The Democrats, Obama and his economic wrecking crew have banned offshore drilling in the United States but have loaned Brazil $2 billion to help Petrobras, the state owned Brazilian oil company, to develop their off shore oil fields. Via the WSJ:
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. (emphasis added)
So, why exactly are we helping to finance offshore drilling in Brazil (if oil is so bad) while simultaneously putting almost 21,000 American workers out of work in the Gulf region alone? Via the Guardian.uk:
Since the ban was imposed on 28 May – more than a month after the Deepwater Horizon accident – all 33 drilling rigs operating in the Gulf have been idled. The rig owners have warned they will tow them elsewhere if the ban remains in place.
“Once these rigs move overseas and enter into long-term contracts, they not going to come back in six months and one day,” he said. “That is the problem.”
The rigs directly employ around 7,000 people. But, according to the Louisiana Mid-Continent Oil and Gas Association, each offshore job supports three more onshore, meaning a further 21,000 jobs are at risk. Rosenblum added: “It’s an eco-system of businesses which are being harmed even now by this moratorium.”
He said the US government had broken the law by not consulting with local politicians about the ban. He compared it to the response to the terrorist attacks of 9/11, which resulted in the airline industry being shut down for three days. “Never before has the government with a stroke of a pen shut down on entire industry for six months,” he said. (emphasis added)
And by the way, the wells off the coast of Brazil are considered “ultra deep” wells:
Unfortunately, deep water drilling comes with a price…
In 2007, Brazil reported the discovery of a massive offshore oil field. The Tupi discovery boosted Brazil’s proven oil reserves more than 50%. But don’t let this ultra-deep field’s huge numbers fool you-it’s going to take a lot of time and money to bring Tupi into production.
In order to extract the oil, producers have to go through 7,000 feet of water, over 10,000 feet of sand and rocks as well as another 6,000 feet of salt.
That is 23,000 feet of drilling before you get to the oil. For comparison, the Deepwater Horizon was working in a water depth of 4,992 feet of water.