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View Full Version : Economics Obama Underwrites deepwater drilling for Brazil but prohibits it in US Offshore


JimBaker488
03-31-2011, 07:06 AM
For the sake of this argument, ignore whether President Barack Obama had anything to do with the Export Import Bank of United States' decision to loan $2 billion to help Brazilian oil giant Petrobras in its efforts to drill for oil deep in the Atlantic Ocean.
**

If I understand the argument correctly, we should not drill in the waters in
the Gulf of Mexico, or the waters off Virginia in the Atlantic Ocean, not only because of the damage it does to the environment in the United States, but ultimately for the damage it does to the environment across the whole planetIf that is the case, why does the United States, or an agency of the United States, guarantee a loan for deep-water, offshore drilling off the coast of Brazil?.
Wouldn't a spill there be a threat to the environment of the planet everywhere?
http://www.sun-sentinel.com/news/opinion/fl-gmcol-offshore-drilling-brazil-mar20110331,0,3699945.column

HonestChieffan
03-31-2011, 07:12 AM
Yesterday he said we will cut imports by 30% or something by 2025. A week ago he told Brazil we want to be their best customer. We tell drillers no to drilling where a known reserve exists. And he keeps harping on oil leases that may or may not have oil, may or may not have enough to commercialize, and may just be thousands of acres with no oil at all that have gone undeveloped.....It all is very clear when seen as as a whole is it not?

mlyonsd
03-31-2011, 07:15 AM
The Obama is a hypocrite train left the station 2 years ago.

blaise
03-31-2011, 07:28 AM
Maybe he figures Brazil is going to drill either way, and he figures we should be the ones that are their favored customers.

Amnorix
03-31-2011, 07:35 AM
The export/import bank exists to fund foreign ventures that will buy US products. The financing they give are LOANS, which are expected to be repaid.

Brazil's policies regarding offshore drilling are their own. If they want to drill, why would we not encourage them to buy US products to do it with?

Our offshore drilling policies have nothing to do with Brazil's, and our offshore drilling policies sure as hell have nothing to do with the import/export BANK. So long as the foreign enterprise isn't involved in anything illegal, why wouldn't we encourage them to buy US products?

But don't let simple logic or obvious facts interfere with the diatribe. Feel free to carry on.

chiefsnorth
03-31-2011, 08:14 AM
What more evidence do we need that this guy is in way over his head? We crossed that threshold long ago.

Chiefshrink
03-31-2011, 08:23 AM
Maybe he figures Brazil is going to drill either way, and he figures we should be the ones that are their favored customers.

No, it's called severe conflict of interest. Obama and Soros has vested interest in Petrobras. They are making a shitload of $$. You wanna talk about 'crook' in the oval office? :shrug:

Amnorix
03-31-2011, 08:59 AM
No, it's called severe conflict of interest. Obama and Soros has vested interest in Petrobras. They are making a shitload of $$. You wanna talk about 'crook' in the oval office? :shrug:

Details/link?

orange
03-31-2011, 09:59 AM
If I understand the argument correctly, we should not drill in the waters in
the Gulf of Mexico,

He doesn't.

Another permit for Shell project
10:00 PM, Mar. 30, 2011
Written by
Connie Lewis

The federal agency that controls the tap of deepwater drilling permits in the Gulf of Mexico on Wednesday approved a new well as part of Shell Offshore Inc.'s recently approved exploration plan.

This brings the number to six permits issued by the Bureau of Ocean Energy Management, Regulation and Enforcement since BP's catastrophic blowout in April 2010 killed 11 people and gushed millions of barrels of oil into the Gulf. That event brought activity to a standstill and a months-long drilling moratorium was issued. The agency's first permit was issued in early March.

That event brought activity to a standstill and a months-long drilling moratorium was issued. The agency's first permit was issued in early March.

To meet the new more stringent safety requirements that have been put in place, Shell demonstrated, among other things, it has the capacity to contain a subsea blowout. The approval is for drilling a new well at a depth of 2,721 feet approximately 137 miles off the Louisiana coastline south of Lafayette. Shell has contracted with the Marine Well Containment Co. to use its capping stack to stop the oil flow should a well control event occur.

The capabilities of the capping stack are specific to the characteristics of the proposed well.

"Today's permit approval represents a culmination of a broad and comprehensive review process involving an exploration plan, a site-specific environmental assessment, and the application for the drilling permit, all of which complied with our rigorous safety and environmental standards, said BOEMRE Director Michael Bromwich. "The completion of this process further demonstrates that we are proceeding as quickly as our resources allow to properly regulate offshore oil and gas operations in the safe and environmentally responsible manner."

http://www.sun-sentinel.com/news/opinion/fl-gmcol-offshore-drilling-brazil-mar20110331,0,3699945.column

But don't let facts get in the way of a good anti-Obama rant. They never have before. Carry on.

HonestChieffan
03-31-2011, 10:34 AM
Lets not pass the opportunity to spin and mislead, eh Orange?

I do believe there was one actual new one...Petrobas got it when Obama was on the way to Brazil.

http://thehayride.com/2011/03/those-new-gulf-drilling-permits-not-so-new/

Those New Gulf Oil-Drilling Permits? Not So New
Mar. 25 2011 - 9:40 am

)
The U.S. has issued five permits in recent weeks for oil drilling in the Gulf of Mexico—hailing some as “new.”

But all allow work to resume that was halted last year during BP’s Deepwater Horizon spill.

Faced with rising oil prices, melting alternatives, and growing criticism, the U.S. began issuing the permits in February. The fifth went to Chevron yesterday.

Administration officials have championed the permits with statements asserting that things are back to normal, only safer:

“Today’s permit approval further demonstrates industry’s ability to meet and satisfy the enhanced safety requirements associated with deepwater drilling, including the capability to contain a deepwater loss of well control and blowout,” said Michael R. Bromwich, director of the Bureau of Ocean Energy Management, Regulation and Enforcement, yesterday.

“We will continue to review and approve those applications that demonstrate the ability to operate safely in deep water.”

The Bureau’s press release insists this drilling is “completely new”:

“Today’s is the first deepwater permit approved for completely new exploration since the deepwater drilling moratorium was lifted; this means that this is the first exploratory well drilled into this reservoir or field, which has never produced.”

But the press release goes on to say, “Initial drilling on Chevron’s Well #1 began March 2010.” And drilling was halted in June, at 80 percent of its target depth, because of the Deepwater Horizon spill. Since then, Chevron’s operation has undergone a new and more rigorous review.

Chevron didn’t get very far with Well #1 last Spring, but it had been in the field and poking holes in the sea floor—in 6,750 feet of water about 215 miles south of the Louisiana coast.

The Administration puts emphasis on the new to blunt criticism that it is holding up domestic energy production. Most media have bit on the new-drilling hook, and environmentalists have reacted with predictable outrage. Grist called the recent permits “giveaways to polluters.”

But industry has been glib, at best: “We look forward to the day when a single permit on plan doesn’t merit a press conference by the Secretary of the Interior,” said Erik Milito of the American Petroleum Institute.

Despite its history of record profits, the oil industry faces exhausting obstacles in the Gulf, Milito said in a statement yesterday (pdf), as the government pursues an unofficial moratorium on new driling:

The administration has repeatedly decided to pursue policies and actions that delay, defer or deny access and production from our domestic resources.”

Of 14 permits submitted for initial exploratory drilling in the Gulf—drilling that would be, in other words, new—one has been withdrawn for modification and 13 are listed as “pending.”

On Monday, the Interior Department announced it had approved an exploration plan for Shell, also describing it as new:

This is the first new deepwater exploration plan approved since the Deepwater Horizon explosion and resulting oil spill.”

But later in the same press release we learn:

The plan is a supplemental exploration plan that proposes activities that were not included in an original exploration plan for the same lease – located in Shell’s Auger field – which was approved in 1985.”

A plan, too, is a long way from a permit. It describes proposed activities, and once the plan is approved, the applicant can apply for permits to carry out those activities, a process that can take, according to Milito, another decade.

Who’s wearing the black hats in this scene—and who’s wearing the white hats—depends on whether the beholder is green. Either way, for all of the chatter about new drilling in the Gulf of Mexico, little has changed.

JimBaker488
03-31-2011, 11:09 AM
The export/import bank exists to fund foreign ventures that will buy US products. The financing they give are LOANS, which are expected to be repaid.

Brazil's policies regarding offshore drilling are their own. If they want to drill, why would we not encourage them to buy US products to do it with?

Our offshore drilling policies have nothing to do with Brazil's, and our offshore drilling policies sure as hell have nothing to do with the import/export BANK. So long as the foreign enterprise isn't involved in anything illegal, why wouldn't we encourage them to buy US products?

But don't let simple logic or obvious facts interfere with the diatribe. Feel free to carry on.
Instead of making loans to international Oil & Gas companies to purchase products/services from US-based companies, why not improve access to domestic O&G reserves (including deep-water access) to US based companies and thereby increase business for domestic companies to service the American drillers/producers ? OK, and then the government could use more of that scare funding for loans to developing other domestic energy sources that are struggling and really need subsidation to succeeding in the long-term, like Solar & Wind ?

Amnorix
03-31-2011, 01:45 PM
Instead of making loans to international Oil & Gas companies to purchase products/services from US-based companies, why not improve access to domestic O&G reserves (including deep-water access) to US based companies and thereby increase business for domestic companies to service the American drillers/producers ? OK, and then the government could use more of that scare funding for loans to developing other domestic energy sources that are struggling and really need subsidation to succeeding in the long-term, like Solar & Wind ?


These aren't interrelated questions.

The export-import bank doesn't make the loan. It just guarantees the loan. The actual money is coming, in this case, from JPMorgan bank. Which I think has the money to loan to domestic oil companies also. Whether any federal guarantee exists for such loans depends on whether some other program exists. The SBA, for example, has a loan department.

The export-import bank exists to help FOREIGN entities (not domestic entites) get loans at lower rates to help finance the purchase by such FOREIGN entity of US goods.

That has nothing to do with drilling off the shores of the United States, or the financing of such drilling, or whether we think we make enough oil production domestically, etc. etc.

One has NOTHING to do with the other. The Export-Import bank doesn't sit there when a foreign entity comes to it for loan support etc. and cross-check against some random US policies in the same field to see if it makes more sense to give that loan domestically. That's not its mission and is not remotely within its purview. You can suggest that the policy isn't consistent, but why in the hell does it make sense to limit foreign purchase of US-made goods that are legally available for sale overseas based on some unrelated US policies?!?!

mikey23545
03-31-2011, 01:57 PM
He doesn't.

Another permit for Shell project
10:00 PM, Mar. 30, 2011
Written by
Connie Lewis

The federal agency that controls the tap of deepwater drilling permits in the Gulf of Mexico on Wednesday approved a new well as part of Shell Offshore Inc.'s recently approved exploration plan.

This brings the number to six permits issued by the Bureau of Ocean Energy Management, Regulation and Enforcement since BP's catastrophic blowout in April 2010 killed 11 people and gushed millions of barrels of oil into the Gulf. That event brought activity to a standstill and a months-long drilling moratorium was issued. The agency's first permit was issued in early March.

That event brought activity to a standstill and a months-long drilling moratorium was issued. The agency's first permit was issued in early March.

To meet the new more stringent safety requirements that have been put in place, Shell demonstrated, among other things, it has the capacity to contain a subsea blowout. The approval is for drilling a new well at a depth of 2,721 feet approximately 137 miles off the Louisiana coastline south of Lafayette. Shell has contracted with the Marine Well Containment Co. to use its capping stack to stop the oil flow should a well control event occur.

The capabilities of the capping stack are specific to the characteristics of the proposed well.

"Today's permit approval represents a culmination of a broad and comprehensive review process involving an exploration plan, a site-specific environmental assessment, and the application for the drilling permit, all of which complied with our rigorous safety and environmental standards, said BOEMRE Director Michael Bromwich. "The completion of this process further demonstrates that we are proceeding as quickly as our resources allow to properly regulate offshore oil and gas operations in the safe and environmentally responsible manner."

http://www.sun-sentinel.com/news/opinion/fl-gmcol-offshore-drilling-brazil-mar20110331,0,3699945.column

But don't let facts get in the way of a good anti-Obama rant. They never have before. Carry on.

Wow, that was a pretty slow response for you, Orange...Was your internet connection down for a while?

JimBaker488
03-31-2011, 03:16 PM
These aren't interrelated questions.

The export-import bank doesn't make the loan. It just guarantees the loan.

I think it's common knowledge in the fianancial industry that "underwriting" or "guaranteeing" a loan for all practical purpose is a de facto loan.