Glenn Beck said President Donald Trump’s newly announced oil agreement with Venezuela could significantly expand America’s long-term access to crude oil while providing another source of heavy crude outside Canada and the Middle East.

"On social media, the president announced what he called the biggest oil deal in world history," Beck said.

"Here's what it is in plain English, okay?"

According to Beck, the agreement involves Venezuela’s acting government and the creation of a private company in which the United States would hold a stake alongside an unnamed private operator.

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Beck said the company would receive development rights to Venezuelan oil fields for 100 years.

"America gets 55% of what comes out of the ground. We have an ownership share, plus the right to buy the oil at cost instead of the market price," Beck said.

"You want to know how we're going to fill our strategic oil reserves? This is it."

Beck said the agreement covers an estimated 65 billion barrels of proven reserves.

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If that estimate holds, he said, the new company would become the world's second-largest corporate holder of oil behind the Saudis.

"The president says it more than doubles American reserves and costs the taxpayers nothing," Beck said.

Beck said Venezuela's side of the agreement is expected to involve roughly $100 billion in private investment and more than $200 billion going into its treasury.

He cautioned, however, that proven reserves underground should not be confused with oil immediately available to the United States through the Strategic Petroleum Reserve.

"There are two things in this country called reserves, and they are not the same thing," Beck said.

The 65 billion barrels identified in Venezuela represent oil that remains underground and would have to be developed and produced.

The Strategic Petroleum Reserve, by contrast, consists of oil already stored in underground salt caverns along the Gulf Coast in Texas and Louisiana.

"That's not geology. That's a pantry, okay?" Beck said.

Congress authorized the SPR in 1975 following the Arab oil embargo, and the United States began filling it in 1977.

Beck said its storage capacity is 714 million barrels and that it contained 726 million barrels in 2010.

According to Beck, the SPR stood at 289 million barrels last week, its lowest level since November 1982.

He said the reserve began the year with 415 million barrels before Trump ordered the release of 172 million barrels in March after Iran choked off the Strait of Hormuz.

"So you set the two numbers next to each other: 65 billion barrels under Venezuela that we just purchased, 200 and, I don't know, 89 million barrels under Louisiana. One of them is a lease, the other is fuel," Beck said.

"You cannot put a 100-year contract into a salt dome, okay?"

Beck used the historical collapse of the Dutch nutmeg monopoly to explain why obtaining access to a resource does not immediately translate into production.

He recounted Frenchman Pierre Poivre's efforts during the 18th century to obtain nutmeg and clove seedlings from the Dutch East Indies, noting that the plants required years before producing usable crops.

Beck said the same principle applies to Venezuela.

"These are the seedlings. The seedlings are not nutmeg. You don't win overnight," Beck said.

Canada currently supplies roughly 4 million barrels of crude per day to the United States and approximately 60% of U.S. oil imports, according to Beck.

He said about 90% of Canadian crude exports go to the United States.

Much of that supply consists of heavy, sour crude from Alberta, which Gulf Coast refineries are designed to process.

Beck said Venezuelan crude offers a potential substitute because it has similar characteristics.

"Does it take Canada's leverage away? On paper, yes, in about a decade," Beck said.

Venezuela currently produces approximately 1.2 million barrels per day, compared with a peak of 3.5 million barrels per day during the 1990s, according to Beck.

Matching Canada's current supply to the United States would therefore require Venezuela to roughly triple production.

"To stand in for Canada, it has to triple that, and that requires rigs and upgraders and pipelines and $100 billion," Beck said.

He also raised questions about the durability of a century-long agreement negotiated with Venezuela's acting government.

"A 100-year lease is only as good as the government that granted it and the one after that," Beck said.

Beck nevertheless argued that Venezuela's proximity to the United States gives the agreement strategic advantages.

Venezuelan oil would not have to travel through the Strait of Hormuz or other distant geopolitical choke points.

"The honest read of this deal is: this oil does not have to come out of Saudi Arabia or cross the Strait of Hormuz. It doesn't need a carrier group to escort it," Beck said.

"Anything that reduces the number of choke points between us and a tanker is worth having."

Beck said the agreement should be evaluated over decades rather than according to its immediate effect on American oil supplies.

"If you're going to be dependent on somebody, a neighbor beats an enemy all the way on the other side of the world," Beck said.

"A 100-year horizon is the right horizon for refineries, okay?"

For Beck, the central question is how quickly Venezuela can attract the investment, equipment and infrastructure necessary to turn its underground reserves into substantial production.

"So this argument is real, and it doesn't require anybody to lie about the calendar, but the calendar is the whole thing," Beck said.

"The mistake is not making the deal."

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