The American Kafir

2011/03/22

Obama: Drill, Brazil, Drill! And Senator Questions $2-Billion Loan to Brazil for Offshore Drilling

Source Link: Investors Business Daily

Energy Policy: While leaving U.S. oil and jobs in the ground, our itinerant president tells a South American neighbor that we’ll help it develop its offshore resources so we can one day import its oil. WHAT?!?

With Japan staggered by a natural disaster and a nuclear crisis, cruise missiles launched against Libya in our third Middle East conflict and a majority of U.S. senators complaining about a lack of leadership on the budget, President Obama decided it would be a good time to schmooze with Brazilians.

His “What, me worry?” presidency has given both Americans and our allies plenty to worry about. But in the process of making nice with Brazil, Obama made a mind-boggling announcement that should make even his most loyal supporter cringe:

We will help Brazil develop its offshore oil so we can one day import it.

We have noted this double standard before, particularly when — at a time when the president was railing against tax incentives for U.S. oil companies — we supported the U.S. Export-Import Bank’s plan to lend $2 billion to Brazil’s state-run Petrobras with the promise of more to follow.

Now, with a seven-year offshore drilling ban in effect off of both coasts, on Alaska’s continental shelf and in much of the Gulf of Mexico — and a de facto moratorium covering the rest — Obama tells the Brazilians:

“We want to help you with the technology and support to develop these oil reserves safely. And when you’re ready to start selling, we want to be one of your best customers.”

Obama wants to develop Brazilian offshore oil to help the Brazilian economy create jobs for Brazilian workers while Americans are left unemployed in the face of skyrocketing energy prices by an administration that despises fossil fuels as a threat to the environment and wants to increase our dependency on foreign oil.

Obama said he chose Brazil to kick off his first-ever visit to South America in recognition of that country’s ascendancy. He has also highlighted one of the reasons for America’s decline — an energy policy that through the creation of an artificial shortage of fossil fuels makes prices “necessarily skyrocket” to foster his green energy agenda.

In an op-ed in USA Today explaining his trip, Obama opined: “Brazil holds recently discovered oil reserves that could be far larger than ours. And as we seek to increase secure-energy supplies, we look forward to developing a strategic energy partnership.”

Yet in his alleged quest for “secure-energy supplies,” he refuses to develop oil and natural gas resources in U.S. waters. His administration has locked up areas in the West where oil shale reserves are estimated to be triple Saudi Arabia’s reserves of crude. His administration is even stalling on plans to build a pipeline to deliver oil from Canada’s tar sands to the U.S. market.

That project would build a 1,661-mile pipeline from the tar sands of Alberta to U.S. refineries near Houston. It would create 13,000 “shovel-ready” jobs and provide 500,000 more barrels of oil per day from an ally.

Yet it’s now being held up by the State Department because it crosses an international border, on the grounds that it needs further environmental review. Shipping oil by tanker from Brazil is safer and more secure?

If Brazil had copied our current energy policy, it wouldn’t have discovered in December 2007 the Tupi field, estimated to contain 5 billion to 8 billon barrels of crude, or its Carioca offshore oilfield that may hold up to 33 billion barrels.

Haroldo Lima, head of Brazil’s National Oil Agency, estimates that Carioca might hold as much as five times the reserves of Tupi. Somehow the Brazilians aren’t too worried about oil spoiling the pristine beaches of nearby Sao Paulo or Rio de Janeiro in the tourist season.

We suggest that President Obama return home and start worrying about an unapologetic American renaissance in which we focus more on American energy and American jobs and less on mythical environmental hazards and foreign accolades.

Senator Questions $2-Billion Loan to Brazil for Offshore Drilling as Domestic Production Languishes

Written By Penny Starr

(CNSNews.com) – Sen. David Vitter (R-La.) is questioning how the United States has benefited from a $2-billion loan the Export Import Bank of the United States made to a Brazilian oil company for its offshore drilling operations.

How has that loan, made several years ago, helped U.S. companies, the senator asked in a March 17, 2011 letter to Fred Hochberg, president of the Export-Import Bank.

“I am sure you can understand the frustration Louisianans have with a $2 billion loan to produce energy offshore Brazil,” Vitter wrote to Hochberg – especially given the “ongoing de facto moratorium” on deepwater drilling in the Gulf of Mexico.

The Obama administration has approved only three permits for drilling new deepwater wells in the Gulf of Mexico since it lifted its moratorium on issuing permits last October– seven months after the BP rig explosion and oil spill.

“I would appreciate a full accounting for the return on investment the American taxpayer has received, and is anticipated to receive, on the $2 billion loan to this Brazilian petroleum company,” Vitter wrote to Hochberg. “I want to understand why permitting domestically is nearly stalled, and if there is at least a return on this investment over the last year and a half for supporting production offshore Brazil.”

When Vitter first inquired about the loan to Brazil’s Petrobras two years ago, the Export-Import Bank responded to Vitter’s staff by telephone, explaining that the U.S. would benefit from the loan through the increased export of U.S. drilling products and services.

The Export-Import Bank of the United States, the official export credit agency of the United States, helps finance the export of U.S. goods and services to international markets.

Specifically, Vitter now wants to know:

— The name of all U.S. companies that have increased exports based on this loan.
— The specific product exports that have increased based on this loan.
— The return on investment for this loan during the next 5 and 10-year windows.
— The name of all U.S. and foreign investors, including institutional investors, that increased their shareholdings in Petrobras in excess of $50 million within a 6 month period before and after the ExIm loan.

“Given that U.S. offshore oil and gas reserves are estimated at nearly triple the 40 billion barrels estimated offshore Brazil, a thorough response from you would be helpful in understanding why permitting domestically is nearly stalled, and if there is at least a return on investment for supporting production offshore Brazil,” Vitter wrote.

President Obama was in Brazil over the weekend. On Monday, he arrived in Chile, and from there he’ll stop in El Salvador. The White House says the South American trip is intended to seek out “job creating opportunities.”

Export-Import Bank President Hochberg is among the delegation accompanying the president to Brazil, Chile and El Salvador.

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