Upping the oily ante

Oliver North
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Posted: Mar 18, 2005 12:00 AM

 WASHINGTON, D.C. -- Last week, Iran's "mullah-President" Mohammad Khatami visited Caracas to ink some deals with Venezuela's socialist-President Hugo Chavez. At the event, billed as an effort to "counterbalance U.S. global hegemony," both anti-American leaders demeaned U.S. overtures aimed at dissuading Tehran from building nuclear weapons. "Iran has every right in the world, as do other countries, to develop its own atomic energy," Chavez said.
 
Spokesmen in Tehran have said the United States is "hallucinating" about any possibility that the Iranian Islamic Republic will scrap its nuclear program in exchange for "funny and disrespectful" economic incentives. "The U.S. should apologize to Iran for making this proposal," said Iran's Intelligence Minister Ali Yunesi. He went on to call U.S. Secretary of State Condoleezza Rice a "queen of war and violence."

 Tough talk, sounding like a "Havana harangue" -- the kind of shrill blather we've come to expect of Fidel Castro in his dotage. But this isn't just the roar of a toothless tiger. Khatami and Chavez are putting their money where their mouths are. With oil prices at near record levels, Iran and Venezuela -- two of the world's top five oil producers -- are rolling in petro-dollars. And they are using their newfound wealth to finance much more than words.

 Iran's oil wealth is buying Russian nuclear technology, material and the know-how to build the kind of bomb for which Pakistan's A.Q. Khan provided the blueprints. Petro-dollars are also paying for Russian, Chinese and North Korean help in building an Iranian long-range ballistic missile -- one that not only reaches Israel, but Western Europe, as well. When the Israelis suggested that they might unilaterally stop the Iranian nuclear threat, as they did with Iraq in 1981, Tehran responded with economic blackmail: Any attack would result in mining the Hormuz Straits, through which 40 percent of the world's oil is transported.

 Hugo Chavez, his pockets bulging with American petro-dollars, has gone on a spending spree of his own -- but not to benefit his country's poor. With $5 billion in annual profits from the now nationalized Venezuelan oil industry, Comrade Chavez is buying 100,000 AK-47s, 50 advanced MiG-29 fighters, new naval combatants and a fleet of lethal helicopter gunships. He's financing and outfitting a new "Bolivarian Army" to "contend with the forces of imperialism" and is paying to build an "al Jazeera-type" radio network to provide "the truth about American hegemonistic designs" in Latin America.

 Like the Iranians, the self-styled revolutionary Chavez is using oil revenues to purchase more than just foreign weapons. He's also buying friends and influence beyond his own borders. Fidel Castro is tickled commie-pink over a sweetheart deal he has for acquiring 53,000 barrels of Venezuelan sweet crude every day and over $800 million in unpaid debt -- all in exchange for sending teachers, doctors -- and military advisors -- to Caracas. And he's not the only "Latin leader" benefiting from the Chavez largesse. According to sources in Managua, "Hugo Chavez is the principal financier" for die-hard Sandinista Daniel Ortega, who hopes to become the "come-back communist" in Nicaragua's 2006 elections.

 Thus far, Washington's response to these Khatami-Chavez oil-funded provocations has been purely rhetorical. This week, President Bush reiterated his support for the failed European diplomatic initiative aimed at dissuading Iran from nuclear enrichment programs. At the same time, the administration announced plans to "contain" Venezuela's aggressive anti-American agenda -- yet did nothing to deter the delivery of the advanced military hardware being acquired by the Chavez regime.

 In little-noticed testimony before the Senate Armed Services Committee this week, Gen. Bantz Craddock, the commander in chief of the U.S. Southern Command, said that he is "concerned because we don't know the intent" of the Chavez military build-up.

 Roger Pardo-Maurer, deputy assistant secretary of defense for western hemisphere affairs, has said that Chavez is "using his oil money and influence to introduce his conflictive style into the politics of other countries," and went on to call it "subversion."

 Yet, no one in the White House, State Department or Pentagon has the temerity to say in any communique that what Chavez and Khatami are doing is "unacceptable." That word is apparently being saved for some future statement: "If (insert name here) does (insert act here), that would be unacceptable."

 Why the muted response? Because of oil. The slowly recovering U.S. and global economy depends on the slippery black substance. Even the OPEC ministers meeting this week in Isfahan, Iran -- of all places -- recognize that the price per barrel of increasingly scarce crude is very close to squelching the year-old upturn.

 Worse yet, everyone knows that the Iranian threat to close the Straits of Hormuz, and Chavez' repeated warnings that he could cut off U.S. supplies of Venezuelan oil -- 15 percent of all we consume -- is real.

 The common thread here is U.S. dependence on foreign oil. Sixty percent of all we use is imported. This week's narrow 51-to-49 victory in the U.S. Senate for opening a tiny portion of the Arctic National Wildlife Refuge (ANWR) for drilling is part of the long-term solution. So, too, are the increased efforts to develop fuel cell alternatives to petroleum power. But both of these responses to the present problem leave us vulnerable in the short term to the aberrant behavior of two wealthy, hostile regimes -- now building an "Axis of Instability" and upping the oil ante just hours south of our borders.

 Fueling the fires of freedom in the Middle East and Southwest Asia is important, but so is protecting democracy and free enterprise in our own hemisphere. It's time for the administration to pay closer attention to what's happening close to home. Otherwise, we'll all be paying the price at the pump.