Friday, 27 January 2012 18:12

Investing in Crude Abroad, Green Dreams in the US

"Off the coast of Rio de Janeiro — below a mile of water and two miles of shifting rock, sand and salt — is an ultradeep sea of oil that could turn Brazil into the world’s fourth-largest oil producer, behind Russia, Saudi Arabia and the United States.

The country’s state-controlled oil company, Petrobras, expects to pump 4.9 million barrels a day from the country’s oil fields by 2020, with 40 percent of that coming from the seabed. One and a half million barrels will be bound for export markets.
The United States wants it, but China is getting it.
Less than a month after President Obama visited Brazil in March to make a pitch for oil, Brazilian President Dilma Rousseff was off to Beijing to sign oil contracts with two huge state-owned Chinese companies."
At the same time, the Obama administration pushed forward to scrap the Keystone XL Pipeline at home. The Washington Post’s Robert Samuelson wrote: “Rejecting the Keystone pipeline is an act of insanity.” Obama’s hometown paper, the Chicago Tribune, says “Obama made a decision that will deny the U.S. a reliable source of oil. Note that Canada has never threatened to block the Strait of Hormuz. Obama made a decision that will cost the U.S. good jobs. He seems to think those jobs will still be there when he gets around to making a decision on the pipeline. But they may well be gone for good.” 

Instead of serving American interests, Obama spends billions to invest in Brazillian drilling: "
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." 

This smart move will benefit Beijing at least as well as Washington. Now comes the sanity question: why? Because: "
Oil from tar sands, reports the BBC on the Keystone decision, “is so plentiful that full-scale development would seriously delay the transition to low-carbon alternative fuels,” which is the holy grail of the left. 
Full scale development of tar sands can only be stopped by taxing oil out of existence, like was tried with cap and trade.  Cape and trade was never about trying to cool the earth. It was about giving "green" technologies a competitive advantage over fossil fuels that free markets won't conceed."  

To tax oil out of existence, one should strongly rely on imports, invest in oil developments that will enrich China's supply, and bet for wind mills and solar panels at home. Not sure if Fidel Castro dreamed to have such a staunch competitor in the Oval Office. Remains to see what voters dream for their country.

Sources: - Obama’s $2 billion to Brazil ends up helping send oil to China. - With Keystone XL, Obama Mask Slips on Jobs, Energy

Share on Myspace