Suggestions from the U.S. over the past months that it may scale down sanctions on Venezuela to increase oil supplies should make us all think of the Keystone XL (KXL) pipeline. The now-defunct project could have been a stable and reliable source of oil for U.S. refineries for decades.
The 830,000 barrels per day (bpd) of oil shipped by KXL to our closest ally and trade partner would have made it an irreplaceable asset, especially amid today’s global energy shortages.
For those wondering, the pipeline would likely have been more than enough to offset volumes of crude oil coming into the U.S. from Russia earlier in 2022, before Russian energy was banned by Congress [1]. Today, it would negate the need for the U.S. to look to Venezuela and other OPEC producers for more oil.
Current global events make you wonder if the Americans are thinking twice about their decision to quash the pipeline.
OPEC’s recent announcement to cut oil production by 2 million barrels per day (bpd) is just one of several examples that make the KXL cancellation likely to be a regrettable one for the U.S.
KXL could in fact be revived if the Biden administration were willing to reinstate its presidential permit. After all, Canada has proven itself a reliable source for U.S. refiners. Additionally, the project has already finished construction in Canada, drastically reducing the time needed for completion south of the border.
However, reviving KXL has proven difficult. The backlash from special interest groups that effectively pushed for the pipeline’s shutdown – organizations which have indirectly contributed to mass global energy shortages in the process – would be severe, no doubt.
Instead, the Americans have opted to ask for more oil production from Venezuela.
There is a catch, of course, which may prove to be too "dangerous" for President Nicolas Maduro’s authoritarian regime to survive.
The U.S. has said that in exchange for significant sanctions relief, Maduro’s government must resume long-suspended talks with the country’s opposition to discuss conditions required to hold free and fair presidential elections in 2024 [2]. All this also must happen in "good faith," according to The Wall Street Journal.
The Biden administration is preparing to scale down sanctions on Venezuela’s authoritarian regime to allow Chevron to resume pumping oil there, according to people familiar with the proposal https://t.co/1JORp8K56W
— The Wall Street Journal (@WSJ) October 6, 2022
This begs anyone to ask these questions:
> Why is the U.S. even contemplating relying yet on another dictator for energy?
> Have we not learned anything from the 2022 war in Ukraine?
> Can we trust Maduro to keep a promise that would threaten his government's very existence while also potentially subjecting him to punishment just as severe?
To add, Venezuela’s embattled energy companies have in recent years entered into partnerships with Russian oil producers, while the two countries have strengthened ties according to the New York Times. Therefore, asking Venezuela for more oil also offers a financial lifeline to Russia [3].
Let’s compare Canada and Venezuela in a straightforward and logical way, shall we? How do the two countries stack up against one another on various Environmental, Social and Governance indices? Here's a glance:
Social Progress Index 2021
- Venezuela: N/A
- Canada: 6th
Democracy Index 2021
- Venezuela: 151st
- Canada: 12th
Human Freedom Index 2021
- Venezuela: 164th
- Canada: 6th
In case you’re wondering, non-applicable (N/A) typically means that the country chose not to participate in the index or provide the data required to be ranked accordingly. It’s not uncommon for autocratic rulers to opt out of social- and governance-related index rankings for obvious reasons.
Hence, it is highly nonsensical to continue to let energy dollars flow to oil and gas producers that do not care about civil liberties or human rights. The chance that this capital will be used to continue to oppress everyday Venezuelans and support the longevity of Maduro’s dictatorial regime is high.
If only the U.S. would look north to Canada, home to vast oil and natural gas reserves that already play a large role in underpinning America's energy needs.
Canada can do more – way more – not just for the U.S., but also for our allies and trade partners across oceans.
Global oil and gas demand is growing. Who would you choose to buy your energy supplies from? Would it be free and fair democracies like Canada, or brutal regimes like the one currently in power in Venezuela?
It’s time that the U.S. stop looking to other less stable and reliable producers for its energy needs. Canada is right here waiting.
Let's build the U.S. section of Keystone XL and put some of our energy supply shortage concerns behind us for good.
SOURCES:
1 – The White House – FACT SHEET: United States Bans Imports of Russian Oil, Liquefied Natural Gas, and Coal, Date Accessed: October 2022 (https://www.whitehouse.gov/briefing-room/statements-releases/2022/03/08/fact-sheet-united-states-bans-imports-of-russian-oil-liquefied-natural-gas-and-coal/)
2 – The Wall Street Journal – U.S. Looks to Ease Venezuela Sanctions, Enabling Chevron to Pump Oil, Date Accessed: October 2022 (https://www.wsj.com/articles/u-s-plans-to-ease-venezuela-sanctions-enabling-chevron-to-pump-oil-11665005719)
3 – Forbes – Why Biden’s Killing Of Keystone XL Was An Energy Security Blunder, Date Accessed: October 2022 (https://www.forbes.com/sites/davidblackmon/2022/03/10/why-bidens-killing-of-keystone-xl-was-a-big-energy-blunder/?sh=3a89ca3413fd)