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  • Colombian President Juan Manuel Santos and US President Donald Trump at a joint press conference following a meeting at the White House, May 18, 2017

    Colombian President Juan Manuel Santos and US President Donald Trump at a joint press conference following a meeting at the White House, May 18, 2017 | Photo: EFE

Published 22 June 2017
Opinion

As Colombian president Juan Manuel Santos visited Washington May 18, U.S. Secretary of State Rex Tillerson called for an “evaluation” of policy towards Colombia, shoring up aid for a Colombian military operating on an annual budget of $10.3 billion. The stated reason for the visit was “countering backsliding in Venezuela,” suggesting that geo-strategic alliances between Bogota and Caracas were atop the agenda. Just weeks prior, in April, President Trump hosted an unannounced, semi-secret meeting in Mar-a-Lago, Florida with former hardline president of Colombia Alvaro Uribe (who led the harsh opposition to the FARC peace proposal), during which they discussed Venezuela, Uribe airing his strong objections to Colombia’s peace agreement. The day after President Santos’ visit to Washington, Colombia’s ambassador to the United States, Juan Carlos Pinzon, resigned.

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The looming threat of peace, along with Colombia’s binding ties to the Venezuelan oil industry, may pose ominous for several of Colombia’s top coal producers—Goldman Sachs’ Colombia Natural Resources, Drummond, Anglo-American and Glencore, in particular— which have helped turn the Andean country into a top-5 global coal exporter. Colombia has become the second largest supplier to a German nation phasing out nuclear power, with Japan’s nuclear divestments offering similar market openings. Traditionally, Colombia’s military has used the cover of pursuing FARC rebels to justify actions resulting in the government de-inhabiting land around coal regions, contributing to an internal displacement crisis on par with Afghanistan, Syria and Iraq. Colombia’s other leading export, oil, is mostly nationalized, and competes with the private coal sector for overseas market share.

In spite of a history of military security-related border issues, Colombia’s political leadership has funded construction programs that deepen ties with its neighbor Venezuela via hydrocarbon-carrying pipelines financed by billions of dollars in Chinese investment. That plan, initiated with gas deals and binational technical commissions for the “comprehensive study of hydrographic basins in joint use” aims to ultimately develop fields along the Venezuela-Colombia border, including Venezuela’s Lake Maracaibo, the Arauca River, and the Orinoco Basin, for the offloading at Colombia’s Pacific ports in Buenaventura and Tumaco. If successful, this arrangement would be game-changing for the global energy system and power politics, generally. Unlocking a new Pacific sea route through Colombia would enable Venezuela to send its exports to Asia while avoiding the time and cost of traversing the Panama Canal, Malacca Strait and Cape Horn, cutting 8,000 miles off the average journey to China.


Growing difficulties along Venezuela’s regular route to Asia have reportedly caused Caracas to fall behind on debt payments (made in oil) to its Chinese creditors. Venezuelan ships are being denied passage in international waters because of rust, drawing too much water and emitting excess amounts of carbon, among a list of environmental violations tabulated by London’s supranational body, the International Maritime Organization. Venezuelan Supermax tankers are normally denied passage through the Panama Canal for their bulk.


Colombia has its own compelling reason to diversify export routes too, since it currently relies on a single port on the Caribbean coast for the bulk of its shipments. Colombian officials have gone on record stating a desire to open up new routes that would exploit its two-ocean geography, working with Venezuela to fill the requisite supply. Colombia’s Ecopetrol corporation, which is 89% government owned, has recently nationalized its main strategic refinery, by buying it from Swiss trader Glencore in 2009. One reason: to build up its emerging, bi-national export system of oil and gas, which began imports of Venezuelan gas last year.

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Yet rebel groups attacking Colombian pipelines and power stations have been on the rise since Colombia’s collaboration with Venezuela began, interfering with developments like Venezuela’s attempts to purchase a 51% stake in Colombia’s strategic refinery, Reficar. Massive cost overruns from its expansion have generated a feud between Santos and Uribe, who, just before leaving office in 2010, signed a cost reimbursement contract with Chicago Bridge and Iron, agreeing to compensate the firm for all costs rendered. President Santos now blames Uribe, as well as Chicago Bridge and Iron, for the ongoing fiasco, further reducing the viability of joint Venezuelan-Colombian energy collaboration, outlined in Ecopetrol’s SEC filing:

"Our commercial strategy has led us to the Far East...we have started to trade some volume out of the Colombian supply chain by purchasing refined products from an international third party [i.e. Venezuela] and selling such products to another international third party."

Former U.S. ambassador to Colombia, William Wood also indicated in cables released by Wikileaks, entitled, “Colombia and Venezuela: Ties that Bind,” that Colombia’s apparent conciliation with Venezuela during the Uribe presidency envisaged a series of merged “joint energy projects” to create a “façade of friendship... an outwardly conciliatory approach” which could “create the political space to permit clandestine cross border operations” staged from Colombia into Venezuela. These would be built upon a history of Colombian military raids into neighboring countries—like Colombia’s 2008 armed foray into Ecuador, supposedly in pursuit of a FARC guerilla leader— which enraged then-Venezuelan president, Hugo Chavez, prompting him to militarize his side of the border with Colombia.
With FARC demobilized, fresh pretexts for the deployment of Colombia’s armed forces to disrupt regional ties and make room for coal may be necessary.
Though he doubted the “economic viability of the Venezuela-Colombia Pacific oil pipeline,” Ambassador Wood nevertheless acknowledged that “70 percent of the Colombians in Venezuela were pulled by Venezuela’s oil boom,” leading to “many members of Colombia’s business and political elites having extensive Venezuelan ties.” Such ties are embodied in Colombia’s 15 consulates in Venezuela, dwarfing its representation in any other country.

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While concerns of Venezuelan influence remain a concern, Ambassador Wood implied that they are far from yielding much in the way of tangible cause for alarm, partly because a new military-political constellation, led by the second largest guerilla force, the ELN, has begun to fill the void left by the FARC in the wake of the recent peace deal; launching assaults on pipelines in a similar style to that of the demobilized rebel group.

In the grander scheme of Latin American energy integration, Venezuela would serve as the regional hub, channeling energy up the Isthmus of Panama, across Colombia and down into Brazil, Bolivia, Ecuador and Argentina.

Still, any solutions arising from recent summits with the clashing Colombian presidents, both past and present, aren’t yet clear—though it seems that Washington may be more receptive to Colombia’s former president than to its current one.

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