Sunday, 31 January 2010

Is God Brazilian?

Brazil has been at the forefront of pioneering renewable energy, but the discovery of oil off her coast has left this country with a dilemma. Brazil, hitherto known as a powerhouse of green energy is facing a major threat and although the majority of the country's cars are powered by ethanol, oil looms large on the horizon. PetrĂ³leo Brasileiro S/A - Petrobras is the embodiment of the Brazilian government's monopoly in the oil sector's integral activities, a monopoly sanctioned by law. The Petrobras platform at the heart of the oil-rich Campos Basin, is capable of producing a world record-breaking 100,000 barrels of crude per day, meaning that when fully operational, Brazil could rocket into the top five world oil producers, alongside Kuwait and Iraq.

The Brazilian government through a spokesperson has suggested that although there are very many poor people in the country and that each Brazilian consumes energy at a rate that is less than seven times what each American consumes, the Brazilian population need, and have the right to have energy sufficient to meet their need.

Brazil's status as a leader in green energy technology is threatened by this new development. But my view is that, just as the Brazilian government intervened at the start of the ethanol programme (expensive though it was) and thereby contributed substantially to its success, the same should apply to oil. Brazil has already designed its economy around renewable energy sources and apart from ethanol for auto-mobiles, there is extensive reliance on hydro-electricity and wind produced energy.

It might be impossible to ask a developing country like Brazil not to exploit its substantial oil reserves, but the country's head-start in developing and exploiting renewable energy technology places her in the unique position where further development can indeed be achieved without the over-reliance on oil for revenue and energy, which has been the undoing of some other oil producing nations. Nigeria, for example, comes to mind.

A big ask, maybe, but the Brazilians have demonstrated a capacity for careful planning. And much of the same will be required methinks, including inter alia ensuring that the oil and gas sectors are as environmentally friendly as possible with emissions as low as possible. Consideration may be given for instance, to the technique of carbon capture and storage, a technique that is currently being employed by Norway in its oil and gas industry. An environmentally friendly approach to the development of the oil and gas sectors will be necessary, in order to achieve an outcome that benefits the majority of Brazilians without at the same time damaging the country's reputation for its renewable energy successes.


CodLiverOil said...

Although Brazil is not perfect, and has made blunders in the past. Brazil has shown itself to be a able and capable nation that deserves it's long overdue respect and recognition.

They have considerable achievements and a lot of their potential is yet untapped. One only wonders how high their fortunes will soar.

Indeed they are true to the words on their national flag Ordem e Progresso ("Order and Progress"). Respect to Brazilians and Brazil.

Anengiyefa said...

Making mistakes is human and there are no countries of the world that have not made mistakes.

Brazil is moving forward in giant leaps. Their success in the aerospace industry with Embraer is a case in point. They are manufacturing aircraft that have placed them in the mainstream of that industry on the world stage, alongside the US and Europe.

They have proved beyond any doubt that they are capable and well deserving of all of their success. The development of the oil sector however, has the potential to be a double-edged sword, as some other countries have found out. It is this pitfall that I am trusting the Brazilians to foresee, to plan against and to avoid..

CodLiverOil said...

What you say is true about Brazil, but Brazil unlike Nigeria has not sat down for over 40 years and just depended on revenues from one resource (to the exclusion of everything else). They economy is diversified, their leaders for the most part are of a decent standard. Lula is a good leader though I'm sure he has his detractors. Technocrats are allowed to rise to high office and play their role in the development of society.

I think Brazil is too sophisticated, to be seduced by the earnings from oil. The case of Nigeria, the vast majority of those who enter the political arena are of dubious worth better yet a waste of space. Their only goal is self-enrichment, some are content to get away with millions, others billions (of looted funds). That is the scope of their horizons. To people who have small minds this is a lot for an individual or small group of individuals, but (this amount of money) for a nation this is really nothing. The world has moved on the numbers being thrown about at a national level are in the order of hundreds of billions if not trillions of US dollars. Those in office in Nigeria can only imagine that millions in their bank accounts are a good thing. I'd like to think that the leadership of Brazil is more mature, and are more accustomed to wealth than Nigerians, after all Brazil has enjoyed wealth for more than 40 years.

The authorities in Brazil are not complacent and but ambitious and pragmatic. They will guide their nation to a better future. That is why I don't think it (oil) will be a double-edged sword for them.

Anengiyefa said...

CodLiverOil, I think we are concurring on this matter. Brazil is too sophisticated to suffer the same fate as Nigeria, because as I stated in the body of the main post, they have experienced growth and development and their economy has been designed in the absence of oil. These accomplishments have come about through careful planning and implementation. With the same attitude, if anything, oil will only speed them up on that journey towards true development. Brazil is set to become a major contender for world power status in this century..