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.