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ENERGY-BRAZIL: Pray, Cheer, and Do the Rain Dance to Stave Off Crisis

Fabiana Frayssinet

RIO DE JANEIRO, Nov 22 2007 (IPS) - An energy crisis will hit Brazil in 2009 or 2010, and not even the discovery of vast undersea oil and gas reserves with “enormous potential yields,” as announced by the government, can stave it off, warn experts.

The Tupí oilfield found in the Santos basin, off the coast of the southern state of Sao Paulo, could augment Brazil’s proven reserves by 50 percent. At year-end 2006, national reserves stood at 13.8 billion barrels of crude, according to Brazilian oil giant Petrobras.

If these estimates are confirmed, Brazil would step up from 16th to 9th place among the world’s oil producers.

“We will cease to be a middle-ranking country in terms of oil, struggling towards self-sufficiency in oil and gas, and become an exporting country, on a par with the Arabian states, Venezuela and others,” said presidential chief of staff Dilma Rousseff.

But the discovery, according to experts consulted by IPS, will not mitigate short-term energy needs, nor will it avoid the coming energy supply crisis in this country of over 188 million people.

“It’s a promise for the future, but it is real,” said Adriano Pires, head of the Brazilian Infrastructure Centre, who estimates that it will take seven to ten years for the Tupí field to yield material results.

Pires attributes the future energy deficit to lack of planning and investment.

The economy began to grow at a rate of three to five percent per year, but “investments in energy development did not increase in proportion to economic growth,” he said.

“Until 2010 we’ll just have to pray for rain,” he remarked. The country’s main energy source at present is hydroelectric power, which depends on unpredictable factors such as the amount of rainfall.

Nearly 84 percent of Brazil’s total energy consumption is supplied by hydroelectric power. Other sources are natural gas (4.5 percent), biomass (4.3 percent), nuclear power (2.4 percent) and coal (two percent).

In early November, a prolonged drought affecting strategic parts of the country caused levels of water in hydroelectric dam reservoirs to fall. In order to compensate for the drop in hydropower output, Petrobras was forced to divert natural gas, imported from Bolivia, from the consumer market, to fuel thermoelectric generating stations.

In 2006, average natural gas consumption in Brazil stood at 41.79 million cubic metres a day. It is mainly used for industrial purposes, and to a lesser extent as fuel for cars.

Although the gas shortage was temporary – Petrobras was soon obliged to restore normal supply – Pires regards it as an early alarm of what is to come.

This is the beginning of an energy crisis “similar to, or much worse than” the one in 2001 which led former president Fernando Henrique Cardoso (1995-2003) to impose strict energy savings measures, he said.

“That crisis brought about rationing of electric power, and this one may prompt measures to ration natural gas as well,” Pires said.

As a short term solution, the vice president of the Postgraduate Engineering Centre at the Federal University of Rio de Janeiro, Aquilino Senra, said “a good agreement must be negotiated with Bolivian President Evo Morales, to increase imports of natural gas from that country.”

Bolivia exports 30 million cubic metres of natural gas a day to Brazil, and 7.7 million cubic metres to Argentina.

Senra also proposed that on a short term basis, supplies of liquefied natural gas (LNG) could be imported from other countries, although he recognises that it is much more expensive than natural gas.

And like Pires, Senra invoked the need for rain. “We’ll have to cheer for the rains like a crowd of football fans, because if we have any more droughts the problem will be even worse,” said Senra.

The energy crisis “is paradoxical in this country, which has the greatest hydroelectric potential in the world and the sixth largest reserves of the nuclear fuel, uranium, and is among the top 16 producers of crude oil,” he said.

Senra also told IPS that the potential oil reserves in the Santos basin cannot solve the energy shortage in the short term, because it will take at least six years for production to come onstream.

According to Luiz Messias, project manager for the state company Electronuclear, if the continued construction of the Angra III nuclear power station, recently announced by the government of President Luiz Inácio Lula da Silva, had not been postponed, along with other projects of its kind, the crisis would have been averted.

The two operational nuclear reactors, Angra I and II, generate two percent of the country’s electricity.

In an interview with IPS, Messias said that the main advantages of nuclear energy are its high capacity, its independence from unpredictable factors like rainfall, and its guaranteed operation at 86 percent of its maximum potential output.

Rebeca Lerer, energy campaign coordinator for Greenpeace Brazil, does not agree. The organisation is pursuing two legal actions to prevent the resumption of construction work at Angra III, which was interrupted in the 1980s, during the 1964-1985 military dictatorship.

Lerer states that the four billion dollars earmarked for Angra III could be used instead to make a wind park “for the same cost, in just two years, and without the risks of nuclear accidents or nuclear waste.”

In the longer term, Greenpeace considers that by 2050 an energy supply consisting of 88 percent renewable energy sources and 12 percent natural gas, as a transitional source, would be possible.

“Oil based fuels and nuclear energy could be completely eliminated, and the cost would be much lower than the energy supply envisaged by the government for mid-century,” Lerer said.

According to the activist, Brazil has a vast unexplored potential in solar and wind energy sources, and in energy savings through increased efficiency. The authorities could also take “simple measures, such as improving transmission lines to minimise energy losses,” she added.

Pires advocated “greater transparency about the crisis, that is, more dialogue between the various agents involved, to work jointly on solutions.”

More controversial but essential measures must be considered, such as “raising electricity prices to lower demand, and avoid rationing,” he said.

“Ultimately, the bill for this crisis will be paid by consumers,” Pires concluded.