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© Hazel Henderson, August, 2000
GLOBOCOP v. OPEC: Round One
An unlikely challenger to US global super power is Hugo Chavez Frias, the young President of Venezuela. Chavez has burst onto the world stage as the most popular elected leader in Latin America. He has reinvigorated OPEC and its oil weapon, and become a hero in much of the developing world – as a spunky new challenger to US global hegemony.
In response, US officials reiterate many of the mistakes that soured their relations with Latin America in the past. Recent clumsy warnings to President Chavez not to visit Iraq’s Saddam Hussein or Libya’s President Khadafi are cases in point. These US admonitions only assured that President Chavez would not snub these OPEC leaders during his recent world tour. Such US criticism only galvanizes OPEC’s resolve to maintain its new price band for its oil and its new determination not to cave in to gas guzzling US pressure to open up its oil pumps.
Round One of OPEC’s new strategy clearly is a victory. This is thanks in large part to Venezuela, a key player and founder of the forty-year old oil producers’ cartel. In truth, the US is on shaky moral ground – still hogging about twice the energy per unit of GNP as Japan and Europe, while adding a correspondingly larger quantity of pollutants into the global atmosphere.
Contrary to political and media scapegoating of OPEC as the villain of rising oil prices, OPEC gets less in real dollars for its oil, at today’s $30 per barrel, than it did in the 1970s. Few politicians care to remind US and European voters that the lion’s share of consumer oil prices consists of taxes and refinery mark-ups. Less than 40% of oil prices are the costs of the oil itself. In fact, oil often costs consumers less than milk, orange juice and bottled water. Meanwhile, refiners played roulette with their inventories, trying to beat price movements. They ended up with short stocks of oil.
In fact, the USA has been a sitting duck, set up for the recent run-up in oil prices. Special interests made sure that Congress kept hands off improving auto efficiency mileage standards, and blocked ratifying the Kyoto Accords on reducing climate-changing air pollutants.
Thus, US energy efficiency advances have stalled. Our economy remains oil dependent and vulnerable to inflation and/or recession. We even blinded ourselves by juggling our Consumer Price Index to strip out its oil component – so we could hide its creeping inflation.
Now, US policymakers and media are compounding the problem by demonizing President Chavez. This assured his continued overwhelming popular support in the recent Venezuelan election while burnishing his image among the majority of the world’s developing countries.
One would think that the US would have learned from its disastrously similar, failed policies toward Latin America. US policy toward Cuba, for example, has helped keep Castro in power. Its not easy being Globocop – although many in Washington still like this role. US voters have long disagreed however. They may be wiser than their leaders in the long run.
The US public overwhelmingly supports environmental goals, technologies of efficiency and clean, renewable energy. Higher oil prices are best for the US too. They will help push Detroit into offering the long delayed clean, high mileage, affordable cars consumers want. Everyone welcomes lower heating and cooling bills from energy-efficient houses and appliances.
The Venezuelan founders of OPEC, President Romolo Betancourt and his energy minister, Perez Alfonso, always stressed that oil was a precious resource that would run out early in this new century – part of the reason they fostered OPEC. They also believed in future technologies in solar, hydrogen, wind, ocean and other renewable energy sources, as well as conservation to protect the earth. The US oil, coal and automobile lobbies are still trying to hold back the future information-based, Solar Age. They should start investing more in this cleaner, greener future.
Round Two may also go to OPEC. President Chavez recently inaugurated the first International Seminar on New World Trends and the Future of Oil and Energy in Caracas, Venezuela. The second Seminar, held in Vancouver, Canada, released a concluding statement, to be conveyed to OPEC leaders at their forthcoming Summit, to be chaired by President Chavez in Caracas, September 28th. The Seminar Statement supports OPEC’s new price band and concurs that OPEC is being falsely targeted in recent price rises.
The Seminar experts also offered OPEC some far-reaching, strategic advice, including:
- Set up a Fund for New Energy Technologies to keep abreast of the super-major oil companies, Shell, BP and their shifting investments from oil into solar, hydrogen and other renewable energy sources. Indeed, BP’s new ads tell us that its name now stands for Beyond Petroleum.
- Switch its focus to its cleaner gas resources, while gaining income and carbon credits under the Kyoto Accords by reducing pollution. President Clinton could do much to help Nigeria (an OPEC member) by supporting such a policy. Nigeria’s wasted gas, which is flared off into air pollution could thus be piped to users.
- Set up an electronic barter exchange for OPEC’s petroleum. This would enable less developed OPEC member countries — Nigeria, Libya, Algeria and Indonesia , to bypass the world’s global casino of some $1.5 billion daily currency trading (most of which is speculation). This would also allow OPEC member countries short of foreign exchange to trade their excess oil directly with other countries and buyers for other commodities, goods and services they need: from tractors and generators to solar collectors, wind and water turbines and internet access to improve the lives of their own rural peoples.
Perhaps Round Three will be a win-win for OPEC, the USA and the world.
HAZEL HENDERSON, author, futurist and consultant on sustainable development. Her latest book is Beyond Globalization: Shaping a Sustainable Global Economy. www.hazelhenderson.com