As Big Oil Eyes Venezuela, Congress Must Ensure No U.S. Taxpayer Giveaways for Industry
New report calls on lawmakers to ensure American taxpayers—or the proceeds from plundered Venezuelan oil—will not be used to back risky investment in Venezuelan oil fields
WASHINGTON — In the fallout of President Trump’s extraordinary rendition of the president of Venezuela, the administration’s obsession with developing the uneconomic oil resources in the country raises the likelihood of massive U.S. taxpayer subsidies and financial guarantees to Big Oil, according to a new report from Public Citizen.
The report, Congress Must Stop Trump’s Venezuelan Oil Takeover, highlights ways Congress can conduct much-needed oversight over potential conflicts of interest and corporate favors stemming from Trump’s Venezuelan oil grab.
While Trump claims he will rely on U.S. companies to exploit Venezuela’s oil resources for years to come, due to decrepit Venezuelan infrastructure, the low quality of Venezuelan crude, and political instability, most Big Oil corporations are hesitant to invest without a guarantee of profits. Trump’s solution appears to be U.S. taxpayer subsidies and guarantees for Big Oil.
The report identifies key vehicles, including the U.S. International Development Finance Corp and the Export-Import Bank, poised to subsidize Big Oil.
The report also spotlights international oil majors who may be in line for payouts in longstanding litigation against the Venezuelan government and highlights Gulf Coast refineries, including Valero Energy, Phillips 66, and Marathon Petroleum as potential beneficiaries. These refiners already import Venezuelan heavy and dirty crude and would likely be in a position to import and refine more.
“Handing over Venezuela’s oil industry to Big Oil will do nothing to lower prices at the gas pump, but will burden American taxpayers with billions in new subsidies for oil executives,” said Tyson Slocum, director of Public Citizen’s Energy Program. “Rebuilding Venezuela’s battered oil industry in the long term will require a massive influx of capital. The fossil fuel industry is unwilling to take on this risk without some sort of taxpayer-backed guarantee. ”
The report calls on Congress to stop any federal government guarantee to Big Oil that would force American taxpayers—or use the proceeds from purloined Venezuelan oil—to cover all or some of the risk of investment in Venezuela. Further, lawmakers must prevent the Trump administration from using federal programs like the Development Finance Corporation (DFC) to provide risk insurance and other subsidies for Big Oil.
Public Citizen’s report comes ahead of a Friday White House meeting between the president and representatives of major fossil fuel companies, including leaders from Chevron, ConocoPhillips, and Exxon Mobil, according to the Wall Street Journal.
“The Trump administration’s shocking actions to use force to exploit Venezuela’s oil resources echo the imperial arrogance of the United States after the invasion of Iraq and a century of military intervention in Central and South America,” said Robert Weissman, co-president of Public Citizen. “But at no time in post World War II history has the United States ever so blatantly claimed a right to control other countries’ natural resources or to use military force to obtain them. Along with blocking further military action against Venezuela, Congress must act to ensure U.S. taxpayers don’t subsidize Big Oil’s exploitation of Venezuela’s oil resources.”
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