[Marxism] Human cost of Brazil's biofuels boom

Walter Lippmann walterlx at earthlink.net
Mon Jun 16 08:18:40 MDT 2008

Things are bad with ethanol, nuclear power's no good, either.
Wood-burning fires pollute the atmosphere, so how about oil?

Evidently oil, too, has its problems. Maybe the only way to 
heat things are with solar and harnessing the hot air of the
critics. No one pontificates about the environmental damage 
of Saudi Arabian oil drilling. In Venezuela, oil is sold to
the public at prices cheaper than bottled water, and today
we all know how bad bottled water is for the environment.

What to do now? Say it loud, I fret and I'm proud!
What to do now? Say it loud, I fret and I'm proud!
What to do now? Say it loud, I fret and I'm proud!
What to do now? Say it loud, I fret and I'm proud!
What to do now? Say it loud, I fret and I'm proud!
What to do now? Say it loud, I fret and I'm proud!

Seriously, folks, this is another example of the national
question, writ large: when countries control their natural
resources, they can build their economies and reduce their
dependencies on foreign suppliers. That's why Cuba wants to
have its own oil if it can get it out of the ground on a 
reasonably cost-efficient basis. I worry about Venezuela's
environmentally harmful practice of selling gasoline to 
the public at prices lower than bottled water, and I hope
that Venezuela uses its windfall to build a rapid transit
system. Ultimately, of course, a new form of human social
organization is needed, putting social projects and social
needs first. Perhaps it could be called "social-ism"?

Walter Lippmann
Vancouver, B.C., Canada
June 16, 2008

Why Brazil Isn't Ashamed to Exploit Its Oil
June 16, 2008; Page A13

Petrobras CEO José Sergio Gabrielli was flush with bullish insights
when he stopped by the Journal's New York office last week to talk
about the Brazilian oil company.

One reason for Mr. Gabrielli's optimism is last year's discovery of
the offshore Tupi field, which is said to contain between five
billion and eight billion barrels of black gold. Another, equally
important reason is that, according to Mr. Gabrielli, neither
environmentalists nor Brazilian politicians have raised concerns
about exploiting oil in the waters off the Brazilian coast.

That's quite a contrast with attitudes in the U.S., where offshore
exploration and development has been all but shut down save in the
Gulf of Mexico. One company official explains the difference by
saying that Brazilians understand the importance of energy to their
future, while Americans do not.

I have another theory. And mine fits the pattern of resource
development – or lack thereof – all over the Western Hemisphere. 
It comes down to this: Where government has the property right,
restrictions on development tend to be low. But when the private
sector is the owner, environmental concerns blossom.

Exhibit A is Petrobras. Not only did Mr. Gabrielli say there is no
appetite for stopping offshore projects in his country. He went
further. "Brazil has one of the freest and most investor-oriented
regulation in the world. Even freer than the United States of
America," he said, referring to the climate for oil exploration.

That may be so, but it would be interesting to know why, given
Brazil's prominent embrace of socialism. It could be that the country
is changing. After all there is now private-sector competition in the
oil industry. Yet it is also worth noting that the Brazilian
government has a 58% controlling stake in Petrobras's voting shares
and 32% of its total shares. This means that some of Petrobras
profits go straight to the government's bottom line, giving the
politicians more money to spend on bribing their constituents.

In the U.S., Congress doesn't have nearly such a vested interest in a
successful oil industry. What good are corporate profits if they go
to shareholders, pensioners and employees? Congress has even been
denied the windfall profits tax. For American politicians there is a
much greater incentive to respond to the concentrated power of the
special interest group known as the "greens."

There are plenty of other examples. In 1995, the British government
sold its final remaining shares of British Petroleum, which had been
largely privatized throughout the 1980s. In October 1996, a British
member of the European Parliament, Socialist Richard Howitt, began
harassing BP for alleged environmental and human-rights violations in
Colombia. Had the company suddenly gone from being a model citizen to
a murderous, contaminating corporation? Or did the Socialists lose
their incentive to support the company and discover new reasons to
attack it, since left-wing constituents were ideologically allied
with the Colombian rebels who were blowing up BP pipelines?

At least Petrobras is a well-run, publicly listed company that has to
answer to shareholders. Pemex, Mexico's state-owned oil monopoly, has
a history as a notorious polluter yet is seemingly exempt from
political pressure to clean up its act.

Mining provides an even better window on this contradiction. Bolivia,
Venezuela and Cuba all boast aggressive, state-owned mining
operations. Yet neither the nongovernmental enviro-movement nor the
political class utters a peep to object.

Wherever the private sector is proposing mineral exploration, the
story is flipped on its head. In February, I visited a rural town in
El Salvador, where Pacific Rim Mining Corp. is trying to reopen the
El Dorado gold mine. The company spent a year building the designs
for the mine, in a process that included more than 20 public meetings
with the local community. It says that the final design exceeds
international standards. The government of President Tony Saca
acknowledges this by telling the company that there is no technical
problem with the mine, only political ones.

Those political problems come from the left-wing FMLN political
party, and the NGOs that share the FMLN's antiprivate-sector
ideology. They have raised an environmental stink about the mine,
though none of it has been substantiated. Even so, the Saca
government has responded by sitting on Pacific Rim's permits for four
years, sending a signal to investors that El Salvador is not open for

The local mayor told me that the community wants the project, which
will directly create 600 new jobs and could produce as many as 3,000
indirect jobs. The real problem is that since the government isn't
the owner, El Dorado doesn't inspire politicians in San Salvador the
way Petrobras inspires Brasilia.


     Los Angeles, California
     Editor-in-Chief, CubaNews
     "Cuba - Un Paraíso bajo el bloqueo"

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