Putin’s pawns and the price of gas in Southwest Florida

Cars line up to get gas in South Fort Myers, Fla., following the ban on Russian oil. (Image: NBC2)

March 11, 2021 by David Silverberg

There’s nothing quite like an outside threat to bring Americans together. After Dec. 7, 1941 or Sept. 11, 2001, Americans rallied to the country’s defense and dropped their domestic differences.

The United States is not in a shooting war with Russia right now but it is certainly in a conflict. Only this time, there’s no give in partisanship and Republicans are maneuvering to take advantage of the situation with an eye to the November midterm elections—especially in Southwest Florida.

With its embargo on purchases of Russian oil the United States is turning to Venezuela as a potential supplier, easing its decades-long tensions with the South American country and its opposition to its president, Nicolas Maduro.

This has created howls of protest from Florida Republicans, who sense an opening to expand their appeal to Florida’s Hispanic community, especially Venezuelan-Americans.

Their efforts can particularly be seen in the actions and statements of two Southwest Florida congressmen: Reps. Mario Diaz-Balart (R-25-Fla.) and Byron Donalds (R-19-Fla.).

While dealing with two dictators at the same time is certainly not a comfortable position for a democracy, at the same time their partisan attacks on the administration display some glaring inconsistencies.

The Doral gambit

Rep. Mario Diaz-Balart and Rep. Byron Donalds

Maintaining an anti-Maduro drumbeat is especially important for Diaz-Balart whose district includes the city of Doral, whose population of nearly 76,000 is as much as 28 percent Venezuelan-American, many of them exiles and refugees from Venezuela’s socialist regime.  

This week, Diaz-Balart was early and adamant in his denunciations of a US rapprochement with Venezuela.

His most articulated and detailed attack came Wednesday, March 9 in a Miami Herald op-ed titled “Biden would be wrong to support the tyrant in Venezuela to fight the tyrant in Russia.”

“If the Biden administration agrees to weaken sanctions against the murderous and anti-American Maduro dictatorship, it would shamelessly betray the Venezuelan people and the cause of freedom, as well as the national security interests of the United States,” he wrote. “Instead, the United States must pursue a policy that puts American values first, rather than trading one type of blood oil for another.”

Noting the energy ties between the West and Russia, Diaz-Balart argued: “We must pursue a policy of ironclad sanctions that prioritizes U.S. national security interests, human rights and freedom, rather than securing a bad deal with a different devil.”

The same day Diaz-Balart and Donalds sent a letter to President Joe Biden and Energy Secretary Jennifer Granholm expressing their concerns about opening up relations with Maduro. They were joined by three other members: Carlos Gimenez (R-26-Fla.), Daniel Webster (R-11-Fla.) and Scott Franklin (R-15-Fla.). (Interestingly, Southwest Florida’s other member of Congress, Rep. Greg Steube (R-17-Fla.), who does not have a significant Hispanic constituency in his district, was not included.)

Clearly intended for constituent consumption rather than any genuine policy impact, the letter was predictably accusatory and insulting.

“Since taking office, your administration has engaged in a relentless crusade against America’s energy infrastructure, killing jobs and making us more reliant on adversaries such as the Iranians, Russians, and yes, the evil Maduro regime,” it alleged. “We are concerned that your administration supports Maduro over Midland, the Kremlin over Colorado, and the Ayatollah over the Arctic National Wildlife Refuge (ANWR).”

The letter calls the reaching out to Venezuela “a slap in the face to the half a million Venezuelans that call America home who fled his vicious and failed socialist nation” and calls the gas crunch a “mounting Green New Deal policy induced energy crisis at home.” Lastly it urges “complete reversal of your harmful energy and foreign affairs policies.”

Just days prior, Donalds had been demanding a cutoff of Russian oil imports: “This is a no-brainer BAN RUSSIAN IMPORTS NOW!” he tweeted on March 7.

Analysis: Inconsistency, illogic and insecurity

In their attacks Diaz-Balart and Donalds are simply following a larger Republican playbook that is just designed to score points against the Biden administration rather than seriously shape policy.

This strategy was exposed and neatly summarized by Washington Post columnist Dana Milbank in a column titled: “Biden heeded Republicans’ pleas to ban Russian oil. Then they pounced.”

“For days, Republicans called for a ban on imports of Russian oil, a move that, while the right thing to do to counter Putin’s attack against Ukraine, would cause already high gas prices to rise even further,” wrote Milbank. “Biden did as Republicans wanted — and they responded by blaming his energy policies for spiking gas prices.”

He continued: “It’s not only that the charge is bogus — the current price of gas has virtually nothing to do with Biden’s energy policies — but that the Republican officials leveling it are sowing division at home and giving a rhetorical boost to the enemy at a perilous moment when national unity and sacrifice will be needed to prevail against Russia.”

Milbank didn’t focus on Diaz-Balart or Donalds but their particular attacks on the outreach to Venezuela after demanding a Russian oil cutoff while still lambasting the president for high oil prices, is in keeping with the overall Republican flight from logic. Milbank called it “a gusher of mendacity.”

“Blaming Biden for the spike in prices around Russia’s Ukraine invasion isn’t just false — it’s an assist to Putin that damages national security,” Milbank pointed out.

It’s also interesting to note that the stridency of Diaz-Balart’s and Donalds’ criticism of Biden seems to be in direct proportion to their lack of criticism of Putin and the invasion of Ukraine.

None of this should be surprising. After all, all Republican politicians including Diaz-Balart and Donalds are just pursuing short term electoral advantage rather than responsibly trying to help the country navigate between the shoals of plague, war and now a fuel famine. Still, at a time when Americans should be pulling together to face a common, unmistakable threat, their inconsistency and illogic is disheartening at the least. At worst it’s unpatriotic and gives aid and comfort to the enemy.

Or, as Milbank put it: “Fighting Russian aggression while avoiding World War III is hard enough. With Republicans acting in bad faith, it’s that much harder.”

Liberty lives in light

© 2022 by David Silverberg

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Venezuelan oil sanctions may impact gas prices in Southwest Florida

01-29-19 mnuchin at wh on venezuelaTreasury Secretary Steven Mnuchin explains sanctions against Venezuela at a White House briefing, Jan. 28, 2019.

Jan. 29, 2019 by David Silverberg

New sanctions imposed on Venezuelan exports of crude oil could raise oil prices in Southwest Florida and throughout the United States—although it may take time before that impact is felt at the pump.

On Monday, Jan. 28, at a White House press briefing, US sanctions were announced against Venezuela’s state oil company, PDVSA (Petroleos de Venezuela, SA), by National Security Advisor Ambassador John Bolton, Secretary of the Treasury Steven Mnuchin, and Director of the National Economic Council Larry Kudlow.

PDVSA owns the CITGO oil company, which is the main supplier of gasoline products to the 7-Eleven convenience store chain.

“PDVSA has long been a vehicle for embezzlement, for corruption for Venezuelan officials and businessmen.  Today’s designation of PDVSA will help prevent further diversion of Venezuela’s assets by [Nicolas] Maduro, and will preserve these assets for the people of Venezuela where they belong,” stated Mnuchin.

Mnuchin was at pains to assure the public that the sanctions will not raise prices at the pump.

“…There’s been a big reduction in the overall price of oil and particularly since we instituted the Iran sanctions.  I think you know we’ve been very careful in making sure that these costs don’t impact the American consumer,” said Mnuchin. “Gas prices are almost as low as they’ve been in a very long period of time.  These refineries impact a specific part of the country.  And I think, as you’ve said, we’re very comfortable that they have enough supply that we don’t expect any big impact in the short term.”

The “specific part of the country” Mnuchin mentioned is the Gulf coast of the United States. However, the main impact there is likely to be felt by refineries on the Gulf coast of Louisiana and Texas, which will have to replace Venezuelan heavy crude oil with oil from other, more expensive sources like the Middle East.

“Citgo assets in the United States will be able to continue to operate, provided that any funds that would otherwise go to PDVSA instead will go into a blocked account in the United States,” stated Mnuchin.

“Now, I’ve been in touch with many of the refineries.  There is a significant amount of oil that’s at sea that’s already been paid for.  That oil will continue to come to the United States.  If the people in Venezuela want to continue to sell us oil, as long as that money goes into blocked accounts, we’ll continue to take it.  Otherwise, we will not be buying it.

“And again, we have issued general licenses so the refineries in the United States can continue to operate.  So I expect, in the short term, very modest impacts on the US refineries.  We’ve been working with them closely on these issues.”

US oil imports from Venezuela have been declining in recent years and currently account for only about 5.7 percent of US oil imports.

01-29-19 us oil imports from venezuela

US imports from Venezuela since 1993. (Source: US Energy Information Administration)

Background

The United States has recognized Juan Guaido, an opposition leader who assumed leadership of the National Assembly and swore himself into office, as the legitimate president of Venezuela following an election that the United States charges was fraudulent and rigged to elect Maduro. Russia and China are backing Maduro; European nations are joining the United States in recognizing Guaido.

Analysis

As with most battles of this sort, the impacts will depend on the length of the struggle. The Trump administration is trying to minimize the effect on consumers at the pump, as Mnuchin pointed out. In the short term, it’s likely to succeed in this, since the US is not heavily dependent on Venezuelan oil.

However, the longer the fight with Maduro continues the more likely some consumer impact will be felt. Should the fight escalate and possibly include military action, the likelier the effects on all oil and gas sales and the higher the possibility of impacts on the economy, already weakened by Trump’s government shutdown.

Southwest Florida will feel these impacts, like the rest of the country.

For more information on the political crisis see: How Venezuela got here: a timeline of the political crisis (Bloomberg)

For an extensive explanation of the US-Venezuelan oil relationship and the impact of the sanctions see: AP Explains: What a Venezuelan oil embargo could mean for US (Washington Post)

For a transcript of the White House press briefing see: Press Briefing by Press Secretary Sarah Sanders (White House)

For the video of the press briefing see: White House Daily Briefing (C-SPAN)

Liberty lives in light