Brazil Oil Finds May End Reliance on Middle East | Hacker News Reader

Brazil Oil Finds May End Reliance on Middle East

bloomberg.com

17 pointsgibsonf116 comments

Hopefully this will be good news for Brazil in the long run - but I worry that becoming a major oil exporter will be much worse for the Brazilian people. The ideal workforce to make a country rich from technology and innovation is a well-educated, relatively free one that can experiment and be creative. The ideal workforce to make a country rich from a natural resource is a poorly educated one that will fall in line with the regime that controls the resource. Monopolies and tyrannies are bad for hacking but great for pumping oil.

Don't get your hopes up too much. Petrobras is a state run monopoly and has had a number of recent corruption scandals. Even though the price of oil has risen dramatically and Brazil continues to find more reserves, production has actually dropped the last few years. This is due to the fact that a platform sank a few years ago and 5 year's ago the government decided that all new platforms should be Brazilian-built. Of course they are also behind schedule with cost over-runs. These new fields are very deep and will require new technology and significant investments. Given the government's tendency to maintain political and economic control of natural resources, it is unlikely that much external investment or technology will participate in the exploration. The benefits from these new fields is many years away probably much later than 2012.

I think this will be a good thing. The Middle East thinks they control the world, which is a bad attitude (although true right now). For some reason, I would love to see Dubai fall into ruins. It just doesn't sit well with me that they are such an authoritarian regime that made money not by innovating but by pumping liquid out of the ground. Such a flashy city... but no culture, just money made from oil.

They're entitled to what they have, but I am entitled to not feel good about it :)

Robbing Peter to pay Paul.

From reliance on undemocratic regimes who maintain a corrupt power structure at the barrel of a rifle, to reliance on a democratic regime that maintains a corrupt power structure and a societal stratification that can only be described as economic apartheid. What could go wrong?

You'll forgive me if I believe we should keep looking for other options.

How about 'self reliance'?

Well, countries will commit war on behalf of oil (and infrastructure) corporations, so doing the right thing won't happen until all the wrong incentives dry up. One interesting development out of Petrobras though is Lua, which is a great scripting language with lots of advanced features.

Please elaborate. I didn't quite understand what you said. What's societal stratification and why can it only be described as social apartheid? What are you talking about?

By way of clarification I guess I should explain that in Brazil there is a sizable segment of the population that lives in abject poverty. Frequently inhabiting tenement areas that are really no more than shanty towns, called 'Favelas'. High crime, few educational or employment opportunities, disease and hunger are all found throughout Brazil in these areas. There is also a racial component as well, as Blacks or darker skinned people are disproportionately represented in the impoverished class.

As these types of problems can lead to social unrest, which inevitably impacts politics and trade, I was intimating that the sort of reliance on Brazilian Oil that the author of the article implicitly postulates is unwise.

So it's unwise because Brazil has social problems? So reliance would be bad because it would be supporting those social problems? Is that your point?

No. My point is that the chances of trade disruptions due to social unrest in Brazil is uncomfortably high. Further, the chances of trade disruptions due to ... 'demagogue comes along and tells the impoverished masses that they are being ripped off' ... is a virtual certainty in the presence of oil wealth.

It is not the social problems that I take issue with, the Brazilians can run their nation as they see fit. It is the fact that these social problems have a high probability of developing into something that would adversely effect us if we were dependent on Brazil that I object to.

I like the hopeful note that this information rings. The real proof of this, however, will be reflected in the price of oil in the markets.

This is years away still. And pales in comparison to the possibilities in Canada.

The Alberta tar sands will not be profitable if this new deposit can be accessed at a cost comparable to other deep sea drilling.

If that's the case.... -pop- goes the Alberta bubble, again.

Unless we develop new technology.

...which there will be no reason to develop if an abundance of cheap oil is available.

!HN

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