Roll out the red carpet and throw some confetti! The U.S. government will be investing $1 billion to support drilling in the Gulf of Mexico! Woo-hoo! Oh wait, it's not for us. The $1 billion will be heading south to fund Pemex's operations in the Gulf. The U.S. Export-Import Bank sent $1 billion to Mexico last year to support state-run oil company Pemex's drilling program in the southern Gulf. The federal agency bank has another $1 billion in store unless Congress puts the stop to it. But of course, it's hypocritical to say offshore drilling is dangerous and needs further study in our own country, only to turn around and encourage such hazardous behavior in other countries, right? Well, there's a way around that argument.
The Bank’s activities are not affected by the Obama administration’s ban on offshore drilling because that ban applies only to deepwater drilling--drilling in 500 meters of water or deeper--and the PEMEX projects financed by the Ex-Im Bank are shallow-water projects.Which is interesting for a couple reasons: first because you would think shallow water would be potentially the most dangerous place to be drilling seeing as how close it is to the shore should an oil spill occur. And the other, funnier reason is because it suggests the U.S. government's ban on deepwater drilling somehow has an effect on Mexican policy. Mexico can take our money and then drill wherever they feel like. After all, it's not like our laws against whaling seem to do much to stop Norway or Japan, do they? This little logic hiccup follows the federal government's plan to send $2 billion down to Brazil last year to fund THEIR offshore production. Keep in mind that last year at this time, the U.S. government wasn't even considering offshore drilling beyond the traditional areas because the environmentalists were throwing hissy fits about spoiling the scenery along the Eastern Seaboard. Obama briefly reconsidered this position in early 2010, then the Gulf of Mexico Macondo spill happened and gave every anti-drilling advocate the best early Christmas present imaginable: enough bad PR for the industry to last a generation. So with such negative hype surrounding offshore drilling, how did Brazil get such a nice chunk of government lagresse? Look no further then our favorite ultra-wealthy progressive, George Soros! Soros invested nearly $900 million in Brazilian national oil company Petrobras, and shortly after that, Uncle Sam got out his check book to help the new South American oil player. But why does it matter that Soros invests in Petrobras, you might ask? Is he not allowed to send his money where ever he wants? The answer is, of course he is. It's the American way. But we should be aware of Georgie Boy's ulterior motives, and in this case it's that with investments in foreign countries' oil companies, he stands to gain a lot if they're leading the way in oil production and America is not. But once again, how is Soros to blame if he's just trying to circumvent bad U.S. energy policies? Well, the thing is he's one of the people trying to write those policies. Soros is one of the biggest financial supporters of progressive think-tank/activist group MoveOn. And what does MoveOn think about oil and gas? See for yourself. And don't forget, as was mentioned in a previous blog, the group's opposition to U.S. Marcellus shale gas drilling coincides with Soros having investments in Indonesian gas operations. Isn't that hypocritical for Soros to try to shore up anti-energy sentiment in the U.S. only to financially support it abroad? Or for the Obama administration to be willing to send money abroad to support foreign offshore oil production while panicking about it domestically? Yes, but they really hope you don't notice that.
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