Chevron to Pump Oil in Venezuela: Diverse Energy and Economy?

Energy is an important thing and ensuring that we have energy reduces the risk of economic pitfalls and downturns in a way that impact kitchen tables. With some recent changes in the oil market that include Saudi Arabia and Russia production restrictions the U.S. could be exploring other options. 

Finding other sources of oil is important, tapping our own oil is important, and pushing green development is important. We should ensure we have adequate supply through this transition but find the point where green becomes the preferred industry choice because of its overall higher benefits (The best way is to do that through market innovation and the natural development of the green industry. There is some industry push to green now.) 

 

At the end of the day opening of Venezuela's oil market means we may consider seeking benefit from that market and trying to limit the influence other nations that have had a free hand in that market for too long (i.e. Iran and Russia). Putting our toes into multiple oil markets can help in creating greater influence over world oil supplies.

I'm a believer in general with connecting countries for influence and mutual benefit. However, every country should have a solid record on human rights because society is in general an extension of that need (i.e. meaning without a benefit to life society becomes sickly, weaker, and often have internal turmoil.).  Preference is important but we should always look at our energy security as part of the equation.

Venezuela has received some criticism in the past for human rights and willing engagement with U.S. adversaries so there are rules that will be associated with the License 41 (You can read about the Department of State's relationship with Venezuela). 

In general, I think the more we can make the U.S. energy independent and an energy exporter the better we will be in the long run. I might consider pushing green energy but balancing that with traditional methods that are currently more cost effective and stable. Connecting with Venezuela could be helpful but the goal should be to be energy independent in the long run (cleaner the better).

The key is to get to the tipping point where investment moves more into green and limit the harmful impacts on society but maintain the capacity to use other sources (It will happen soon and it will be somewhat of a natural transition. Having a consistent supply of energy through plug and pay electrical grid could help create a more stable economy. See a study on Oil Shocks and Economic Crisis. 

Diversifying our sources limits the impact of shock and creates more consistency if supply and input can be adjusted to meet availability and cost. Think about it. One source gets restricted and we have excess capacity in other sources to fill the gap in a way that reduces demand for those who are doing the restriction as a tool. The more they play, the more they damage themselves.)

The Treasury Department’s Office of Foreign Assets Control provided License 41 to, “resume limited natural resource extraction operations in Venezuela."

A pretty good article on by Forbes on Biden Administration Allows Chevron To Pump Oil In Venezuela—Here’s Why It’s So Controversial

You can read the Treasury Departments Press release Treasury Issues Venezuela General License 41 Upon Resumption of Mexico City Talks

Interesting reading at the Office of Foreign Asset Control Venezuela Sanctions Regulations31 CFR part 591