America’s path to alternative energy runs through Brazil
Mitt Romney alone can no longer be saddled with the label of most obvious flip-flopper among this year’s presidential candidates. That honor instead belongs to Barack Obama, whose 180 on the Keystone XL pipeline construction last week was sufficient to induce whiplash among oil industry executives and green advocates alike.
In an effort to actually make good on his “all of the above” energy policy, promoting both fossil fuel and renewable energy, President Obama had no choice but to pull off a neck-twisting reversal. Five months ago he postponed a decision on whether to build a controversial $7 billion pipeline to bring Canadian oil sands fuel down to Texas refineries. But it turns out that was only a temporary sop to the activists who see the structure as both an environmental threat as well as the embodiment of reckless Big Oil greed.
Now, with his opponents falsely equating current high oil prices with Obama’s perceived inaction on domestic energy development, Obama is acting differently. He’s scrambling to counter them by not only reconsidering the earlier postponement but actually accelerating the pipeline’s build as a national priority.
As recently as Mar. 8, Senate Democrats echoed Obama’s early wariness on the pipeline by defeating a Republican bill to fast-track Keystone’s construction. The bill fell short by four votes, no doubt due to Obama’s personal outreach to several senators for their “no” vote, prompting Senate Minority Leader Mitch McConnell to remark: “At a moment when millions are out of work, gas prices are sky-rocketing and the Middle East is in turmoil, we’ve got a president who’s up making phone calls trying to block a pipeline here at home. It’s unbelievable.” After two weeks of damaging poll results, Obama hurried to a photo-op in Cushing, Oklahoma to announce his embrace of the pipeline project.
It would be easy to dismiss such quick U-turns as election year politics-as-usual, but perhaps the truth is that Obama and his advisers finally saw the light on the game-changing potential of North America’s energy opportunities. Within the oil and gas sector, the talk of America becoming energy independent has reached fever pitch since Obama nixed his earlier decision on Keystone. Last week’s Wall Street Journal op-ed by renowned Citigroup energy analyst Ed Morse, “Move Over OPEC – Here We Come,” painted a dramatic picture of a Western hemisphere hydrocarbon revolution based on the current glut of Canadian oil sands crude, American shale gas and Mexican offshore drilling, rendering the Americas as “the new Middle East.”
Statements like that reassure defense observers who see the dangers of foreign oil dependency and encourage multinational fuel corporations. But it’s also the renewable energy companies that stand to benefit. Solar, hydropower, wind and green fuel cell need time to become economically viable and plug into a revised and as-yet-undeveloped smart power grid. A domestic fossil fuel awakening can buy that time.
We will also need some breathing room to develop regulations and alter our habits toward more energy-efficient behavior. Morse and other analysts predict that North American oil and gas can satisfy demand until 2030, so long as political gridlock, regulations and ineffective environmental decisions do not impede progress. Given the rapid pace of technical innovation across the sector, 15 years could be sufficient to make a significant impact on how we consume energy.
Yet Obama’s flip-flop on Keystone is not enough to trigger a real energy revolution. Preserving America’s long-term economic security will require more flip-flops, none more so than on the country’s relations with its neighbors in the Americas, and specifically with Brazil.
On Apr. 9, President Obama will welcome President Dilma Rousseff to the United States on her first official visit to the U.S. Brazil, which overtook the UK in 2011 to become the world’s sixth-largest economy, has South America’s second-largest proved reserves of oil after Venezuela (and the 15th-largest in the world at 12 billion barrels of crude). If Brazil is equally engaged as a U.S. partner (together with Canada and Mexico), a Western hemispheric energy corridor could be built by treaty or convention, designed to harness the collective’s combined fossil fuel capacity. Ultimately, these countries have the technological and industrial reserves needed to jump-start the renewables sector as a replacement for its inevitably diminishing hydrocarbon analog.
The consequences of such a partnership would extend far beyond the energy sector. Commodities that will be in even greater demand, like food and water, could serve as an even more powerful security link among the countries of the Americas, especially considering the global agricultural dominance of Brazil and the U.S., and the freshwater reserve dominance of Brazil and Canada. Such a collective could also serve as an important hedge against the pressures that other rising powers like China and Russia will exert on energy, food and water supplies.
But before that optimistic scenario can evolve, Obama would need to consider flip-flopping on the U.S. position vis-a-vis President Rousseff’s upcoming trip. The U.S. is denying her and her delegation the status of a “state visit,” which would confer a specific high-level value to the meeting, ostensibly as punishment for the policy indiscretions of Rousseff’s ex-boss and mentor, Brazil’s former President Luiz Inacio “Lula” da Silva.
Moreover, American promises of support for India’s United Nations Security Council permanent seat bid, contrasted with American “acknowledgment” for Brazil’s own bid, rankle in Brasilia, according to my reporting and others’.
The current U.S. foreign policy stance toward Brazil carries a residual whiff of the U.S.’s 1950s-era developmental economics approach to Latin America, as opposed to the more robust economic amity extended to Asian rising powers. But by the same token, for real improvement in crucial bilateral relations, Brazil will need to change its own hidebound left-wing political tendencies – the kind that recently led Rousseff, a former political prisoner, to excoriate America’s Guantanamo policy while remaining mum on Cuba’s own history of oppression during a state visit to Havana this past January. Only mutual acknowledgment by Brazil and the U.S. of perceived double standards by the other will break the unspoken diplomatic deadlock that threatens the potential for both to advance together.
The administration’s shortsighted, hasty approaches to Brazil parallel its initial shortsighted, hasty approach toward Keystone XL’s approval. Perhaps Obama will forge a new perspective with a different eye to the former as he did to the latter, and in so doing, preserve America’s future security.
PHOTO: U.S. President Barack Obama and Brazil’s President Dilma Rousseff are mobbed by primary school children as they arrive for a meeting at Planalto Palace in Brasilia March 19, 2011. Obama is on the first leg of a three-country tour of Latin America. REUTERS/Roberto Stuckert Filho-Brazilian President/Handout