Chavez's Nightmare

By INVESTOR'S BUSINESS DAILY | Posted Wednesday, October 01, 2008 4:20 PM PT

Energy: Venezuela's Hugo Chavez revealed his worst fear on Tuesday by calling lower oil prices "a hundred hurricanes." With the ban on U.S. offshore drilling now lifted, it's time to make his nightmare come true.

Read More: Energy | Latin America & Caribbean

Why do we say this? Because Chavez is using his abundant oil earnings for three purposes: to buy regional influence, to buy arms and now to introduce Russian nuclear proliferation to our hemisphere. All are serious threats that the next U.S. president will face if global oil prices remain high. Only lower oil prices will stop him.

That's because oil prices, not ideas, fuel his capacity to act. The self-described communist has stolen and wasted a lot of the $800 billion in oil revenue that has flowed to Venezuela over the last decade, mainly from U.S. buyers. But he's managed to use much of it like a captured weapon to undercut what he calls the "empire."

Chavez is also well on the way to making the hemisphere his playground. He has used oil cash to buy off leaders in Argentina; bankroll vassal states in Ecuador, Nicaragua and Bolivia; win new friends in Paraguay; meddle in elections in Peru, El Salvador and Mexico; and finance terrorists in Colombia.

Now he's extended his influence in unexpected new places such as Costa Rica, Honduras, St. Vincent, the Grenadines and Dominica, all of which have made disturbing diplomatic moves in his direction. Fewer and fewer U.S. allies will be left standing against this Chavista tide of corrupt oil largesse.

What's more, Chavez is the region's chief arms proliferator, forking out $4.4 billion for Russian advanced jet fighters, small arms, submarines and now missile systems, none of which he needs.

The stakes rise further with his invitation to Russian influence, starting with "peaceful" nuclear energy development in a nation where gas sells for 18 cents a gallon. Like fellow petrotyrant Iran, development of nuclear weapons — in this case, 1,350 miles from Key West, Fla. — will be next on his to-do list. A third petrotyranny, Russia, still bitter over its loss of empire and blaming the U.S., assures Chavez it will gladly pay for this.

As disturbing as this picture is, there's little doubt next year's list of Chavista "achievements" will be longer. The one thing that will cut it short is an end to high oil prices.

Chavez said as much Tuesday in speaking to friends at a gathering of leftist leaders in Manaus, Brazil. Turmoil in U.S. financial markets will slow global growth and hit Latin America hard, he said, adding that a drop in oil revenue hit Venezuela like "a hurricane, or more than one hurricane, it's a hundred hurricanes."

A downturn in the U.S. economy is one way to lower oil prices. But it's far preferable to defang Chavez by creating permanent substitutes for his petroleum products in U.S. markets.

Now that Congress has allowed the federal ban on drilling to expire on Oct. 1, there is a golden window of opportunity to move toward U.S. energy security. No time should be wasted in getting new domestic oil and natural gas production in motion.

There are obstacles. The Minerals Management Service, which is in charge of offshore drilling, holds bids for leases in five-year blocks. But the schedule could be sped up by changes from the Interior Department to get oil online faster.

State bans on offshore drilling are another obstacle. Some states, including Florida and California, have sizable environmental lobbies holding big sway over their statehouses. Still, there are people who are concerned about Russian nukes coursing through their state waters, and some may respond to calls for action.

A President Barack Obama would also present a problem. He opposes drilling and is expected to reinstate the ban if elected. Congress members from coastal states will have to convince him not to.

Chavez is now on record as saying lower oil prices are the one thing that can stop him. Only through drilling can America make his worst nightmare come true.