Thousands of kilometers away from the Americas, the Russian invasion of Ukraine has made the geopolitical importance of fossil fuels as clear as ever. Reliant on the aggressor for large shares of their oil imports, many states within the European Union are set to face a heavy economic cost for their decision to sanction Russia. However much we should hope for decarbonization in the next few decades, no region in the world is currently exempt from the geopolitics of fossil fuels. While Latin America hasn’t been as substantially impacted by Russia’s invasion of Ukraine, it has other significant fossil fuel-driven geopolitical battles.
The idea of a consistently exploitative U.S. policy focused on extracting wealth from its Southern neighbors has long captured the imagination of those who have studied the region. In 1971, Uruguayan journalist Eduardo Galeano wrote of the “organized sacking” of Venezuela’s oil wealth as the “primary instrument for her political servitude and social degradation,” a twentieth-century history of “feats, curses, infamies, and challenges.” During these allegedly catastrophic years from 1900 to 1971, before Venezuela asserted control over its oil resources, its per-capita income grew almost four times as quickly as that of the United States, while from 1971 to 2018, it shrunk by about a third, recently sinking the country into an unprecedented social, economic, and humanitarian crisis. While there may have been some clearer cases of U.S. multinationals harmfully exploiting Latin American states — most notably in Central America — defining the region’s geopolitics in terms of an American empire is limited at best and outright erroneous at worst. A closer look at the geopolitics of Latin American fossil fuels shows how some states in the region can independently exploit others, not by the might of their weapons or economic influence, but through ideological subversion.
Since his rise to power, Cuban dictator Fidel Castro had coveted Venezuelan oil. In 1959, he lobbied to acquire it through a preferential loan from the government of Rómulo Betancourt, the first social-democratic president of a recently democratized Venezuela. Understanding that his first duty was to the economic interests of his country, Betancourt suggested that Cuba buy Venezuelan oil on the open market, paying the same price as every other country on Earth. Castro’s response was to fund communist revolutionaries and otherwise destabilize the Venezuelan state. His efforts took decades to pay off, but in 1998, with the election of Hugo Chávez, Castro had finally secured an ideological ally in Caracas.
What ensued in the early 2000s was dubbed a “workers-for-oil” deal, whereby Cuba exchanged about 100,000 daily barrels of steeply discounted Venezuelan oil for Cuban doctors and intelligence personnel. While the Chávez government claimed that these doctors allowed for unprecedented healthcare coverage in Venezuela’s poorest areas, the President of the Venezuelan Medical Council declared in 2008 that many of them were insufficiently certified, practicing “medicine illegally” and lacking sufficient knowledge of “the tropical diseases of Venezuela” to be of any use to large swathes of the population. Indeed, the arrival of the Cuban doctors likely even decreased the medical expertise available to Venezuelans. Their preferential treatment made many Venezuelan doctors feel like “second-class doctors in their own country,” prompting about 45% of residents and specialists to leave the country between 2005 and 2008 alone. For the first time since at least 1950, Venezuela’s life expectancy lagged behind that of Latin America starting in 2005, and by 2019, no influx of Cuban doctors could prevent it from falling over three years short of the regional average. The Cuban intelligence personnel, on the other hand, served its purpose very effectively — to rid the Venezuelan military of any opposition to the country’s increasingly authoritarian regime. To this day, the Venezuelan people have not been compensated for the oil their rulers funneled into Cuba, but have instead been deprived of their democracy and the services of their healthcare professionals. Galeano’s harsh words against the “curses” and “infamies” of economic imperialism could hardly be more fitting to the actions of the Cuban government.
A concerningly similar pattern is beginning to take root in Mexico and Colombia, two democracies and traditional U.S. allies whose current presidents are politically aligned with Venezuelan dictator Nicolás Maduro. In Mexico, President Andrés Manuel López Obrador (AMLO) has insisted since he rose to power in 2018 that the Mexican national oil company, PEMEX, should shut down all oil exports and focus on refining oil for internal consumption. This is despite well-documented evidence that such a move would increase Mexico’s budget deficit, significantly decrease the profitability of PEMEX at the expense of Mexican taxpayers, and render Mexico a net oil importer in the long run, leaving its economy vulnerable to oil price increases. This is especially striking considering that Mexico’s oil exports currently account for just under 6% of all exports — its economy is far from oil-dependent, but halting oil exports would deal a significant blow to Mexican trade nonetheless. While AMLO’s policy shift has been publicly justified in terms of securing Mexican independence from energy markets, it seemingly achieves just the opposite and offers little advantage to the country’s economy. What such a policy would achieve is the elimination of a significant Latin American competitor to Venezuela’s troubled oil export industry, and the creation of an enormous market for Venezuelan crude.
Colombia’s Gustavo Petro has offered an even greater concession to Venezuelan fossil fuel interests, and has done so much more overtly. Shortly after her appointment, Petro’s Minister of Energy and Mining announced the government’s intention to sign no further natural gas exploration contracts in Colombia. She justified the decision on environmental grounds, stressing the need for the country to decarbonize fully in order to fight climate change. Yet, when pressed on the near-impossibility for Colombia to find eco-friendly alternatives to all of its existing natural gas demands before its reserves ran out, she conceded that the solution would be to import gas from Venezuela.
Like AMLO’s argument from energy self-sufficiency, Petro’s environmentalist case falls short in key respects. Colombia’s pre-existing economic model, whereby fossil fuel exports are used to secure energy independence and fund ambitious green infrastructure projects, has made it one of the most carbon-efficient economies on Earth. Its ratio of carbon dioxide emissions to GDP, a measure of economic carbon intensity, is about 0.1kg per dollar — about half of the Latin American average and a third of the global average. Among 38 OECD member states, only seven countries are more carbon–efficient than Colombia. In other words, if the whole world could maintain its standard of living while being as carbon-efficient as Colombia, global carbon dioxide emissions would drop to levels unseen since the early 1970s.
One could argue that no country should rest on its laurels, and that additional efforts to fight climate change should be welcome even in low-emission countries. However, these efforts need to be balanced against a consideration for those who now depend on natural gas, and if Colombia ran out of gas reserves, imports from Venezuela are estimated to cost the final user as much as three times what they are currently paying. If Petro thought such a tradeoff were justified to fight climate change, he could achieve it just as easily by charging a 200% tax on all natural gas sales in Colombia. Such a tax would undoubtedly be onerous and regressive, and likely cause particularly vulnerable Colombians to return to even dirtier forms of energy for their heating and cooking, such as wood or charcoal, but it would at least have the benefit of generating revenue for the Colombian government to be reinvested in decarbonization efforts. Depending on Venezuelan gas comes with all of the disadvantages of this hypothetical tax, while also funneling resources to an authoritarian state running an economy about four times more carbon intensive than Colombia’s.
The cases of Mexico and Colombia are in many ways incomparable to the oil-for-workers scheme of the early 2000s between Cuba and Venezuela. Rather than prop up a foreign ally with abundant fossil fuel supplies, AMLO and Petro aspire to undermine their own supplies in order to benefit an allied supplier. Neither president has so far signed a formal trade or intelligence cooperation agreement with Venezuela linked to these economic policies, of the sort that Chávez’s Venezuela signed with Castro’s Cuba. Yet, just as Cuba took advantage of its ideological affinities with Chávez to subjugate the economy of a far larger state, an impoverished Venezuela is poised to seize commodity rents from Latin America’s second and fourth largest economies through the ideological capture of their executive branches. Colombia and Mexico still have the time and resources to spare themselves from that fate. In 2020, Mexico’s oil reserves still exceeded over six billion barrels, while Colombia’s gas reserves, without accounting for ongoing exploration contracts, will last the country at least another seven years. If they can hold their leadership accountable or vote them out for more sensible alternatives, they may well avoid the crisis now facing so many European countries — needlessly dependent on a foreign autocrat to fulfill the energy needs of their populations.