Next Gas 500 Miles

China, always looking for reliable energy suppliers, is investing billions in new Venezuelan oil deals. Reuters is covering this as Venezuela wants to “to lessen its dependence on its arch-foe the United States.” Well it might, but not as much as Chavez wants to shift oil away from the U.S. for ideological points. Even with the free tankers, shipping costs will net Venezuelans a dollar or two less per barrel than they could get from the U.S.

Forget claims about a million barrels a day to China by 2012. It will almost certainly be more than that as Venezuela swaps dependence on one power for even greater dependence on another. Diversification is just a temporary feature.

If you’re tempted to shrug and say “Big deal, we’ll get oil elsewhere,” you should focus less on our percentage of imported oil and more on MPB – miles per barrel, from field to Ford.