Dark Days

November 22, 2002 4:46 PM

The Burden of Profit. Two Texas energy companies, both closely tied to the Bush White House, are lining up administration support for nearly $900 million in public financing for a Peruvian natural gas project that will cut through one of the world's most pristine tropical rain forests. (via homunculus)
posted by four panels (9 comments total)

I'm shocked! Shocked! Bush? Oil? Environmental damage? Screw the little guy? Fuck the environment? I'm shocked.
posted by aacheson at 5:02 PM on November 22, 2002

Quit tryin' to stir up trouble, four-p. You know we need cheap natural gas!

Cheap natural gas at any price, that's what I say!
posted by five fresh fish at 5:06 PM on November 22, 2002

Lord knows this sort of thing must be subsidized, right? Because energy companies don't have the capital to plunder on their own.

Every single day some new revolting bit of news gets excreted by this wretched administration and all some people can say, taking them on individually, is "the sky isn't falling."

Is no one capable of taking the sum of these actions? We have a villainous worm for a president, and no one is lifting a hand to oppose him and his cronies.
posted by argybarg at 5:47 PM on November 22, 2002

Clearly, all of these are Bush cronies:

* Argentina's Pluspetrol and Peru's Teegas, partners in the venture;
* Inter-American Development Bank, a multilateral public-private company jointly owned by 46 countries;
* development banks in Europe and S. America, providing 40% of financing;
* popularly-elected government of Peru, backing project in the name of economic independence;
* Pres. Alejandro Toledo, first Indian president of Peru, hailed by liberals.

Just how many people are in this conspiracy? Does Peru get to decide its own development democratically, or is everything they do subject to veto by various lobby groups in the US? Does the environmental lobby really believe that increasing the country's debt burden is a preferable alternative, that an even broker Peru will be better able to protect its indigenous peoples and environment?

This wasn't something that was stopped in its tracks until Dubya came along and ran roughshod over everyone. In fact, after Shell was forced to quit, the government turned right around and sought new companies to take up the contract, which is when these Bush cronies were brought in -- in the year 2000, before the election.

Hunt and Halliburton are, after all, oil companies. This is what they do. They go out and find jobs pumping oil. They're actually doing this all the time, every day, whoever's in office. They'll probably keep doing it after Bush is gone, too. Amazingly, since they actually have a record of doing this and have become moderately large companies doing so, they tend to get chosen a lot.

argybarg, how exactly do you think ANY oil exploration gets done? Do you really think they have the "capital to plunder on their own"?
posted by dhartung at 7:15 PM on November 22, 2002

dhartung: I would like to know the details of that public financing project. Why should I taxpayer subsidize(pay) all the risks of the exploration and why should private company take all the profits of exploitation. I want a 10% annual interest on that capital and I'm being very generous by asking only 10%, given the enormous risks associated with exploration of the unknown (looking for oil/gas fields is exploration of the unknown) and I want the capital back in 15 year.

It isn't fair ? Well go ask banks the money, go ask PRIVATE investors and see what they'll ask for.

I also use public transport, so I need less gas then other people, so my interest in cheap fuel is very limited. I also have solar panel, so my interest in cheap electricity is reduced : so we need less cheap oil or gas.
posted by elpapacito at 7:28 PM on November 22, 2002

I can think of many better ways to spend $900 million. Why not invest it in alternative energey research and development. It's just disappointing to see an administration so unconcerned about the environmental damage their policies are/will cause.
posted by mrbarrett.com at 8:09 PM on November 22, 2002

I realize this is very pessimistic, but is there even a point in protesting all this wonderful stuff Shrub is doing to the environment? First Alaska, now this Peru thing. Sigh. The most frightening thing is that by the time the war in Iraq starts and ends, Bush will be at the height of his popularity -- just in time for election 2004.

So he'll probably "guide" the country until 2008, by which time more than half the Supreme court will need replacing, and of course they'll be replaced which conservatives -- which'll just allow for more people like Bush to rule the country.

I don't know how I ended up there from Peru... heh oops.
posted by ruwan at 11:17 PM on November 22, 2002

elpapacito: We're talking here, limiting our discussion to the ~1/3 of the project to be underwritten by the US Ex-Im Bank, about money which is obtained from a bank chartered to invest in overseas development. In every respect it operates like a normal bank, except that it follows its specific charter. There is a similar 'bank' designed for home loans, Fannie Mae. Whether it is you obtaining a loan for your first home and half acre, or ShipCorp getting the financing for the port facility, your taxpayer money is not part of the equation: the money they are loaning out is supported by income from the loan portfolio. In the case of Fannie Mae, 7 decades of operation has built a strong, expanding bank which continues to underwrite home ownership across the US. By the same token, Ex-Im is investing in the Peru project (or will if the deal is sealed, which it isn't) with the goal of reaping returns back to its own portfolio, which like FNMA or First National or good old Bailey Building and Loan may then reinvest those monies in its chartered community.

Now, I don't know for sure, but I'm reasonably certain that the other involved development banks operate on much the same principle. (I'm guessing you are not speaking as a US citizen.)

Also, had you read the article, this does not involve exploration of the unknown. There was exploration, for oil; they found instead natural gas. We know it's there, and now it's a matter of getting it to market. You're correct that exploration is risky, and I doubt that Ex-Im underwrites that sort of investment; there are high-risk lenders who do, however, and it was their investment -- in Shell -- that may have been lost. I just don't know. But it certainly is true that whether we're talking exploration or exploitation, somebody somewhere is lending out the money. The oil companies don't do it out of pocket; in that respect it's similar to farming.

And ruwan, once again, the project's players were contracted and in place before the 2000 election. This is not Bush's doing, as salivatingly delicious as that would prove to some. I wouldn't be surprised if his being in office makes it a lot easier for the American portion of the financing to get approved, but that's really up to the officers and governing board of Ex-Im, and not the White House. They're not an agency; they're a corporation.

As for the "environmental damage", part of the financing process involves environmental impact statements. One would hope that Peru is also interesting in safeguarding its indigenous and pristine areas, and it will be their regulatory regime which the pipeline will have to face. Again, minimal role for US officials. Peru is certainly as entitled as any other nation to make that determination for itself. If you have a beef, address it to the government of Peru.
posted by dhartung at 7:39 AM on November 23, 2002

Actually, this project sounds almost tame compared to Halliburton's involvement in the Yadana pipeline in Burma.
posted by homunculus at 1:10 PM on November 23, 2002