Why is the U.S. Lending Brazil $2 Billion?

Radio Commentary, WMVV 90.7 New Life FM, October 2, 2009
By Sue Ella Deadwyler

Good morning, Jim. There must be a “money tree” somewhere, because the United States Export-Import Bank is loaning $2 billion to Petrobras, a state-owned oil company in Brazil, so they can drill for oil in the ocean near Rio de Janeiro. Though that money should be spent to produce the oil that’s already available right here in the United States.

On April 20, 2008 the U.S. Geological Survey reported that North Dakota and Montana have an estimated 3.0 to 4.3 billion barrels of undiscovered, recoverable oil in the Bakken Formation. That’s 25-fold more than the amount of oil reported in its 1995 estimate. By the end of 2007, about 105 million barrels of oil had been produced from the Bakken Formation, which is the largest continuous oil accumulation the Geological Society has ever assessed.

Three months later, the Geological Survey issued another report. The area north of the Arctic Circle has an estimated 90 billion barrels of undiscovered, recoverable oil; 1,670 trillion cubic feet of recoverable natural gas; and 44 billion barrels of recoverable natural gas liquids in 25 geological areas, with a potential for petroleum in all of them. Another discovery north of the area has produced over 400 oil and gas fields, accounting for about 40 billion barrels of oil, more than 1,100 trillion cubic feet of gas and 8.5 billion barrels of natural gas liquids.

You’d think these reports would prompt immediate oil drilling in the U.S., but they haven’t. In Georgia, Senator Pearson introduced S.R. 12 last session to reward anyone who drills the first commercial well that produces oil or gas or natural gas in Georgia or just off the coast in the Atlantic Ocean or who develops ways or devices to produce energy from new sources.

S.R. 12 is still alive for the 2010 session and whether it’ll pass is up for grabs. So, why should the U.S. loan $2 billion to Brazil to produce oil there, when it’s needed so badly here? That’s upside-down thinking and turning it right side up is long over due! For Georgia Insight I’m Sue Ella Deadwyler, your Capitol correspondent.