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President Barack Obama is calling on the world to end massive government subsidies that encourage the use of fossil fuels blamed for global warming.
The president, who is set to host the G-20 economic summit opening Thursday in Pittsburgh, will propose a gradual elimination, with the time frame to be determined, according to White House officials.
"Later this week, I will work with my colleagues at the G-20 to phase out fossil fuel subsidies so that we can better address our climate challenge," Obama said Tuesday at the United Nations global warming summit.
You read that headline correctly. Unfortunately, the Obama Administration is financing oil exploration off Brazil.
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.
But look on the bright side. If President Obama has embraced offshore drilling in Brazil, why not in the old U.S.A.? The land of the sorta free and the home of the heavily indebted has enormous offshore oil deposits, and last year ahead of the November elections, with gasoline at $4 a gallon, Congress let a ban on offshore drilling expire.
Among the deals signed was a 10-billion-dollar loan extended by policy lender China Development Bank to Brazilian state oil company Petrobras, reflecting Brazil's growing ambition to obtain Chinese funding.
Petrobras also inked a 10-year pact for the delivery of up to 200,000 barrels of crude daily to the energy-craving Asian giant.
All eyes were on whether China and Brazil would discuss ditching the dollar in their bilateral trade and replacing it with their own currencies -- the yuan and the real.