The Wall Street Journal reported that the U.S. is going to lend billions of dollars to Brazil's state-owned oil company, Petrobras, to finance exploration of the huge offshore discovery in Brazil's Tupi oil field in the Santos Basin near Rio de Janeiro. Brazil's planning minister confirmed that White House National Security Adviser James Jones met this month with Brazilian officials to talk about the loan.
The U.S. Export-Import Bank tells us it has issued a "preliminary commitment" letter to Petrobras in the amount of $2 billion and has discussed with Brazil the possibility of increasing that amount. Ex-Im Bank says it has not decided whether the money will come in the form of a direct loan or loan guarantees. Either way, this corporate foreign aid may strike some readers as odd, given that the U.S. Treasury seems desperate for cash and Petrobras is one of the largest corporations in the Americas.
In another story they reported that The Obama administration plans to propose allowing offshore oil and natural-gas exploration and development in a large swath of the eastern Gulf of Mexico.
In addition, the administration plans to announce new steps to determine how much oil and natural gas is buried off the coasts of Middle and Southern Atlantic states, where oil-reserve estimates are decades out of date.
At the same time, Mr. Obama's plan wouldn't allow new oil and gas development off the coasts of Northern Atlantic states or California, whose political leaders have long opposed offshore drilling. The administration will call off a plan drafted by the administration of former President George W. Bush that would have given oil companies access to Alaska's Bristol Bay.
Senator Mitch McConnell said on the Senate floor that “Three sources in Alaska, currently shut down, could replace crude oil imports from the Persian Gulf for 65 years. Yet all three are off limits due to decisions made by or continued by this administration.”
In the Outer Continental Shelf Oil & Gas Assessment 2006 from the Bureau of Ocean Energy Management, Regulation and Enforcement, estimates that the quantity of undiscovered technically recoverable resources ranges from 66.6 to 115.3 billion barrels of oil and 326.4 to 565.9 trillion cubic feet of natural gas. The mean or average estimate is 85.9 billion barrels of oil and 419.9 trillion cubic feet of natural gas. These volumes of UTRR for the OCS represent about 60 percent of the total oil and 40 percent of the total natural gas estimated to be contained in undiscovered fields in the United States.
Ron Paul introduced the Affordable Gas Price Act.” This legislation reduces gas prices by reforming government policies that artificially inflate the price of gas. Because of a number of factors, including the instability in the Middle East, the average price of gas has risen approximately 13% since the beginning of the year. In some areas, the price of gas is approaching $4.00 per gallon. There is thus a real possibility that the American people will soon be once again hard hit by skyrocketing gas prices.
“High gas prices threaten our fragile economy and diminish the quality of life for all Americans. One industry that is particularly hard hit is the trucking industry. The effects of high gas prices on the trucking industry will be reflected in increased costs for numerous consumer goods, thus further harming American consumers. “
He added “the legislation repeals the federal moratorium on offshore drilling and allows oil exploration in the ANWR reserve in Alaska. My bill also ensures that the National Environmental Policy Act's environmental impact statement requirement will no longer be used as a tool to force refiners to waste valuable time and capital on nuisance litigation. The Affordable Gas Price Act also provides tax incentives to encourage investment in new refineries.”
The Affordable Gas Price Act is justified by the 16th amendment, which gives Congress the power to lay and collect taxes, the Commerce Clause of Article 1 Section 8, which gives Congress the power to regulate commerce with foreign nations, and Article 1, Section 1 of the Constitution which vests all legislative power in the Congress. This clearly gives Congress authority to pass legislation changing laws and polices relating to offshore drilling and the use of environmental impact statements in litigation.