounts to a fully fledged narcowar. This arguably reflects the post-Cali, post-Medelln Colombianization of the countrys drug trade, with increasingly fragmented cartels engaging each other and the authorities in a highly vicious battle over territory and sales turf. Moreover, as Schaefer, Bahney, and Riley observe, the Mrida initiative, at least as currently formulated, neither addresses the gap between federal and local police forces nor provides assistance at the municipal level to deal with everyday security issues.20 Compounding problems is the fact that, of the $1.6 billion appropriated by Congress between 2008 and 2010, only 46 percent has been obligated and 9 percent actually disbursed. As a result, many of the programs listed under the aid package are not being fully or effectively implemented.21

C. Makes production uneconomical ANN 13


Africa, Europe, and the Cocaine Business African Narco News March 16, 2013 http://africanbusiness.blogspot.com/2012/11/africa-europe-and-cocaine-business.html Cocaines production and marketing chain follows an exponential price curve: the further the cocaine is from the producing country in the commercial chain, the higher its market price will be. For instance, a kilo of high-purity cocaine has a street value of nearly 80,000 in Spain, and that is a conservative estimate. The same kilo in Colombia is worth about 1,200. However, the coca-growing farmer gets no more than 250 for the coca leaves needed to produce that kilo of the drug. Because of this exponential increase in value, potential situations of a shortage of coca leaves or cocaine in the Andean region would not have visible effects on the final price in Europe or on consumption levels. As far as controlling supply is concerned, it is better to intervene in the chain of creation of cocaines added value only when the price of the drug is high enough for the shortage to have an effect on that price far from the producing countries and close to the final consumer. Right now the main coca producer is Colombia, with nearly 100,000 hectares.

D. Even slight increases in trafficking costs reduces economic viability ORegan 10


Cocaine and Instability in Africa: Lessons from Latin America and the Caribbean Davin ORegan; AFRICA SECURITY BRIEF by the African Center For Strategic Studies; July 2010 http://www.ndu.edu/press/lib/images/africa/AfricaBrief-5.pdf Raise Transaction Costs. Trafficking cocaine through West Africa is comparatively cheap. Make it expensive. Counternarcotics strategies need to focus on raising transaction costs. Arresting traffickers, prosecuting cases, tracking smuggling routes, and undertaking other counternarcotics operations are vital to stemming cocaine traffic. Moreover, efforts that merely hinder the business of moving cocaine through West Africa make it more arduous, expensive, and unappealing to traffickers. The more expensive it is, the less inclined cocaine traffickers will be to use West Africa as a transit route. Operations that amount to no more than harassment have produced impressive results in the Caribbean. From very low levels in 2000, annual cocaine seizures in the Netherlands Antilles reached 9 tons by 2004. To counter rising traffic, Antillean and Dutch airport security officers stepped up searches of arriving and departing passengers. But, rather than arresting offenders (the low-level mules), police offered them the opportunity to cooperate. If mules were carrying less than 3 kilograms of drugs, they were not arrested but were returned to their point of origin and given receipts explaining

the drug seizures so they would not face retribution from their employers. This tactic raised the cost of transporting drugs through the Antilles. Meanwhile, the number of mules transiting the Netherlands Antilles dropped 96 percent.12

Scenario One is the Amazon First, Cocaine production threatens global biodiversity through Amazon deforestation Dvalos et al. 11
Cocaine Production Increases Destruction of Colombias Rainforests Liliana M. Dvalos, Adriana C. Bejarano, Mark A. Hall, H. Leonardo Correa, Angelique Corthals, Oscar J. Espejo. Forests and Drugs: Coca-Driven Deforestation in Tropical Biodiversity Hotspots. Environmental Science & Technology, Jan. 29, 2011 http://www.sciencedaily.com/releases/2011/01/110128144723.htm Scientists from Stony Brook University are reporting new evidence that cultivating coca bushes, the source of cocaine, is speeding up destruction of rainforests in Colombia and threatening the region's "hotspots" of plant and animal diversity. The findings, which they say underscore the need for establishing larger protected areas to help preserve biodiversity, appear in ACS' journal Environment Science and Technology. Dr. Liliana M. Dvalos, professor in the Department of Ecology and Evolution at Stony Brook, and her colleagues note that the pace of deforestation in Colombia has accelerated over the past 20 years, even as population growth has slowed and the economy has shifted from agriculture to other revenue sources. This increase in deforestation overlaps with an increase in the cultivation of coca for cocaine production, and the country accounted for 75 per cent of the world's coca in 2000. Earlier reports found that direct deforestation from coca was surprisingly small, with as little as 150 km2 of forests replaced by coca each year by 2005. Since rainforests contain about 10 percent of the world's plant and animal species -- some of which become the basis of new medicines - deforestation represents a serious threat to global biodiversity. With studies suggesting that coca cultivation contributes indirectly to deforestation, the scientists set out to further document this impact. Their analysis of data from 2002-2007 on the effects of coca cultivation on deforestation of rainforests in Colombia identified several factors that boosted the likelihood that rainforests would be destroyed. In southern Colombia, a forest close to newly developed coca farms, for instance, was likely to be cut, as was land in areas where much of the farmland was devoted to coca. This is the first time the indirect impact on deforestation from cultivation destined for the global cocaine market has been quantified across South America's biodiversity hotpots.

Second, Colombian Rainforests Are Critical Global Biodiversity Hotspots Cocaine Production Is the Biggest Threat Doward 9
(Janie Doward, Staff Writer for the Observer, Guardian UK, Colombia's endangered species at the mercy of jungle drug cartels 10/25/09 Experts fear the bird is one of several hundred species that will become extinct within decades if Colombia's rainforests continue to be razed for the purposes of coca cultivation. Other animals under threat and that appear in information packs distributed to European schoolchildren include the harpy eagle, titi monkey, golden poison frog, tapir, spectacled bear and gorgona blue lizard. Colombia, one of the largest environmental hubs in the planet, with a territory of more than 1 million square kilometres, has been warning about the dangers of "ecocide" caused by the country's drug cartels for several years. As one of the most biodiverse countries in the world, it is home to 50,000 plant species and 18% of the world's bird species. But now it is attempting to make children aware that the threats facing its rainforests are a global issue that will have an impact on climatic stability . The move

represents a tacit admission that the past strategy of highlighting the cocaine trade's links to violence and kidnappings has struggled to leave much of an impression on the drug's users. "The environment is an issue that is important to everyone," said the Colombian minister for the environment, Carlos Costa Posada. "We are tired of using images of violence. It is all people think about when they think about Colombia people don't want to come here for tourism. We are not saying this issue [cocaine's role in the destruction of the rainforests] is the most important issue, but it is something people can identify with." Cultivation of illicit crops has led to destruction of 2.2 million hectares of tropical forest in Colombia, an area slightly larger than Wales. For every hectare of coca grown, three of forest are cut down. This means that for each gram of cocaine used, four square metres of rainforest are cleared. The gorgeted puffleg, only 90 millimetres long, is particularly vulnerable. Its habitat consists of only 1,200 hectares of rainforest, 100 of which are disappearing every year because of coca cultivation. "We have around 400 species that are facing extinction," Costa Posada said. "Violence is a local issue, but biodiversity is a world issue deforestation is a major contributor to climate change." Cocaine production creates other problems for Colombians. The jungle laboratories used to refine the coca leaf into powder require significant amounts of chemicals that end up dumped into local water sources. Among them are the "dirty dozen", which are highly toxic and resist biodegradation. The Home Office minister Alan Campbell, who has recently returned from a fact-finding mission to Colombia, said the country was a key partner in the UK's war on the drugs trade. "Most of the cocaine coming into the UK comes from Colombia," Campbell said. "I've seen the damage the coca plantations are doing to Colombia at first hand and what it does to those communities." He said that it was important to "refresh" the message about the harm cocaine can wreak. "Drug use is coming down in the UK, but cocaine has stuck and is drifting up in Europe," he said. "We need to get people here and in Europe aware their actions will have a wider impact. Maybe people will not listen to a middle-aged minister saying drugs are harmful, but the message may carry more impact if they know the harm they are doing to the environment." In conjunction with the Colombian government, the UK is backing "Shared Responsibility", a global campaign to highlight what it says is "the environmental catastrophe caused by illicit crop cultivation felt around the globe". The campaign allows children to play interactive games and learn about how cocaine production is putting the world's rainforests at risk .

Third, Biodiversity loss causes extinction Diner 94


Major David Diner, JAG Corps, United States Army, Winter 1994, Military Law Review, 143 Mil. L. Rev. 161, p. 170-173 1. Why Do We Care? -- No species has ever dominated its fellow species as man has. In most cases, people have assumed the God-like power of life and death -- extinction or survival -- over the plants and animals of the world. For most of history, mankind pursued this domination with a single-minded determination to master the world, tame the wilderness, and exploit nature for the maximum benefit of the human race. In past mass extinction episodes, as many as ninety percent of the existing species perished, and yet the world moved forward, and new species replaced the old. So why should the world be concerned now? The prime reason is the worlds survival. Like all animal life, humans live off of other species. At some point, the number of species could decline to the point at which the ecosystem fails, and then humans also would become extinct. No one knows how many species the world needs to support human life, and to find out -- by allowing certain species to become extinct -- would not be sound policy. In addition to food, species offer many direct and indirect benefits to mankind. 2. Ecological Value. -- Ecological value is the value that species have in maintaining the environment. Pest, erosion, and flood control are prime benefits certain species provide to man. Plants and animals also provide additional ecological services -- pollution control, oxygen production, sewage treatment, and

biodegradation. 3. Scientific and Utilitarian Value. -- Scientific value is the use of species for research into the physical processes of the world. Without plants and animals, a large portion of basic scientific research would be impossible. Utilitarian value is the direct utility humans draw from plants and animals. Only a fraction of the earths species have been examined, and mankind may someday desperately need the species that it is exterminating today. To accept that the snail darter, harelip sucker, or Dismal Swamp southeastern shrew could save mankind may be difficult for some. Many, if not most, species are useless to man in a direct utilitarian sense. Nonetheless, they may be critical in an indirect role, because their extirpations could affect a directly useful species negatively. In a closely interconnected ecosystem, the loss of a species affects other species dependent on it. Moreover, as the number of species decline, the effect of each new extinction on the remaining species increases dramatically. 4. Biological Diversity. -- The main premise of species preservation is that diversity is better than simplicity. As the current mass extinction has progressed, the worlds biological diversity generally has decreased. This trend occurs within ecosystems by reducing the number of species, and within species by reducing the number of individuals. Both trends carry serious future implications. Biologically diverse ecosystems are characterized by a large number of specialist species, filling narrow ecological niches. These ecosystems inherently are more stable than less diverse systems. The more complex the ecosystem, the more successfully it can resist a stress. . . . [l]ike a net, in which each knot is connected to others by several strands, such a fabric can resist collapse better than a simple, unbranched circle of threads -- which if cut anywhere breaks down as a whole. By causing widespread extinctions, humans have artificially simplified many ecosystems. As biologic simplicity increases, so does the risk of ecosystem failure. The spreading Sahara Desert in Africa, and the dustbowl conditions of the 1930s in the United States are relatively mild examples of what might be expected if this trend continues. Theoretically, each new animal or plant extinction, with all its dimly perceived and intertwined affects, could cause total ecosystem collapse and human extinction. Each new extinction increases the risk of disaster. Like a mechanic removing, one by one, the rivets from an aircrafts wings, mankind [humankind] may be edging closer to the abyss.

Fourth, Amazon destruction causes extinction Takacs 96 - Ph.D. in science and technology studies @ Cornell, Professor of Environmental Humanities,
Institute for Earth Systems Science and Policy, California State University, Monterey Bay, David, The Idea of Biodiversity: Philosophies of Paradise, p. 200-1] "Habitat destruction and conversion are eliminating species at such a frightening pace that extinction of many contemporary species and the systems they live in and support ... may lead to ecological disaster and severe alteration of the evolutionary process," Terry Erwin writes." And E. 0. Wilson notes: "The question I am asked most frequently about the diversity of life: if enough species are extinguished, will the ecosystem collapse, and will the extinction of most other species follow soon afterward? The only answer anyone can give is: possibly. By the time we find out, however, it might be too late. One planet, one experiment."" So biodiversity keeps the world
running. It has value in and for itself, as well as for us. Raven, Erwin, and Wilson oblige us to think about the value of biodiversity for our own lives. The Ehrlichs' rivet-popper trope makes this same point; by eliminating rivets, we play Russian roulette with global ecology and human futures: "It is likely that destruction

of the rich complex of species in the Amazon basin could trigger rapid changes in global climate patterns. Agriculture remains heavily dependent on stable climate, and human beings remain heavily dependent on food. By the end of the century the extinction of perhaps a million species in the Amazon basin could have entrained famines in which a billion human beings perished. And if our species is very unlucky, the famines could lead to a thermonuclear war, which could extinguish civilization."

Scenario Two is Nuclear Terrorism First, the Russian Mafia will sell weapons in exchange for cocaine A. Conventional Moran 2K
Sue Lackey, Michael Moran, MSNBC Analysts, Field Experts, Russian mob trading arms for cocaine with Colombia rebels 4/9/09 WASHINGTON, April 9, 2000 Russian crime syndicates and military officers are supplying sophisticated weapons to Colombian rebels in return for huge shipments of cocaine, U.S. intelligence officials told MSNBC.com. A senior intelligence official described the smuggling ring as literally an industry that threatens to overwhelm the Colombian government and turn the U.S.-backed fight against the Colombia cocaine cartels into a losing proposition. The Clinton administration is trying to
escalate the long-running war on Colombias cocaine cartels, and a $1.7 billion aid package to the South American nation is under consideration in Congress. U.S. intelligence officials, all of whom spoke to MSNBC.com on condition of anonymity, said the scope of the Russia-to-Colombia smuggling ring took them by surprise and remains unknown to all but a few high-ranking

an alliance of corrupt Russian military figures, organized crime bosses, diplomats and revolutionaries has been moving regular shipments of up to 40,000 kilograms of cocaine to the former Soviet Union in return for large shipments of deadly weaponry. The intelligence officials said the smuggling ring works
figures in the American government. In short, like this: Russian-built IL-76 cargo planes take off from various airstrips in Russia and Ukraine laden with anti-aircraft missiles, small arms and ammunition. The planes, roughly the size of Boeing 707s and a mainstay of the modern cargo industry, stop in Amman, Jordan, to refuel. There, they bypass normal Jordanian customs with the help of corrupt foreign diplomats and bribed local officials. After crossing the Atlantic, the cargo jets use remote landing strips or parachute air-drops to deliver their cargo to the Revolutionary Armed Forces of Colombia, or FARC. The guerrilla group is challenging the authority of the U.S.-backed Colombian government, and its guerrillas provide security to Colombias cocaine cartels. The planes return loaded wit h up to 40,000 kilograms of cocaine. Some of this is distributed as payment for the arms to the diplomatic middlemen in Amman. The rest is flown back to the former Soviet Union for sale there, in Europe and in the Persian Gulf. CORRUPT DIPLOMATS Officials close to the investigation cited intelligence intercepts that show the IL-76 cargo planes use Royal Jordanian Airlines cargo facilities in Amman, where airline officials are bribed to ignore false cargo manifests. While in Amman, the planes are cleared for transit under diplomatic cover originating from a Spanishspeaking embassy in Amman, according to U.S. intelligence officials. The officials refused to specify which embassy was involved. The officials noted there are two Spanish speaking embassies in Amman - Spain and Chile. A third, that of Portuguese-speaking Brazil, often conducts business in Spanish. InsertArt(891846)Theyre using diplomatic authority to get that stuff in, said a senior U.S. intelligence official close to the investigation. If theyre not using a *diplomatic+ pouch, theyre using diplo matic authority to clear the shipment. This is a big operation. There are a lot of people involved - its literally an industry. The Spanish-speaking embassy official in Jordan, whom the intelligence officials would not identify by name, has the power to clear diplomatic shipments and may also be able to authorize embassy funds when additional money is needed to move the shipments through Amman. Still, while the embassy contact may have a high rank, intelligence sources said they do not think the scheme is operating with the knowledge of the country involved or Jordans government. REBELS AND CARTELS Once the plane has refueled in Amman, officials said, it then proceeds from Jordan to various landing strips throughout South America, where shipments are coordinated by a renegade Peruvian military officer. A senior U.S. intelligence source has identified by name three men alleged to be directly involved in those shipments. Luiz Fernando Da Costa, working under the alias Fernandinho Beira-Mar, is one of Brazils most wanted narco-traffickers. For the past four years, Da Costa has used the town of Pedro Juan Caballero in Paraguay as his base of operations. According to U.S. intelligence, Da Costa runs arms received from Fuad Jamil, a Lebanese businessman operating in the same Paraguayan town. The official said Jamil uses a legitimate import company as a

While most of the weaponry goes directly to FARC, a smaller amount is parceled off to other guerrilla groups. Among them is Hezbollah, the Iranian-backed movement best known for its guerrilla activities in southern Lebanon. U.S. intelligence officials say the group has set down roots among the Arab immigrant communities of Paraguay, Ecuador, Venezuela
front. and Brazil and frequently uses legitimate business operations to cover illegal arms transfers. Within Colombia, arms deliveries to rebel guerrillas are coordinated through the town of Barranco Minas, the headquarters for the FARCs 16th Front. The 16th Front is lead by Tomas Medina Caracas, who operates the arms ring under the alias Negro Acacio. PAYING OFF THE SMUGGLERS The FARC rebels, who control the distribution of the arms, pay the smugglers with cocaine. The drug is then loaded onto the planes for the return journey through Amman. Hundreds of thousands of kilos of cocaine have been smuggled over the last two years. Image: Colombian troops, rebel Colombian government troops carry an injured guerrilla from the Revolutionary Armed Forces of Colombia (FARC). According to drug enforcement officials, cocaine can bring more than $50,000 per kilo in Europe. The involvement of Russian organized crime in its smuggling is well established, and the most common gateway is Spain, where European drug enforcement officials say the bulk of Colombian cocaine and heroin enters the continent. Intelligence officials confirmed that because of Spains pivotal role in the European drug trade, their suspicions in Amman focus on Spains embassy. Some of the cocaine is delivered under diplomatic cover to intermediaries in Jordan, where it finds its way onto the streets. The majority of the cocaine shipment continues on to Russia and Ukraine, where it feeds

The smuggling ring brings together two powerful and destabilizing forces that have become key targets of U.S. foreign policy: the deep-seated corruption of the former Soviet states and Colombias spiral toward druginduced anarchy. For Russia and Ukraine, billions of dollars in International Monetary Fund, World Bank and direct aid is at stake. Scandals over the alleged misuse of such loans
the growing appetite for the drug, or is sold in other lucrative markets in Europe and the Persian Gulf. A POWERFUL UNDERGROUND ALLIANCE already have sparked investigations in the U.S. Congress. For Colombias backers in the United States an d advocates of increased U.S. aid, the revelations are particularly ill-timed. Congress is considering a $1.7 billion drug-interdiction aid package for Colombia, including sophisticated Blackhawk helicopters. Among the weapons being supplied to FARC, intelligence officials said, are rocket-propelled grenade launchers (RPGs) and Russian SA-model shoulder-mounted anti-aircraft weapons similar to the U.S. Stinger missiles. As U.S. soldiers learned in Somalia, both RPGs and missile launchers can bring down a Blackhawk helicopter, even in the untrained hands of rebel armies. *The guerrillas+ get the RPG to explode in the vicinity o f the tail rotor, which gives the helicopter its horizontal stability, said a U.S. Army official. All that has to happen is for t he tail rotor to become a bit unbalanced or for a hydraulic line to be cut, and that helicopter is coming down. It takes good aim and cases full of RPGs, but its been done many times. WELL -ESTABLISHED NETWORK U.S. intelligence officials say the arms-for-drugs ring has been operational for two years. MSNBC.com first broke the story of large arms shipments to FARC rebels last October, and it was that shipment that drew the attention of U.S. intelligence agencies to what they eventually concluded was a major trafficking ring. That single drop last October was said by U.S. intelligence officials to have delivered $50 million worth of AK-47s deep inside FARC-held territory. U.S. authorities ultimately apprehended one of the traffickers, the officials said. Since that time, the intelligence officials said, arms traffickers have refined their operation. While the IL-76 is designed to drop large loads by parachute, that method requires favorable weather and specially trained flight crews. After repeated problems with air drops, traffickers seek to avoid detection by using a variety of existing runways where they can bribe officials to allow the cargo in. The IL-76 also is capable of landing at rough, remote landing strips. The size of the cargo is staggering; the IL-76 is used to transport troops, arms and tanks for the Russian military. In one hour, a trained ground crew can unload, refuel and reload a plane bearing 90,000 pounds of cargo, U.S. military officials say. Thats equivalent to 5,400 rifles and 360,00 0 rounds of ammunition, along with shoulder-held missiles and RPGs. RUSSIA,

The scale of the smuggling underscores the enormous challenge that law enforcement authorities face in the former Soviet Union, where Soviet-era intelligence operatives in many cases made a seamless transition from Cold War spying or military intelligence into organized crime. The source of the weapons [smuggled into Colombia] is both organized crime and military, a U.S. intelligence official
FROM RED TO GRAY

many KGB and other Soviet security agents appropriated bank accounts, companies and contacts used for covert operations, and turned them instead into conduits for their own organized crime activities, including arms and drug trafficking.
said. There is a tremendous gray area between the two in Russia and the Ukraine. After the fall of the Berlin Wall,

B. Nuclear Majalla et al 1
(Al-Majalla, Al-Watan al-Arabi and Al-Wasat, Middle Eastern news sources, Bin Laden's Nuclear Weapons 12/27/01) Al-Watan al-Arabi goes on to say that Western security agencies are afraid that the atomic reactor and armaments plant being developed in Khost will be the means for changing these atomic warheads into miniature atomic weapons which can be used to threaten U.S. and Western cities. The report also acknowledges that these agencies now realize that the threat here is not Islamic in nature but rather is an organized network of terrorists whose intention is to build a criminal network for the creation and sale of two hot commodities: nuclear weapons and drugs . Their purpose is to provide these two staples to those who wish to bring down a government or support a particular political figure while simultaneously generating huge income and profits. Though many of the figures involved appear in the name of Islam, they in fact have nothing to do with the religion. Al-Watans sources report that once the Soviet Union collapsed, the republics that were freed were so politically unstable and economically fragile that many nuclear warheads and other sources of active uranium were quickly hijacked by the mafia and sold to different nations and extremist groups. In Russia alone there exist over 30,000 nuclear warheads which the Russian mafia has no difficulty stealing or purchasing and distributing on the weapons black market. At the same time, the black market in drugs began to be flooded with opiates, particularly heroin, which can be traced back to Afghanistan. For the Russian mafia the most profitable trade is nukes for heroin. Experts consider this lucrative new trade to be one reason for the renewed popularity of heroin, a derivative of opium, after it had been eclipsed as the drug of choice by cocaine during the 80s and 90s.

C. Cocaine is key to FARC financing Ramsey 12


FARC 'Earns $2.4 to $3.5 Billion' From Drugs: Govt Geoffrey Ramsey Wednesday, 24 October 2012 http://www.insightcrime.org/news-briefs/farc-earns-24-to-35-billion-drugs Speaking at a forum organized by the University of Miami on October 23, Colombian Defense Minister Juan Carlos Pinzon provided the governments latest figures on the illicit activities of the Revolutionary Armed Forces of Colombia (FARC). According to Pinzon, the FARC makes between $2.4 and $3.5 billion annually from the drug trade. He added that of the 350 tons of cocaine produced in Colombia annually, some 200 can be linked back to the guerrillas.

Second, the FARC will buy nuclear weapons A. FARC is specifically willing to use nuclear weapons from Former Soviet States
BBC 10
(British Broadcast Channel. 10/19/10. "Colombia tries to stop rebels from getting nuclear arms". BBC. www.bbc.co.uk/news/world-latinamerica-11580759)

Intelligence officials say computers belonging to the Farc proved they had been trying to obtain nuclear material. They believe the rebels intend to use the material to cause maximum damage. Since
2008, when the Colombian army found several computers belonging to the slain Farc commander known as "Raul Reyes", the authorities have

the guerrillas have ambitions involving nuclear arms . At a news conference in Bogota, the new head of the unit, Gen Rafael Parra, said emails found on the computers proved that since 2005 the Farc had been trying to buy nuclear material in Ukraine. Venezuelan nuclear ambitions "It's clearly the intention of the Farc to obtain uranium in Europe. It's obvious that if it tries to do this, then it's for the sole purpose of using it against the people it has been terrorising for years," Gen Parra told reporters.
been working on a theory that

B. FARC has already attempted to purchase nuclear arms BBC 10


Colombia tries to stop rebels from getting nuclear arms 19 October 2010 http://www.bbc.co.uk/news/world-latin-america-11580759 Colombian police have created the first counter-nuclear arms unit in the region dealing with leftist rebels. The new Centre for Nuclear Security will try to prevent members of the Revolutionary Armed Forces of Colombia (Farc) from obtaining nuclear material to make a "dirty bomb". Intelligence officials say computers belonging to the Farc proved they had been trying to obtain nuclear material. They believe the rebels intend to use the material to cause maximum damage. Since 2008, when the Colombian army found several computers belonging to the slain Farc commander known as "Raul Reyes", the authorities have been working on a theory that the guerrillas have ambitions involving nuclear arms. At a news conference in Bogota, the new head of the unit, Gen Rafael Parra, said emails found on the computers proved that since 2005 the Farc had been trying to buy nuclear material in Ukraine. Venezuelan nuclear ambitions "It's clearly the intention of the Farc to obtain uranium in Europe. It's obvious that if it tries to do this, then it's for the sole purpose of using it against the people it has been terrorising for years," Gen Parra told reporters.

C. South America Is the Biggest Internal Link to Non-State Actor Nuclear Proliferation MacDonald 8
Brad MacDonald, staff writer for the Trumpet, Is Chvez Helping Terrorists Go Nuclear? 5/2008 The Most Dangerous Black Market That seizure marked the first time radioactive material has been linked to FARC. It raises some critical questions: Why is FARC in the major league of black-market uranium trade? Where did it get the uranium? And what was it planning on doing with it? So far, the most plausible explanation is that FARC planned to sell the uranium to raise money, since joint American-Colombian eradication efforts against FARCs cocaine crops and operations are eating into its cash flow. Thats reasonable, though in reality the material was nearly worthless. But who would be interested in purchasing uranium, and how deep do FARCs connections with that entity run? Matthew Bunn, senior research associate with Harvards Project on Managing the Atom, said he found it interesting that a very professional terrorist organization like FARC, with a good deal of experience in smuggling, apparently was interested in getting involved in buying and selling nuclear material for money. That suggests that someone who had serious nuclear material (unlike this material) and needed to move it from one country to another might have been able to make use of the farcs capabilities (Foreign Policy, March 28; emphasis mine throughout). Black-market activities are inherently dangerous, but few are more so than the illegal trade of nuclear materials and technology. The nature of the underground trade in uranium, particularly when it involves covert enrichment and construction of a nuclear weapon (the ultimate weapon of mass destruction), requires above all a rare willingness to risk everything for the cause, as well as expansive expertise and vast resources. The point is, 66 pounds of uranium didnt accidentally fall into FARCs lap. fARC is clearlyalthough we dont know to what extentinvolved in the international black-market trade of nuclear material. Thats alarming when you consider the known members of the black-market nuclear trade! Clearly, this

seizure raises more questions than it answers. While many find assurance in the lack of answers, this is a naive approach. The truth is, these questions are extremely disconcertingespecially when considered against the growth of the South American terrorist network. Mountains of evidence have arisen in recent years showing that South America is a hideout and breeding ground for the worlds most dangerous terrorist organizations, including al Qaeda, Hezbollah and Hamas. Pockets of South Americaincluding areas in Venezuela, Bolivia and Ecuador, all of which have governments hostile to the U.S.have become launching pads from which the worlds most venomous anti-American entities, particularly radical Islam, could strike the United States. Now we learn that uranium is being illegally traded in the region. Even the weakest imagination ought to be able to conjure images of what the consequences for America could be!

Third, that causes global nuclear war A. Groups That Receive Weapons from the Russian Mafia Are the ONLY Nuclear Threats Power 97
(Jonathan Power, staff writer for the Baltimore Sun, Threat of the Russian nuclear mafia 10/14/97, Online) The real issue in terms of imminent danger, both then and now, is the Russian mafia. ''The director of the FBI, Louis Freeh, has warned that Russian organized crime networks pose a menace to U.S. national security and has asserted that there is now greater danger of a nuclear attack by some outlaw group than there was by the Soviet Union during the Cold War,'' the Washington Post reported. In conversation, Munir Ahmed Khan, the former chairman of the world's nuclear watchdog body, the International Atomic Energy Agency, confirms that opinion here is moving in the same direction as Mr. Freeh's. Mr. Khan, commenting on the recent allegations made by the former Russian general and national security adviser, Alexander Lebed, that the mafia has stolen Soviet-era nuclear suitcase bombs, says that if this is true they would be usable: ''Competent nuclear scientists, of which there are many out of work and in economic difficulties, could be hired to keep them operational.'' His view is contrary to statements made by Russian President Boris N. Yeltsin's government. Mr. Khan knows a thing or two about undercover bomb work. He masterminded, against all the odds, the clandestine manufacture of Pakistan's nuclear bomb. Iran, even if it is trying to develop a nuclear bomb, North Korea, if it has ever been, are both unlikely ever to use them. ''Rogues'' they may be. Suicidal they are not. Both live in neighborhoods where a move to deploy such weapons would be met with a debilitating blitzkrieg. As Pakistan does, these countries would keep their nukes in the background, partly deterrent, partly prestige item. The Russian mafia -- and the people it does business with -- is another matter. If they do trade in nuclear weapons, the danger will not be with governments with a fixed address, where Washington, Moscow, London, Paris or even Beijing know where to retaliate It will be with a free-lance terrorist group of no fixed abode, determined to use blackmail to secure a particular objective. It could be to force the withdrawal of the Turkish army from Kurdish areas or Israel from its settlements in the West Bank or to demand release of jailed Colombian drug barons. Mr. Freeh promised ''drastic steps to prevent and detect'' nuclear weapons falling into the hands of Russian criminal gangs. Yet at the same time he admitted that the Russian syndicates, with former KGB officers in the hierarchy, run the most sophisticated criminal operations ever seen in the United States. What ''drastic steps'' does Mr. Freeh have up his sleeve? Former CIA director John M. Deutch, commenting on the statement that ''the U.S. government is effectively organized to address the terrorist threat,'' said two words: ''Ha, ha.'' Every policy-maker should read his article in the latest issue of Foreign Policy. Its point is obvious: America is wide open to nuclear terrorist blackmail. Nevertheless, the White House is being very careful to keep the lid on the debate, for fear it could unnerve and alarm public opinion.

The officials' caution and reticence is understandable. For decades, Washington justified the possession of nuclear weapons as creating a stable balance of power. All through the Cold War it paid little or no attention to the now-known dangers of atmospheric testing or to those who warned that nuclear weapons were a Faustian bargain and would inevitably fall into the wrong hands. Missed opportunity Washington, London, Paris, Bonn, Rome, Ottawa and Tokyo (the G-7) missed the historic opportunity of the century to put Russia the right way up when they refused to provide the financial wherewithal to enable Soviet President Mikhail S. Gorbachev to make what could have been a relatively smooth transition from rigid communism to a more liberal set-up, something short of today's present Wild West capitalism. They repeated their mistake when they, led by President George Bush, refused the Russian president, Mr. Yeltsin, help in late 1991. Washington sent as the sole emissary a Treasury undersecretary whose job was to insist to the new Russian government that it honor the old Soviet debt. Only 2 percent of NATO defense spending would have done the job and avoided nearly eight years of economic turmoil and, not least, the emergence of the mafia that now threatens us. No doubt Washington would like to deal with this grave crisis without having to throw into relief its past errors. Common sense suggests the White House is working with Moscow to try quietly to buy off the wouldbe nuclear terrorists. One wishes the authorities well, for if they fail it will be the greatest tragedy to befall humanity since Hiroshima and Nagasaki.

B. Nonstate actor use shatters the taboo and causes global nuclear war GIZEWSKI 1996
(Peter, Senior Associate, Peace and Conflict Studies Programme, University of Toronto, International Journal, Summer, p.400) Absolute and all-encompassing, the prohibition sets all nuclear weapons apart as unique, regardless of size or power. Nuclear explosives both large and small are equally illegitimate, and the latter remain so despite the existence of seemingly legitimate conventional explosives of greater destructive power. The distinction stems in part from widely held but rarely questioned perceptions of nuclear arms as different. Nuclear weapons are distinct simply because they are perceived to be distinct. The distinction also has roots in legal reasoning and diplomacy. Traditions and conventions are crucial to the conduct of social relations. Once established, they render behavior predictable, help to co-ordinate actor expectations, and offer a gauge of intentions. If they are not held to be inviolate, these functions become more difficult. Transgression at any level threatens to erode shared understandings and expectations increasing uncertainty and the inevitable costs and requirements of coping with it. One violation makes subsequent, perhaps more serious, actions of the same type easier to contemplate and thus more likely. Thus, any breach of the nuclear threshold threatens more than one isolated act of destruction: it sets a precedent signaling potential chaos, which may well include the prospect of more destruction to come.

Contention Two is African stability


First, Cocaine trafficking is already fueling African instability ORegan 10
Cocaine and Instability in Africa: Lessons from Latin America and the Caribbean Davin ORegan; AFRICA SECURITY BRIEF by the African Center For Strategic Studies; July 2010 http://www.ndu.edu/press/lib/images/africa/AfricaBrief-5.pdf While West Africa is the current locus of this activity, the continent as a whole is an ideal transshipment centerpoor, with limited oversight and weak policingmaking for a low-cost and low-risk environment. Since Africa is not a producer or major consumer of cocaine, some assume that its domestic effects will be minor. Yet evidence of cocaines destabilizing impact is already emerging. The assassinations of Guinea Bissaus president and the head of the army in early 2009 were likely linked to cocaine transshipment. In January 2010, a senior officer of Guinea Bissaus Presidential Security Service was arrested in a narcotics sting, prompting senior military officials to publicly lament the regular involvement of security personnel in cocaine transshipment. In late 2009, Ghana extradited three Malians who claimed links to al Qaeda in the Islamic Maghreb to the United States on cocaine trafficking charges. The sheer value of the trade poses not only a threat to security but also real risks of distorting the regions economy, investment flows, development, and steps toward democracy.

Second, Its specifically the biggest threat to African stability ORegan 10


Cocaine and Instability in Africa: Lessons from Latin America and the Caribbean Davin ORegan; AFRICA SECURITY BRIEF by the African Center For Strategic Studies; July 2010 http://www.ndu.edu/press/lib/images/africa/AfricaBrief-5.pdf Over the last decade West Africa has emerged from widespread instability and benefited from a period of declining violence and growing democracy. Sierra Leone, Liberia, and Cte dIvoire are emerging from civil wars. Mali, Ghana, and Benin continue to consolidate democratic gains. Cocaine traffic poses a direct threat to these advances . Traffickers abhor attention. Any state response whether parliamentarians passing laws to enhance border security or investigators prosecuting smugglersraises transaction costs and lowers profits. Consequently, traffickers will attempt through co-optation, bribery, and corruption to prevent and deter a states response in order to protect their profits. Rather than guard cocaine cargoes with heavily armed security and gunfights, traffickers would rather pay politicians, judges, and police officers to ignore their trade altogether. The strategy is to make these officials beneficiaries early to ensure low costs over the long term.

Third, Now is key stopping cocaine early is the only way to prevent instability ORegan 10
Cocaine and Instability in Africa: Lessons from Latin America and the Caribbean Davin ORegan; AFRICA SECURITY BRIEF by the African Center For Strategic Studies; July 2010 http://www.ndu.edu/press/lib/images/africa/AfricaBrief-5.pdf Address the Problem Vigorously Now . The threats posed by cocaine trafficking in West Africa are daunting, but they will be much harder to reverse if left unchecked. According to the World Bank, the Caribbeans rising homicide and crime rates have exhibited strong inertia effects. This means that once crime rates are high, it may be difficult to reduce them. At the same time, crime reduction efforts in the short term are likely to have huge long-term gains.10 Since cocaine traffic in West

Africa is still maturing, there is an opportunity to prevent its expansion. Deterring cocaine traffic is much cheaper, too. If West Africa can prevent further expansion of traffic, it can avoid the attendant spikes in crime and violence, flight of foreign investment, proliferation of gangs, overcrowded prisons, overburdened courts, and the rising defense and police expenditures seen in Latin America and the Caribbean.

Fourth, Venezuela is key A. Market is shifting to Europe Pichon et al. 11


The Transatlantic Cocaine Market Research Paper Thibault Le Pichon, Thomas Pietschmann, Ted Leggett, Raggie Johansen Alexandre Schmidt, David Izadifar Aisser Al-Hafedh, Olivier Inizan Gautam Babbar April 2011 http://www.unodc.org/documents/data-and-analysis/Studies/Transatlantic_cocaine_market.pdf Global demand for cocaine has shifted. Demand in the United States was more than four times as high as in Europe in 1998, but just over a decade later, the volume and value of the West and Central European cocaine market (US$33 billion) is approaching parity with that of the US (US$37 billion). Two thirds of European cocaine users live in just three countries: the United Kingdom, Spain and Italy. With Germany and France, these countries represent 80% of European cocaine consumption. European cocaine seizures increased rapidly between 1998 and 2006, peaking at some 121 tons. They have dropped off sharply since then, to some 53 tons in 2009, while at most, European demand has stabilized. There have been increases in seizures in South America, but the price of pure cocaine has not increased greatly in Europe, suggesting that traffickers have found new ways of evading law enforcement. cade, most (about 60%) of the cocaine seized was taken at sea or in ports. The Bolivarian Republic of Venezuela was the most prominent country of origin for direct cocaine shipments to Europe, with the cocaine coming mainly from Colombia.

B. More than half of all cocaine goes through Venezuela Pichon et al. 11
The Transatlantic Cocaine Market Research Paper Thibault Le Pichon, Thomas Pietschmann, Ted Leggett, Raggie Johansen Alexandre Schmidt, David Izadifar Aisser Al-Hafedh, Olivier Inizan Gautam Babbar April 2011 http://www.unodc.org/documents/data-and-analysis/Studies/Transatlantic_cocaine_market.pdf The Bolivarian Republic of Venezuela has emerged as a key transit country for shipments to Europe, particularly for large maritime shipments. The largest cocaine seizure in 2008 was 4.1 tons of cocaine seized from a commercial vessel coming from the Bolivarian Republic of Venezuela, and 2.5 tons were also seized on a fishing boat from that country. According to the Maritime Analysis Operation Centre (MAOC-N), more than half (51%) of all intercepted shipments in the Atlantic during the 2006-2008 period started their maritime journey in the Bolivarian Republic of Venezuela.

C. Africa is increasingly turning into a hub for Venezuelan cocaine ANN 13


Africa, Europe, and the Cocaine Business African Narco News March 16, 2013 http://africanbusiness.blogspot.com/2012/11/africa-europe-and-cocaine-business.html Since 2005 more evidence has emerged that Colombian and Venezuelan gangs were setting up shop in West Africa as a safe haven, turning the region into a beachhead for shipping cocaine to Europe. There are many reasons that explain why the drug business is taking root in the region. In general, a mix of push and pull factors are at play: growing demand for cocaine in EU countries, tighter controls on

traditional direct routes between South America and Europe, a declining cocaine market in the US and excellent conditions for setting up markets and undertaking illegal activities in West Africa. Given the shortfalls in the security forces and rule of law in that region, which is home to some of the worlds poorest countries, the amount of cocaine that is seized is not as representative as in other parts of the globe. One can presume that the real amount of cocaine that is trafficked in the region is a multiple of the volume that is actually seized. The UNODCs conservative estimate is that every year nearly 50 tonnes of the drug move through West Africa; in other words, one-fifth of the cocaine bound for Europe goes through the region. That is more or less a quarter of the wholesale trade, is worth about US$450 million and ends up in the hands of African middlemen and helpers. Eric Walter Amegan (Middleman) There is some evidence that in particular Ghana, Guinea-Bissau (which has earned a reputation as Africas first narco-state), Guinea, Cape Verde and Senegal have become staging grounds for the largest flows of cocaine headed for Europe. There has been a significant increase recently in investments by South Americans in some countries of West Africa, such as purchases of real estate or fish- or wood-processing plants. One might assume that the acquisition of this property, possibly designed to mask illegal activities, points to the establishment of lasting structures in the region. This would allow for expansion of drug trafficking in the future.

Fifth, African cocaine trade causes instability ANN 13


Africa, Europe, and the Cocaine Business African Narco News March 16, 2013 http://africanbusiness.blogspot.com/2012/11/africa-europe-and-cocaine-business.html Aside from Nigeria, Ghana and Senegal, probably no State in West Africa is capable of confronting successfully and on its own the organised crime gangs that are settling on their territory. One hundred kilos of pure cocaine, dumped on a beach in Guinea-Bissau, would have a market value in Europe that is equivalent to all the development aid that the country receives in a year. Several hundred kilos of cocaine allegedly arrive weekly to Guinea-Bissau. The US$450 million in drug profits that UNODC estimates stay in the hands of African intermediaries each year are equal to all the foreign direct investment made in Ghana, Guinea-Bissau, Guinea, Mali and Senegal in 2005. The fragile or failed States of West Africa conduct in a very limited fashion the functions of governance in the areas of security, social policy and legitimacy/rule of law. In West Africa, cocaine trafficking rings find ideal conditions. It is a perfect geographical prolongation of the coca-producing countries; weak state structures are the norm, with limited territorial control and legal systems with limited scope. Both regions offer certain comparative advantages for criminal elements, which encourages the establishment of trans-national black markets and easy creation of illegal added-value. Due to growing pressure from government anti-drug agencies along traditional smuggling routes, West Africa attracts people involved in the cocaine trade because of the favourable operating conditions it offers. The result of this is a rise in organised crime activities in the region. As the drug trade takes root, consumption of drugs also increases. This has been observed in many transit countries, where higher demand is fuelled by more abundant supply. This happens in Central America and Brazil, but also in Guinea-Bissau. In many cases the rise in consumption stems from the distribution of cocaine currency. Besides this, along with drug trafficking what is also expanding is a series of secondary effects such as corruption, violence, money laundering, and trafficking in light and small weapons. The most visible example of this effect has been observed in Mexico, where the conflict with and among drug cartels has claimed more than 60,000 lives since 2006, according to official figures. According to some estimates, more than 80% of drug-related violent acts stem from the resolution of economic conflicts or criminal elements competing for leadership. Contrary to what one might presume, only a small percentage of drug-related violence stems from people being high on drugs or crimes involving people

seeking money to buy them. In West Africa, all it takes is a moderate bribe to neutralise the already weak control that authorities have on their territory, or the police.

Sixth, Lack of resources contributes to instability ANN 13


Africa, Europe, and the Cocaine Business African Narco News March 16, 2013 http://africanbusiness.blogspot.com/2012/11/africa-europe-and-cocaine-business.html There is a new dimension to the cocaine trafficking bound for Europe, and this requires more attention. After a significant rise in recent years, it is now estimated that nearly 50 tonnes of cocaine pass through West Africa each year before reaching European soil; in other words, one fifth of the cocaine that makes its way into Europe. The fragile States of West Africa are not in a position to take on Latin American organised crime gangs, which are much stronger in terms of resources. The establishment of the illegal drug market in those weak States goes hand in hand with a rise in instability, growing levels of corruption, possible financing of non-governmental armed groups and high incidence of cocaine use.

Seventh, Instability spillsover to the whole continent ANN 13


Narco-Corruption In Africa July 1, 2013 http://african-business.blogspot.com/2013/04/narcocorruption-in-africa.html In the last decade, West Africa emerged as a major transit hub for Latin American Drug Trafficking Organizations (DTOs) transporting cocaine to Western Europe. Since that time, there has been cause for hope and despair. The UN Office on Drugs and Crime (UNODC), the Economic Community of West African States (ECOWAS), and an array of international donors have made great strides in acknowledging the growing problem of drug trafficking and have implemented practical measures to stem this flow. All the while, the fears of many observers have been confirmed as the insidious effects of the drug trade have begun to take effect in many West African states. Consumption is on the rise and narcocorruption now undermines the rule of law and legitimate economic growth necessary for development and stability. One of the most alarming trends that place Africa and Africans on the radar of policy makers, law enforcement, and researchers alike is the number of fronts on which the illicit drug trade is growing. Its geographic expansion beyond the relatively confined region of West Africa is now endangering East and Southern Africa.

Eighth, African instability goes nuclear Deutsch, 02


(Jeffrey, Founder of the Rabid Tigers Project, Rabid Tiger Newsletter, Vol. II, No. 9, "The Nuclear Family Has Become Over-Extended," November 18, http://list.webengr.com/pipermail/picoipo/2002November/000208.html) The Rabid Tiger Project believes that a nuclear war is most likely to start in Africa . Civil wars in the Congo (the country formerly known as Zaire), Rwanda, Somalia and Sierra Leone, and domestic instability in Zimbabwe, Sudan and other countries, as well as occasional brushfire and other wars (thanks in part to "national" borders that cut across tribal ones) turn into a really nasty stew. We've got all too many rabid tigers and potential rabid tigers, who are willing to push the button rather than risk being seen as wishy-washy in the face of a mortal threat and overthrown. Geopolitically speaking, Africa is open range. Very few countries in Africa are beholden to any particular power. South Africa is a major exception in this respect - not to mention in that she also probably already has the Bomb. Thus, outside powers can more easily find client states there than, say, in Europe where the political

lines have long since been drawn, or Asia where many of the countries (China, India, Japan) are powers unto themselves and don't need any "help," thank you. Thus, an African war can attract outside involvement very quickly. Of course, a proxy war alone may not induce the Great Powers to fight each other. But an African nuclear strike can ignite a much broader conflagration, if the other powers are interested in a fight. Certainly, such a strike would in the first place have been facilitated by outside help - financial, scientific, engineering, etc. Africa is an ocean of troubled waters, and some people love to go fishing.

Contention Three is Solvency


First, Venezuela says yes A. Needs to address rising violence McDermott 5
Venezuela: Facilitator or Obstacle to Drug Trade? Jeremy McDermott 05 January 2012 http://www.insightcrime.org/news-analysis/venezuela-facilitator-or-obstacle-to-drug-trade Chavez is now having to pay attention to the rise in crime for domestic reasons, not just under international pressure. Almost all types of violent crime are rising, which in part is due to the drugs passing through his country, which not only have a corrupting influence and stimulate local consumption, but have helped give birth to a criminal underclass, which engages in widespread murder, kidnapping and extortion. The murder rate is now over 48 per 100,000 of the population, the highest in South America and Caracas has become one of the kidnap capitals of Latin America. Chavez's relationship with the Colombian rebel group of the Revolutionary Armed Forces of Colombia (FARC), has already been well documented. The FARC are believed to smuggling tons of cocaine into Venezuela every month, and enjoy the cooperation of elements of the security forces and Venezuelan political establishment, which not only facilitate their drug activities, but provide weapons, munitions along with medical and logistic support. What was made clear in confessions by Venezuelan drug lord Walid Makled, captured in Colombia but extradited to Venezuela in May 2011, is that the military play an important role in drug trafficking in Venezuela. He said that he had paid off over 40 generals to allow his drug smuggling business to flourish. The military control the borders, the airports and ports, in short most of the entry and departure points for drug shipments. They also can escort drug shipments that cross the country. Makleds allegations were supported by international intelligence agencies which insisted that while Colombian groups still control much of the cocaine passing through Venezuela, they work with powerful elements in the military and the Chavez regime, which act as facilitators. Chavez has an almost praetorian regime. He relies on a large number of active or former military officers in his government. He cannot take the issue of military corruption head on, as this could undermine his control of the insititutions of state.

B. Venezuelan officials want cooperation GAO 9


Drug Control: U.S. Counternarcotics Cooperation with Venezuela Has Declined United States Government Accountability Office Report to the Ranking Member, Committee on Foreign Relations, U.S. Senate July 2009 http://www.gao.gov/htext/d09806.html The United States and Venezuela cooperated closely on counternarcotics between 2002 and 2005, but this cooperation has greatly declined since. The United States has attempted to resume cooperation through a va of measures, including negotiations, designations, and technical cooperation, but Venezuelawhile initially supporting some of these effortshas not reciprocated. In 2007, the government of Venezuela began denying visas for U.S. officials to serve in Venezuela, which has further complicated efforts to cooperate. For its part, the Venezuelan government claims cooperation with the United States on counternarcotics is not necessary because of its own counternarcotics programs. At the time of our visit to Caracas, however, Venezuelan officials expressed willingness for greater technical cooperation with the United States if the government of Venezuela were to allow it.

Second, Counternarcotics cooperation is key to fight cocaine A. Solves safe refuge Forero 7
Cocaine Finds a New Latin American Home JUAN FORERO; NPR; October 22, 2007 http://www.npr.org/templates/story/story.php?storyId=89750281 Lack of Cooperation Washington has pumped billions of dollars into Colombia's battle against narcotics trafficking, but the country hasn't won such cooperation from Venezuela's President Hugo Chavez a populist who is not a fan of the Bush administration. Chavez frequently derides President Bush on his weekly broadcast. In a recent show, he called him a donkey. Chavez's government says that the Americans are tarnishing Venezuela by accusing it of being soft on traffickers. He stopped American anti-drug flights over Venezuelan air space long ago. He also ended cooperation with the Drug Enforcement Administration, accusing its agents of spying. John Walters, the White House drug czar, denies such charges. He says the lack of cooperation has been a boon to the drug trade . "When you don't keep the pressure on, it dwells like a cancer where it's not effectively challenged," Walters says. "Right now, that cancer is growing in Venezuela." Tackling Latin America's Drug Problem Walters says the pressure by Colombian authorities on Colombian traffickers has been fierce. It's led to some recent raids, like the one in Colombia that led to the arrest of Diego Montoya, who was on the FBI's top ten most wanted list. Such raids have forced other traffickers to seek refuge in Venezuela. Colombian intelligence believes that Wilber Varela, considered by some anti-drug agencies to be the top trafficker in South America, is hiding out in Venezuela. One of the most knowledgeable people in Venezuela about the drug trade is Mildred Camero. Until 2005, she was the drug czar for Chavez's government. Though well-regarded, she was abruptly removed. She now is a consultant on drug issues to the United Nations, the United States and private businesses. "The problem of drugs has gotten out of the hands of Venezuela," Camero says. "Now the big deals are not done in Bogota. They're done in Caracas because there's an open door. Since Colombia has a defined policy of fighting drug trafficking and the guerrillas, well, they come to Venezuela and do business here in Caracas."

B. Solves FARC and trafficking GAO 9


Drug Control: U.S. Counternarcotics Cooperation with Venezuela Has Declined United States Government Accountability Office Report to the Ranking Member, Committee on Foreign Relations, U.S. Senate July 2009 http://www.gao.gov/htext/d09806.html While Venezuela has its own counternarcotics initiatives and says it does not need U.S. assistance, available data indicate that drug trafficking through Venezuela is increasing. At a minimum, the lack of Venezuelan counternarcotics cooperation with the United States is a significant impediment to the U.S. capacity to interdict drugs en route to the United States. Moreover, if illegal armed groups continue to find safe haven in Venezuela and receive support from Venezuela, the permissive atmosphere and lack of cooperation will likely adversely affect the security gains made in Colombia since 2000. However, as Venezuelan officials have repeatedly stated, Venezuela is caught between the world's largest producer of cocaine--Colombia--and largest consumer of cocaine--the United States. Nevertheless, absent greater initiative by the Venezuelan government to resume counternarcotics cooperation with the United States, U.S. efforts to address the increasing flow of cocaine through Venezuela will continue to be problematic.

Third, Engagement key A. Engagement is precondition for counternarcotics cooperation GAO 9


Drug Control: U.S. Counternarcotics Cooperation with Venezuela Has Declined United States Government Accountability Office Report to the Ranking Member, Committee on Foreign Relations, U.S. Senate July 2009 http://www.gao.gov/htext/d09806.html Beginning in 2005, the government of Venezuela took a number of actions that have weakened U.S.Venezuelan counternarcotics cooperation. In January 2005, Venezuela refused to renew its participation in the Cooperating Nation Information Exchange System and, in March 2005, the Venezuelan National Guard withdrew from the Prosecutor's Drug Task Force. In July 2005, President Chvez accused DEA of spying and said he would ask DEA agents to leave the country. U.S. officials denied the allegation, yet the Venezuelan government suspended official relations with DEA and made it clear it would not resume counternarcotics cooperation with the United States until both countries negotiated and signed an addendum to the 1978 Memorandum of Understanding. These actions led President Bush in September 2005 to designate Venezuela as having "failed demonstrably" during the previous 12 months to make substantial efforts to adhere to their obligations under international counternarcotics agreements and the counternarcotics measures specified in U.S. law. [Footnote 31] Figure 5 illustrates a timeline of significant events affecting U.S.-Venezuelan relations since 2002.

B. Status quo sanctions and embargoes hinder cooperation GAO 9


Drug Control: U.S. Counternarcotics Cooperation with Venezuela Has Declined United States Government Accountability Office Report to the Ranking Member, Committee on Foreign Relations, U.S. Senate July 2009 http://www.gao.gov/htext/d09806.html As required by law, the U.S. government annually publishes several reports in which it designates, or identifies, countries failing to comply with certain international standards governing narcotics trafficking, support for terrorism, and regard for human rights. Designations can be a tool for persuading countries to change their policies and practices, as sanctions often accompany designations. For example, in 2006, State designated Venezuela as a country that had "virtually ceased its cooperation in the global war on terror." [Footnote 33] As a result, the U.S. government imposed-as required by law--a military equipment embargo against Venezuela, prohibiting the sale or license of defense articles and services.[Footnote 34] The United States has renewed both the designation and the embargo every year since 2006. As figure 4 shows, in addition to the annual designation for not cooperating with the United States on antiterrorism efforts, State has also annually designated Venezuela as failing to comply with minimum human trafficking standards since 2003[Footnote 35] and with human rights standards, since at least 2002. Furthermore, every year since 2005, the President has designated Venezuela as a major drug transit country that has "failed demonstrably" to meet its international counternarcotics obligations and responsibilities by taking sufficient action against the rising drug trafficking problem both within and along its borders. Venezuelan officials have questioned the accuracy of these various reports. In particular, they maintain the narcotics designation is not a technical assessment and that the United States has politicized drug trafficking in Venezuela. In addition, Venezuelan officials said these multiple annual designations hinder not only an improved bilateral relationship with the United States, but also the resumption of counternarcotics cooperation. Both U.S. and Venezuelan officials pointed out that the sanctions from designations, particularly the embargo on defense articles and services, hinders Venezuela from cooperating on counternarcotics even if it desired to do so.[Footnote 36] This embargo not only prohibits Venezuela from procuring

defense articles and services directly from the United States, but it also prevents Venezuela from buying defense articles from a third country if they have U.S.-origin content. For example, the head of ONA told us Venezuela wanted to buy Super Tucano airplanes from Brazil to intercept suspicious drug trafficking aircraft, but it was unable to do so because the planes contain U.S.- origin parts. Instead, Venezuela is in the process of buying 18 Chinese- made K8 planes.

Fourth, Systematic policies key occasional seizures are insufficient ANN 13


Africa, Europe, and the Cocaine Business African Narco News March 16, 2013 http://africanbusiness.blogspot.com/2012/11/africa-europe-and-cocaine-business.html How the price of cocaine is set. For the amount of coca leaves needed to produce a kilo of cocaine, an Andean grower receives about 250. That kilo has a commercial value of nearly 1,200 for a middleman in the producer country. That same kilo, while in transit, has a wholesale price of between 12,000 and 15,000.This kilo of relatively pure cocaine, later mixed with additives, sells on the streets of Madrid for 80,000, depending on the purity and the number of doses. Organised criminals ability to evade Europes tools for controlling narcotics are adequate, but it is not clear that they are based on a consistent strategy to block drug trafficking to Europe in a systematic way. Seizures that are just occasional as opposed to systematic only contribute to causing drug lords to move their current trafficking routes, and not to cutting them off or decreasing their number over the mid- and long term.

Misc
Venezuela is a major cocaine route Morgenthau 11
Morgenthau: The Link Between Iran and Venezuela -- A Crisis in the Making? Robert Morgenthau; District Attorney for New York, the Brookings Institution; July 14, 2011 http://laht.com/article.asp?ArticleId=343289&CategoryId=10718 And let there be no doubt that Hugo Chavez leads not only a corrupt government but one staffed by terrorist sympathizers. The government has strong ties to narco-trafficking and money laundering, and reportedly plays an active role in the transshipment of narcotics and the laundering of narcotics proceeds in exchange for payments to corrupt government officials. The U.S. Government Accountability Office (GAO) recently published a study requested by Senator Richard Lugar examining the issue of illicit drugs transiting Venezuela. The study reported a high level of corruption within the government, military, and law enforcement that has enabled Venezuela to become a major transshipment route for trafficking cocaine out of Colombia. Intelligence gathered by my office strongly supports the conclusion that Hezbollah supporters in South America are engaged in the trafficking of narcotics. The GAO study also confirms allegations of Venezuelan support for FARC, the Colombian terrorist insurgency group which finances its operations through narcotics trafficking, extortion and kidnapping.

US-Venezuelan relations key to stop the cocaine trade Ackerman 13


Will Chavezs death improve drug war diplomacy? MCCARTON ACKERMAN MAR 7, 2013 http://www.salon.com/2013/03/07/will_chavezs_death_improve_drug_war_relations/ After the death of Venezuelan President Hugo Chavez, some are optimistic about the country improving cooperation with the US in the fight against drug trafficking. Despite the infamous photo of Chavez and President Barack Obama smiling and shaking hands at the 2009 Summit of the Americas, US officials say that relations with Venezuela are at a low point since each country rejected the others ambassador in 2010. Last October, Obama also accused Venezuela of failing to meet its obligation on combatting drug trafficking. The nation has become a major drug hub since Chavez took power, and analysts believe as much as 25% of the cocaine that enters the US comes from Venezuela. The US Treasury Department has blacklisted seven current and former Venezuelan officials, including former Defense Minister Henry Rangel Silva, because of suspected ties to drug-dealing Colombian insurgents. And although several senior officials in the country say drug corruption is weakening the government, other high level officials are suspected of making millions off the trade. People in very important positions in government are getting rich, so if change comes, its probably going to be very, very gradual, says Michael Shifter, president of the Inter-American Dialogue think tank in Washington. But although progress on tackling the countrys drug trade is slow, there are some indicators of change. Venezuelan vice president Nicolas Maduro, Chavezs designated heir, began talks last November with Roberta Jacobson, assistant secretary of State for Latin America. The country has also cooperated with the US on several drug-related issues, including the extradition to Colombia of several drug kingpins. However, the tension between the two countries remains palpable; Maduro implied yesterday on national television that the US was at fault for Chavezs illness. He intends to set up a scientific commission to investigate the issue.

Venezuela isnt cooperating with the US to fight cocaine AFP 11

US says Venezuela not cooperating with drug war AFP Oct 19, 2011 http://www.google.com/hostednews/afp/article/ALeqM5gh0dQDoPYlDxKXbs2Kiyf52tiEg?docId=CNG.3454d73d3d7682777e93c5791d44d6c6.d41 WASHINGTON Venezuela is not cooperating with the United States in its fight against illegal drug trafficking, US officials told a congressional panel Wednesday. In Bolivia, another nation that has cut off most US cooperation, information from neighboring countries indicates the chiefs of some Mexican and Colombian drug cartels are moving to Bolivia to evade pressure from police, the Drug Enforcement Administration's intelligence chief Rodney Benson told a committee assessing US aid funds for the Andean region. Meanwhile, Venezuela continues to be the main launch point for regional cocaine transport en route to Central America and then Mexico and the United States, though only one percent of the cocaine Bolivia produces ends up in the US market, the official said. "Clearly, Venezuela is becoming more significant for drug trafficking organizations," Benson said. "Right now we have one agent in the country. We need to continue to build with authorities there... but clearly we've taken several steps back," Benson said. And "I don't know the reasons why," he stressed. It is not, in any case, a great surprise. Politically, Venezuela is the United States' biggest problem in Latin America, due to its ties with Iran, Syria and Cuba. It also constantly tries to counter US influence with its own leftist cooperation programs. Venezuelan President Hugo Chavez -- who is seeking reelection next year -accused then-president George W. Bush of being involved in the short-lived coup that ousted him from office briefly in April 2002. The countries have tense bilateral ties, as do the United States and Bolivia.

Mexican drugs come from Venezuela Neuman 12


Cocaines Flow Is Unchecked in Venezuela WILLIAM NEUMAN July 26, 2012 http://www.nytimes.com/2012/07/27/world/americas/venezuela-is-cocaine-hub-despite-itsclaims.html?pagewanted=all A map of flight tracks made by a United States government task force using data from long-range radar makes the point vividly: a thick tangle of squiggly lines, representing drug flights, originates in Apure, on Venezuelas border with Colombia; heads north to the Caribbean; and then takes a sharp left toward Central America. From there, the drugs are moved north by Mexicos well-established traffickers.

Venezuela is key Forero 7


Cocaine Finds a New Latin American Home JUAN FORERO; NPR; October 22, 2007 http://www.npr.org/templates/story/story.php?storyId=89750281 South America's cocaine pipeline is always adapting, particularly when the pressure is on. That pressure, applied in Colombia through an American-backed anti-drug campaign, has had an unintended effect: Colombian traffickers have set up shop in neighboring Venezuela. This has helped make Venezuela a major platform to ship drugs on to Europe and the United States. American and Colombian counter-drug officials say that cocaine is increasingly crossing into Venezuela, doubling in the last decade to an estimated 200 metric tons this past year. Much of it gets into Venezuela through dozens of unpatrolled rivers flowing between the two countries, like the long, Tachira River. Or it travels on short flights from clandestine airfields in Colombia's vast jungle to airstrips just 50 or 100 miles away in Venezuela. Once in Venezuela, the merchandise is flown out in small planes to the Dominican Republic or Haiti before the drugs hit American cities. Or they go by plane and shipping container to Europe and increasingly the first stop of those shipments is West Africa. The Drug Frontier A narrow bridge over the Tachira River joins Venezuela with Colombia. The music played on this bridge is all about the frontier a jagged, porous, violent 1,300 mile border that, for all intents and purposes, exists in

name only. In Urena, Venezuela, people cross the bridge by the thousands, on foot and on rickety motorcycles, past vendors selling chilled juice and listening to radios. They pull suitcases and carry oversized boxes. Trucks roll in by the thousands. The inspections are usually perfunctory. Those lax inspections have permitted tons of cocaine to make its way from Colombia where most of the world's cocaine is produced and onto the first leg of an indirect, multi-nation journey. Gen. Oscar Naranjo is chief of Colombia's National Police. He's a man who has been chasing traffickers since the days when the merchandise of choice were bales of marijuana. "What we've seen in recent years is a proliferation of routes from Latin America to Africa, Africa to Europe," Naranjo said. "That signifies that the corridor they've tried to use to move drugs goes through Colombia, Venezuela, some African countries and some European countries." Venezuela's Exacerbated Drug Problem Anti-drug agencies say complicity by Venezuelan officials has exacerbated the problem. Venezuelan Attorney General Isaias Rodriguez, in a rare interview, acknowledges that a problem exists. Two institutions that have had members linked to drug trafficking include the DISIP, Venezuela's intelligence service and the National Guard, which is omnipresent on the border. "There is complacency or participation in drug trafficking [by those agencies]," Rodriguez says. "And not just them, but civil authorities in airports." Indeed, one of the key jumping off points for Colombian cocaine is the airport in Venezuela's capital, Caracas. American and Colombian officials say bribes are regularly paid out to airport workers. They then look the other way. Up to a ton of cocaine is shipped out each month in small planes traveling to the Caribbean or on the many commercial flights to Europe.

European cocaine demand is quickly outpacing the US ANN 13


Africa, Europe, and the Cocaine Business African Narco News March 16, 2013 http://africanbusiness.blogspot.com/2012/11/africa-europe-and-cocaine-business.html The first anti-drug strategy that the EU adopted for the period 2000-04 was aimed mainly at achieving a considerable reduction in consumption and availability of drugs in Europe.*48+ This goal has not been met. Consumption of narcotics increased in almost every category of drugs, including cocaine. It is estimated that 12 million Europeans have tried cocaine at least once in their life; in 2007 alone, an estimated 3.5 million adolescents and young adults used the drug. Altogether, nearly 4.5 million Europeans sniff cocaine regularly. Although the US remains the largest market for cocaine, with an annual import volume of around 450 tonnes, Europe is catching up quickly: whereas the amount of cocaine seized in the US has been on the decline since 1990, at the same time there has been a significant rise in seizures in Europe and West Africa. This is a clear indication of the growing volume of cocaine making its way into Europe. In the EU, cocaine-related crimes rose 62% between 2000 and 2005. Meanwhile, the increase in Europe is not distributed evenly among EU countries. In Spain, 16,799 cocaine-related crimes were recorded in 2000; but the number soared to 46,200 in 2006. In Spain, Italy and France, cocaine consumption has trebled in recent years and in the UK it has quadrupled. Britain accounts for 26% of Europes cocaine consumers, followed by Spain with 24% and Italy with 22%.

Stopping Venezuela is key ANN 13


Africa, Europe, and the Cocaine Business African Narco News March 16, 2013 http://africanbusiness.blogspot.com/2012/11/africa-europe-and-cocaine-business.html Venezuela has become a relatively safe haven for Colombian traffickers. Compared to Colombia, Venezuela offers big advantages for cocaine traffickers, thanks to corrupt security forces, a highly permeable and practically uncontrollable jungle border spanning more than 2,000 km, and patchy efforts at crime-fighting. Cocaine is shipped from Venezuela in speedboats and semi-submersible

vessels to the Lesser Antilles and from there to the US and European markets. An ever-growing amount is shipped directly from Venezuela to West Africa.

Cocaine contributes to an explosion of violence empirics prove ORegan 10


Cocaine and Instability in Africa: Lessons from Latin America and the Caribbean Davin ORegan; AFRICA SECURITY BRIEF by the African Center For Strategic Studies; July 2010 http://www.ndu.edu/press/lib/images/africa/AfricaBrief-5.pdf Narcotics trafficking is not intrinsically violent. Violence within the international trade in cannabis and Ecstasy, a popular hallucinogen/amphetamine, is comparatively low. But the overwhelming evidence from Latin America and the Caribbean indicates that where cocaine traffic moves, so too do homicide rates and conflict. If efforts of co-optation and bribery prove unsuccessful, traffickers may resort to violence to deter or resist attempts by government authorities to curtail drug flows and arrest traffickers. Trafficking groups also use violence to maintain loyalty and discipline as well as target other traffickers to resolve disputes, enforce agreements or contracts, and protect or acquire market share. In such environments, violence can spiral. Studies have shown that when violence within one criminal activity rises, all crimes can become more violent, gangs proliferate, and frustrated citizens may resort to mob justice including lynching suspected criminals.6 Often, the average age of violent criminals falls and the prevalence of violent youth behavior grows. In short, a culture of violence emerges. Evidence from Latin America bears this out. The homicide rate there, the highest in the world, is more than three times the global average. Guatemalas homicide rate rose 50 percent between 2004 and 2008, an increase that paralleled cocaine traffic. According to a World Bank report on crime in the Caribbean, the strongest explanation for the relatively high rates of crime and violence in the regionand their apparent rise in recent yearsis narcotics trafficking.7 Jamaica has one of the highest homicide rates in the world, and an estimated 40 percent of all murders are related to narcotics disputes. Indeed, there are 268 local and transnational gangs in Jamaica alone, comprising tens of thousands of members. Police shootings have correspondingly risen sharply while relations with civilians have suffered. Within the last 10 years, almost 2,000 Jamaicans have been killed by the policeslayings often followed up by the most cursory of internal investigations. Such conditions can contribute to severe bursts of violence in Jamaica.

Counterproduction strategies destroy the Amazon Monga Bay 8


Cocaine use is destroying the Amazon Monga Bay environmental news; May 26, 2008 http://news.mongabay.com/2008/0526-cocaine.html

to destruction of the Amazon rainforest for coca plantations, the raw ingredient used for cocaine production Cocaine production destroys rainforest 2.2 million hectares of forest have been cleared for cocaine production Pollution from production has fouled waterways while armed groups operating in forests areas have decimated wildlife. Coca eradication also takes a toll Antidrugs efforts have also harmed ecologically sensitive areas in Colombia In an effort to destroy the rebels' chief source of income, the Colombian government has targeted coca fields with aerial spraying of herbicides.
A new campaign has linked in Europe and the United States in Colombia. The "Shared Responsibility" drive, a joint initiative by the British and Colombian governments, features a collection of photographs showing the destruction of rainforest . In a speech in London marketing the launch of the initiative, Francisco Santos, Colombia's Vice President, said that every gram of cocaine consumed "destroys four square meters of rainforest." Deforestation in the Colombian Amazon - photo by Rhett A. Butler. The campaign estimates that in Colombia. kerosene, sulfuric acid, acetone, and carbide are used to process the leaves "The real price of cocaine is not just among communities and on the streets here, but in communities and on the streets of Colombia," British Home Office Minister Vernon Coaker was quoted as saying by Reuters. . Colombia has long battled a cocaine-fueled insurgency in its remote regions. Coca provides the key ingredient in cocaine and its eradication is a fundamental part of the US-backed war on drugs. Much of Colombia's coca is grown by poor farmers because it generates more income than any other crop. Typically farmers convert the plant into coca paste and sell it to groups -- including paramilitaries and Colombian rebels -- who refine it into cocaine and export the narcotic to markets like the United States, Europe, and increasingly, Brazil. Drug eradification efforts have focused on aerial fumigation programs where herbicides (a mixture that includes Monsanto Corporation's Roundup and Cosmo-Flux 411F) are dropped by crop-duster planes on suspect vegetation. Since the concoction is a non-selective herbicide,

cocaine consumption

surrounding vegetation -- including subsistence crops and native plants -- are killed as well. widespread spraying of herbicides could pose health threats to locals as well as damage to the environment farmers often replant coca seedlings soon after spraying,
Environmentalists, indigenous rights' groups, and even the government of Ecuador have complained that . Local reports suggest that

making the whole exercise somewhat futile Drug eradification efforts in the country have lately resulted in the shifting of large-scale coca production into extensive rainforests a biodiversity hotspot
coca under cultivation in Colombia. the of Choc state, in northwest Colombia.

. In 2005 a report from the White House Office of National Drug Control Policy showed that a massive aerial spraying offensive in 2004 failed to reduce the area of

Venezuela Oil 1AC Final


We begin with the plan: The United States federal government should substantially increase its economic engagement towards Venezuela by investing in Venezuelan oil infrastructure. We reserve the right to clarify intent.
Said Intent includes providing technical, financial, managerial expertise. This is a partial privatization of the PDVSA as American firms would have partial shares in the PDVSA Note: the PDVSA is the Venezuelan oil company owned by their government

Contention One is the Venezuelan economy


First, American investment in Venezuelan oil is key to avert economic collapse Homan 13
EXPLORING THE NEXT GENERATION OFPROLIFERATORS Patrick Homan; Monterey Institute of International Studies, James Martin Center for Nonproliferation Studies; 26 Feb 2013. http://www.niu.edu/polisci/announcements/Grad%20attachments/Homan.pdf Despite being the worlds eighth-largest oil producer, Venezuela faces a host of economic issues. After recovering from a recession that began in 2009, the Venezuelan economy grew consistently from 201012, including 5 percent growth in 2012.59 However, much of this growth can be attributed to public spending, as Chvezs main short-term solution to his countrys economic woes has been borrowing. As a result, net public debt rose from 14 percent of GDP in 2008 to 29 percent in 2010.60 In 2011, the International Monetary Fund reported Venezuelas public debt as 45.5 percent of GDP.61 Much of Chvezs borrowing has been from China. Between 2008 and 2010, China lent Venezuela $12 billion and is being repaid in oil shipments, which cuts even further into government revenues.62 Furthermore, inflation in Venezuela during 2012 was near 20 percent; as a result, the Venezuelan currency traded on the black market for a third of the official rate.63 While Chvezs near-term future seems safe with oil prices around $100 a barrel, there are growing long-term risks within the Venezuela economy. Any future decline in oil prices would send the Venezuelan economy into a tailspin and lead to a default on its obligations. Chvezs handling of his countrys oil sector is the chief cause of Venezuelas economic problems. Chvez pillaged Petrleos de Venezuela (PDVSA), the state-owned oil firm, by packing it with pro-Chvez loyalists, starving it of much needed investment, and using its profits for social spending. As a result, PDVSAs output has gone from 3.3 million barrels per day (b/d) in 1998 to its current level of around 2.25 million b/d, according to recent industry estimates.64 Of that, some 1 million b/d is sold at subsidized prices at home or to regional allies (such as Cuba), leaving just 1.25 million b/d for full-price exports.65 The declining state of its oil sector is having a large impact on the overall Venezuelan economy, as petroleum now accounts for 92 percent of its export revenue.66 This is an extremely troubling development for Chvezs government because its domestic support relies heavily on petrodollars for providing government subsidies and funding social welfare programs. Meanwhile, Chvezs harassment and hostility towards businesses and the private sector has devastated the rest of the Venezuelan economy. In his pursuit toward state socialism, Chvez nationalized hundreds of companies, seizing everything from steel companies and bottle makers to housing schemes.67 When workers have resisted, he has deployed the National Guard against them and trumped up charges against their owners. His efforts to accelerate the revolutionary process caused much of Venezuelas private sector to close or flee. The results are a significant amount of capital flight and a need to import many goods that it previously produced.

Second, Venezuelas economy is on the brink Lees 13


Venezuela's Controversial Election Results Are Only the Start of Its Troubles KEVIN LEES APRIL 15, 2013 http://www.newrepub lic.com/article/112920/venezuela-elections-2013-close-results-are-defeat-chavismo#

Maduro immediately face an economic crisis, the hangover from a 14-year spending binge and an economy on the brink of collapse Venezuela's economy has precariously
was favored to win on Sunday and then . Since Chvez's reelection in October 2012,

slipped from troubled to tumbling

all while oil prices have surged to $103 a barrel. But Venezuela now also faces its Bush v. Gore moment, with Capriles demanding a recount of the vote in a late-night Sunday address to

the nation. Maduro, in his victory speech, claimed that Capriles had called to offer a pact, but Capriles angrily denounced Maduro as a liar. Capriles started the campaign by taunting Maduro, "No one elected you, kid," and in his speech, he argued that if Maduro was illegitimate before, he's just as illegitimate now. He stopped short of outright declaring victory himself, but he stated that the election result didn't reflect the truth of the Venezuelan electorate, and he made it all but clear that he expected a promised audit to show that he, in fact, was the real victor on Sunday. Venezuela will now confront a long and grueling battle in unprecedented territory you have to go back to December 1968 to find a presidential result that was even closer in Venezuela, a result that ended with Venezuela's first-ever peaceful transfer of power following an election. If Maduro holds on to his victory, however, he'll be crippled by nagging doubts over the legitimacy of his presidency, and the close result, barely a month after Chvez's funeral, was a stinging defeat for Chavismo. Meanwhile,

the more acute

economic problems continue, and may well accelerate, given that government policy for the past six months has been designed merely to get Maduro to the finish line of Sunday's election.

Third, the Venezuelan economy is key to the Brazilian economy A. Market access on the brink Israel 13
Brazilian firms root for Chavez's man in Venezuela vote Esteban Israel Mar 21, 2013 http://www.reuters.com/article/2013/03/21/us-venezuela-brazil-business-idUSBRE92K0ZY20130321 Brazil, the world's seventh largest economy, has emerged as regional powerbroker in Latin America with moderate center-left policies that it hopes can influence more stridently left-wing neighbors such as Venezuela. With Brazil's economy slowing to a crawl, the last thing its entrepreneurs want to do is forfeit growing markets. Over the past decade, Brazil's exports to Venezuela soared by 533 percent to some $5 billion, making it Brazil's second largest market in Latin America after Argentina, both major buyers of Brazilian manufactured goods. Economists say Brazil's investments in Venezuela are around $20 billion. Venezuela, an oil producing nation that imports some 70 percent of its food, is now the third largest consumer of Brazilian beef and an important buyer of its chicken. Key infrastructure projects launched during the 14 years of Chavez's government, from the Caracas metro expansion to bridges across the Orinoco river that divides Venezuela, are run by Brazilian firms like Odebrecht.

B. Manufacturing Daudelin 13
Why Venezuela matters for Brazil Jean Daudelin; The Norman Paterson School of International Affairs (NPSIA); April 20, 2013 http://npsia.wordpress.com/2013/04/20/why-venezuela-matters-for-brazil/ I think the answer lies deeper than ideology or even security preoccupations and reaches to the very core of the Brazilian governments economic model, which is still rooted in old and increasingly farfetched dreams of industrialization. The ten-year-long Golden Age of Lulas presidency was based on low inflation and the effective redistribution of reasonably high growth. The axis of that growth, however, has lied in growing exports of primary products, primarily agricultural. For twenty years now, Brazil has been quickly de-industrializing. The fast decline of its manufacturing sector has taken place in the face of strenuous efforts of the government, particularly under the PT, to shore up and protect what a half-century of state efforts had produced, until the brief neo-liberal opening of the early 1990s triggered a debacle that Chinas rise, and the primary goods bonanza it produced, only deepened. Much of Brazils industry is not competitive globally. Domestic protection and support for national champions have consequently been crucial to its survival, but so has regional integration, particularly Mercosur. Hiding its industries behind a common tariff with even less competitiveand even keener protectionistArgentina, ensured that a market would be found for Brazilian products. Bringing Venezuela on board was an even better deal: with no industry to speak of, Venezuela brought no competition within the bloc but putting its sizeable market behind the tariff wall broadened the reach of Brazils uncompetitive manufactured products. Deepening economic instability in Argentina is now threatening the whole scheme. Cristina Kirchners attempts to protect her own industrial sector by imposing barriers to Brazilian products, along with declining demand in Argentina, is hurting Brazilian manufacturing exports to that country which, in the first three months of this year, have declined by 10%.[2] With mass protests against Kirchner in the streets of Buenos Aires and most of the countrys major cities last week, continuing high inflation and falling confidence, things are not looking up. In such a context, what export market is left for Brazils industrial goods but troubled Venezuela, whose oil revenues protect from economic collapse? Mercosur is a raw deal for Venezuelan consumers, who would be much better off importing from the cheapest world producers,

but the chavista mix of ideological blindness and economic incompetence is proving to be a boon for Brazil. In that context, quickly recognizing Maduro and keeping a clearer-eyed opposition out of power was a no-brainer.

Fourth, Brazilian economic stability is critical to avert Brazilian proliferation Shultz 2K


Donald SHULTZ, Research Professor of National Security Policy at US Army War College, THE UNITED STATES AND LATIN AMERICA: SHAPING AN ELUSIVE FUTURE, March, 2000, pg. Online @ http://www.carlisle.army.mil/ssi/pdffiles/PUB31.pdf While we are in a speculative mode, it may be useful to raise the issue of whether, two or three decades from now, the United States might have to deal with a regional hegemon or peer competitor. The most obvious candidate for such a role would be Brazil, which already accounts for almost half of Latin Americas economic production and has by far the largest armed forces in the region (313,250 active troops).53 That country could very well assume a more commanding political and military role in the decades ahead. Until recently, the primary U.S. concern about Brazil has been that it might acquire nuclear weapons and delivery systems. In the 1970s, the Brazilian military embarked on a secret program to develop an atom bomb. By the late 1980s, both Brazil and Argentina were aggressively pursuing nuclear development programs that had clear military spin-offs.54 There were powerful military and civilian advocates of developing nuclear weapons and ballistic missiles within both countries. Today, however, the situation has changed. As a result of political leadership transitions in both countries, Brazil and Argentina now appear firmly committed to restricting their nuclear programs to peaceful purposes. They have entered into various nuclear-related agreements with each othermost notably the quadripartite comprehensive safeguards agreement (1991), which permits the inspection of all their nuclear installations by the International Atomic Energy Agencyand have joined the Missile Technology Control Regime. Even so, no one can be certain about the future. As Scott Tollefson has observed: . . . the military application of Brazils nuclear and space programs depends less on technological considerations than on political will. While technological constraints present a formidable barrier to achieving nuclear bombs and ballistic missiles, that barrier is not insurmountable. The critical element, therefore, in determining the applications of Brazils nuclear and space technologies will be primarily political.55 Put simply, if changes in political leadership were instrumental in redirecting Brazils nuclear program towards peaceful purposes, future political upheavals could still produce a reversion to previous orientations. Civilian supremacy is not so strong that it could not be swept away by a coup, especially if the legitimacy of the current democratic experiment were to be undermined by economic crisis and growing poverty/inequality. Nor are civilian leaders necessarily less militaristic or more committed to democracy than the military. The example of Perus Fujimori comes immediately to mind. How serious a threat might Brazil potentially be? It has been estimated that if the nuclear plant at Angra dos Reis (Angra I) were only producing at 30 percent capacity, it could produce five 20-kiloton weapons a year. If production from other plants were included, Brazil would have a capability three times greater than India or Pakistan. Furthermore, its defense industry already has a substantial missile producing capability. On the other hand, the country has a very limited capacity to project its military power via air and sealift or to sustain its forces over long distances. And though a 1983 law authorizes significant military manpower increases (which could place Brazil at a numerical level slightly higher than France, Iran and Pakistan), such growth will be restricted by a lack of economic resources. Indeed, the development of all these military potentials has been, and will continue to be, severely constrained by a lack of money. (Which is one reason Brazil decided to engage in arms control with Argentina in the first place.) 56 In short, a restoration of Brazilian militarism, imbued with nationalistic ambitions for great power status, is not unthinkable, and such a regime could present some fairly serious problems. That government would probably need foreign as well as domestic

enemies to help justify its existence. One obvious candidate would be the United States, which would presumably be critical of any return to dictatorial rule. Beyond this, moreover, the spectre of a predatory international community, covetous of the riches of the Amazon, could help rally political support to the regime. For years, some Brazilian military officers have been warning of foreign intervention. Indeed, as far back as 1991 General Antenor de Santa Cruz Abreu, then chief of the Military Command of the Amazon, threatened to transform the region into a new Vietnam if developed countries tried to internationalize the Amazon. Subsequently, in 1993, U.S.-Guyanese combined military exercises near the Brazilian border provoked an angry response from many high-ranking Brazilian officers. 57 Since then, of course, U.S.-Brazilian relations have improved considerably. Nevertheless, the basic U.S./ international concerns over the Amazonthe threat to the regions ecology through burning and deforestation, the presence of narcotrafficking activities, the Indian question, etc.have not disappeared, and some may very well intensify in the years ahead. At the same time, if the growing trend towards subregional economic groupingsin particular, MERCOSURcontinues, it is likely to increase competition between Southern Cone and NAFTA countries. Economic conflicts, in turn, may be expected to intensify political differences, and could lead to heightened politico-military rivalry between different blocs or coalitions in the hemisphere. Even so, there continue to be traditional rivalries and conflicts within MERCOSUR, especially between Brazil and its neighbors, and these will certainly complicate the groups evolution. Among other things, the past year witnessed a serious deterioration of relations between Brazil and Argentina, the product partly of the formers January 1999 currency devaluation, which severely strained economic ties between the two countries. In part, too, these conflicts were aggravated by Argentinas (unsuccessful) bid to join the North Atlantic Treaty Organization (NATO), which Brazilians interpreted as an attempt to gain strategic advantage. The upshot was that relations soured to the extent where questions have been raised as to the continued viability of MERCOSUR itself. In light of these problems, one cannot but wonder what impact a resurgence of Brazilian authoritarianism, combined with a push for regional hegemonic status, would have on Argentina, currently a non-NATO ally of the United States.

Fifth, Brazilian proliferation is the most likely scenario for global nuclear war multiple warrants
Border disputes, instability, unpredictable leaders, accidents, military coups, lower warning times, first strikes, arms race, technical accidents, physical security

Yusuf 8
Predicting Proliferation: The History of the Future of Nuclear Weapons Moeed Yusuf; Fellow at the Frederick S. Pardee Center for the Study of the Longer-Range Future at Boston University; January 2009 http://www.brookings.edu/~/media/research/files/papers/2009/1/nuclear%20proliferation%20yusuf/0 1_nuclear_proliferation_yusuf.pdf Michael Mandelbaum, earlier mentioned as someone who remained relatively comfortable about the ability of the superpowers to deter each other, was less optimistic regarding the capacity of developing countries to do so. He stressed that developing country proliferation would increase the likelihood of the use of nuclear weapons in conflicts.78 Ted Greenwood, an American academic who later advised the U.S. Department of Defense, pointed to the active border disputes of Nth states such as South Africa, Israel, and Taiwan to suggest an increased likelihood of nuclear war.79 Mentions of the possibility of weapons falling into the hands of irresponsible powers the mad ruler scenario were frequent. As French scholar, Thierry de Montbrial pointed out: there are many politically unstable countries whose leaders are not predictableand would not hesitate to use an atomic weapon, if they had one.80 Hinting at the same concern, the renowned French sociologist Raymond Aron argued that acquisition of nuclear weapons by developing countries could even result in a

superpower conflict in the Cold War context due to a deliberate or inadvertent action of a small state.81 Moreover, in contrast to the relative stability within the borders of developed countries, Dunn and Overholt pointed to frequent military coups in countries like Argentina, Chile, Brazil, Greece, Indonesia, Iraq, Libya, Nigeria, Pakistan, South Korea, Syria, Turkey, Venezuela, and Zaire to emphasize the possibility of militaristic leaders wresting power and utilizing nuclear weapons as a means of coercing adversaries.82 A number of commentators anticipated that Nth powers would seek to create a first strike capability to preempt traditional rivals. Counterforce targeting strategies were considered likely, but also inherently destabilizing, especially for contiguous countries where warning times were diminished. Technical deficiencies in ensuring robust command and control and the security of the arsenal were taken for granted and used to further heighten fears of accidental or unauthorized use.83

Contention Two is Refining


First, declining Venezuelan production is shifting critical American demand to Canadian tar sands without Venezuela, tar sands output will multiply twenty-fold Hussain 13
Growing Canadian oil exports to U.S. bittersweet for producers as price discount bites Yadullah Hussain 07/02/13 http://business.financialpost.com/2013/02/07/growing-canadian-oil-exports-to-u-sbittersweet-for-producers-as-price-discount-bites/?__lsa=0861-4749 But a deeper dive into the data shows Canadian oil exports to the United States have actually risen over the past decade in real and percentage terms. In 2002, Canadian crude accounted for just less than 16% of all U.S. imports, a figure estimated to have reached 28% by the end of 2012. While overall U.S. oil imports have declined, Canadian crude shipments south of the border have risen by a third. Growing Canadian imports from oil sands projects effectively pushed out waterborne imports of heavy crude oil from less stable regions, such as Mexico or Venezuela , said Sabine Schels, analyst at Bank of America Merrill Lynch. This is bittersweet for Canadian companies. Cornering the U.S. market has come at a heavy price in the shape of depressed prices fetched by the Western Canada Select, the heavy Canadian crude. The discounts on Canadian heavy crude are forcing companies including Suncor Energy Inc. to delay plans worth billions of dollars and depressing their bottom lines. In a desperate effort to escape the dreaded $30 discount they must offer U.S. refiners, Alberta-based companies are seeking ways to ship their crude out of Alaska, Atlantic and B.C. But Canadian producers know their biggest market remains the United States. Overall the U.S. Gulf Coast is a huge crude oil market nearly equivalent to all of China today , IHS CERA, an energy research consultancy, said in a report. Consequently, the U.S. Gulf Coast will be a critical part of the future for oil sands , particularly for bitumen blends. TransCanada Corp.s CEO Russ Girling knows this, which is why proposes a pipeline to the Atlantic to take Alberta crude not just to global markets, but back into the United States. Scott Eells/BloombergRuss Girling, chief executive officer of TransCanada Corp. Its not a Plan B, its a Plan A, and it will go if the market supports it, along with Keystone, Mr. Girling told Bloomberg. Once you get on tidewater, you can get anywhere, and you dont need a presidential permit to bring oil into the Gulf Coast. IHS expects oil sands volumes to the Gulf Coast to increase considerably as more than two million barrels per day of new pipeline capacity planned is expected to connect Western Canada to the Gulf Coast in the next three years that is assuming it is approved and gets built. Clearly, Canadian producers are caught in the U.S. orbit and will remain in its vortex for the foreseeable future . It could have been much worse. Unlike their natural gas counterparts who have been dealt a double blow of plunging exports to the U.S and plummeting prices, Canadian crude is popular among U.S. refiners and theres more to it than just being the cheapest crude on earth. Many U.S. Gulf Coast refiners are addicted to heavier crudes, and dont have a taste for the lighter crude churned out from Texas and North Dakota shale plays. Which is why while light blends from places like Nigeria and Angola have declined dramatically, Canadian heavy has been in the ascendancy. John Powell, senior petroleum analyst with the U.S. Department of Energy, expects more sweet crude to be replaced by home-grown blends from places like Eagle Ford, but heavier crude imports will hold their own. In 2013, we see imports, wherever they come from, probably going to get heavier, he said. The Canadian surge has come as other sources of heavy crude face structural issues. Mexican heavy supply is expected to decline, and there is uncertainty around future supply from Venezuela, IHS said. If oil

sands could displace most of the Mexican and Venezuelan imports, the opportunity for bitumen blends would be about 1.5 million barrels per day . U.S. tight oil will grow, but it is still going to leave a lot of room for other suppliers, said Jackie Forrest, senior director at IHS CERA. Canada is specifically well placed. The heavy crude refiners are still going to make more money running heavy crude than the light sweet crude, so they are going to prefer Canadian supply, said Ms. Forrest. While that does not mean Canadian producers should stop exploring other markets to diversify their revenue streams, Canadian crude will not disappear in the U.S. anytime soon, even without Keystone XL pipeline being built. Over time, though, there are concerns that U.S. refiners may move toward lighter crude to meet the needs of rising U.S. shale plays, which produce lighter crude. But is it easy for refiners to flip the switch from heavy crude to light crude? Probably not, says Bill Simpkins, Atlantic Canada representative of the Canadian Fuels Association, which represents many refiners in Canada. Mainly because once you have a refinery and its purpose-built for particular crude and slate of products, they are probably always sourcing that type of crude. And the market for heavier crude is likely to only get bigger. Because of the dwindling supply of conventional sweeter crudes, and their higher costs, you are more likely to see older refineries to move into producing heavier crudes, said Mr. Simpkins. Gulf Coast refiners such as Marathon Petroleum Corp. and Valero Energy Corp. are strong advocates of Keystone XL and are keen to get Canadian crude to the Gulf market.

Second, Venezuelan oil production outcompetes Canada Hussain 13


Life after Chavez: Americas oil gains could be Canadas loss Yadullah Hussain 06/03/13 http://business.financialpost.com/2013/03/06/life-after-chavez-venezuela-u-s-oil-industries-arenaturally-attractive-trading-partners/?__lsa=0861-4749 Brent crude prices didnt move much as traders absorbed the death of Hugo Chavez who ruled the worlds sixth largest OPEC producer, but it may mask a long-term shift that could impact North American energy trading patterns. Over the longer term, changes in policy towards the energy sector might eventually allow Venezuelas oil production to return to the much higher levels seen in the late 1990s, said Tom Pugh, commodities economist at Capital Economics. However, any such recovery would take many years. Venezuela is home to the worlds largest proven oil reserves of around 296.5 billion barrels, but its production has steadily fallen under Mr. Chavez who diverted Venezuelas oil revenues to his pet projects and weakened the state-owned Petrleos de Venezuela, which is responsible for developing the countrys enormous riches. Even as 40% of Venezuelan oil exports headed towards the United States, Mr. Chavez despised Washingtons policies and was actively pursuing a policy to shift exports to China, the Caribbean, Central America and other Asian markets. U.S. imports of Venezuelan petroleum products peaked in 1997, at 379,000 bbl/d, and have since fallen to as low as 23,000 bbl/d in October 2012, the U.S. Department of Energy said in a January note. Despite severe disagreements, the two countries oil industries are naturally attractive oil trading partners due to their proximity , according to the U.S. Department of Energy. The robust trade in crude oil from Venezuela to the United States is due to the compatibility between the configuration of some U.S. refineries and the quality characteristics of Venezuelan crude, which is predominately sour and medium or heavy. This is a worrying development for Canadian crude producers, which offer similar type of heavy crude to the U.S. Gulf Coast refineries, and may lose out if Venezuela reforms its oil industry . Despite shrinking U.S. oil imports, Canada is now it southern neighbours largest supplier of crude, accounting for nearly 30% of all U.S. imports last year. Much of these gains were at the expense of heavier crudes from Venezuela and Mexico. A long-term reversal in Venezuela oil

production could compete with Canada in the United States and even China and Asian markets. Its too soon to say what Hugo Chavezs death means for oil prices, but it is certainly true that oil prices are what made Hugo Chavez possible, Daniel Yergin, the chairman of IHS Cambridge Energy Research Associates, said in an email to Bloomberg. Declining crude prices brought Chavez to rise to power and rising prices gave him the funds needed to sustain state spending and consolidate power, Yergin told the newswire. The countrys crude export stood at 1.7 million bpd in 2011, according to the International Energy Agency, similar to Libyas crude production, which was completely shut down during its bloody civil war in 2011. 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 .

Third, if theres a market for oil sands theyll be developed - economic viability of the oil sands is on the brink Johnson AND Dawson 13
Pipeline Called Key to Canada Oil Sands KEITH JOHNSON in Washington and CHESTER DAWSON in Calgary, Alberta June 7, 2013 http://online.wsj.com/article/SB10001424127887324069104578531713102125222.html 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. GS +1.22% 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., TRP.T +0.42% 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. But market experts said blocking Keystone would at most temporarily sidetrack Alberta's development plans.

Fourth, Venezuelan oil production steals the US market from Canada pushes oil sands over the brink McKenna 13
The secret threat to Canadas oil sands BARRIE MCKENNA; The Globe and Mail; May. 02 2013 http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/the-secretthreat-canadas-oil-sands/article11597201/ OTTAWA Natural Resources Minister Joe Oliver likes to pick on Venezuela when he sells the virtues of Canadian oil to Americans. Buy from a loyal ally, not from less friendly, less stable countries with shoddy environmental records, Mr. Oliver warned bluntly in a speech last week in Washington. Unfortunately, Venezuelan oil has a lot more in common with Canadian oil sands crude than Mr. Oliver cares to admit. Oil is a commodity, after all. And price typically trumps virtue and a smiling face. The bottom line is that Canada and Venezuela produce the same kind of heavy crude thats now sought by re-engineered U.S. petroleum refineries along the Gulf of Mexico. So does Mexico. In recent years, Canada has been winning the competitive battle to feed those refineries. Alberta oil has steadily displaced Mexican and Venezuelan crude in the U.S. market. But there is no certainty that shift will continue. Indeed, Venezuela and Mexico are showing tentative signs of getting their energy act together. Canada has benefited from the ineptitude of its energy producing rivals in the hemisphere. The state-run oil industries in Venezuela and Mexico are hobbled by inefficiencies, poor technology and under-investment in exploration. In spite of vast reserves, the two countries are producing less oil now than they did five years ago. U.S. imports of Venezuelan crude, for example, have dropped to less than a million barrels a day from 1.7 million barrels a day in 1997. Oil imports from Mexico have shrunk nearly 30 cent since 2006. New drilling technology and foreign investment cash could change all that . An often overlooked risk for Canadas oil patch is the possibility that both these underperforming competitors could start ramping up production and exports again. That would exacerbate the already-significant price discount on Canadian crude in the U.S. market. It would also ratchet up pressure on Canadian producers to access alternative markets in China and India via pipelines to the West Coast. Politics and economics have held back Venezuela and Mexico. But the landscape in both countries is shifting. Hugo Chavez was an unexpected gift to the oil sands. Now that hes gone, Venezuela has a much greater chance of shedding its image as an unstable and inefficient supplier of oil to the U.S. Venezuela has proven oil reserves of 211 billion barrels, eclipsing Canadas 175 billion barrels, according to the U.S. Energy Information Administration. And in Mexico, newly installed President Enrique Pena Nieto is vowing to reform the countrys troubled oil industry and attract private investment, particularly to help develop deep offshore and shale reserves in the Gulf of Mexico. Mexico has nearly 11 billion barrels of proven oil reserves, but roughly twice that including potential unconventional and deepwater sources. Mexico is unlikely to privatize Petroleos Mexicanos the stateowned oil company known as Pemex. But Finance Minister Luis Videgaray acknowledged recently that Mexico cant do everything itself and there might be opportunities for private investors in unconventional oil and gas projects where Pemex clearly doesnt have either the capital or the

expertise. Venezuela and Mexico have a long way to go to right their energy industries, and some tough political decisions to make. But if, and when, they do, Canada could be the biggest loser. More Venezuelan and Mexican oil coming into the U.S. would likely lead to an even larger discount on oil sands crude, which is already hampered by high extraction costs and limited pipeline capacity. The threat of new and more productive rivals underscores why projects such as the Keystone XL and Northern Gateway pipelines are so vital to Canada. The industry needs access to markets before there is a gusher of rival capacity in the neighbourhood oil thats free of the extraction, transportation and environmental challenges of the oil sands.

Fifth, Time is key US refineries will cut off Venezuela soon, unless their oil exports increase Ladislaw AND Verrastro 13
Post-Chavez Outlook for Venezuelan Oil Production Sarah O. Ladislaw; co-director and senior fellow with the Energy and National Security Program at the Center for Strategic and International Studies (CSIS) in Washington, D.C.; Frank Verrastro; senior vice president and James R. Schlesinger Chair for Energy & Geopolitics at CSIS; MAR 6, 2013 http://csis.org/publication/post-chavez-outlook-venezuelanoil-production U.S. refineries in the Gulf Coast are specifically designed to process Venezuelas sour and medium to heavy crude and serves as its natural market. Despite oil production being down, the United States still imports just under a million barrels of crude per day from Venezuela (down from a peak of 1.4 mmbd in 1997) and, as stated earlier, the government of Venezuela is highly dependent on those revenues for their ongoing stability, especially as revenue from other exports and domestic consumption decline. As we look ahead to another period of transition in Venezuela it is important to be mindful of the potential for disruption and to look for ways to mitigate the impacts of such disruption, but it is equally important to remember the trade ties that bind the two countries for the time being and to find opportunities to drive change in a positive direction. Time may be limited in this regard because the U.S. domestic production outlook is changing thanks to tight oil development in the United States and the influx of Canadian oil sands, both of which are giving U.S. refiners more options in terms of the crudes they use and more decisions to make about how they want to configure their refineries going forward. A future in which Venezuela is no longer as competitive in its natural market in the United States would change the outlook for Venezuelan crude marketing decisions. The long-term outlook for Venezuelas continued oil market production is changing both in commercial and political terms .

Scenario one for extinction is the climate JAMES HANSEN; directs the NASA Goddard Institute for Space Studies; May 9, 2012 Game Over for the Climate http://www.nytimes.com/2012/05/10/opinion/game-over-forthe-climate.html?_r=0 NCHO GLOBAL warming isnt a prediction. It is happening. That is why I was so troubled to read a recent interview with President Obama in Rolling Stone in which he said that Canada would exploit the oil in its vast tar sands reserves regardless of what we do.

If Canada proceeds, and we do nothing, it will be game over for

the climate. Canadas tar sands, deposits of sand saturated with bitumen, contain twice the amount of carbon dioxide emitted by global oil use in our entire history . If we were to fully exploit this new oil source, and continue to burn our conventional oil, gas and coal supplies, concentrations of carbon dioxide in the atmosphere eventually would reach levels higher than in the Pliocene era, more than 2.5 million years ago, when sea level was at least 50 feet higher than it is now. That level of heat-trapping gases would assure that the disintegration of the ice sheets would accelerate out of control. Sea levels would rise and destroy coastal cities. Global temperatures would become intolerable. Twenty to 50 percent of the planets species would be driven to extinction. Civilization would be at risk . That is the long-term outlook.

But near-term, things will be bad enough. Over the next several decades, the Western United States and the semi-arid region from North Dakota to Texas will develop semi-permanent drought, with rain, when it does come, occurring in extreme events with heavy flooding. Economic losses would be incalculable . More and more of the
Midwest would be a dust bowl. Californias Central Valley could no longer be irrigated.

Food prices would rise to unprecedented levels . If

this sounds apocalyptic, it is . This is why we need to reduce emissions dramatically. President Obama has the power not only to deny tar sands oil additional access to Gulf Coast refining, which Canada desires in part for export markets, but also to encourage economic incentives to leave tar sands and other dirty fuels in the ground. The global warming signal is now louder than the noise of random weather, as I predicted would happen by now in the journal Science in 1981. Extremely hot summers have increased noticeably. We can say with high confidence that the recent heat waves in Texas and Russia, and the one in Europe in 2003, which killed tens of thousands, were not natural events they were caused by human-induced climate change.
We have known since the 1800s that carbon dioxide traps heat in the atmosphere. The right amount keeps the climate conducive to human life. But add too much, as we are doing now, and temperatures will inevitably rise too high. This is not the result of natural variability, as some argue. The earth is currently in the part of its long-term orbit cycle where temperatures would normally be cooling. But they are rising and its because we are forcing them higher with fossil fuel emissions. The concentration of carbon dioxide in the atmospher e has risen from 280 parts per million to 393 p.p.m. over the last 150 years. The tar sands contain enough carbon 240 gigatons to add 120 p.p.m. Tar shale, a close cousin of tar sands found mainly in the

If we turn to these dirtiest of fuels, instead of finding ways to phase out our addiction to fossil fuels, there is no hope of keeping carbon concentrations below 500 p.p.m. a level that would, as earths history shows, leave our children a climate system that is out of their control. We need to start reducing emissions significantly, not create new ways to increase them.
United States, contains at least an additional 300 gigatons of carbon.

Scenario two is the Canadian economy First, Oil sands are killing the Canadian economy - Dutch Disease Weyler 13
Why more tar sands pipelines will only bring disaster for B.C. and Canada REX WEYLER; journalist, author and an activist with Tanker Free B.C.; MAY 8, 2013 http://rabble.ca/news/2013/05/why-more-tar-sands-pipelines-will-only-bring-disaster-bc-and-canada Digging up a natural resource and selling it for cash might sound like a good idea, but it is never that simple. The first financial blow to any resource colony arrives with the now-famous economic "Dutch disease," named in the Netherlands during the North Sea oil boom. Dutch disease is simple: When a nation with a healthy manufacturing sector exploits a cheap resource for cash, its national currency rises in value. This increase in exchange-rates makes all of its exports more expensive to customers, who turn elsewhere. The former manufacturing sector erodes. The country loses jobs and economic stability , so when the resource boom is over, or when commodity prices drop, the nation is worse off, not better. That's Dutch disease. And Canada has it bad . The tar sands boom over the last decade pushed up the Canadian dollar value, and right on cue, Canadian manufacturing declined. Last year, the global trade watchdog, the Organization for Economic Co-operation and Development (OECD) warned that the tar sands boom and commodity price fluctuations has left Canada with a floundering economy. "The export-oriented manufacturing sector had by 2011 shrunk sharply," the OECD reported. The OECD encouraged Canada to restore its non-resource economy to maintain high employment and equitable wealth distribution. They noted that while Alberta was making money from the tar sands, the rest of Canada suffered from a hollowed-out manufacturing and export sector. Now however, since commodity prices have dropped, even Alberta is suffering the curse of Dutch disease. In March this year, the Alberta government announced that it would cut spending and borrow billions to cope with declining revenues, due to falling crude oil prices, exactly as Dutch disease warns. Alberta -- only a decade after former premier Ralph Klein paid off the province's $23-billion debt -- is in debt again and going deeper. Alberta expects to borrow $12.7-billion over the next three years. In the same month that Alberta promised more debt, Canada lost 54,500 jobs, the biggest job decline in four years. Half those

lost jobs disappeared from the manufacturing sector, once again, just as Dutch disease predicts. Meanwhile, to ship oil to China and America, Canada risks oil spills that would cost billions of dollars to clean up, destroy the $14-billion annual west coast tourism industry, obliterate a healthy fishing industry, and shut down our ports. A single oil spill near Vancouver or Victoria harbours could cost this region $40 billion dollars.

Second, Growth is key to Canadas legitimacy as a global middle power Bothwell 11


*Alice. International Studies at Univ of Stellenbosch. Can Canada Still be Considered a Middle Power? March 2011 http://scholar.sun.ac.za/handle/10019.1/6698//Cal-JV]

Canada between 1945 and 2010 has been classified as a prominent " middle power ." At the same time its relative standing among nations has been declining and it has less regard in the world than it once did. Middle power theory seeks to classify those nations who in the wake of the Second World War were neither great powers nor non- great powers. The idea of middlepowermanship greatly appealed to Canadians and they undertook initiatives to separate themselves from the non-great powers. Canada is often seen as the exemplary case for observing middle power status. Through the post war era and the Cold War Canada was both economically and politically powerful. By getting involved in a plethora of multi-lateral bodies such as the United Nations and the Commonwealth while promoting peacekeeping and mediation, Canada was able to exert its growing influence on the world order . Throughout this time
Canada worked hard to build its reputation as a mediator and s pecialized in ending quarrels. This is true of Canadas involvement in the Commonwealth in the 1960s and 1970s with regard to the Rhodesian question. On two separate occasions it was the Canadian contingents that prevented the Commonwealth from dissipating. This further bolstered Canadas rise to prominence in the world order. Over the years ,

as Canada took on more initiatives resources became very thinly spread. With an economic slow down and new commitments to national policies (universal healthcare and pensions) the Canadian budget was rearranged and priorities changed. No longer were there the same resources available to middle power initiatives or the military. This has greatly impacted Canadas ability to participate in international projects. Recently, Canadas position in the world has come into question, asking whether or not it truly is still a middle power. By looking at various traditional middle power elements including the economy, peacekeeping, official development assistance and involvement in prominence is waning. Using the case study of Zimbabwean/ Canadian relations through the 20th and 21st centuries, the decline of Canadas middle power performance can be traced. Combining these different themes with hard and soft power theory it is clear to see that Canada no longer holds the same position of middle power it once did. It also shows that Canadians are holding onto an image of Canada, which is dated, and it is time to redefine Canadas position within the world order. multilateral bodies
it can be seen that Canadas

Third, Canadas standing as a middle power is a controlling impact necessary to mediate otherwise-inevitable great power conflict Bothwell 11
[Alice. International Studies at Univ of Stellenbosch. Can Canada Still be Considered a Middle Power? March 2011 http://scholar.sun.ac.za/handle/10019.1/6698//Cal-JV] Robert Cox in his 1989 article Middlepowermanship, Japan and the Future World Order poses a valid question what is the essence of the middle powers functional relationship to the world order? (Cox, 1989:825). Before delving into the theory behind middle powers it is impo rtant to understand why they are so

Middle powers have acted as a stabiliser and neutraliser , especially during the Cold War, middle power countries acted within the interests of their bloc to neutralise the tension, or urging restraint on the alliance leader, or resisting renewed 21 tendencies towards isolationism on the part of the bloc leader(Cooper et al. 1993:20). The middle-power role is to affirm the principle of adherence to acceptable rules of conduct by all powers, great and small (Cox, 1989:834). Middle powers are able to affirm this world order through various international institutions based on a post- Westphalian political structure and a
important in the world.

decentralization of global hegemony (Cox, 1989:835). In the era after the Second World War when the Great Powers had been decimated a new grouping of powers began to emerge. A country like Canada who was very involved in the war through industry, finance, technology and manpower came out on the other side with a new place in the global order. No longer was Canada a former colony or a nation pretending to be its own country; rather, as a nation Canada had an important impact . Perhaps most importantly, the Canadian economy was stronger than ever at the end of the war. Since Canada was not a great power like the United States or Britain but was no longer a small power a new place in the world order needed to be sought out. This is where the evolution of middle powers began. After the Cold War ended there were new opportunities for middle powers. They were not needed to try and keep a stable world order; there were new initiatives they were able to
participate in. Since the Soviet Union and the United States were no longer caught in a constant power struggle and there was no longer the same divide between east and west and as a result,

middle powers had greater freedom of action thrust upon them in terms of

their diplomacy (Cooper et al.1993: 21). Middle powers have the ability to come together through multilateral bodies such as NATO and the UN to uphold the norms and rules of the international system and perform certain tasks to maintain and strengthen that system (Cooper et al. 1993: 21). Throughout the 1980s with the powers were poised to take on a more active role in the international arena (Cooper et al.1993: 21).
United States declining resources middle

Scenario three is global biodiversity First, Tar sands destroy the Boreal Forest Hansen 9
Guest Columnist: President's trip to Canada defines critical carbon moment JAMES E. HANSEN; director of NASA Goddard Institute for Space Studies; February 17, 2009 http://www.seattlepi.com/local/opinion/article/Guest-Columnist-President-s-trip-to-Canada1300396.php The tar sands of Canada constitute one of our planet's greatest threats . They are a double-barreled threat. First, producing oil from tar sands emits two to three times the global warming pollution of conventional oil. But the process also diminishes one of the best carbon reduction tools on the planet -- Canada's Boreal Forest. This forest plays a key role in the global carbon equation by serving as a major storehouse for terrestrial carbon -- indeed, it is believed to store more carbon per hectare than any other ecosystem on Earth. When this pristine forest is strip-mined for tar sands development, much of its stored carbon is lost. Canada's Boreal Forest is also the reservoir for a large fraction of North America's clean, fresh water, home to about 5 billion migratory birds, and some of the largest remaining populations of caribou, moose, bear and wolves on the planet.

Second, Boreal development threatens global biodiversity NRDC 4


The Boreal Forest: Earth's Green Crown Natural Resources Defense Council 2004 http://www.nrdc.org/land/forests/boreal/intro.asp Canada's vast boreal forest is among the largest intact forest ecosystems left on earth, and must be preserved. In the far-north latitudes, just below the treeless tundra of the polar region, a forest of evergreen trees encircles the earth. This is the boreal forest, and it is the biggest terrestrial ecosystem in the world. It is also largely intact, free of roads and industrial development -- especially in Canada, where more than 1.3 billion pristine acres are found. The global boreal forests are larger than even the Amazon rainforest. Like the Amazon, the boreal forest is of critical importance to all living things. Its trees and peatlands comprise one of the world's largest "carbon reservoirs"; carbon stored in this

way is carbon not released into the atmosphere, where it would trap heat and accelerate global warming. Its wetlands filter millions of gallons of water each day. And as a vast and intact forest ecosystem, it still supports a natural food web, complete with large carnivores like bears, wolves and lynx along with thousands of other species of plants, mammals, birds and insects. The boreal forest is also home to hundreds of First Nations communities, many of which rely on fishing, hunting and trapping for their livelihoods. Despite its global significance, Canada's boreal forest is in great danger today. Large industries -- timber, mining, oil, gas, and hydropower companies -- are eyeing it for development, and less than 8 percent of the boreal forest is protected from large-scale industrial development.

Third, Biodiversity loss causes extinction Diner 94


Major David Diner, JAG Corps, United States Army, Winter 1994, Military Law Review, 143 Mil. L. Rev. 161, p. 170-173 1. Why Do We Care? -- No species has ever dominated its fellow species as man has. In most cases, people have assumed the God-like power of life and death -- extinction or survival -- over the plants and animals of the world. For most of history, mankind pursued this domination with a single-minded determination to master the world, tame the wilderness, and exploit nature for the maximum benefit of the human race. In past mass extinction episodes, as many as ninety percent of the existing species perished, and yet the world moved forward, and new species replaced the old. So why should the world be concerned now? The prime reason is the worlds survival. Like all animal life, humans live off of other species. At some point, the number of species could decline to the point at which the ecosystem fails, and then humans also would become extinct. No one knows how many species the world needs to support human life, and to find out -- by allowing certain species to become extinct -- would not be sound policy. In addition to food, species offer many direct and indirect benefits to mankind. 2. Ecological Value. -- Ecological value is the value that species have in maintaining the environment. Pest, erosion, and flood control are prime benefits certain species provide to man. Plants and animals also provide additional ecological services -- pollution control, oxygen production, sewage treatment, and biodegradation. 3. Scientific and Utilitarian Value. -- Scientific value is the use of species for research into the physical processes of the world. Without plants and animals, a large portion of basic scientific research would be impossible. Utilitarian value is the direct utility humans draw from plants and animals. Only a fraction of the earths species have been examined, and mankind may someday desperately need the species that it is exterminating today. To accept that the snail darter, harelip sucker, or Dismal Swamp southeastern shrew could save mankind may be difficult for some. Many, if not most, species are useless to man in a direct utilitarian sense. Nonetheless, they may be critical in an indirect role, because their extirpations could affect a directly useful species negatively. In a closely interconnected ecosystem, the loss of a species affects other species dependent on it. Moreover, as the number of species decline, the effect of each new extinction on the remaining species increases dramatically. 4. Biological Diversity. -- The main premise of species preservation is that diversity is better than simplicity. As the current mass extinction has progressed, the worlds biological diversity generally has decreased. This trend occurs within ecosystems by reducing the number of species, and within species by reducing the number of individuals. Both trends carry serious future implications. Biologically diverse ecosystems are characterized by a large number of specialist species, filling narrow ecological niches. These ecosystems inherently are more stable than less diverse systems. The more complex the ecosystem, the more successfully it can resist a stress. . . . [l]ike a net, in which each knot is connected to others by several strands, such a fabric can resist collapse better than a simple, unbranched circle of threads -- which if cut anywhere breaks down as a whole. By causing widespread extinctions, humans have artificially simplified many ecosystems. As biologic simplicity

increases, so does the risk of ecosystem failure. The spreading Sahara Desert in Africa, and the dustbowl conditions of the 1930s in the United States are relatively mild examples of what might be expected if this trend continues. Theoretically, each new animal or plant extinction, with all its dimly perceived and intertwined affects, could cause total ecosystem collapse and human extinction. Each new extinction increases the risk of disaster. Like a mechanic removing, one by one, the rivets from an aircrafts wings, mankind [humankind] may be edging closer to the abyss.

Contention Three is Solvency


First, Maduro will accept the plan C. He needs foreign investment to fund Chavezs legacy of grand socialist programs thats key to his political legitimacy Thomas-Symonds 13
What After Chavez? Nick Thomas-Symonds; practicing barrister at Civitas Law, Cardiff, specializing in chancery and commercial law. He is also Lecturer in Politics at St. Edmund Hall, Oxford University. He teaches British Politics and Government Since 1900, Modern British Politics, Politics in Europe and US Politics. He also teaches Contemporary US Politics on Oxford Universitys Department of Continuing Education Foundations of Diplomacy course; April 18, 2013 http://www.e -ir.info/2013/04/18/what-after-chavez/

A major part of Mr Chavezs popular appeal was his willingness to stand up to what he characterized as imperialism. He accused the US of trying to bring him down. With Mr Chavezs death on 5 March 2013, there is an argument that things can only get better in diplomatic relations between the US and Venezuela. After all, even under Mr Chavez, Venezuela was still trading widely with the US. The United States is Venezuelas most important trading partner Oil dominates U.S. imports from Venezuela, which is one of the top four suppliers of foreign oil to the United States. About 500 U.S. companies are represented in Venezuela. U. S. foreign direct investment in Venezuela is concentrated largely in the petroleum, manufacturing and finance sectors. That is not to say, however, that the US desire for oil has made it a no-go area for US governments in their diplomatic relations with the Bolivarian Republic. Sanctions were imposed on the Venezuelan state oil company, PDVSA, in 2011, for making supplies to Iran To win the presidential election Maduro needed to present himself as continuing the work of Mr Chavez.
After all, El Comandante traced his heritage to another Latin American independence leader, Simon Bolivar. Mr Chavezs antipathy had personal elements, too. To use just one example, a brief coup in 2002 temporarily removed him from power, and he openly accused the US of being respo nsible for it. The US Department of States fact sheet on US-Venezuela relations confirms the extent of this trade: . U.S. exports to Venezuela include machinery, organic chemicals, agricultural products, optical and medical instruments, autos and auto parts. It adds: . The demise of Mr Chavez is one thing, the position of his successor, Nicolas Maduro, on the US, quite another. , Mr , a former bus driver, As Mr Chavezs chosen successor, and as the incumbent during the election, this may have seemed an easy task. However, Mr Maduro has taken this argument to extraordinary lengths. He not only de clared himself the son of Chavez but claimed Chavez lives! and even went so far as to argue that El Comandante appeared t o him as a bird whilst praying. Mr Maduro has continued to plough Chavezs anti-US furrow. After all, he did serve for a substantia l period as his foreign minister. An allegation that the dead president had been the subject of an attack by historic enemies led the US State Department to declare the notion that the US had played any part in

Mr Maduro won the presidential election on 14 April 2013 with 50.7% of the vote. His winning margin of 1.5% constitutes only 235,000 votes. His defeated rival, Henrique Capriles, has alleged electoral malpractice and asked for the votes to be counted again the narrow margin of Mr Maduros victory, particularly given the advantages of his links to Mr Chavez, may prove less durable than he may think. Protests against the result continue Mr Maduros policies matter. One of his first acts was to announce the continuation of funding of socialist programmes from oil revenues. The current policy of using the nations oil reserves to fund socialist programmes cannot continue without putting the stability of the nations economy at risk. On the other hand, the programmes cannot be scaled back without political and social unrest. It is here that there may be a small chink of light for US-Venezuela relations, even under Mr Maduro. Venezuela cannot afford to turn any investors away unnecessarily.
Chavezs death from cancer as absurd. step. However, the National Electoral Council has declared Mr Maduros victory irreversible. That said, Cabello, said the results require deep self-criticism. after all. For now at least, month that whoever was the President was in a Catch 22 situation. Even now, the US multi-national Chevron advertises that it is playing a part in six onshore and offshore projects.

. The US urged an audit of the result as an important, prudent and necessary

On Twitter, National Assembly, Head Mr Diosdado

. The outcome may yet prove unpredictable, a nd Mr Chavezs demise may have heralded something new in Venezuelan foreign policy

Even setting to one side the protests against his controversial presidential election victory, the International Atomic Energy (IEA) predicted last

D. 14 years of economic devastation Roberts AND Daga 13


Venezuela: U.S. Should Push President Maduro Toward Economic Freedom James M. Roberts; research fellow for economic freedom and growth at the Center for International Trade and Economics; and Sergio Daga; Heritage Foundation visiting senior policy analyst in economic freedom in Latin America; April 15, 2013 http://www.heritage.org/research/reports/2013/04/venezuela-us-should-push-president-maduro-toward-economic-freedom

Hugo Chavezs hand-picked successor, former trade union boss Nicols Maduro, appears to have defeated Capriles by a narrow margin in a contentious and hard-fought special election Venezuela is in such shambles after 14 years of seat-of-the-pants mismanagement that Maduro may ultimately be forced to pursue more moderate policies and seek help from the U.S. to restore stability The Obama Administration and Congress should exploit this opening by using U.S. leverage to push Venezuela to turn from Chavezs failed experiment in oil-cursed 21st-century socialism toward economic freedom
Governor Henrique victory is confirmed . [1] .

on April 14. assuming his

Second, the plan solves Roberts AND Daga 13


Venezuela: U.S. Should Push President Maduro Toward Economic Freedom James M. Roberts; research fellow for ec onomic freedom and growth at the Center for International Trade and Economics; and Sergio Daga; Heritage Foundation visiting senior policy analyst in economic freedom in Latin America; April 15, 2013 http://www.heritage.org/research/reports/2013/04/venezuela-us-should-push-president-maduro-toward-economic-freedom

U.S. Policy Toward the New Maduro Government Washington should insist on strict conditionality before sending a new U.S. ambassador to Caracas or assenting to any new lending to Venezuela by international financial institutions until the new government Takes steps to privatize PDVSA to bring in international equity partners with the expertise and financial capacity to restore PDVSA to the high level of professional operational and managerial expertise for which it was widely respected prior to 1999
information for all Venezuelans. Use U.S. Leverage

: Produces a comprehensive plan for reform that reduces the size of the public sector, reverses nationalizations and

expropriations of land and enterprises with just compensation to owners, restores the independence of the central bank and judicial institutions, reforms the electoral system, and submits to an internationally supervised audit of the governments books during the Chavez years;

; Immediately stops all subsidies to Cuba and terminates wasteful and economically destabilizing subsidy programs such as

PetroCaribe and ALBA; Ceases cooperation with international state sponsors of terrorism (such as Iran) and joins the internat ional communitys cooperative efforts in the fight against transnational crime, narco-trafficking, and terrorism; and Restores freedom of the press and access to

The foundations of economic freedom in Venezuela were severely weakened during the 14-year misrule by Chavez. Although Chavezs death may aggravate instability and further polarize Venezuela, it need not be that way. Venezuela is in need of immediate and sweeping reforms, but these changes will take time, effort, determination, and, above all, dedicated reformers in Venezuela The Obama Administration should step into the breach with active and forward-looking policies to bring Venezuela back into the globalized economic system
. .

Third, The Venezuelan oil sector needs investment to sustain itself inefficiences will destroy the industry in the status quo Gjelten 13
Venezuela's Next Leader Faces Tough Choice On Oil Program TOM GJELTEN; NPR Latin American Expert; April 11, 2013 http://www .npr.org/2013/04/11/176843567/venezuela-s-next-leader-faces-tough-choice-on-oil-program As

Venezuela's

president, Hugo Chavez thought in grandiose terms, and his country's vast oil riches enabled him to act on his vision. But Chavez died before he had to deal with the flaws in his model, and some hard choices await his successor. Key to Chavez's notion

oil reserves estimated by the Organization of Petroleum Exporting Countries to be the largest in the world are worth tens of billions of dollars a year in potential revenue During his presidency, Chavez diverted much of that potential wealth to Venezuelan consumers in the form of cheap gasoline He propped up the Castro regime in Cuba, and he offered Venezuelan oil on highly preferential terms to 18 Caribbean and Latin American countries through an energy alliance he called PetroCaribe Oil production in Venezuela declined sharply under the Chavez administration, however, largely due to inadequate investment in the energy infrastructure, inefficiencies in oil industry management, and the replacement of skilled oil technicians and managers with political loyalists
of "21st Century Socialism" was the redistribution of Venezuela's oil earnings. The country's . (18 cents per gallon or less). . . PetroCaribe Initiative The drop in oil production more than 7 percent just in the first quarter of 2013 is severe enough to call into question whether the Chavista oil welfare programs can be sustained. For the Caribbean and Latin American countries that have been benefiting from the PetroCaribe program, it is a time of great anxiety. Chavez saw the energy alliance as a way to free the member states from U.S. energy imperialism. "There's no one who can slow our ever-faster march toward our great historical goals," he said, defining PetroCaribe as "energy unity." For poor countries, the PetroCaribe deal was irresistible. Typically, they had to pay cash for only half the oil they received. The rest they got on credit, financed over 25 years at 1 percent. Among those who eagerly signed up for the program was Haiti. In reality, PD VSA makes money from only a small proportion of the oil it produces. Now, can that continue? I don't think so. - Roger Tissot, energy economist "Any country that would benefit from such a credit would take advantage of it," says Ren Jean-Jumeau, Haiti's minister of energy. "There's not even a need to justify this. Haiti is a struggling economy, and this is a great advantage for us. We consider it extremely important." In the Dominican Republic, PetroCaribe was key to the country's 2008-2009 financial stabilization program. "By allowing us to defer the oil payments, it was a big, big thing for the government," says Juan Carlos Russo of the Pontificia Universidad Catlica in Santo Domingo. To be sure, there were strings attached: Chavez wanted the PetroCaribe countries to support his ideological crusade against the U.S. Some did so enthusiastically. Others largely ignored the Chavista rhetoric. "A lot of these countries looked at this thing in a practical manner," says Jeremy Martin, director of the energy program for the Institute of the Americas at the University of California, San Diego. "They were able to stomach the ideology as long as they could get such a wonderful financial deal." For countries such as Haiti, Jamaica and the Dominican Republic, the cheap oil from Venezuela could not have come at a better time, with energy prices rising and the world economy in crisis. "Most of these countries have no domestic s upplies of oil and gas," Martin notes. "If they do, it's minimal. These are energy-starved countries. And so they became absolutely addicted [to the PetroCaribe program]." What Does Venezuela Get? But whether the deal is good for Venezuela is another question. "In my economic mind, I w ould say, 'Why are they willing to sacrifice this much?' " says Russo. The Dominican Republic is repaying its oil debt to Venezuela partly in string beans. Jorge

To Venezuela, from a cash-flow point of view, this represents close to $5 billion a year of revenue that they're missing In reality, PDVSA makes money from only a small proportion of the oil it produces Venezuela's problem is that its oil production is declining, in part because of the lack of reinvestment and the politicization of PDVSA operations under the Chavez government. Unless oil prices move sharply higher, the country will face a significant loss of oil revenue In 1997, PDVSA was producing 3.5 million barrels a day Today they are about 2.8 million barrels a day. It shows you what a bad job the Venezuelan government has done in managing their national oil company Venezuela's next president won't be able to maintain the oil industry
Pion, who previously worked in Latin America for the Amoco and Shell companies, notes that all the oil that Venezuela provides on easy credit terms to other countries could have been sold for cash on the global market. " ," Pion says. The state-owned oil company Petroleos de Venezuela, S.A. also donated oil to low-income families in the United States. There were the oil subsidies for Cuba. Plus, there's all the oil that goes for cheap gasoline for Venezuelan drivers. " ," says independent energy economist Roger Tissot, who specializes in the Latin American energy market. "Now, can that continue? I don't think so." ." ," notes Pion, now an energy analyst at the University of Texas at Austin. " ." Chavez died before he had to confront the economic and political problems certain to plague his successor. , subsidize gasoline at home, spend oil revenue on social programs and share Venezuela's oil wealth with his Caribbean and Latin neighbors. Something has to give. If it's a choice between serving domestic needs and maintaining the sweetheart oil deals with other countries, the PetroCaribe nations may be in for a disappointment.

Fourth, American firms are eager to invest delays in funding kill their industry Peixe 13
Venezuela Sees Foreign Investment in Oil Fall in Political Vacuum Left by Chavez Joao Peixe 27 January 2013 http://oilprice.com/Latest-Energy-News/World-News/Venezuela-Sees-Foreign-Investment-in-OilFall-in-Political-Vacuum-Left-by-Chavez.html Due to the political vacuum left by Hugo Chavezs absence whilst he battles cancer behind closed doors, Venezuelas oil industry has experienced the first decline in foreign investment in five years . No new credit lines have been announced from China, the largest foreign contributor to Venezuelas oil industry, since April last year, and both Russian and Indian companies are withholding their planned investments until the political situation becomes more stable and transparent. This lack of investment from foreign governments is contrasted by the private sector where investors are eager to buy into Venezuelan assets , believing that Chavezs successor will reduce the states grip on the economy. Matt Ferchen, a scholar at the Carnegie Tsinghua Centre for Global Policy, explained that there There is simply nowhere in the world, outside of China, where the CDB has built up such a huge financial presence. Even if Chavez wasnt the easiest partner for China, he was their man, and now they dont know who is in charge. Vice President Nicholas Maduro is currently running the country, but Chavezs political opposition have called for Maduro to stand down temporarily and cede power to their party whilst Chavez is ill, in order to increase the political stability in the country and give investors some assurance. Current delays to the funding threaten the ability of one of the most oil rich countries in the world to reverse its declining output. Oil production in Venezuela has fallen 13 percent since Chavez first took power in 1999 to just 2.7 million barrels a day.

Fifth, American technical expertise is the best managerial practices, corporate knowledge, and financial assets Fryklund 10
Independents Transforming U.S. Resource Play Expertise Into International Success Robert Bob Fryklund; vice president of research for IHS CERA. He joined the company in July 2006 after serving as Libya president and Brazil country manager for ConocoPhillips. With more than 30 years of both international and domestic industry experience, Fryklund also has held senior leadership positions with British Borneo, Union Texas and Amerada Hess. Based in Houston, he focuses on strategic solutions for the upstream arena and advises national oil companies, independent, majors and investors. He also serves on several boards and committees within the industry, including the Independent Petroleum Association of America and the American Association of Petroleum Geologists. Fryklund holds a bachelors from Hamilton College and an advanced certificate in management. He also has completed advanced studies in business and geology from the University of Houston and the University of Tulsa; April 2010 http://www.aogr.com/index.php/magazine/editors-choice/independents-transforming-u.s.resource-play-expertise-international HOUSTONThe development of onshore unconventional resources has shifted the trend lines on future U.S. natural gas supply projections and has dramatically changed the game in domestic exploration, drilling and production. Independent companies have led the charge into the unconventional oil and gas frontier in North America, and the skill sets they have acquired position them to be strong players in international resource play opportunities. Multinational supermajors and national oil companies are looking to U.S. independent operators like never before to leverage technological expertise and best practices developed through years of experimentation in lower-48 unconventional plays. Independents with large acreage positions in North American shale gas plays and successful track

records in developing those resources are in demand for their corporate knowledge as much as their assets .

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