We’re financing offshore drilling, just not in our backyard. IBD:
Given how many ratholes our government could pour its money down — wind farms, switch grass — it’s good to learn some cash is going toward something productive.
Last week, Spain’s news wire reported that the U.S. Eximbank is raising its stake in Brazil’s rich offshore oil fields to as much as $10 billion, from an initial $2 billion.
We’ll admit that, on first blush, spending such money overseas when we’ve got plenty at home sounds a little questionable. But the investment has both practical and strategic benefits for our energy security.
First, the U.S. money is a loan, and Brazil has excellent credit with an investment-grade BBB sovereign rating and a record of responsible borrowing. Whatever we loan the Brazilians will be paid back on time and with interest.
Second, the cash will encourage Brazil’s state oil company, Petrobras, to contract with American businesses. And we aren’t just talking about oil companies, but software, steel, research, environmental impact and engineering concerns, to name a few others.
Third, drilling new offshore discoveries in Brazil’s Tupi field is an epic project in its own right. Cutting through 10 miles of ultrahard salt amid wild temperature fluctuations to extract as much as 40 billion barrels of oil, maybe more, is a grand project.
It will create technological breakthroughs not seen since the space program, and qualifies as a great engineering feat. Along with the 1,712-mile natural gas pipeline to be constructed from Alaska to the lower 48, it ought to stir America’s imagination to continue to break new frontiers.
When the strategic factors are brought into place, the benefits become very obvious.
Well worth reading the rest.