Venezuelan Oil Neg

A2: Oil Advantage

UQ Level

Production Up

Venezuelan production is increasing now—new investment plan

Nelson 2013(George, Argentina Independent Staff, May 3, "Venezuela: Oil and Natural Gas Production Set To Increase", http://www.argentinaindependent.com/currentaffairs/newsfromlatinamerica/venezuela-oil-and-natural-gas-production-set-to-increase/)

Venezuela is set to increase oil production capacity by 2014, according to the government. The world’s largest crude oil reserves are found in the country, estimated at around 297,700million barrels.The Venezuelan minister of petroleum and mining, Rafael Ramírez, said that US $25 billion is to be invested in the oil sector in a bid to increase mining and production capacity .“Our goal is to produce four million barrels per day ,” said Ramirez during a meeting with the National Oil Chamber, in the Sucre State, in the northeast of the country.The country is currently producing three million barrels a day , although present capacity stands at a potential 3.7 million barrels per day.“In the early 1980’s Venezuela was producing 1,600,000 barrels of oil a day, this is nothing compared to what we can do today,” said the minister while also stating the government’s plan to increase natural gas production.Increasing production to six million barrels per day for 2019 is an objective that “requires a comprehensive investment plan”, according to Ramirez. “We will do in seven years what has been done in the last 60 with regards to oil production in Venezuela.”¶

Venezuela is increasing production now

Orozco 2013(Jose, Bloomberg Staff, May 27, "Chevron Lends Venezuelan Oil Venture $2 Billion for Output Boost", http://www.bloomberg.com/news/2013-05-27/chevron-lends-venezuelan-oil-venture-2-billion-for-output-boost.html)

Petroleos de Venezuela SA, the country’s state-owned oil producer, signed a $2 billion financing agreement with San Ramon, California-based Chevron Corp. (CVX) to increase output at their Petroboscan oil joint venture. The loan’s interest rate is the London Interbank Offered Rate plus 4.5 percentage points, Oil Minister Rafael Ramirez told reporters in Caracas today. The money will be handled directly by Petroboscan and will help boost daily output to 127,000 barrels from 107,000 barrels, he said. “The loan has a very low rate because it’s a corporate loan from Chevron to its joint venture and is tied to increased production,” said Ramirez, who signed the credit along with Ali Moshiri, Chevron’s head of Latin America, Middle East and Africa. “That way we obligate ourselves and our partner to focus on increasing production.” Venezuela, which channels oil earnings into social programs and regional fuel subsidies, is seeking financing from foreign partners to tap more of the world’s largest oil reserves. The state-owned producer reached an agreement with China on terms of a $4 billion loan on May 15 for the Sinovensa joint venture

with China National Petroleum Corp. Ramirez said today he’ll sign the financing agreement in Beijing this week. The minister said May 3 that PDVSA would invest $15.4 billion in exploration and production this year and that its partners must meet production targets or risk having projects disbanded . Ramirez said last month that PDVSA would ask its partners to finance at least $8 billion of a $25 billion investment program.

Venezuela is ramping up production

PVE 2013(Press-Venezeuelan Embassy to the US, June 14, "Venezuela to Increase Oil Production to 3.25 m BPD in 2013", http://venezuela-us.org/2013/06/14/venezuela-to-increase-oil-production-to-3-25m-bpd-in-2013/)

Venezuelan Oil and Mining Minister Rafael Ramirez said Thursday that according to projections, the production capacity of Petróleos de Venezuela (PDVSA) will reach 3.25 million barrels per day by late 2013.In statements to the media, he said that this is an increase of 250,000 barrels over the previous year, and is thanks to new developments in the Orinoco Oil Belt, the site of the world’s largest certified oil reserves.Ramirez referred to efforts that are under way to increase oil output levels.“1,000 wells are being drilled annually , with 200 drills, hundreds of miles of pipeline are being installed to build in this period of government [2013-2019] a capability that will double the current one ,” he said, to reach 6 million barrels per day in 2019.“We are focused on meeting our goals because it is a stage of volumetric expansion of the production capacity, which is in compliance with the timelines stipulated for the [Orinoco Oil] Belt,” he said. Ramirez said that the government has implemented efforts in recent weeks to meet the projected goals for oil extraction and has signed cooperation agreements with strategic partners and secured financing .

Investment Now

Multiple groups are investing—solves the aff

Iwata 2013(Mari, Wall Street Journal Staff, June 6, "Venezuela Secures $4 Billion Funding From China", http://online.wsj.com/article/SB10001424127887324798904578528922435217366.html)

Venezuela has secured $4 billion in funds from China to be used for oil field development , Oil Minister Rafael Ramirez said Thursday. The minister didn't give details of the new funding from China, which will add to at least $35 billion of credit Beijing has provided to Venezuela, mostly in return for future oil deliveries. The South American country's state energy company Petroleos de Venezuela SA, or PDVSA, said Wednesday that Venezuela was negotiating a $4 billion credit line from Export-Import Bank of China. Mr. Ramirez was speaking in Tokyo following a trip to Beijing for talks with Exim Bank President Li Ruogu and other officials. Venezuela has also secured a number of financing agreements with its partners, ranging from Russia's Rosneft to U.S. oil major Chevron Corp., CVX +0.25% during the past few weeks as it looks for funding for its plans to rapidly boost oil production . The new Chinese funds add to a separate $4 billion loan that PDVSA will receive from the Chinese government to boost oil production at Petrolera Sinovensa, a joint venture in Venezuela's between PDVSA and China National Petroleum Corp. in Venezuela's rich Orinoco heavy oil belt. "We plan to increase output to four million barrels a day by 2014 and six million barrels a day by 2016 . Only Asia can absorb these increases," Mr. Ramirez told reporters.

China is investing now—solves investment

Qian 2013(Zhao, Global Times Staff, March 13, "After Chavez, Sino-Venezuelan cooperation will not stop", http://english.peopledaily.com.cn/90778/8164901.html)

Chinese experts have offered reassurance over the outlook for investment in Venezuela . "Chavez's chosen successor Nicolas Maduro is favored to win, and the previous policies are expected to be maintained during the new president's term of office," Wu Changsheng, director of the Latin American Research Center at the China Foundation for International Studies, told the Global Times Thursday. Wu said that even if Venezuelan opposition leader Henrique Capriles should come to power, cooperation between China and Venezuela would still continue , as it is a win-win solution for both countries. China's imports of crude oil from Venezuela reached an average of 460,000 barrels per day in December last year, accounting for 8.3 percent of China's total imports, the China National Petroleum Corporation (CNPC) said in a statement. In the same statement, Venezuela's Oil Minister Rafael Ramirez was quoted as saying that exports from Venezuela to China will rise to 1 million barrels per day by 2015. China's average daily oil imports reached 6.12 million barrels by the end of last year, according to the General Administration of Customs. Venezuela has also benefited from China's investment. Venezuela's

Congress voted in May last year to double the amount the government can borrow from China under a deal that lets the nation pay off Chinese loans with oil . A deal was signed in 2008 to let Venezuela borrow as much as $4 billion from the China Development Bank at any given time, but the vote in May doubled that to $8 billion, Reuters reported.

Link Level

Long Timeframe for Production

Increasing production will take a long time—Venezuela doesn’t want to shift

Gonzalez and Vyas 2013(Angel and Kejal, Wall Street Journal Staff, March 6, "Revival of Venezuela's Oil Sector on Stand-By", http://online.wsj.com/article/SB10001424127887324128504578344612480601482.html)

Venezuela's battered oil industry bore the burden of Hugo Chávez's socialist dream . Now the charismatic leader's death gives his successors the opportunity to unlock its potential, but few in the oil industry expect an immediate renaissance . Under Mr. Chávez's rule, a huge oil-sector strike, the firing of thousands of top engineers, poor maintenance, frequent refinery accidents and the diversion of oil revenue into social programs and subsidies to foreign allies crippled Petróleos de Venezuela SA, the national oil company . Despite arguably having the world's largest oil reserves, Venezuela's oil output fell by nearly a third to about 2.5 million barrels—about a quarter of Saudi Arabia's output—a day since Mr. Chávez took over 14 years ago, according to the U.S. Energy Information Administration. PDVSA, as the oil company is known, maintains it produces closer to three million barrels a day.A toughening stance on foreign companies through Chávez's presidency also pushed Exxon Mobil Corp. XOM +0.46% and ConocoPhillips COP +0.26% out of the country in 2007 and prompted other oil firms that remained to invest little.But the country's oil policy is unlikely to change in the short term, Venezuelan officials and analysts say, as Mr. Chávez's likely successors from the ruling United Socialist Party of Venezuela are expected to build their political power base on the so-called Bolivarian Revolution that widened government intervention across most economic sectors."The oil is for the people, this is a principle that is fixed into our national consciousness," Rafael Ramírez, the country's oil minister, said Tuesday night on state TV after the government announced Mr. Chávez´s death.Mr. Ramírez added that PDVSA would keep sailing the course set by Mr. Chávez, maintaining its focus on social programs and a firm grip on the nation's vast oil reserves.

The infrastructure is too far behind for an immediate rebound—it takes years to solve

Flannelly 2013(Michael, Dividend.com, March 6, " Venezuelan Oil Production in the Post-Chavez World (CVX, XOM, COP, more)", http://www.dividend.com/news/2013/venezuelan-oil-production-in-the-post-chavez-world-cvx-xom-cop-more/)

Throughout Hugo Chavez’s 14 year reign as President of Venezuela, he was committed to nationalizing oil production in order to aid in funding a variety of social programs aimed at helping the poor. In doing so, he eventually limited the amount of oil supplied to the rest of the world (and left a substantial amount of money on the table for Venezuelan coffers). Conversely, the amount of oil expertise flowing in his own country was limited due to his protectionist

policies. Supermajor oil companies like ExxonMobil (XOM) exited the country, furthering reducing the country’s exposure to oil and gas technology . Venezuela’s current oil production infrastructure is pretty dilapidated due to Chavez’s inability (or indifference) to reinvest in the nationalized oil industry, especially with limited technological innovations and expertise. Even if future leaders in the Latin American country were to open up their borders to a variety of multinational oil corporations , it may take awhile for the foreign direct investment to lead to a substantial oil production.

Can’t solve—it will take years for production to return to sustainable levels

Money Morning 2013(March 19, " Oil Companies Hope for New Opportunity in Energy-Rich Venezuela", http://moneymorning.com/2013/03/19/oil-companies-hope-for-new-opportunity-in-energy-rich-venezuela/)

Due to years of not properly investing in its oil industry resources, production steadily declined by about 25% in the 14 years Chavez was in power , and oil exports fell by nearly 50%. In fact, there were various points during the Chavez years that Venezuela was actually a net importer of crude."Venezuela's clout on OPEC and on world oil prices has been greatly diminished because of its inability to exploit its enormous resources," Michael Lynch, president of Strategic Energy and Economic Research, a consultancy, told The New York Times. "In the 1990s, their production was booming and they could thumb their nose at Saudi Arabia and get away with it, but now they have become OPEC's poor cousin."That is to say even with a regime change , which does not appear imminent , it will take years for output there to jump to the point where Venezuela makes a significant contribution to reserves and profits for major oil companies.

Won’t Accept U.S. Investment

Venezuela will choose other investors

Roberts and Daga 2013(James, Research Fellow for Economic Freedom and Growth in the Center for International Trade and Economics at the Heritage Foundation, and Sergio, Visiting Senior Policy Analyst for Economic Freedom in Latin America at The Heritage Foundation, April 15, "Venezuela: U.S. Should Push President Maduro Toward Economic Freedom", http://www.heritage.org/research/reports/2013/04/venezuela-us-should-push-president-maduro-toward-economic-freedom)

An inefficient and non-transparent regulatory environment that is hostile to private foreign direct investment obstructs long-term development and hampers entrepreneurial growth. The investment regime is tightly controlled by the state and favors investors from China, Russia , Iran , and other democracy-challenged countries.[10] Investor protection in Venezuela is ranked at 140 out of 144 countries, according to the WEF report.[11] In 1998, before Chavez took power, there were more than 14,000 private industrial companies in Venezuela; in 2011, after 13 years of extensive nationalizations and expropriations, only about 9,000 remained.[12]

Venezuela won’t accept new investment

Fletcher 2013(Sam, Senior Writer for Oil and Gas Journal, April 29, " MARKET WATCH: Energy prices undermined by economic worries", http://www.ogj.com/articles/2013/04/market-watch--energy-prices-undermined-by-economic-worries.html)

In other news, Raymond James analysts said it is “abundantly clear” the election of the late Venezuelan President Hugo Chavez's handpicked successor ensures that country’s “ hardline , aggressively nationalistic energy policy will continue long after Chavez's death.”They said, “This, of course, will keep a lid on Venezuelan oil production by keeping away foreign investment from companies that are understandably fearful of further violations of property rights. But the effect of ‘chavismo’ is even more widespread than that. Venezuela plays a famously hawkish role within the Organization of Petroleum Exporting Countries in close alliance with Iran.”

Impact Level

A2: Venezuela Causes Oil Shocks

Venezuelan production is too low and unstable to affect the market

Jegarajah 2013(Sri, CNBC Market Reporter, March 5, "Venezuela—The Next Risk for Oil Markets", http://www.cnbc.com/id/100520892)

Meanwhile, a former executive at PDVSA told CNBC that Venezuela has lost its ability to influence global oil markets because years of under investment in the OPEC (Organization of Petroleum Exporting Countries) member's petroleum industry has constrained production."Venezuela is a weak OPEC hawk, as it has no sufficient production to influence prices," said Gustavo Coronel, a founding member of the board of state-oil firm Petroleos de Venezuela. "Venezuela is no longer a factor that can really upset the markets as it was the case 20 years ago." Furthermore, the energy boom in the U.S. has helped cut dependence of Venezuelan net crude and oil products and exports to the U.S. have dropped to levels last seen nearly 30 years ago. "The U.S. would not miss Venezuelan oil very much," Coronel said. "Whatever disruption would be almost entirely psychologically induced." A founding member of the OPEC, Venezuela's total deposits stood at an estimated 296.5 billion barrels at the end of 2011, according to BP's 2012 annual Statistical Review of World Energy. That compared to Saudi Arabia's 265.4 billion barrels. However, Ed Morse, global head of commodities research for Citigroup Global Markets, described the statistic as "irrelevant" because the Latin American producer is struggling to secure enough investment and technical expertise to unlock the resource. "The issue is not what's in the ground and commerciable, rather how quickly it can be put into production and so long as there's no capital flowing into the upstream in Venezuela, especially capital by the companies that have the technology to develop the heavy oil reserve base, the resource levels are going to remain kind of irrelevant," he said last June.

Venezuela doesn’t have the supply to affect oil prices

Krauss 2013(Clifford, NYT Staffwriter, March 8, "Dwindling Production Has Led to Lesser Role for Venezuela as Major Oil Power", http://www.nytimes.com/2013/03/09/world/americas/venezuelas-role-as-oil-power-diminished.html?_r=0)

But Mr. Chávez’s death on Tuesday has had surprisingly little impact on global oil markets , highlighting how Venezuela’s dwindling crude production and exports have undercut its global power in recent years . International oil prices have barely moved since Mr. Chávez died. OPEC has decided to increase shipments to the United States and Europe this month, using oil from Saudi Arabia and other Gulf states. Oil company executives, long frustrated by Mr. Chávez’s nationalizations, are voicing only tepid hopes that they could possibly return in full force to what

was once one of their crown jewels. Venezuela’s annual oil production has declined since Mr. Chávez took office in 1999 by roughly a quarter, and oil exports have dropped by nearly a half, a major economic threat to a country that depends on oil for 95 percent of its exports and 45 percent of its federal budget revenues. “Venezuela’s clout on OPEC and on world oil prices has been greatly diminished because of its inability to exploit its enormous resources ,” said Michael Lynch, president of Strategic Energy and Economic Research, a consultancy. “In the 1990s, their production was booming and they could thumb their nose at Saudi Arabia and get away with it, but now they have become OPEC’s poor cousin.”

A2: Shocks Cause Decline

Shocks don’t affect the economy

Kahn 2011 (Jeremy, independent journalist who writes about international affairs, politics, and business, February 13, “Crude reality”, http://www.boston.com/bostonglobe/ideas/articles/2011/02/13/crude_reality/)

The idea that a sudden spike in oil prices spells economic doom has influenced America’s foreign policy since at least 1973, when Arab states, upset with Western support for Israel during the Yom Kippur War, drastically cut production and halted exports to the United States. The result was a sudden quadrupling in crude prices and a deep global recession. Many Americans still have vivid memories of gas lines stretching for blocks, and of the unemployment, inflation, and general sense of insecurity and panic that followed. Even harder hit were our allies in Europe and Japan, as well as many developing nations. Economists have a term for this disruption: an oil shock. The idea that such oil shocks will inevitably wreak havoc on the US economy has become deeply rooted in the American psyche, and in turn the United States has made ensuring the smooth flow of crude from the Middle East a central tenet of its foreign policy. Oil security is one of the primary reasons America has a long-term military presence in the region. Even aside from the Iraq and Afghan wars, we have equipment and forces positioned in Oman, Saudi Arabia, Kuwait, and Qatar; the US Navy’s Fifth Fleet is permanently stationed in Bahrain. But a growing body of economic research suggests that this conventional view of oil shocks is wrong. The US economy is far less susceptible to interruptions in the oil supply than previously assumed , according to these studies. Scholars examining the recent history of oil disruptions have found the worldwide oil market to be remarkably adaptable and surprisingly quick at compensating for shortfalls . Economists have found that much of the damage once attributed to oil shocks can more persuasively be laid at the feet of bad government policies . The US economy , meanwhile, has become less dependent on Persian Gulf oil and less sensitive to changes in crude prices overall than it was in 1973 .

No oil shocks—empirics

Rasmussen and Roitman 2012(Tobias, senior economist at the IMF, and Agustin, economist at the IMF, February 22, “Oil Shocks Around the World: Are They Really That Bad?,” http://www.theoildrum.com/node/8944)

The message is clear. In more than 80% of the countries, the correlation between oil prices and GDP is positive , and in only two advanced economies – the US and Japan – it is negative . One of the contributing factors to this pattern is that in 90% of the countries, exports tend to move in the same direction as oil prices. Anatomy of oil shock episodes Given that periods of high oil prices have generally coincided with good times for the world economy, especially in recent years , it is

important to disentangle the impact of oil price increases on economic activity during episodes of markedly high oil prices. Following Hamilton (2003), we identify 12 episodes since 1970 in which oil prices have reached three-year highs. The median increase in oil prices in these years was 27%. We study the behaviour of macroeconomic aggregates during these episodes by comparing the median annual change in a particular variable during oil shock years to the median annual change over the entire sample period. This tells us of any unusual observed changes (Figure 2). We find no evidence of a widespread contemporaneous negative effect on economic output across oil-importing countries, but rather value and volume increases in both imports and exports. It is only in the year after the shock that we find a negative impact on output for a small majority of countries. To analyse multiple countries and control for global conditions, we adapt the basic autoregressive model of Hamilton (2003, 2005). Our main interest is in the effect of an oil price shock on the economy of a typical oil-importing country. Taking into account the fact that higher oil prices are generally positively associated with good global conditions, we find that the effect becomes larger and more significant as the ratio of oil imports to GDP increases (Figure 3). To trace out the full impact of an oil shock, we calculate impulse responses for a 25% increase in oil prices (Figure 4). The results indicate that the typical oil importer can expect a cumulative GDP loss of about 0.3% over the first two years, with little subsequent impact . For countries with oil imports of more than 4% of GDP (ie at or above the average for middle- and low-income oil importers), however, the loss increases to about 0.8% – and this loss increases further for those with oil imports above 5% of GDP. In contrast to the oil importers, oil exporters show little impact on GDP in the first two years but then a substantial increase consistent with the positive income effect, with real GDP 0.6% higher three years after the initial shock. Figure 3. To put these numbers in perspective, it is useful to think of an economy where oil accounts for 4% of total expenditure and where aggregate spending is determined entirely by demand. If the quantity of oil consumption remains unchanged, then a 25% increase in the price of oil will cause spending on other items to decrease and, hence, real GDP to contract by 1% of the total. From this reference point, one would expect the possibility of substituting away from oil to reduce the overall impact on GDP. At the same time, there could also be factors working in the opposite direction, via, for example, confidence effects, market frictions, or changes in monetary policy. With our estimates of the GDP loss at only about half the level implied by the direct price effect on the import bill, the results presented here suggest the size of any such magnifying effect s, if present, is not substantial across countries .

A2: Economy Impact

Economic collapse doesn’t cause lashout—countries focus inward

Bennett and Nordstrom 2000 (D. Scott and Timothy, Department of Political Science Professors at Pennsylvania State, February, “Foreign Policy Substitutability and Internal Economic Problems in Enduring Rivalries,” Journal of Conflict Resolution, JSTOR)

INTERNAL CONDITIONS AND EXTERNAL BEHAVIOR: IMPROVEMENTS By coming at externalization from the substitutability perspective, we hope to deal with some of the theoretical problems raised by critics of diversionary conflict theory. Substitutability can be seen as a particular problem of model specification where the dependent variable has not been fully developed. We believe that one of the theoretical problems with studies of externalization has been a lack of attention to alternative choices ; Bueno de Mesquita actually hints toward this (and the importance of foreign policy substitution) when he argues that it is shortsighted to conclude that a leader will uniformly externalize in response to domestic problems at the expense of other possible policy choices (1985, 130). We hope to improve on the study of externalization and behavior within rivalries by considering multiple outcomes in response to domestic conditions.5 In particular, we will focus on the alternative option that instead of externalizing, leaders may internalize when faced with domestic economic troubles . Rather than diverting the attention of the public or relevant elites through military action, leaders may actually work to solve their internal problems internally . Tying internal solutions to the external environment, we focus on the possibility that leaders may work to disengage their country from hostile relationships in the international arena to deal with domestic issues . Domestic problems often emerge from the challenges of spreading finite resources across many different issue areas in a manner that satisfies the public and solves real problems. Turning inward for some time may free up resources required to jump-start the domestic economy or may simply provide leaders the time to solve internal distributional issues. In our study, we will focus on the condition of the domestic economy (gross domestic product [GDP] per capita growth) as a source of pressure on leaders to externalize. We do this for a number of reasons. First, when studying rivalries, we need an indicator of potential domestic trouble that is applicable beyond just the United States or just advanced industrialized democracies. In many non-Western states, variables such as election cycles and presidential popularity are irrelevant. Economics are important to all countries at all times. At a purely practical level, GDP data is also more widely available (cross-nationally and historically) than is data on inflation or unemployment. 6 Second, we believe that fundamental economic conditions are a source of potential political problems to which leaders must pay attention. Slowing growth or worsening economic conditions may lead to mass dissatisfaction and protests down the road; economic problems may best be dealt with at an early stage before they turn into outward, potentially violent, conflict. This leads us to a third argument, which is that we in fact believe that it may be more appropriate in general to use indicators of latent conflict rather than manifest conflict as indicators of the potential to divert. Once the citizens of a country are so distressed that they resort to manifest conflict (rioting or engaging in open protest),

it may be too late for a leader to satisfy them by engaging in distracting foreign policy actions . If indeed leaders do attempt to distract people's attention, then if protest reaches a high level, that attempt has actually failed and we are looking for correlations between failed externalization attempts and further diversion.

Decline doesn’t cause war

Miller 2000 (Morris, Professor of Administration at the University of Ottawa, Interdisciplinary Science Review, v 25 n4 2000, ingenta connect)

The question may be reformulated. Do wars spring from a popular reaction to a sudden economic crisis that exacerbates poverty and growing disparities in wealth and incomes? Perhaps one could argue, as some scholars do, that it is some dramatic event or sequence of such events leading to the exacerbation of poverty that, in turn, leads to this deplorable denouement. This exogenous factor might act as a catalyst for a violent reaction on the part of the people or on the part of the political leadership who would then possibly be tempted to seek a diversion by finding or, if need be, fabricating an enemy and setting in train the process leading to war. According to a stud yunder- taken by Minxin Pei and Ariel Adesnik of the Carnegie Endowment for International Peace ,there would not appear to be any merit in this hypothesis . After studying ninety-three episodesof economic crisis in twenty-two countries in Latin America and Asia in the years since the Second World War they concluded that:19 Much of the conventional wisdom about the political impact of economic crises may be wrong ... The severity of economic crisis – as measured in terms of inflation and negative growth – bore no relationship to the collapse of regimes ... (or, in democratic states, rarely) to an outbreak of violence ... In the cases of dictatorships and semi-democracies, the ruling elites responded to crises by increasing repression (thereby using one form of violence to abort another).

A2: Venezuelan Economy—Alt Cause

Venezuelan collapse is inevitable—low prices derail the economy

Nagel 2013(Juan, Venezuela blogger for Transitions, May 16, " Is Venezuela becoming a failed state?", http://transitions.foreignpolicy.com/posts/2013/05/16/is_venezuela_becoming_a_failed_state)

Venezuela remains mired in a political and economic crisis that shows no signs of letting up . But while street protests , soaring inflation , scarcity, and skyrocketing crime are massive headaches, the government can count on still-high oil prices to soothe the pain a bit. The question that begs asking is: How will Venezuela maintain stability if oil prices drop? A recent report by the International Energy Agency underscores the challenges the country faces in the short term. The United States has made huge progress in oil extraction thanks to fracking technology. It is set to become the world's largest oil producer by the year 2020, and the global spread of fracking is bound to significantly increase international recoverable oil reserves in the near future. The agency crows that fracking is creating a "supply shock that is sending ripples around the world." This obviously matters to Venezuela, a country that exports large amounts of oil and little else. Venezuela is increasingly reliant on high oil prices to maintain some semblance of stability. A prolonged drop in oil prices will undoubtedly shake the foundations of the petro-state to its core. Being an oil producer, Venezuela can earn money in two ways: by sustaining high prices, or by increasing production. (Obviously, if it can do both things, it has hit the jackpot). Fracking threatens the first, and the country has seriously failed on the latter. Venezuela produces less oil now than it did in 1999, the year Hugo Chávez first came to power. Worryingly, the IEA sees few prospects for increased production. For example, in spite of increasing investment to $22 billion last year, Venezuelan production barely budged. State oil giant PDVSA vows to increase production by 3 million barrels per day in the next six years, but the IEA believes that a combination of the company's inefficiency and its heavy debt burden means the increase will actually be a tenth of that amount. Two other developments conspire against the future viability of Venezuela's oil industry. The country is increasing sales of crude oil to China , as part of a geo-strategic move the Chávez administration embarked on many years ago. The problem is that the oil being shipped has already been paid for , and the government has also already spent the money . The other issue is Venezuela's creaking refining infrastructure . Last year, following several accidents at its refineries, Venezuela became a net importer of gasoline and other refined products. In the last part of the year alone, PDVSA bought refined products for $1.5 billion, only to turn around and give it away for practically nothing, thanks to the heavy subsidies that characterize its internal market. The consensus is that Venezuela needs high oil prices just to stay afloat. But if the fracking oil boom results in low oil prices, what does the future hold for the South American country? Sadly, Venezuelans have nothing else to fall back on. Its private industry is a shambles, and the country is even importing toilet paper. Years of populism have left the state crippled and heavily in debt. The public deficit reached a whopping 15 percent of GDP last year, even in the context of high oil prices. Most of the spending came in the form of

entitlements and subsidies that will not be easily eliminated . Furthermore, the country's current power clique seems particularly inept in dealing with the complicated economic and political conditions it has inherited . Nicolás Maduro's only claim to legitimacy is that Hugo Chávez chose him. Now he is left with the thankless task of dealing with the Chávez mess. He has surrounded himself with a Cabinet composed of many of the same old faces, and neither his policies nor his rhetoric suggest any shift toward the type of solutions that could steer Venezuela away from the precipice. The problem for Venezuelans is that there is no great reformer in the governing party. And while opposition leader Henrique Capriles would undoubtedly steer Venezuela toward greater economic freedoms, there is little he would be able to do if the price of oil were to tank. A long period of low oil prices spells doom for Venezuela's political sustainability. Without high oil revenues, basic services would practically disappear, and the potential for instability would be enormous . Already the country is stuck in a state of undeclared in civil war , and there are claims that drug smuggling has permeated the higher echelons of the government .

Multiple alt causes to stability and Venezuela’s economy

Tulchin 2013(Dr. Joseph, Latin American Scholar, April 24, "Oil price is key to success for Venezuela’s President Maduro", http://www.worldreview.info/content/oil-price-key-success-venezuelas-president-maduro)

First is the petroleum industry. The social model built by Mr Chavez will collapse very quickly without increased production. No Venezuelan government can survive long with the price of oil below US$90 per barrel or if production continues to decline even at higher prices. Second is inflation. The economy is seriously dysfunctional, largely because of Mr Chavez’s wild spending spree in the year prior to last October’s elections and his dependence on oil revenue.Third is the crime rate which makes Venezuela one of the most violent countries in the world. This is itself symbolic of a more general problem of social cohesion. Today, Venezuelan society is deeply divided. Civil discourse has disappeared, personal freedoms have been severely curtailed, the rule of law is uncertain. It will be a challenge for the new government to avoid civic discord and violence and deal with widespread crime. A rising proportion of this is connected to international traffic in drugs.

Too many domestic problems—the aff cant solve

Metzker 2013(Jared, IPS Staff, June 17, "Analysts Say Oil Could Help Mend U.S.-Venezuela Relations", http://www.globalissues.org/news/2013/06/17/16843)

According to Michael Shifter, president of the Inter-American Dialogue, a Washington-based think tank, Maduro has offered "conflicting signals"."Maduro has so far shifted in his position toward the U.S. between a moderate approach and a more hard-line one," Shifter told IPS.3The new president's waffling may be a reflection of his tenuous grip on power. By many accounts, Maduro lacks the political prowess and rabble-rousing charm of Chavez, who enjoyed military backing as well as fervent support from the lower classes .In addition to a strong anti-Chavista

opposition that openly challenges the legitimacy of his narrowly won election, Maduro has had to deal with a split within Chavez's own former political base.Shifter pointed out that among the military, which was once a source of significant strength for Chavez, more support is given to Diosdado Cabello, currently head of Venezuela's parliament and whose supporters believe he was the rightful heir to the presidency.Maduro's legitimacy stems largely from his perceived ideological fidelity, the reason for his selection by Chavez to lead in the first place. Shifter said this leads him to "emulate" his predecessor and makes rapprochement with the United States less probable.Still, ideological concerns may not ultimately decide the issue. Venezuela has inherited from Chavez an economy in difficult straits, which continues to suffer from notorious shortages and high inflation.

A2: Venezuelan Relations Advantage

General

A2: Solves Venezuelan Relations

Can’t solve hostilities—used to drive domestic support

Sullivan 2013(Mark, Specialist in Latin American Affairs at the Congressional Research Service, April 9, "Hugo Chávez’s Death: Implications for Venezuela and U.S. Relations", http://www.fas.org/sgp/crs/row/R42989.pdf)

Hostility toward the United States was often used by the Chávez government as a way to shore up support during elections , and it appears that this is being employed by the PSUV once again in the current presidential campaign . On March 20, 2013, Foreign Minister Elias Jaua said that Venezuelan officials would no longer be talking about improving U.S.-Venezuelan relations with Assistant Secretary of State Jacobson because of comments that Jacobson had made in a Spanish newspaper; Jacobson had said that “ Venezuelans deserve open, fair and transparent elections .” A senior U.S. official reportedly said that such bizarre accusations and behavior raises doubts over whether bilateral relations will be able to be improved with a Maduro government.16 Another strange accusation by Maduro is that two former U.S. State Department officials were plotting to kill Capriles and to blame it on the Maduro government; the State Department strongly rejected the “allegations of U.S. government involvement to harm anyone in Venezuela.”17Looking ahead, some observers contend that anti-Americanism could also be a means for PSUV leaders to mask internal problems within Chavismo, and even could be utilized as a potential new PSUV government led by Maduro deals with a deteriorating economy.

Can’t solve relations—too many tensions and Maduro needs the political leverage

O'Reilly 2013(Andrew, Fox News Staff, April 17, "U.S.-Venezuelan Relations Remain Tense Under Maduro, Experts Claim", http://latino.foxnews.com/latino/politics/2013/04/17/us-venezuelan-relations-remain-tense-under-maduro-experts-claim/)

While the ultimate impact of the Venezuelan presidential election remains to be seen, what's for sure is that relations between the U nited S tates and the administration of President-elect Nicolás Maduro will continue to be as tense as under the late Hugo Chávez , experts said. After voting on Sunday in a Caracas slum, Maduro said that while he would like to reestablish relations with the U.S. “in terms of equality and respect,” Washington will always try to undermine his rule. These words followed a steady rhetoric on the campaign trail of Maduro accusing the U.S. of conspiring against him and causing disruptions in Venezuela to unseat his rule, including working with opposition labor unions and causing electric power blackouts. Experts argue that given Maduro’s anti-American sentiments leading up to the election, as well as the controversy surrounding his victory and the polarization in Venezuela, there is little hope for a change in relations between the countries. Americans will insist on a level of respect that he is not going to give them. “It’s hard to see [Maduro] backing off his rhetoric in the aftermath of the election,” Eric Hershberg, the

director of American University’s Center for Latin American and Latino Studies, told Fox News Latino. “Americans will insist on a level of respect that he is not going to give them.” The death of Hugo Chávez put Maduro and the rest of the Venezuelan left in a difficult position. Chávez’s charisma held the movement together and his social spending allowed him to skirt the dicey issues of rising inflation, high crime and a fledgling economy. While the current election results are still being debated, how Maduro faces the country’s mounting problems – both politically and socially – are what will decide is he and Chavismo survive his six-year term.In 2009, Chávez led a successful push for a constitutional referendum that abolished term limits for the offices of President, state governors, mayors and congress members. The previous provision established a three-term limit for deputies and a two-term limit for the other offices, but with the 2009 referendum, Chávez – or any other leader – could ostensibly stay in power indefinitely. Maduro does not have the charm or power to hold the Chavista movement together nor make Venezuelans forget about the problems plaguing their nation. If Sunday’s vote is any indication, Venezuela is torn between Chávez’s legacy and a dismal future , with the official results giving Maduro 51 percent of the vote to challenger Henrique Capriles’ 49 percent – although opposition sources showed Capriles winning by more than 300,000 votes. “Chávez could overcome the detractors because he was viewed as a national hero, Maduro doesn’t have that,” said Larry Birns with the Council for Hemispheric Affairs. To maintain his credibility within the Chavista movement and fend off opponents from within his own party, Maduro needs to maintain his opposition to the U.S. and continue to paint Americans as imperialist intruders , experts said. “He’s got to worry about the opponents that will pose a threat to his rule,” Birns said. “These are difficult times for Maduro and no one knows how the scenario will play out. ”For its part, the United States is not in better shape when it comes to its relations with Venezuela – or other Latin American nations. Diplomatic disputes with Venezuela and touchy relations with neighboring Bolivia and Ecuador have led to a schism between the United States and the countries in the Bolivarian Alliance for the Americas. Hershberg said that the Obama administration's refusal to accept the official results of Venezuela's election will not only anger Maduro, but could be viewed as hypocritical in the light of the scandal surrounding the uncounted votes during the 2000 U.S. presidential election that saw George W. Bush defeat Al Gore.

Venezuela won’t engage—we can’t build relations

Labott 2013(Elise, CNN Foreign Affairs Reporter, March 6, "U.S.-Venezuela relations likely to remain tense after Chavez", http://security.blogs.cnn.com/2013/03/06/u-s-venezuela-relations-likely-to-remain-tense-after-chavez/)

But in the words of one senior official, the outreach to Caracas has been a "rocky road." Talks have been short on substance and never left U.S. officials with the feeling Venezuela was interested in mending fences. Maduro's first news conference, a good portion of which was devoted to railing against the United States, was not very encouraging. As he prepares to stand in upcoming elections to replace Chavez, Maduro's anti-American rhetoric is dismissed in the United States as political jockeying to shore up his political base. This tried-and-true method of using America as straw man worked for Chavez, which is why U.S. officials acknowledge that

the campaign season not be the best time to break new ground or expect tangible progress. Officials say they will continue to speak out in favor of a more productive relationship between the two countries, but the ball, officials say, is firmly in Venezuela's court. "The opportunities are not there yet for the U.S. to engage " says Carl Meacham of the Center for Strategic and International Studies. "For the next month or so, Maduro has to show he is even more Chavez than Chavez was . That means he is going to be more anti-American , more anti-capitalist, more anti-systemic. As far as a rapprochement, I don't see it coming anytime soon."

Alt Cause

The aff can’t solve relations—diplomat crisis guarantees no normalization

Metzker 2013(Jared, IPS Staff, June 17, "Analysts Say Oil Could Help Mend U.S.-Venezuela Relations", http://www.globalissues.org/news/2013/06/17/16843)

Nonetheless, major actions remain to be taken if normalisation is to even begin, such as the exchange of ambassadors and official U.S. recognition of the Maduro government. Shifter (who regards the Kerry-Jaua meeting as "a small step") was not optimistic that these larger requirements will be completed in the short term." I don't think Washington is going to push hard to send an ambassador to Caracas ," he said. "It will probably take more time to observe the new government and see where it is going."

Alt cause to relations- human rights, drugs, Cuba and Iran

Sullivan 2013(Mark, Specialist in Latin American Affairs for the Congressional Research Service, January 10, “Venezuela: Issues for Congress”, http://www.fas.org/sgp/crs/row/R40938.pdf)

The United States traditionally has had close relations with Venezuela, a major supplier of foreign oil to the United States, but there has been significant friction with the Chávez government. For several years, U .S. officials have expressed concerns about human rights, Venezuela’s military arms purchases (largely from Russia), its relations with Cuba and Iran, its efforts to export its brand of populism to other Latin American countries, and the use of Venezuelan territory by Colombian guerrilla and paramilitary forces. Declining Venezuelan cooperation on antidrug and antiterrorism efforts also has been a U.S. concern . Since 2005, Venezuela has been designated annually (by President Bush and President Obama) as a country that has failed to adhere to its international anti-drug obligations. Since 2006, the Department of State has prohibited the sale of defense articles and services to Venezuela because of lack of cooperation on antiterrorism efforts.

Iran Scenario

Iran Can’t Gain Influence

Iranian influence will wane—Chavez was key

Sullivan 2013(Mark, Specialist in Latin American Affairs at the Congressional Research Service, April 9, "Hugo Chávez’s Death: Implications for Venezuela and U.S. Relations", http://www.fas.org/sgp/crs/row/R42989.pdf)

In terms of Venezuela’s foreign policy, observers who believe that Maduro will win the election maintain that there would be continuity with the policy under President Chávez, especially since Maduro served as his Foreign Minister for more than six years. Many see Venezuela’s strong support for Cuba continuing under a Maduro presidency, although some analysts contend that a difficult economic situation in Venezuela could result in a diminishment of that support. Some observers also contend that without Chávez at the helm, Venezuela’s role as a regional power could begin to wane as well as its relations with Ira n .18Venezuela’s strengthening of relations with Iran in recent years is viewed by many analysts as being driven by the personal relationship between Chávez and Iranian President Mahmoud Ahmadinejad .

Ahmadinejad was key to those relations—Iranian leadership won’t continue the partnership

Fassihi 2013(Farnaz, Wall Street Journal, March 7, "Iran Leader Lambasted for Tribute to Chávez", http://online.wsj.com/article/SB10001424127887323628804578346611821870502.html)

But for Iran, Mr. Chávez's death jeopardizes the carefully cultivated alliance with one of the nation's few allies and its gateway into Latin America. Mr. Chávez's close ties to Iran were regarded nervously even among his own constituents . Mr. Ahmadinejad faced his own skeptics over the relationship in his own country . Mr. Ahmadinejad leaves office in June and although he will likely continue to be a player in Iran's politics, the extent of his influence in foreign policy is unclear. "Definitely this will have an impact on Iran's relations with Venezuela," said political analyst Sadegh Zibakalam said by telephone from Tehran. "What will become of Iran's billions of dollars of investments?"

A2: Causes Terrorism

No Latin American terrorism-not in self-interest, groups weak

Weitz 2011(Richard, Senior Fellow of the Center for Political-Military Analysis at the Hudson Institute, November 9, “Where are Latin America’s Terrorists?”, http://www.project-syndicate.org/commentary/where-are-latin-america-s-terrorists-)

The Colombian army’s killing of Alfonso Cano, head of the Revolutionary Armed Forces of Colombia (FARC), will not eliminate that country’s largest guerrilla group anytime soon. But it does partly illustrate why international terrorism has not established a major presence in Latin America. Local security forces , bolstered by generous American assistance, have made the region a difficult place for foreign terrorists to set up operational cells – and other conditions also help to make Latin America less vulnerable. One reason why the FARC has survived repeated blows to its leadership is the support that it receives from various groups, perhaps including government officials, in neighboring Ecuador and Venezuela. Fortunately, this backing appears to have declined in the last year or so , following improvement in Colombia’s relations with these countries. Another factor contributing to the FARC’s survival has been its transformation over the years from a revolutionary organization into a narco-terrorist group that uses violence to support its criminal operations. Many former terrorist and insurgent groups in the region have undergone similar transformations over the last two decades. These groups, some with transnational reach, mostly engage in narcotics trafficking, arms smuggling, and kidnapping. At worst, they sometimes employ terrorist tactics (commonly defined as violence that deliberately targets civilians). In Colombia, the FARC and the National Liberation Army (ELN) finance their operations through drug trafficking, kidnapping, and extortion. These groups might kill civilians, but their main targets are the police and security personnel who threaten their activities. Latin America is distinctive in the recurring and broad overlap of mass movements professing revolutionary goals with transnational criminal operations. The Internet and modern social media are allowing these mass criminal movements to expand their activities beyond kidnapping, extortion, and trafficking in drugs, arms, and people, to include fraud, piracy, information theft, hacking, and sabotage. Violent mass movements remain in some Latin American countries, but, like the FARC, they are typically heavily engaged in organized crime. Drug cartels and gang warfare may ruin the lives of thousands of innocent people, but they should not be seen as equivalent to the ideological revolutionaries who used to wreak havoc in the region, or to contemporary mass terrorists. Extra-regional terrorist movements such as al-Qaeda have minimal presence in South America, with little independent operational activity and few ties to local violent movements. At most, the two types of groups might share operational insights and revenue from transnational criminal operations. Hezbollah has not conducted an attack in Latin America in almost two decades . Indigenous organized criminal movements are responsible for the most serious sources of local violence. Latin American countries generally are not a conducive environment for major terrorist groups. They lack large Muslim communities that could provide a bridgehead for Islamist extremist movements based in Africa and the Middle

East. The demise of military dictatorships and the spread of democratic regimes throughout Latin America (except for Cuba) means that even severe economic, class, ethnic, and other tensions now more often manifest themselves politically , in struggles for votes and influence. No Latin American government appears to remain a n active state sponsor of foreign terrorist movements. At worst, certain public officials may tolerate some foreign terrorists’ activities and neglect to act vigorously against them. More often, governments misapply anti-terrorist laws against their non-violent opponents. For example, despite significant improvement in its human-rights policies, the Chilean government has at times applied harsh anti-terrorism laws against indigenous Mapuche protesters. Indeed, Latin American terrorism is sometimes exaggerated , because governments have incentives to cite local terrorist threats to secure foreign support , such as US capacity-building funding. Just as during the Cold War, when Latin American leaders were lavished with aid for fighting communist subversion, governments seek to fight “terrorist” threats at America’s expense. Ironically, the strength of transnational criminal organizations in Latin America may act as a barrier to external terrorist groups. Extra-regional terrorists certainly have incentives to penetrate the region. Entering the US, a high-value target for some violent extremist groups, from Latin America is not difficult for skilled operatives. Extra-regional terrorist groups could also raise funds and collaborate operationally with local militants. But Latin America’s powerful transnational criminal movements, such as the gangs in Mexico that control much of the drug trafficking into the US, do not want to jeopardize their profits by associating themselves with al-Qaeda and its affiliates. Supporting terrorism would merely divert time and other resources from profit-making activities, while focusing unsought US and other international attention on their criminal operations.

A2: Nuke Terror Impact

Terrorists won’t acquire nuclear weapons

Stratfor 2009 (May 29, “Debunking Myths About Nuclear Weapons and Terrorism”, http://www.stratfor.com/sample/analysis/debunking-myths-about-nuclear-weapons-and-terrorism)

Loose Nukes and Clandestine Acquisition But what about acquiring a nuclear weapon that has already been built? The security of nuclear weapons is and has long been an important concern. However, the effort involved in actually trying to steal a nuclear weapon would entail a significant dedication of resources and an immense intelligence effort beyond the reach of almost any terrorist organization . Indeed, the odds of a failure are high, no matter how careful and meticulous the planning. Some nuclear weapons facilities around the world are obviously not as hardened as others, but taken as a whole, they are some of the hardest targets on the planet, and the personnel better vetted than almost any other institution. Even the lightest attempt to begin probing runs the risk of not only failing to acquire a bomb, but setting off a series of alarms and red flags that brings such an aggressive investigative and law enforcement/military response down on the terrorist organization that it could be completely wiped out before it ever attempted to target its true objectives (whatever they might be). And even if one could be stolen or otherwise acquired, modern nuclear weapons have been designed to include a series of (highly classified) safety features . Though all nuclear weapons are not created equal, these range from permissive action links without which the device cannot be armed (a feature Pakistan is now thought to employ) to configurations that will actually render the fissile core (s) useless if improperly accessed . has long been something STRATFOR has kept a close eye on, and something we continue to monitor. The Hollywood scenario of a terrorist group stealing away with a nuclear device in the night and automatically being able to arm it at its convenience is not grounded in reality. Furthermore, the theft would be difficult to carry off without setting off the same alarms and red flags that would leave little opportunity for the device to be smuggled particularly far — much less half way around the world. Nuclear weapons are complex devices that require considerable care and maintenance — especially the small, modern and easily transportable variety . After the collapse of the Soviet Union, fears arose of a series of Soviet nuclear weapons were somehow lost, well after the fissile and radioisotope materials in the design would have decayed significantly enough to effect the performance of the weapon, in addition to the diminished functionality of its other components after being handled roughly over the years.

No attribution makes retaliation impossible

Dowle 2005 (Mark, Professor at the Graduate School of Journalism at the University of California Berkeley, “Nuclear Fallout: Berkeley Team Thinks Beyond the Unthinkable,”

California Monthly, September 20, http://www.alumni.berkeley.edu/Alumni/Cal_Monthly/September_2005/COVER_STORY-_Berkeleys_Big_Bang_Project_.asp)

Because terrorists tend to be stateless and well hidden , immediate retaliation in kind is almost impossible . But some nuclear explosions do leave an isotopic signature, a DNA-like fingerprint that allows forensic physicists such as Naval Postgraduate School weapons systems analyst Bob Harney to possibly determine the origin of the fissile material in the bomb. Nuclear forensics is not a precise science , Harney warns. Post-attack sites are almost certain to be contaminated with unrelated or naturally occurring radioactivity , and there are numerous , highly enriched uranium stashes in the world with unknown signatures . But there is no question, according to Peter Huessy, a member of the Committee on the Present Danger and consultant to the National Defense University in Washington, D.C., that Russian forensic experts could quickly detect Russian isotopes, and that highly enriched uranium (HEU) from, say, France could readily be differentiated from American HEU. But, Huessy warns, distinguishing post-blast residues of Pakistani uranium from North Korean uranium would be more challenging, probably impossible. Because neither country is a member of the I nternational A tomic E nergy A gency, IAEA inspectors have been unable to collect from their facilities reliable isotope samples that could be compared to post-attack residues. Even if the uranium were traced, the source nation could claim that the material had been stole.

A2: Iran Prolif Impact

Deterrence prevents escalation

Slater 1998(Jerome, professor of political science at SUNY at Buffalo, Winter, "Netanyahu, a Palestinian state, and Israeli security reassessed" Political Science Quarterly, Vol. 112, Issue 4 ebsco)

Israel's nuclear deterrent will not be significantly undercut, even if the Arab states eventually gain possession of nuclear or other w eapons of mass destruction. The consequences of the arrival of MAD (mutual assured destruction) in the Middle East are likely to be mutual deterrence --and not only of nuclear attacks but also of large-scale conventional aggression, just as was the case in Europe during the superpower nuclear standoff of the cold war. Any minimally rational Arab leader must assume that if Israel faced imminent destruction by invading Arab armies it would not shrink from using its nuclear weapons , regardless of whether it faced retaliation in kind; rather, in Samson- like fashion it would pull the walls down around its enemies as well as itself. Nor is the Samson myth the only one that predicts Israeli behavior. Even more important is Masada--suicide over surrender or defeat. But above all, nothing could be more central to the Israeli identity than the Holocaust and its most crucial imperative: Never Again.

China Scenario

A2: China Influence—Not Zero Sum

Influence not zero sum

Nolte 2013(Dr. Detlef, Ph.D. in Political Science from the University of Mannheim, Professor of Political Science at the University of Hamburg, German Institute of Global and Area Studies, "The Dragon in the Backyard: US Visions of China's Relations toward Latin America", http://www.giga-hamburg.de/dl/download.php?d=/content/publikationen/pdf/gf_international_1305.pdf)

“if Washington takes a broad future-oriented perspective, we may be surprised at some of the common interests we share. That list of shared or broadly compatible interests, in my view, in-cludes the following: One, if China invests in oil and energy resources in Latin America when oth-ers are not prepared to do so, the PRC is contribut-ing to a larger global pool of available energy . Lat-in American oil brought to the surface by Chinese companies or firms or interests probably is going to end up in the United States .” This positive view of Chinese investment in natural resources is supported by empirical evi-dence, which shows “that Chinese investment in Latin America predominantly expands and makes more competitive the global resource base. Chi-nese investors tend to be more willing to take on new frontier projects that others pass up” (Kotschwar et al. 2012: 19).

Influence isn’t zero sum—it can be mutually beneficial

Xiaoxia 2013(Wang, Economic Observer Staff, May 6, "In America's Backyard: China's Rising Influence In Latin America", http://worldcrunch.com/china-2.0/in-america-039-s-backyard-china-039-s-rising-influence-in-latin-america/foreign-policy-trade-economy-investments-energy/c9s11647/)

China's involvement in the Latin American continent doesn’t constitute a threat to the United States , but brings benefits. It is precisely because China has reached "loans-for-oil" swap agreements with Venezuela , Brazil, Ecuador and other countries that it brings much-needed funds to these oil-producing countries in South America. Not only have these funds been used in the field of oil production, but they have also safeguarded the energy supply of the United States, as well as stabilized these countries' livelihood -- and to a certain extent reduced the impact of illegal immigration and the drug trade on the U.S. For South America, China and the United States, this is not a zero-sum game, but a multiple choice of mutual benefits and synergies. Even if China has become the Latin American economy’s new upstart, it is still not in a position to challenge the strong and diverse influence that the United States has accumulated over two centuries in the region.

A2: Chinese Influence—Dialogue Solves

US-Sino dialogue prevents tensions and creates transparency and limits expansion

Hilton 2013(Isabel, former Latin America editor of The Independent, Norwegian Peacebuilding Resource Center, February, "China in Latin America: Hegemonic challege?", http://www.peacebuilding.no/var/ezflow_site/storage/original/application/26ff1a0cc3c0b6d5692c8afbc054aad9.pdf)

The United States, distracted elsewhere in recent years, has reacted calmly to date to China’s increasing presence in Latin America. In a striking acknowledgement of China’s importance in the region, the U.S. and China have created a mechanism for mutual transparency through the U.S.–China Dialogue on Latin America. This started in 2006, just before then-President Hu Jintao’s visit to Washington, and continues under the Obama administration. Through four rounds of dialogue to date, the U.S. has conceded China’s standing in Latin America, while seeking successfully to set limits to China’s action in troublesome countries such as Venezuela and Cuba. In 2006, for instance, when Venezuela sought a chair on the United Nations Security Council, China was reluctant to lend its support. Although China eventually voted in favour, it did not otherwise back the campaign.

A2: Chinese Influence—Causes Cooperation

Chinese influence won’t collapse leadership and alt causes to conflict

Hilton 2013(Isabel, former Latin America editor of The Independent, Norwegian Peacebuilding Resource Center, February, "China in Latin America: Hegemonic challege?", http://www.peacebuilding.no/var/ezflow_site/storage/original/application/26ff1a0cc3c0b6d5692c8afbc054aad9.pdf)

China’s presence in Latin America is unlikely to diminish and will continue to affect its regional partners for the foreseeable future. Although this undoubtedly entails a loss of U.S. influence in the region, both China and the U.S. have so far sought cooperation rather than confrontation . In the context of the Obama administration’s “ pivot” to Asia, however, and the latent, long-term strategic competition between China and the United States, there is potential for increasing competition for influence in the future . An escalation of tensions between China and U.S. allies in the South China or East China Sea could prompt China to raise retaliatory tensions in the U.S. backyard. At that point, the traditional Latin American allies of the U.S. could face some uncomfortable choices.

A2: Heg—No Impact

American leadership isn’t key—the international order is self-sustaining even if the U.S. declines

Ikenberry 2011 (G. John, “A World of our Making” http://www.democracyjournal.org/21/a-world-of-our-making-1.php?page=all)

Second, the character of liberal international order itself —with or without American hegemonic leadership —reinforces continuity. The complex interdependence that is unleashed in an open and loosely rule-based order generates expanding realms of exchange and investment that result in a growing array of firms, interest groups, and other sorts of political stakeholders who seek to preserve the stability and openness of the system. Beyond this, the liberal order is also relatively easy to join. In the post-Cold War decades, countries in different regions of the world have made democratic transitions and connected themselves to various parts of this system. East European countries and states within the old Soviet empire have joined NATO. East Asian countries, including China, have joined the World Trade Organization (WTO). Through its many multilateral institutions, the liberal international order facilitates integration and offers support for states that are making transitions toward liberal democracy. Many countries have also experienced growth and rising incomes within this order. Comparing international orders is tricky, but the current liberal international order, seen in comparative perspective, does appear to have unique characteristics that encourage integration and discourage opposition and resistance.

DA Links

Oil Prices DA

Plan causes oil price decline—overproduction and wipes out price control mechanisms

Butler 2013(Nick, Financial Times Energy Analyst, March 5, "Venezuela and the oil market after Chávez", http://blogs.ft.com/nick-butler/2013/03/05/venezuela-and-the-oil-market-after-chavez/?)

In the meantime, any new government will be desperate to sustain revenue and to see oil prices remain as high as possible. The power to achieve that, however, lies elsewhere and in economic terms, Venezuela is a price taker . They must deal at whatever price the market sets and in the end that means relying on the Saudis to maintain Opec discipline.Looking ahead, events in Venezuela put further downward pressure on the oil price. Almost any new government is likely to want to increase oil production and to encourage foreign involvement. The country’s resources are enormous and as Venezuelans move beyond the rhetoric of the Chávez years they may want to see greater investment, a return to a professional oil company and a new opening to the international market. Although it could take time to deliver, any material growth in output and exports would increase the pressures being felt within Opec from the rise in Iraqi production, which is already occurring. Global demand growth is not sufficient to absorb all the production available. As ever, the game will come back to the Saudis. In recent months, probably as a result of their increasing revenue needs, they appear to reset their desired price at something above $110. As production elsewhere grows, that level will become harder and harder to maintain .For the past decade the policies of Chávez have kept Venezuelan production and exports down and oil prices up. With his death, there is no guarantee that such policies or such an outcome will be maintained for long.