BRAZIL: ADULTS IN CHARGE
Brazil announced today that its state oil company, Petrobras, would spend $18 billion to develop its Santos Basin offshore natural gas reserves in a bid to reduce its dependence on imported natural gas, explicitly, from nationalization-minded leftwing Bolivia.
Eighteen billion. That’s big money. A massive investment. A whole Iraq-War of an investment. A history-changing investment.
Why the hell doesn’t the U.S. get a clue from Brazil!
The U.S. is a veritable soup of regulations and special interests that prohibits development of its own abundant natural gas and oil reserves. That’s why U.S. upsteam energy companies can find almost nowhere to drill - the only place left for them is the hurricane-vulnerable western Gulf of Mexico. Everything else is off limits in the U.S. due to NIMBYS, leftwing lawyers, environmental wackos and other plagues. As a result, U.S. dependence on imported fuel from the likes of Hugo Chavez and other dodgy dictators is growing. They call the shots.
Not so Brazil. At least not with this revolutionary announcement.
Brazil knows has a difficult problem on its hands - its dependence on Bolivian imported fuel. Bolivia’s new president-elect, Evo Morales, has vowed to nationalize Bolivia’s natural resources. Brazil is Bolivia’s biggest foreign investor, with about 80% of Bolivia’s economy in its investment, and it stands to lose the most from any such nationalization.
So with this $18 billion announcement, Brazil is saying to let what happens, happen.
With this $18 billion investment in its own offshore reserves, Brazil is vowing never to allow itself to be a hostage to Morales’ takeover threats. Morales will either have to play ball with Brazil on equal terms or else confiscate Brazil’s assets, only to see them turn to rust as all such communist confiscations amount to, wealth in the hands of those who do not earn it. But Morales will no longer be able to threaten Brazil. It will instead have to offer something good to Brazil. That may just get him thinking about whether he wants Bolivia to be prosperous or Bolivia to be as poor as Cuba.
Morales will have something to think about as he meets Lula this coming week.
The EFE story is here.
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