The Secret to Brazil's Energy Success

The Obama administration's energy policy is in the midst of transition from being stubbornly ideological to being wholly incoherent. That much was clear when President Obama unveiled his Blueprint for a Secure Energy Future this week.

With gasoline prices climbing above $4 a gallon, the administration is talking about tapping our Strategic Petroleum Reserve in a desperate attempt to hold down pump prices. It's also expanding subsidies and incentives for energy supplies that cost a lot more than oil, and it's aiming to reduce our dependency on foreign oil by one-third over the next 10 years.

Meanwhile, in a bizarre turn, Mr. Obama recently expressed enthusiasm for aggressive offshore drilling--in Brazil.

At least the president is practicing the green virtue of recycling. His energy address featured all the greatest hits of past presidential declarations of energy independence, including even George W. Bush's paean to switchgrass ethanol. Yet Mr. Obama's energy "blueprint" will get no further than all previous presidential schemes for the same reason: It is unserious at its core.

There are only two ways to reduce our foreign oil imports: a large oil tax to suppress consumption, or expanded production of domestic oil resources. All of the other bells and whistles—hybrid and flex-fuel cars, biofuels, etc.—will have only a marginal effect on overall oil demand. Higher energy taxes are not in the cards. What about expanded domestic oil production? Mr. Obama tried to thread the needle by claiming to be pro-domestic production, while at the same time embracing the tired talking point that because the U.S. has only 2% of the world's proven oil reserves—about 20 billion barrels—we can't hope to achieve independence from foreign oil from our own resources.

Yet a recent report from the Congressional Research Service that has received surprisingly little attention concludes that the U.S. probably has as much as 155 billion barrels of oil recoverable with existing technology that we simply haven't looked for or have closed off from exploration for political reasons. That's five times the outdated and misleading figure Mr. Obama cites. And there are an additional 700 billion barrels of oil shale and other unconventional hydrocarbons that could be developed here at home. That's more than the oil reserves of Saudi Arabia.

Mr. Obama ought to tell the whole story about Brazil, instead of just half of it. He touts the measures Brazil took to improve its energy independence, such as flex-fuel vehicles and biofuels. And yes, Brazil has gone from importing 77% of its oil from foreign sources in 1980 to importing no oil by 2009. A great success story in conservation and alternative energy? Not really. Total Brazilian oil consumption still more than doubled.

The biggest factor is that Brazil increased its domestic oil production over the last two decades by 876% (not a typo). Most of that production has come from offshore exploration.

Brazilians achieved independence from foreign oil the old-fashioned way—they drilled. Instead of tapping our Strategic Petroleum Reserve, how about tapping into our still-in-the-ground oil reserves?


Steven F. Hayward is the F.K. Weyerhaeuser Fellow at AEI.

Photo Credit: White House Photo by Lawrence Jackson

 

 

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Steven F.
Hayward
  • Steven F. Hayward was previously the F.K. Weyerhaeuser Fellow at AEI. He is the author of the Almanac of Environmental Trends, and the author of many books on environmental topics. He has written biographies of Presidents Jimmy Carter and Ronald Reagan and of Winston Churchill, and the upcoming book, The Politically Incorrect Guide to the Presidents. He contributed to AEI's Energy and Environment Outlook series. 

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