How Facts Get Twisted - The Brazilian Oil Deal Story

[BigLouie]

Interesting read from the Chron.

The emails still come in at least a couple of times a month, although what once was a flood has, thankfully, slowed to trickle. The argument is this: President Obama gave $2 billion of our tax money to Brazil so it can expand its offshore oil industry while he opposes drilling at home. The Brazil’s state-owned oil company, Petrobras, will sell its oil to China. Insert expression of partisan outrage here.
This story has endured for a couple of years, in part because Glenn Beck yammered on about it on Fox News. So to all those outraged about the “Brazilian oil giveaway,” I refer you to the recent $1.5 billion deal by Houston-based National Oilwell Varco to provide equipment for seven drillships in Brazil. The story notes that the deal will create jobs in Houston and is the result of a “growing link between Houston’s oil industry and the South American deep-water powerhouse.” Petrobras plans to spend $225 billion on projects between now and 2015.
The deal underscores the rationale behind the transaction against which Beck and so many emailers have railed during the ensuring years. They complained that Obama signed the executive order to loan $2 billion to Brazil without securing a reciprocal agreement to receive oil. Except Obama never signed an executive order. The loan was made by the Export-Import Bank, which exists to make loans to foreign markets to encourage the export of U.S. goods, in this case, oilfield services. Nor was the money taxpayer funded. The Ex-Im Bank provides loan guarantees for commercial lenders, and it receives no funding from Congress.
In a 2009 editorial, the Wall Street Journal complained that Obama was supporting offshore drilling in Brazil and not in the U.S. The Ex-Im Bank is governed by a bipartisan board, all of whom were still holdover appointees from President George W. Bush at the time the Brazilian loan was approved. In 2009, there certainly was a touch of irony that one arm of the government would be guaranteeing loans to Brazil for offshore oil development while the administration put the breaks on expanding offshore drilling at home. Less than a year later, Obama decided to go ahead with plans to open new areas to drilling — in part to win political support for the ill-fated cap-and-trade bill — one month before BP’s disaster in the Gulf of Mexico caused the administration to put new drilling efforts on hold.
As for China, it does have an agreement to buy oil from Brazil and it, too, agreed to loan money to Petrobras — about five times as much as the U.S. did.
With the economy weak at home, more businesses are seeking sales abroad. That’s increasing U.S. exports, one of the few bright spots in the flagging economic recovery. The “Brazilian oil giveaway” was no such thing. It was an investment in a key developing market for U.S. companies. The National Oilwell Varco deal is a reminder of how those benefits hit home.

[Doove]

Wow. I'm rather shocked that Whirlaway didn't point that out.

[blue3122]

Since the EPA under Obama shut down ALL offshore US drilling, including jackup rigs, approximately 40,000 jobs have been lost in Louisana and Texas. These rigs operate in shallow water, have a great safety record and employ not only rig personnel but also logistics, and other manufacturing people who supply pipes, bits, engines, parts to the rigs. Many of the people who have worked on these for years ARE in fact, going to countries like Brazil or other (Venezuela, Ecuador) countries to provide needed expertise. I am not sure what the expat tax exemption is now. I think around $95000(per person) that is not taxed by the US. So we are exporting jobs with this senseless over-regulation by the EPA and Energy department, neither of which understands or has looked at what they are doing. I have been in energy for 25 years and my friends who run these rigs don't think these jobs will ever return under Obama. The problem they have is that if Obama is re-elected and the ban continues, it may take a decade to re-start this business in the US due to the lack of equipment and trained personnel. But all those drinking the Hope and Change kool-aid don't understand that government over-regulation is a gigantic monkey on the back of businesses here.

[Munchmasterman]

Originally Posted by blue3122

Since the EPA under Obama shut down ALL offshore US drilling, including jackup rigs, approximately 40,000 jobs have been lost in Louisana and Texas. These rigs operate in shallow water, have a great safety record and employ not only rig personnel but also logistics, and other manufacturing people who supply pipes, bits, engines, parts to the rigs. Many of the people who have worked on these for years ARE in fact, going to countries like Brazil or other (Venezuela, Ecuador) countries to provide needed expertise. I am not sure what the expat tax exemption is now. I think around $95000(per person) that is not taxed by the US. So we are exporting jobs with this senseless over-regulation by the EPA and Energy department, neither of which understands or has looked at what they are doing. I have been in energy for 25 years and my friends who run these rigs don't think these jobs will ever return under Obama. The problem they have is that if Obama is re-elected and the ban continues, it may take a decade to re-start this business in the US due to the lack of equipment and trained personnel. But all those drinking the Hope and Change kool-aid don't understand that government over-regulation is a gigantic monkey on the back of businesses here.

I call bullshit.
According to the report, 39 shallow-water permits for new wells have been issued since June 8, 2010, when new rules and information requirements were put into effect. Shallow water drilling operations were not affected by the deepwater drilling moratorium following the gulf oil spill. And there were lots more shallow-water well permits issued by the Obama administration prior to June 8, 2010.
http://www.politifact.com/truth-o-me...n-just-one-ne/

Any real source links to back anything you said? You picked the perfect thread to dilate your sphincter.

[blue3122]

Yes. Permits are being issued. However permits do not allow actual drilling to begin but only give the operator the right to a future drilling. There are other processes besides a permit that have to be covered. A permit to drill also does not get past the EPA which is the primary government agency stopping drilling now. There are approximately 350 jack up rigs in the gulf. Of the 39 (your site) permits, only a few were jack ups. Each of these employs about 100 people, plus maybe another 200-300 onshore. Already about 30% of these have either been moved to other countries or are being mothballed. For "sites" I usually pick up the phone and talk to friends in the business who operate these rigs. These are not big companies but small business people. (I am on the natgas and refined products side on land only). http://www.shallowwaterenergy.org/si...%2012%2010.pdf

We need about 30-40 new permits a MONTH to maintain or grow the current production which is down about 200K-300K barrels per day since Obama regulators started the anti-oil program. Ever wonder if this might contribute to gas prices?

My biggest issue is that these are small businesses who create jobs and many of them are being put out of business by regulators. One company is family owned, has 3 rigs, employs about 50 people full time in the company plus another 250-300 contractors and provides jobs for about 700 support personnel. They haven't been able to drill for almost 2 years and now have only 4 people (besides the 6 family members) still employed. They will likely declare bankruptcy later this year. They have been in business for 30 years and have never spilled 1 drop of oil and only had 3 accidents in that time where someone required a hospital stay. None of those injuries was life threatening. Essentially, they were regulated out of business. And so were the 1000 people that they provided jobs to.