Energy policy of Brazil
Brazil is the 10th largest energy consumer in the world and the largest in South America. At the same time, it is an important oil and gas producer in the region and the world's second largest ethanol fuel producer. The governmental agencies responsible for energy policy are the Ministry of Mines and Energy (MME), the National Council for Energy Policy (CNPE, in the Portuguese-language acronym), the National Agency of Petroleum, Natural Gas and Biofuels (ANP) and the National Agency of Electricity (ANEEL). State-owned companies Petrobras and Eletrobrás are the major players in Brazil's energy sector, as well as Latin America's.
- 1 Overview
- 2 Reforms of the energy sector
- 3 Primary energy sources
- 4 Electricity
- 5 Biofuels
- 6 Environmental damages
- 7 Critics
- 8 Further reading
- 9 References
|Energy in Brazil|
|Change 2004-10||6.0%||30%||40%||-21 %||29%||20%|
|Mtoe = 11.63 TWh, Prim. energy includes energy losses >|
Reforms of the energy sector
At the end of the 1990s and the beginning of the 2000s, Brazil's energy sector underwent market liberalization. In 1997, the Petroleum Investment Law was adopted, establishing a legal and regulatory framework, and liberalizing oil production. The key objectives of the law were the creation of the CNPE and the ANP, increased use of natural gas, increased competition in the energy market, and investments in power generation. The state monopoly of oil and gas exploration was ended, and energy subsidies were reduced. However, the government retained monopoly control of key energy complexes and administered the price of certain energy products.
Current government policies concentrate mainly on the improvement of energy efficiency, in both residential and industrial sectors, as well as increasing renewable energy. Further restructuring of the energy sector will be one of the key issues for ensuring sufficient energy investments to meet the rising need for fuel and electricity.
Primary energy sources
Brazil is the world's 12th largest oil producer. Up to 1997, the oil monopoly belonged to Petróleo Brasileiro S.A. (Petrobras). As of today, more than 50 oil companies are engaged in oil exploration. The only global oil producer is Petrobras, with output of more than 2 million barrels (320,000 m3) of oil equivalent per day. It is also a major distributor of oil products, and owns oil refineries and oil tankers.
In 2006, Brazil had 11.2 billion barrels (1.78×109 m3) the second-largest proven oil reserves in South America after Venezuela. The vast majority of proven reserves are located at Campos and Santos offshore basins on the southeast coast of Brazil. In November 2007, Petrobras announced that it believes the offshore Tupi oil field has between 5 and 8 billion barrels (1.3×109 m3) of recoverable light oil and neighbouring fields may even contain more, which all in all could result in Brazil becoming one of the largest producers of oil in the world.
Brazil is a net exporter of oil since 2011. However, the country still imports some light oil from the Middle East, because several refineries, built in the 1960s and 1970s under the military government, are not suited to process the heavy oil in Brazilian reserves, discovered decades later.
Transpetro, a wholly owned subsidiary of Petrobras, operates a crude oil transport network. The system consists of 6,000 kilometres (3,700 mi) of crude oil pipelines, coastal import terminals, and inland storage facilities.
At the end of 2005, the proven reserves of Brazil's natural gas were 306 x 109 m³, with possible reserves expected to be 15 times higher. Until recently natural gas was produced as a by-product of the oil industry. The main reserves in use are located at Campos and Santos Basins. Other natural gas basins include Foz do Amazonas, Ceara e Potiguar, Pernambuco e Paraíba, Sergipe/Alagoas, Espírito Santo and Amazonas (onshore). Petrobras controls over 90 percent of Brazil’s natural gas reserves.
Brazil's inland gas pipeline systems are operated by Petrobras subsidiary Transpetro. In 2005, construction began on the Gas Unificação (Gasun pipeline) which will link Mato Grosso do Sul in southwest Brazil, to Maranhão in the northeast. China’s Sinopec is a contractor for the Gasene pipeline, which will link the northeast and southeast networks. Petrobras is also constructing the Urucu-Manaus pipeline, which will link the Urucu gas reserves to power plants in the state of Amazonas.
In 2005, the gas production was 18.7 x 109 m³, which is less than the natural gas consumption of Brazil. Gas imports come mainly from Bolivia's Rio Grande bassin through the Bolivia-Brazil gas pipeline (Gasbol pipeline), from Argentina through the Transportadora de Gas de Mercosur pipeline (Paraná-Uruguayana pipeline), and from LNG import. Brazil has held talks with Venezuela and Argentina to build a new pipeline system Gran Gasoducto del Sur linking the three countries; however, the plan has not moved beyond the planning stages.
Brazil has total coal reserves of about 30 billion tonnes, but the deposits vary by the quality and quantity. The proved recoverable reserves are around 10 billion tonnes. In 2004 Brazil produced 5.4 million tonnes of coal, while coal consumption reached 21.9 million tonnes. Almost all of Brazil’s coal output is steam coal, of which about 85% is fired in power stations. Reserves of subbituminous coal are located mostly in the states of Rio Grande do Sul, Santa Catarina and Paraná.
Brazil has the world's second largest known oil shale (the Irati shale and lacustrine deposits) resources and has second largest shale oil production after Estonia. Oil shale resources lie in São Mateus do Sul, Paraná, and in Vale do Paraíba. Brazil has developed the world’s largest surface oil shale pyrolysis retort Petrosix, operated by Petrobras. Production in 1999 was about 200,000 tonnes.
Brazil has the 6th largest uranium reserves in the world. Deposits of uranium are found in eight different states of Brazil. Proven reserves are 162,000 tonnes. Cumulative production at the end of 2002 was less than 1,400 tonnes. The Poços de Caldas production centre in Minas Gerais state was shut down in 1997 and was replaced by a new plant at Lagoa Real in Bahia. There is a plan to build another production center at Itatiaia.
Power sector reforms were launched in the mid-1990s and a new regulatory framework was applied in 2004. In 2004, Brazil had 86.5 GW of installed generating capacity and it produced 387 Twh of electricity. As of today 66% of distribution and 28% of power generation is owned by private companies. In 2004, 59 companies operated in power generation and 64 in electricity distribution.
The major power company is Centrais Elétricas Brasileiras (Eletrobrás), which together with its subsidiaries generates and transmits approximately 60% of Brazil's electric supply. The largest private-owned power company is Tractebel Energia. An independent system operator (Operador Nacional do Sistema Elétrico - ONS), responsible for the technical coordination of electricity dispatching and for the management of transmission services, and a wholesale market were created in 1998.
During the electricity crisis in 2001, the government launched a program to build 55 gas-fired power stations with a total capacity of 22 GW, but only 19 power stations were built, with a total capacity of 4,012 MW.
Brazil is the third largest hydroelectricity producer in the world after China and Canada. In 2007 hydropower accounted for 83% of Brazilian electricity production. The gross theoretical capability exceeds 3,000 TWh per annum, of which 800 TWh per annum is economically exploitable. In 2004, Brazil produced 321TWh of hydropower.
The installed capacity is 59 GW. Brazil co-owns the Itaipu hydroelectric power plant on the Paraná River located on the border between Brazil and Paraguay, which is the world's second largest operational hydroelectric power plant with installed generation capacity of 14 GW by 20 generating units of 700 MW each.
Due the Brazil's dependence on hydroelectric power and lack of investments in transmission, the reserves were being used for several years, which led to the dams having a low level of water. Then after another bad year of rain, in June 2001, the government was forced to ration electricity usage, this ended in late 2001. Nowadays due to the new rules of the sector, new power lines were built as were new power plants. Today the load is even bigger than it was in 2001 but the system is much safer.
Nuclear energy accounts for about 4% of Brazil's electricity. The nuclear power generation monopoly is owned by Eletronuclear (Eletrobrás Eletronuclear S/A), a wholly owned subsidiary of Eletrobrás. Nuclear energy is produced by two reactors at Angra. It is located at the Central Nuclear Almirante Álvaro Alberto (CNAAA) on the Praia de Itaorna in Angra dos Reis, Rio de Janeiro. It consists of two pressurized water reactors, Angra I, with capacity of 657 MW, connected to the power grid in 1982, and Angra II, with capacity of 1,350 MW, connected in 2000. A third reactor, Angra III, with a projected output of 1,350 MW, is planned to be finished by 2014 and work has been paralyzed due to environmental concerns, but the licenses are being approved and the heavy construction work will start in 2009. By 2025 Brazil plans to build seven more reactors.
In February 2008 President Lula da Silva signed a nuclear cooperation agreement with Argentina.
The total installed photovoltaic power capacity in Brazil is estimated to be between 12 and 15 MWp, of which 50% is for telecommunications systems and 50% for rural energy systems. It is less than 0.01% of the energy in Brazil.
Brazil has one of the highest solar incidence in the world.
Brazil's gross wind resource potential is estimated to be about 140 GW, of which 30 GW could be effectively transformed into wind power projects. Currently it generates about 54 GWh per annum. According to a Nov-07 award for Brazil's Proinfa program, current capacity is 237 MW, of which 208 was added in 2006; agreements for 1,423 MW are to be in operation by the end of 2008.
Due to its ethanol fuel production, Brazil has sometimes been described as a bio-energy superpower. Ethanol fuel is produced from sugar cane. Brazil has the largest sugar cane crop in the world, and is the largest exporter of ethanol in the world. With the 1973 oil crisis, the Brazilian government initiated in 1975 the Pró-Álcool program. The Pró-Álcool or Programa Nacional do Álcool (National Alcohol Program) was a nationwide program financed by the government to phase out all automobile fuels derived from fossil fuels in favour of ethanol. The program successfully reduced by 10 million the number of cars running on gasoline in Brazil, thereby reducing the country's dependence on oil imports.
Brazil's peat reserves are estimated at 25 billion tonnes, which is the most in South America. However, no production of peat for fuel has yet been developed. Brazil produces 65 million tonnes of fuelwood per year. The annual production of charcoal is about 6 million tonnes, which is used in the steel industry. The cogeneration potential of agricultural and livestock residues varies from 4 GW to 47 GW by 2025.
Oil spill off the coast of Rio de Janeiro
Starting from 8 November 2011 Chevron had spill of crude oil off the southeastern coast of Brazil. 416,400 liters oil leaked in two weeks from undersea rock well in the Frade oil project 370 km off the Brazilian coast. Prosecutors in Brazil demand $10.6bn in the legal suit. Chevron's activities are suspended until the cause of an oil spill is clear.
The Munduruku indigenous group in Para state faced problems by the authorities to build hydropower plants on the Tapajós river without their permission.
- Silvestre, B. S., Dalcol, P. R. T. (2009) Geographical proximity and innovation: Evidences from the Campos Basin oil & gas industrial agglomeration — Brazil. Technovation, Vol. 29 (8), pp. 546–561.
- OECD/IEA. World Energy Outlook 2006. ISBN 92-64-10989-7
- "Project Closing Report. Natural Gas Centre of Excellence Project. Narrative" (PDF). 20 March 2005. Archived from the original (PDF) on 2007-09-27. Retrieved 2007-05-12.
- "OECD Economic Survey of Brazil 2005: Regulation of the electricity sector" (PDF). Retrieved May 12, 2007.
- IEA Key World Energy Statistics Statistics 2013, 2012, 2011, 2010, 2009, 2006 IEA October, crude oil p.11, coal p. 13 gas p. 15
- "Critical issues in Brazil's energy sector" (PDF). Baker Institute. June 2004. Retrieved 2007-05-19.
- Country Analysis Brief. Brazil, US Energy Information Agency, August 2006
- Gary Duffy (2007-11-09). "Brazil announces new oil reserves". BBC. Retrieved 2007-12-12.
- Brasil se tornará exportador líquido de petróleo em 2011, diz AIE
- "Survey of energy resources" (PDF). World Energy Council. 2004. Retrieved 2007-07-13.
- Review on oil shale data, by Jean Laherrere, September 2005
- Altun, N. E.; Hiçyilmaz, C.; Hwang, J.-Y.; Suat Bağci, A.; Kök, M. V. (2006). "Oil Shales in the world and Turkey; reserves, current situation and future prospects: a review" (PDF). Oil Shale. A Scientific-Technical Journal (Estonian Academy Publishers) 23 (3): 211–227. ISSN 0208-189X. Retrieved 2007-06-16.
- Ronaldo C. Fabrício (March 20, 2005). "Outlook of Nuclear Power in Brazil" (PDF). Eletronuclear. Retrieved 2007-05-12.
- "Key World Energy Statistics -- 2006 Edition" (PDF). International Energy Agency. 2006. Archived from the original (PDF) on 2007-07-09. Retrieved 2007-07-13.
- "Power: World's biggest hydroelectric facility". USGS. Retrieved May 18, 2006.
- "Nuclear Power in Brazil. Briefing Paper # 95". Uranium Information Centre. May 2007. Archived from the original on 2007-02-08. Retrieved 2007-05-19.
- "Brazil plans to build seven nuclear reactors". Mecropress. 23 October 2006. Retrieved 2007-05-19.
- "Brazil and Argentina's Nuclear Cooperation". Nonproliferation for Global Security Foundation. Dec 2008.
- Brazil - A Bio-Energy Superpower, by Mario Osava, Tierramérica
- Chevron Takes Responsibility for Brazil Oil Spill, May Face $51M Fine
- Chevron takes full responsibility for Brazil oil spill spill 20.11.2011
- Chevron faces $10.6bn Brazil legal suit over oil spill 14.12.2011
- Amazon tribe threatens to declare war amid row over Brazilian dam project The Guardian 3.4.2013