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Matt Coday - Will Trump’s Venezuela Oil Deal Lower Energy Prices?
•The Lars Larson Show
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Oil & Gas Workers Association President Matt Coday joins Lars to discuss President Trump’s new deal giving the U.S. access to Venezuela’s massive oil reserves. Could the agreement eventually bring down energy prices for American consumers?
Hey, welcome back to the Lawrence Larsen show. Well, Friday night, very late on Friday night, certainly too late to include in my talk show, Donald Trump announced a deal that would give the United States a stake in Venezuela's vast oil reserves. He says it's a step toward his goal of extracting energy from the country after American forces captured then President Nicolas Maduro in a middle of the night raid way back in January. Doesn't seem like it's been that long, but in any case, it has been. I thought we'd talk about it with Matt Cody, who is president of the Oil and Gas Workers Association. Matt, welcome back to the program.
SPEAKER_01
Hey, great to be on with you today.
SPEAKER_00
Hey, give my audience the short, you know, because I I'm not in the oil business. I don't I don't have any expertise there, and most of them don't either, I would imagine. So does this have the potential to bring energy costs down dramatically for Americans at some point?
SPEAKER_01
Yes, the answer is yes. President Trump is absolutely right whenever he says that it will lower gas prices for all Americans for years to come.
SPEAKER_00
So what does it take to make this happen, though, and what's it going to cost us up front? And I would imagine if we're dealing with a country like Venezuela, is there some risk that maybe the country renationalizes its assets and simply steals back uh what's come to us?
SPEAKER_01
There's always that risk. And in fact, there's that risk in uh almost every foreign nation. If you look at what the country of Chad did uh whenever they nationalized ExxonMobil's assets, I believe in 2023. We certainly have that risk in an unstable political environment in Venezuela. But with the U.S., uh I don't know, I don't want to say forces, but with our influence in South America, and of course with great trade relationships, we're able to minimize a lot of that.
SPEAKER_00
Well, in fact, this deal says the U.S. has 55% effective output of the new private company that's going to do the deal with Venezuela. So it sounds like if it works the right way, it will benefit American consumers, it'll benefit that private company, it'll benefit the American taxpayer, and ultimately it'll benefit the people of Venezuela. Am I seeing this with too rosy a view?
SPEAKER_01
No, you're seeing it perfectly right. Um, because that's what it does. Uh look, our Gulf Coast refineries, especially, are set up to process a heavier crude than what we produce here in the United States.
SPEAKER_00
And so is that West Texas intermediate stuff? And we need some what's the other one? The Brent crude, right?
SPEAKER_01
No, uh so Brent is kind of the benchmark, the global standard. Um uh whenever we talk about a heavier crude, um, which is what we produce most of in the uh South America anyway, um, when we talk about the Mexican Maed crude, or whenever we talk about Venezuela, most of that that comes from the Orinoco belt. Um so it's a heavier crude, just different API, different gravity. Um, and so it comes out a little bit thicker. There's a different refining process for it. So it's just different than the lighter, sweeter crudel that we produce here, which you accurately said, West Texas Intermediate. That's the benchmark that we use here in the U.S. And so the refineries are set up to process that heavier crude. We we need to continue importing heavier crude because that's what lower gas prices. Um, look, we would love to just have everything set up where everything was just American oil, but we would wind up in a policy of isolationism and it would cost billions of dollars to upgrade those refineries.
SPEAKER_00
And then but but let me ask you something, Matt, because one of the frustrations I've got is people say, Well, why don't the oil companies build some more refineries? I said, Would you build a refinery if Joe Biden just a couple of years ago was telling you, we're gonna put you all out of business in in a decade? No, of course not. So, but but at this point, if you could guarantee a supply of both U.S. oil, the the lighter, sweeter stuff, and the thicker stuff from Venezuela, could we get some of the oil companies to upgrade their existing facilities or even build a new one? There is one under construction, isn't there?
SPEAKER_01
Yes, there's one, uh, of course, uh South Texas. And then there's some others that have announced that they're putting in new refineries. Uh, saw one this last week. It's going to be down around San Antonio, Texas. Um, and that will process the lighter, sweeter crudel. Also, while I can't you know publicly tell you about anything uh right now, um, we can do both things. And President Trump and this White House, his energy advisors and a lot of his staff, we've been working with them for months. And of course, with my my friends uh Governor Jeff Landry from Louisiana, uh Governor Patrick Morrissey from West Virginia, you know, uh governors all across the state, um, state reps, uh, you know, energy companies, there's a whole much bigger plan. I don't know if that probably wasn't the right way to say that, but there's uh a much bigger plan where we can do both.
SPEAKER_00
And in fact, there's almost no other way for Venezuela to do it, is it? Because Maduro ran down the infrastructure so much that you say, well, they've got lots of oil. Yes, but you have to have the equipment to get it out of the ground and get it to where it needs to go, and that's going to cost a lot of money, and you have to persuade people to spend that kind of money or invest it in a place where they they worry that they'll invest the money and then they'll have it stolen from them at some point. What's the way to allay that fear?
SPEAKER_01
Man large, you're absolutely right. Being being able to bring stability to that region of South America is so crucial. Um, and so being able to establish those trade relationships. Look, if you go back to the 2018 Brookings Institute study that tied uh crime rates to poverty levels, well, then the longer the people of Venezuela stay poor, the more the crime is. The more those cartels, you know, those uh militia, those factions uh take root and grow. But being able to be good trading partners with the people of Venezuela, that brings prosperity to them. And that benefits both them and us here in the United States. So it's a win-win all around.
SPEAKER_00
Yeah, and in fact, I mean, it really, like Ronald Reagan said, the best social program in the world is a job. So rather than having to, you know, pony up a bunch of foreign aid and give it away to countries like Venezuela, why don't we just make it possible for the people of that country to earn their own living and benefit us at the same time?
SPEAKER_01
Absolutely right. And while we're talking about past presidents, I find it funny that in present day, some of the people who are opposing President Trump's great deal in Venezuela, well, in 2022, whenever Joe Biden's administration granted a license to Chevron to continue production and to export that oil to the United States, well, those people were fully on board whenever it was Joe Biden's plan. That's the thing we need to do. And that's one of the things that President Trump does so well is to bring Americans together and say, hey, look, regardless of party, this is good for our country. This is good for everybody here.
SPEAKER_00
Well, Matt Cody, president of the Oil and Gas Workers Association. Matt, you got to remember about those Democrats, the ones who backed up President Otto Pen and the deal to keep stuff coming to the United States from Venezuela. If they didn't have double standards, Matt, they wouldn't have any standards at all, would they?
SPEAKER_01
Oh, man, Lars, we could go on all day about the hypocrisy in politics.
SPEAKER_00
I just want to see this stuff to and I understand nobody's well, when is it going to lower my gas prices? Next week. I mean, what do you think? I mean, stuff like this is going to take some time to move the needle. But if you could take the higher prices for a short period of time and know that it's going to lead to longer prices that are going to be very, very stable and hold things in place, I'll tell you what, I think most Americans understand. If it's a matter of paying a little bit now to save a whole bunch of money over the long term, that's why people buy houses. That's Matt Cody, president of the Oil and Gas Workers Association. Matt, it's a pleasure. Back in a moment. You got the Lars Larson show.
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