Venezuela has returned to the center of the international energy scene after the capture of President Nicolás Maduro. The Trump administration now looks to the South American country’s fields as a strategic lever to revive oil extraction on a global scale. A prospect that, according to many climate and energy experts, would have major consequences far beyond Venezuela’s borders.
With about 300 billion barrels of proven reserves, Caracas holds the world record for oil. Donald Trump has openly indicated his goal: to involve U.S. companies in the resumption of production, presenting the operation as an investment that will pay for itself. “Oil companies are going to come in, they’re going to spend money, we’re going to get oil back. Frankly, we should have done this a long time ago. A huge amount of money is coming out of the ground and we will be reimbursed for everything we spend,” the president said after Maduro’s extraction from Caracas.
Emissions and heavy crude oil
The plan calls for billions of dollars to bring dilapidated infrastructure back into operation and an overhaul of the regulatory framework, starting with the removal of the requirement for state participation in oil projects. But the most significant impact, experts warn, is not just about industrial policy or public accounts. It concerns the climate.
As Paasha Mahdavi, an associate professor at the University of California, Santa Barbara, explained to The Guardian, increasing production from current levels-about one million barrels per day-to 1.5 million would mean generating about 550 million tons of carbon dioxide per year once the crude is burned. That’s more emissions than are produced annually by economies such as the United Kingdom and Brazil.
“If millions of barrels a day of new oil come on the market, a huge amount of CO₂ ends up in the atmosphere, and the people of Earth cannot afford it,” John Sterman, a climate and economics expert at the Massachusetts Institute of Technology, explained to the British newspaper. The effect would be amplified by the characteristics of Venezuelan crude oil, which is among the most polluting in the world. Much of the reserves are extra-heavy, carbon- and methane-intensive oil, which requires more energy to extract, transport, and refine.
Industrial challenges and costs
An increase in supply would also have indirect but decisive consequences: lower global oil prices and a slowdown in the transition to renewables and electricity. “If oil production increases, climate change will worsen more rapidly and everyone will lose, including Venezuelans,” Sterman noted. “The climate damage Venezuela will suffer, along with other countries, will almost certainly outweigh any short-term economic benefits.”
On the industrial side, the strategy appears anything but simple. After years of sanctions, mismanagement and underinvestment, Venezuela’s oil sector is in critical condition. According to research and consulting firm Energy Aspects, increasing production by 500,000 barrels per day would require about $10 billion and at least two years of work. Rystad Energy estimates at $110 billion the investment needed to return to 2 million barrels per day by 2030. Returning to the record levels of the 1970s-when a peak of 3.7 million barrels was reached-would involve massive development of the Orinoco Belt, where crude oil is denser, more sulfurous, and much more expensive to manage.
“The political and project-related risk is enormous,” Sterman stressed. “It is an extremely complicated operation.” Not surprisingly, then, many major companies remain cautious. Chevron, the only U.S. major still operating in the country, may be moving more quickly, while ExxonMobil is carefully assessing the impact of the situation on its oil operations in neighboring Guyana. But a general rush for Venezuelan oil is far from a foregone conclusion.
Geopolitics and consequences
Criticism also focuses on the geopolitical dimension. Several environmental organizations have denounced the U.S. strategy as a revival of unsustainable resource exploitation. “The United States must stop treating Latin America as a colony from which to extract raw materials,” Elizabeth Bast, executive director of Oil Change International, told The Guardian. “The future of Venezuela must be decided by the Venezuelan people, not by U.S. oil company executives.”
Patrick Galey, head of fossil fuel investigations at Global Witness, told the British newspaper of “another fossil fuel-fueled conflict.” As long, he points out, energy systems remain dependent on oil and gas, entire populations will continue to be exposed to the interests of outside powers and authoritarian leaders.
Massively relaunching extraction in Venezuela would mean increasing production of one of the world’s heaviest and most polluting oils, with direct consequences for emissions, global prices and investment in renewable energy. The immediate profits could be real, but the environmental costs and economic complications are likely, in the medium term, to far outweigh the benefits.
