... The U.S. is going to lend billions of dollars to Brazil's state-owned oil company, Petrobras, to finance exploration of the huge offshore discovery in Brazil's Tupi oil field in the Santos Basin near Rio de Janeiro. Brazil's planning minister confirmed that White House National Security Adviser James Jones met this month with Brazilian officials to talk about the loan.
The U.S. Export-Import Bank tells us it has issued a "preliminary commitment" letter to Petrobras in the amount of $2 billion and has discussed with Brazil the possibility of increasing that amount. Ex-Im Bank says it has not decided whether the money will come in the form of a direct loan or loan guarantees. Either way, this corporate foreign aid may strike some readers as odd, given that the U.S. Treasury seems desperate for cash and Petrobras is one of the largest corporations in the Americas. (WSJ, hat tip Naive & Abroad)
As the author says, ''too bad it's not in U.S. waters". In reality Obama isn't funding anything. The money will come out of the pockets of hard-working Americans, Americans who cannot hold up under much more financial stress.
The truth is we could be drilling in U.S. waters in the Gulf, -- but not the East coast, West coast, or waters off Alaska. The Tupi oil fields in Brazil will make Brazil a leading oil exporter. If America could drill off all her shores, it could be our equivalent of the Tupi oil fields.
If the Obama administration and everyone else were really serious about getting off foreign oil, they would do everything in their power to clear the path to American offshore drilling -- now.
Obama's plan is to increase taxes on oil companies and give a $1,000 tax cut to 'help' Americans, more 'rebates', new investigations of the oil companies... Obama said drilling off Florida's shores "would not do anything" to lower oil prices.
Even those against offshore drilling will admit that a lot of oil lies untapped under the rocky floors of the Atlantic and Pacific oceans off the U.S. coasts, in areas where Congress has banned drilling since 1982. They they ask the ridiculous question, "But is it enough to free the U.S. from its dependence on foreign suppliers?" (Scientific American)
I don't know if there is enough oil to free us from dependence on foreign suppliers, but shouldn't we find out? And even if it is not enough to completely make us independent, it will certainly make us less dependent. Isn't being less dependent the goal? Should we toss out the idea of becoming less dependent simply because drilling offshore won't make us completely independent? What kind of thinking is that?
Americans are in favor of drilling for our own oil. While the percentages differ in polls taken in 2007, 2008, 2009 (I did not find a 2010 poll), the majority in all want offshore drilling.
It is very difficult to estimate how much oil is anywhere, some estimates have proven to be wrong, and we need new, current estimates - but that costs money.
...There is a chance that the (Minerals Management Services) MMS has miscalculated the amount of offshore oil, because its estimates are based on 30- to 40-year-old data. For example, MMS spokesperson Nicholas Pardi says a 1987 survey of the Gulf of Mexico indicated there was potentially nine billion barrels of oil there, but when the area was resurveyed nine years later (using newer technologies), the number jumped to potential 45 billion barrels. (Scientific American)
Sure, some people don't want the oil rigs dotting their skyline, and they worry about a potential spill and environmental problems, but if we leave our dependence on foreign oil up to the environmentalists and the NIMBY groups, we will ALWAYS be dependent.
Others argue that if we drilled our own oil, it would not be any cheaper than foreign oil. Is the goal cheaper gas or dependence from oil originating in countries that don't really like us very much?
I would love to have congress hold hearings on why we are financing offshore drilling in Brazil and not here at home. I would love to see this funding blocked.