Monday, January 23, 2012
Obama’s Brazilian Oil Disaster
So much for Plan B.
by John Hayward
President Obama’s ideologically-motivated opposition to the Keystone XL oil pipeline has gotten all the headlines lately, but critics forget that our brilliant leader had a Plan B for obtaining oil. That’s “B” as in “Brazil.”
Obama has put a tremendous amount of effort into cultivating the Brazilian oil industry. In fact, he offered Brazil’s Petrobras oil company $2 billion in loan subsidies to encourage precisely the kind of offshore exploration he has forbidden American companies to engage in. His offshore drilling moratorium has already cost the American economy over a billion dollars, and killed 20,000 jobs.
In November, the Obama Administration made the bizarre decision to stiff American aircraft manufacturer Hawker-Beechcraft for a billion-dollar no-bid contract to manufacture a light attack plane. The company had already spent $100 million producing a plane that met all of the Air Force’s requirements. The contract was given to a company essentially owned by the Brazilian government, Embraer, which has very little experience producing such aircraft. Hawker-Beechcraft unsuccessfully appealed to the General Accounting Office over this decision, then filed suit in federal court. Some wondered at the time whether this was a gift to win Brazil’s favor.
The President was on a Brazilian junket when he launched the war on Libya via long-distance telephone call. He cheerfully assured the Brazilian oil industry, in words he would never use to an American energy company, that “when you’re ready to start selling, we want to be one of your best customers.” Of course, he was also prattling on about American jobs energy independence at the time. His critics noticed the wide gulf between his words and deeds, as quoted in a Fox News report:
"We have abundant energy resources off Louisiana's coast, but this administration has virtually shut down our offshore industry and instead is using Americans' tax dollars to support drilling off the coast of Brazil," Sen. David Vitter, R-La., said in a statement. "It's ridiculous to ignore our own resources and continue going hat-in-hand to countries like Saudi Arabia and Brazil to beg them to produce more oil."
Fresh off a three-country visit to the region, Obama is trying to improve relations with the powerhouses of Latin America. Gulf Oil CEO Joe Petrowski agreed it's better to encourage production in more reliable Brazil than in the "inherently unstable" Middle East.
Still, he called Obama's announcement "puzzling," even "humorous."
"More oil that is not concentrated in the Mideast is good for the world and good for America. It would be a lot better if we had the drilling here," Petrowski told Fox News. "And it seems a double standard and it seems somewhat hypocritical to a country that desperately needs jobs ... that we're encouraging other countries to create the jobs that we need."
Well, guess what? Brazil is ready to sell that oil.
The Washington Times reports on the latest Obama disaster:
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.
The deals are part of a growing oil relationship between the two countries that, thanks to a series of billion-dollar agreements, is giving China greater influence over Brazil’s oil frontier.
Chinese oil companies are pushing to meet mandatory expansion targets by inking deals across Africa and Latin America, but they are especially interested in Brazil.
“With the Lula and Carioca discoveries alone, Brazil added a possible 38 billion barrels of estimated recoverable oil,” said Luis Giusti, a former president of Venezuela’s state oil company, PDVSA, referring to the new Brazilian oil fields.
“That immediately changed the picture,” he said, adding that Brazil is on track to become “an oil giant.”
And when you’re looking to become an oil giant, who needs a no-growth dwarf like Barack Obama? This was all a done deal before President Downgrade began making a fool of himself in Brazil. While Obama was offering $2 billion in loan guarantees, China was giving them $10 billion loans in exchange for 10-year oil deals, and buying $5 billion chunks of Brazilian oil companies. They’re also getting leverage with Venezuela, which is getting Chinese support for joint ventures with Petrobras.
So, there will be plenty of offshore drilling going on, but it won’t be done by American companies creating American jobs and earning American dollars, and we won’t be getting the oil. Plan B was an epic disaster. Plan C involves dependency on China instead of the Middle East, and a more primitive, restricted American economy settling for the “green energy” junk Obama’s top contributors are pushing.
Since the Brazil thing didn’t work out, can that American company at least have its Air Force contract back?
To read another article by John Hayward, click here.
Posted by Brett at 7:11 PM