Lesson From Brazil: Drill! Drill! Drill!
One thing Brazil and the U.S. have in common is that each country has vast oil reserves in waters off their coastlines. Here we may draw a line in the waves between the serious and the unserious.
Brazil discovered in November that billions of barrels of oil sit in difficult water beneath a swath of the Santos Basin, 180 miles offshore from Rio de Janeiro and Sao Paulo. The U.S. has known for decades that at least 8.5 billion proven barrels of oil sit off its Pacific, Atlantic and Gulf coasts, with the Interior Department estimating 86 billion barrels of undiscovered oil resources.
When Brazil made this find last November, did its legislature announce that, for fear of oil spills hitting Rio's beaches or altering the climate, it would forgo exploiting these fields?
Of course it didn't. Guilherme Estrella, director of exploration and production for the Brazilian oil company Petrobras, said, "It's an extraordinary position for Brazil to be in." Indeed it is.
At this point in time, is there another country on the face of the earth that would possess the oil and gas reserves held by the United States and refuse to exploit them? Only technical incompetence, as in Mexico, would hold anyone back.
But not us. We won't drill.
Daniel Henninger in today's WSJ
4 Comments:
The problem is that many do not realize the technological improvements and environmental protection in drilling over the last 40 years.
Brazil has one of the best state run oil companies in the world with state of the art equipment. The Brazilian government acts on the basis of knowledge rather than good intentions.
It's a bit like trying to explain economics to Senator Dodd.
Why should we use expensive U.S. based firms and labor to drill off our shores when the Chinese are willing to do it for us (and not even ask our permission to do so)?
Drilling for oil in the U.S. isn't going to lower oil prices. Demand is such that there is not going to be relief from higher prices. Ever.
Brazil does not have enough technology to explore new Basin because the oil is too deep, so we need more time to explore or privatize Petrobras (easier and more efficient solution, in spite of the fact that Petrobras is one of the best public firms).
The entire political agenda in Washington is driven be an "End of the World" scenario. Global warming is the the excuse the politicians will use to set up a totalitarian state in the US.
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