Yesterday’s WSJ included a thought-provoking piece by Mary Anastasia O’Grady noting that there has been very little objection in Brazil to the development of that country’s offshore oilfields.
The contrast with the current mess in the United States is dramatic, something Ms. O’Grady attributes, at least in part, to the Brazilian state’s controlling stake in Petrobras (that country’s oil giant): Her theory, which, she says, “fits the pattern of resource development – or lack thereof – all over the Western Hemisphere…comes down to this: Where government has the property right, restrictions on development tend to be low. But when the private sector is the owner, environmental concerns blossom.” That’s a touch too simplistic. Relative levels of economic development clearly have a part to play, as, obviously, does the existence of a political climate where dissent can flourish (I’m unsurprised that Cuba’s offshore drilling has run into few objections), but it still raises an obvious question: Would the current objections to drilling off the US coastline be reduced if those particular reserves were being exploited by a majority state-owned entity? And if they would, could that be something (much as I detest the idea of state-owned enterprise) to consider? I’d stress that I’m not talking about nationalization of the existing oil companies, merely the creation of a new, specific vehicle to exploit these particular reserves “for the people.”
It’s important, incidentally, to add that nobody should fool themselves that America’s offshore reserves could by themselves ‘solve’ this country’s energy problem (a problem that does include, to a greater or lesser degree, the pollution that is a by-product of that energy and, for that matter, its production), but they could be part of a wider package including nuclear, oil shale, biofuels (alongside a lifting of the tariffs on imported sugar ethanol) , wind, solar, who-knows-what-else and, yes, conservation, that taken together, and over time, could do just that.