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HighShaman's avatar

Why is the US Loaning Brazil BILLIONS of DOLLARS to "Explore" Off Shore Drilling for OIL !

Asked by HighShaman (3045points) December 11th, 2009

The Government has loaned Brazil $10 BILLION for offshore oil exploration.
The Department of the Interior says that Montana and North Dakota have over 4 BILLION BARRELS of recoverable oil in the Bakken Formation region PLUS the untapped reserves in Alaska and other states.
Can anyone explain WHY we are sending $$$ to Brazil for this oil “Exploration” OR How do YOU feel about your taxpayer dollars being used this way ?

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13 Answers

grumpyfish's avatar

You ask the question from a very US-centric position, which others will explain to you =)

4 Billion Barrels is 50 days of oil consumption for the world, or 200 days of US oil consumption. Also, we’re already tapping Bakken (7.8 million bbl in 2007). And “untapped reserves in Alaska” are so mired in politics to be untouchable.

SirGoofy's avatar

But…but…what about all the “environmental issues”? And all the global warming junk? What about the pristine waters off the coast of Brazil?? Sorry to answer your question with more questions.

grumpyfish's avatar

And furthermore… $10Billion is not much in the world of oil exploration. Exxon spends +/-$15 billion a YEAR on oil exploration.

JLeslie's avatar

I wonder what the rest of the details are on the deal are? Do they pay us back with interest AND if they find oil do we get to buy it at some cheap locked in price? Or, is it simply for Brazil to have more oil for themselves?

proXXi's avatar

Umm.. Because without exploration it won’t be found?

I know you believe gasoline just magically appears at the corner station but it doesn’t.

HighShaman's avatar

From the report that I read; IF oil is found in Brazil; it would be SOLD at the going rate back to the US .

master_mind413's avatar

why dont we spend that money on solving a more important issue….. alternative fuels ? I mean we spend billions searching for more oil when we start to run out why dont we search for some thing that doesn’t run out or we can just replace when it does were still using ancient technology in cars as far as using fuel goes but we have the latest on our computer it doesn’t make a hole lot of sense

grumpyfish's avatar

@master_mind413 We also spend billions on alternative energy, I don’t think the $10B was pulled out of alternative energy pockets and put into offshore oil drilling.

JLeslie's avatar

I’m torn. Are we happy to let Brazil do the drilling because it is negative on the environment and better in their backyards then ours? I have a problem with that type of thinking. Or, is it simply that Brazil intends to drill and was looking for governments who would help fund it and we agreed to bank roll them? Still, if there is some sort of Integrity related problem with the whole thing it makes me uncomfortable.

YARNLADY's avatar

This issue is so much more complicated than you choose to believe.

First: a loan implies we will receive payback plus interest, in other words a good investment.

Second: It is in our best interest to convince other countries to spoil their coastlines with oil development – than to do it off our beautiful coasts.

Third: It is in our best interest to convince other countries to use up their available, finite supplies of oil, thereby making our reserves worth far more in an ever dwindling supply.

JLeslie's avatar

@YARNLADY But your second point, it seems wrong to ruin any coastlines. I know I am being an irrational idealist here. Or, do you mean just visually ruin the coastline? I am thinking of environmental impact. Also, I think your third point is brilliant, I had not thought of that.

YARNLADY's avatar

@JLeslie yes it is a very provincial point of view – NIMBY

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