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Brazil energy market

Page history last edited by Brian D Butler 9 years, 9 months ago

 

 

 

 

 

 

 

Energy Market in Brazil

 

The Brazilian government has undertaken an ambitious program to reduce dependence on imported oil. Imports previously accounted for more than 70% of the country's oil needs but now account for about 33%. Brazil is one of the world's leading producers of hydroelectric power, with a current capacity of about 58,000 megawatts. Existing hydroelectric power provides 92% of the nation's electricity. Two large hydroelectric projects, the 12,600 megawatt Itaipu Dam on the Paraná River (the world's largest dam) and the Tucurui Dam in Pará in northern Brazil, are in operation. Brazil's first commercial nuclear reactor, Angra I, located near Rio de Janeiro, has been in operation for more than 10 years. Angra II has been completed in 2002. An Angra III is almost completed, planned inauguration is 2008. The three reactors would have combined capacity of 5,000 megawatts when completed.

 

Table of Contents:

 


 

 

 see also:  Brazil alternative energy market

 

 

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.[4]   read more:  http://en.wikipedia.org/wiki/Energy_policy_of_Brazil

 

 

Primary energy sources

Oil

Brazil is the world's 15th 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.[1] 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.[5]

 

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.[5] 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.[6]

 

Transpetro, a wholly owned subsidiary of Petrobras, operates a crude oil transport network. The system consists of 4,000 miles (6,400 km) of crude oil pipelines, coastal import terminals, and inland storage facilities.[5]

 

Natural gas

At the end of 2005, the proven reserves of Brazil's natural gas were 306 bcm, 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).[2] Petrobras controls over 90 percent of Brazil’s natural gas reserves.[5]

 

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.[5]

 

In 2005, the gas production was 18.7 bcm, which is less than the natural gas consumption of Brazil.[1] 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.[5]

 

Coal

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.[7] In 2004 Brazil produced 5.4 million tonnes of coal, while coal consumption reached 21.9 million tonnes.[1] 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.[7]

 

Oil shale

Main article: Petrosix

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.[8][9]

 

Uranium

Brazil has the 6th largest uranium reserves in the world.[10] 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.[7]

 

 

Oil and Gas:  offshore drilling in Brazil

 

 

Tupi has lots of oil.  But, just how much is a matter of great debate:  The one field that has been measured with any accuracy contains 5bn-8bn barrels – as much as the remaining reserves of Norway. Ministers are working on the assumption that there is 10 times that amount waiting to be found.

 

Last November 2007, Petrobras, a state-controlled oil giant, announced that it had found between 5 billion and 8 billion barrels of light, sweet crude (about the size of Norway's find in the North Sea) in a field called Tupi, wedged under a layer of salt deep beneath the floor of the Atlantic Ocean. There is a strong presumption of more oil in other "pre-salt" fields.

 

The "Tupi" oil sits between 5.3 and 7km below sea level, farther from the surface than any of the world's existing fields. The company already extracts oil and gas at a depth of nearly two kilometres and has the technology to go a kilometre deeper. But Tupi is a lot more complex.

 

But, Petrobras has both the technical expertise and the capital to pull this off. 

 

Most of Petrobras's planned investment in exploration and production of $65 billion over the next five years will be spent on the new fields. José Sergio Gabrielli, Petrobras's president, says that the company's plans for expansion are predicated on oil at $35 a barrel. He also says that the company has the financial strength to raise more debt if necessary.

 

Foreign ownership

 

While Petrobras is controlled by the Brazilian state through a majority of its voting stock, most of its capital is in non-voting shares. Some 60 per cent of total capital is held by minority – mostly foreign – shareholders. It is they who would lose the opportunity to benefit from exploiting the offshore discoveries.

 

Foreign capital helped pave the way for the current success:  Much of Petrobras's new stature and success comes from the decision of a previous government to float 60% of its shares on the stockmarket and to open up the oil industry, allowing foreign firms in as partners and competitors.  See our discussion on privatization

 

Foreign partners include:  Britain's BG Group has a 25% stake in Tupi and Portugal's Galp Energia 10%

 

But the government still makes (lots of) money from Petrobras:   (as of 2008), The government takes a royalty of up to 10% of the value of oil and gas. In addition, there is a second tax linked to production. Much of this second levy goes to the states where the oil is—mainly Rio de Janeiro. On top of this, of course, the government reaps dividends from its 40% share in Petrobras, which is the fifth-largest company in the Americas by market capitalisation.

 

Existing "Concessions model"

 

In effect since 1997;  oil companies buy rights to explore geographical blocks of Brazilian territory, on land or at sea. Petrobras – usually but not always as leader – has formed consortia with several international oil companies to buy concessions. Concession holders accept the risk of finding no oil, make the necessary investments and are rewarded with rights over whatever is discovered. They pay royalties to the government on what they produce.

 

 

 

Brazil debates changing the rules

Brazil's government is debating whether to create a new, wholly state-owned, oil company to maximise its profit from the new fields.  If so, international oil companies may be locked out of one of the biggest parties of the industry for some time.

 

Petrobras and others are likely to be offered the chance to participate through service contracts – in which companies are paid to bring up the oil and gas but have no commercial rights over it – or production sharing agreements, in which they are given some of the oil they produce to cover costs and some as profit but have limited control over how much they may produce and when.

 

Just as years of investment and accumulated expertise are set to pay off in spectacular fashion, the company’s domination of the industry it helped to create has been put in jeopardy.

 

New State owend company?

 

To keep 100% of the profits for the government.  Lula da Silva seems determined to create a wholly state company modelled on Norway’s Petoro

 

Where will Brazil find the money to fund this new company?

 

This is really the key question.  If Brazil goes ahead with its plan to create a new state owned company to explore the Tupi oil fields, where will the money come from to fund this new entity? New taxes? 

 

By cutting out private investors, Brazil is in effect committing to develop the new fields itself, and thus grab the entire rewards for itself.  But, by doing so, they are also incurring all risks, and financing challenges by itself as well.

 

The oil is very deep, and is covered by more than 2000 meters of hot, high pressured salt. This is not an easy job, nor will it be cheap.  And, if the price of oil in international markets were to fall, it might make such difficult to reach oil less commercially viable.

 

By cutting out private investors from this new find, Brazil may benefit, but by doing so they may find this project impossible to pay for, execute and bring to market by themselves.

 

They might end up with 100% of the oil, but 0% extracted because of a lack of $ to do the job.

 

 

Petrobras has the money & knowledge :

 

The company’s strategic plan for 2008-12 includes investments of more than $112bn, of which just $8bn must be financed. The plan was drawn up on the basis of oil at $35 a barrel and before the discovery of the new fields.  “We think we can develop the pre-salt fields on our own,”

 

 

Politics important:

Lula wants to help his chosen successor "Dilma Rousseff" to get elected in 2010.

 

Potential for corruption:

By creating a brand new, and potentially huge state entity, Lula may be opening the doors to future corruption possibilities.  In Brazil, there is always the need to reward political challengers with good jobs for joining a coalition government.  A huge new state entity would be just the needed reward for political jobs for challengers.

 

 

 

Impact on Foreign Investment

 

Uncertainty about potential rule changes has now caused Petrobras's share price to wobble (see chart), taking the rest of the São Paulo stockmarket with it.  The general fear is that shutting out Petrobras's outside shareholders (from the gains of the Tupi oil find) might scare off foreign investors from Brazil in general.

 

 

source:   Economist magazine: http://www.economist.com/world/americas/displaystory.cfm?story_id=12009864

 

 

 

 

 

Electricity generation issues

 

In 2008, the biggest challenge for Lobão will circumvent the crisis that is already installed on the electric industry.  On Wednesday 9, the director-general of the National Agency of Electric Energy, Jerson Kelman, defended a campaign for a reduction in energy consumption.  "It's not impossible to have rationing," said Kelman

 

The average volume of rainfall is the lowest of the last 76 years.   In the Southeast, the reservoirs began the year 2007 with 53% of capacity.  Today, we are with 44.73%.  In the Northeast, the volume of water was 61.9%. Currently, is at 27.1%.

 

It is a reality that has already reached the international market. On the same day that Lobão was ungido, the agency risk Fitch Ratings issued a report pointing 2008 as one years complicated scenario for the energy, if Brazil grow more than 5% a year. According to a information of the ONS, of the 21 thermal who had to be driven to compensate for the lack of water in the reservoirs, 13 power generating below the expected.

 

 

Electricity

 

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.[1] As of today 66% of distribution and 28% of power generation is owned by private companies.[1] In 2004, 59 companies operated in power generation and 64 in electricity distribution.[3]

 

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.[5] 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.[3]

 

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.[4]

 

Hydropower

 

Brazil is the third largest hydroelectricity producer in the world after China and Canada. In 2004 hydropower accounted for 83% of Brazilian power production.[1] The gross theoretical capability exceeds 3,000 TWh per annum, of which 800 TWh per annum is economically exploitable.[7] In 2004, Brazil produced 321TWh of hydropower.[11]

 

The installed capacity is 59 GW.[11] 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.[12] The first new hydroelectric power station after more than twenty years will be the Belo Monte Dam.[1]

 

Due the Brazil's reliance on hydroelectric power, the drought in 2000-2001 resulted in recurring blackouts, and in June 2001 the government was forced to ration electricity usage, which was ended in late 2001. However, the country still remains vulnerable to power outages.[4]

 

Nuclear energy

Nuclear energy accounts for about 4% of Brazil's electricity.[13] The nuclear power generation monopoly is owned by Eletronuclear (Eletrobrás Termonuclear S/A), a wholly-owned subsidiary of Eletrobrás. Nuclear energy is produced by two reactors at Angra, which is Brazil's sole nuclear power plant. It is located at the Central Nuclear Almirante Álvaro Alberto (CNAAA) on the Praia de Itaorna in Angra dos Reis, Rio de Janeiro, Brazil. 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 on 2009. By 2025 Brazil plans to build seven more reactors.[14]

In February 2008 President Lula da Silva signed a nuclear cooperation agreement with Argentine.[15]

 

Solar power

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.[7]

 

Wind energy

Main article: Wind power in Brazil

 

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. The current installed capacity is 22.075 MW generating about 54 GWh per annum.[7] Update 11/07: 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.

 

 

 

 

BioFuels:

 

source: report

 

news:  01/2009: In Brazil, Petrobras said that it will commence operation at its Montes Claros Biodiesel plant in Minas Gerais by the end of the first quarter, ahead of its original schedule. The state oil company said that it has sold offtake contracts for 400,000 gallons of biodiesel for first quarter delivery.

 

 

"Brazil is the world’s leader in renewable energy sources" - BRASSCOM

 

 

Ethanol

 

Over the next decade Brazil will invest $25billion in the construction of new ethanol plants to meet domestic demand per the Empresa de Pesquisa Energetica (EPE). Per the EPE Brazil is the No. 1 exporter of ethanol made from sugar cane, has foreign sales of nearly 396 million gal/year.

 

Hydrous ethanol, used throughout Brazil but not previously in the United States, allows for the elimination of the drying stage that creates anhydrous ethanol, used in the US. The energy savings from elimination of the dehydration process is estimated at between 10 and 45 percent.

 

Read more

 

News

In Brazil, Cosan announced that it would merge with Nova America and acquire four new sugar cane factories and gain control of leading sugar company Uniao in return for giving Nova shareholders 11 percent of its stock. Cosan will now control 10 percent of the Brazilian sugar trade. 

 

Exports

In the Sudan, Kenana Sugar will commence operations next month at its 16 Mgy sugarcane ethanol plant, the country's first. Brazil's Dedini Industrias de Base, supervised construction. The plant is located 150 miles south of Khartoum and will convert molasses to ethanol. Dedini has been given the opportunity by the Sudanese government to construct up to 18 ethanol plants around the country.

 

Biofuels

 

Due to its ethanol fuel production, Brazil has sometimes been described as a bio-energy superpower. [16] 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 nation-wide 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.

 

The production and consumption of biodiesel is expected to reach to 2% of diesel fuel in 2008 and 5% in 2013.[1]

 

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.[7]

 

 

 

Alternative Energy Market

 

The complex set of forces of planetary energy matrix must be one of the main items on the agenda of global leaders, whether of companies or governments - and everyone will look out for the successful experiences Brazil

 

 

 

The greatest example, of course, is the production of ethanol.  While the producers in the US still depend on government subsidies, the Brazilian fuel today is extremely competitive.  And should emerge a significant innovation among producers of sugar cane: besides supplying the cars of ethanol, the plant will be increasingly used in the generation of electricity.  Today, the plants use only about a third of bagasse and straw of the cane to generate electricity - which, in general, is consumed in the production of alcohol and sugar.  The two-thirds have wasted an enormous amount, and he will begin appearing in 2008, with greater use of biomass.

 

According to the Union of Industry, Cana-de-Sugar (Unica), the electric potential of the biomass of the cane is already equivalent to the expected production of the river hydroelectric Madeira, and in five years, will be equal to the plant of Itaipu.  But for that promise is achieved, lack a definition policy: the government must take the decision to encourage this clean energy paying better prices.  "If the government is just concerned about the energy crisis, it should create tax incentives for the development of alternative energies," says Marcos Jank, president of Unica.  "We want the alcohol is the first product, electricity, the second, and sugar, the third."

 

In addition to price, there is another important factor: how to connect the power plants to the electric network.  The investment is not small - but certainly the cost of transmission will be lower than those of plants of the Amazon.

 

 

The technology of solar panels is already known for decades, but still has a high cost of production when compared to traditional sources. The same is true for wind energy. The country has great potential for both, but they are not yet underexploited. 

 

It is clear that Brazil is the country of rivers and hydroelectric, a technology dominated, and that offers one of the best production costs of the world.  Still, more could be done, say experts.  The Proinfa, program of the federal government to encourage small hydroelectric and alternative sources of electricity, has had very timid, says Célio Bermann, a professor of the Institute for Energy and Eletrotécnica: "By the end of 2006, the Proinfa not reached 23% of the targets established. "  One major criticism concerns the stability of the rules.

 

Several wind energy projects already approved, but which are not brought forward because there is no guarantee that energy will be bought at prices that justify the investment.  In addition to learning technology, there are strategic reasons for the investment.

 

"It's a cycle inversely proportional. When the level of the rivers is lowest when the wind is blowing stronger, while the weakest season of winds is the most flow in rivers," says Marques, president of Bioenergy, a company that operates of wind turbines in the Northeast. 

 

Finally, there is much to do in terms of economy and efficiency.  Today, 15% on average of all the electricity that is generated is lost on the way up to the home user.  With a reduction of only 10% in that waste, the gain would be enormous.  "It would be the same thing to build another plant of the river port of Madeira for a time period much shorter and with far fewer resources," says Bermann, USP.  As can be seen, with a little strategic vision and determination, Brazil can consolidate its position as a world reference in the energies of the future.

 

 

 

Biodiesel....overinvestment?

 

The biodiesel, an alternative fuel made based on vegetable oils, has been announced as one of the main programmes of the government in the area of energy.  While offering environmental gains by reducing pollution and be renewable, biofuel mamona of oil, soya or palm, and other raw materials, was presented as an opportunity to generate employment and income in the family farming.   After much testing, reached a moment of truth for the Brazilian biodiesel. 

 

In January, becomes compulsory in positions throughout the country B2, the diesel mixture of 2% of biofuel.  This means that, over 2008, will be needed around 840 million litres of biodiesel to supply a fleet of 2.3 million trucks, buses and pickups.  But the premier can be expected by two problems: excess industrial capacity and rising prices of vegetable oils.  The price of soybean oil, raw materials, 75% of the Brazilian production of biodiesel, almost doubled in two years.  The result is bad for teh biodiesel market.

 

Stimulated by large incentives by the government, many companies invested in the sector.  There are 49 plants approved by the National Agency of Oil, Natural Gas and Biofuels (ANP), with an installed capacity of 2.5 billion litres per year - three times the quota necessary to meet the B2 in 2008.  Other 47 factories awaiting permission from the agency to be established.  When all the plants are in operation, the production capacity reach 3.8 billion litres per year.

 

"There was an explosion in the industry that generated a fever of competition and just playing the prices go down," says Jorio Dauster, president of the board of Brasil Ecodiesel, the largest company in the sector, with six plants.

 

The fact is that the account is not closed.  In an auction sponsored by the ANP in November, Petrobras purchased 380 million litres of biodiesel by the average price of 1.86 real per liter - though the reference price was 2.40 reais.  The value reached does not cover even the cost of production, estimated at 2 the real litre, the biofuel made with soybean oil, considered the most economically viable.

 

Why companies have committed to deliver the product at a loss?  The explanation is that, since many plants are built, there is an eagerness to close contracts with Petrobras and ensure any remuneration for investment.  After all, the auction already made by the ANP ensure the supply of biodiesel for the entire first half of 2008 and there would be another great opportunity for the sale as early.  "We can not get the factories stopped for six months," said Dauster.  Given the scenario of raw materials up, the industry was divided.  "Some companies felt that it was better bet beginning of this program, even with the price below cost. Gave Other understood that not to work in the loss," says Odacir Klein, former Minister of Transport and director of the newly established Union of Brazilian Biodiesel (Ubrabio).

 

Inaugurated in September, with a capacity to produce 110 million litres of biofuel per year using vegetable oils and beef tallow the refrigerator of the company, a biodiesel plant in the Bertin, located in Lins, in the interior of São Paulo, is stopped.

 

Who sold the product in the auction, however, dealing with a difficult equation to close - why there is suspicion that some companies will not deliver the biodiesel auctioned, repeating what happened over 2007.  During this period, when the market operated in testing, only 400 million litres, less than half of the volume sold, were delivered. 

 

To decrease the risk of missing the product, the regulatory agency included penalties for those who do not provide the promised, prohibiting the participation in future auctions.  "The goal of the first auction was stimulate the market to produce and therefore the contracts nor brought punitive clauses. Now, there is more that possibility," says Edson Silva, superintendent of supply of ANP.

 

 

Not attractive
Understand that produce biodiesel today not compensate
Raw materials, which are vegetable oils, are worth more in the market than the actual fuel (price per litre of the industry, without ICMS)
Soyabean oil  1.96 Real
Oil palm 2.11 real
Sunflower oil 2.42 real
Oil mamona 3.85 real
Biodiesel 1.86 Real
Consequently, the production of plants for biodiesel is below the installed capacity (in litres)
Production in 2007 (1)
 400 million
Capacity
 2.5 billion
(1) Estimated

 

 

 

WHEN THE PROGRAM Brazilian of biodiesel was conceived in 2005, the market for agricultural commodities was very bad.  But since then, the outlook changed.  The increase in income in China and India increased 6.5% the consumption of vegetable oils in 2007, and already provides new growth of 6%, demand in 2008.  Furthermore, the advance of biofuels - there included the ethanol - also shook with the market for vegetable oils.  As the biodiesel wins weight in the global energy matrix, its connection with the oil increases.  "This means that a higher price of oil has been translated into higher prices of vegetable oils," says James Fry, director of consultancy LMC English, specializing in the market for agricultural commodities.  This has an effect on world food prices.

 

 

It is not only in Brazil that the market for biodiesel is complicated.  Germany is the world's largest producer, with 40% of about 13 billion liters manufactured on the planet.  But that leadership has been built on a range of subsidies to producers and tax reductions.  The United States, another important country in the market, also offer large benefits to producers.

 

For now, the Brazilian government believes in alternatives to boost the industries. It is almost certain that the compulsory addition of 5% of the biofuel diesel, scheduled for 2013, is anticipated to increase demand.  Also cited is expected that the prices of reference of the next auctions are more generous, absorbing, well, the high cost of the raw material.  The government should also stimulate the market, called BX - one in which firms use biodiesel in fleets themselves.  CVRD, for example, 20% mixture of biodiesel to diesel for its locomotives.  "This can be a new frontier for the national biodiesel, because the export will still take to happen," says Silva, the ANP.

 

The big test of the Brazilian biodiesel will even from March, when the new crop of soybeans begin to be delivered.  If demand by the international grain remain heated, the pressure on export will be a factor for a more complicated production.  Other bottlenecks such as transport and storage, should arise.  The lack of storage tanks for the biofuel in distributors can be the first one.  It will take much more than marketing for the biodiesel fulfil promises golden launch of the programme.

 

 

Jatropha Oil:

 

 

What is Jatropha?   Goldman Sachs recently cited Jatropha curcas as one of the best candidates for future biodiesel production.[3] However, despite its abundance and use as an oil and reclamation plant, none of the Jatropha species have been properly domesticated and, as a result, its productivity is variable, and the long-term impact of its large-scale use on soil quality and the environment is unknown.[1]

 

 

 

 

Energy Players in Brazil:

  1. Petrobras
  2. Dedini:  http://www.dedini.com.br/en/index.html

 

 

 

Natural Gas

 

centered around Rio

 

Use of natural gas advances in the city of Maceió
 
2 July 2007

 

 

 

Since 2001, when the distributor from Alagoas state Algás became the first outside the Rio de Janeiro-São Paulo axis to supply natural gas to houses and condominiums in Northeast Brazil, more than 18,000 residential units already are contracted to use this alternative energy source in the city of Maceió (Alagoas state). By 2010, the number is expected to reach 50,000. "Initially the company's biggest challenge was to present piped natural gas to consumers, explaining the advantages of the product," said Algás president Gerson Fonseca. "Now, this differential is already recognized by all the chain of the real estate market, like builders, real estate agents and other area professionals," he concluded.

 

Fonseca said that the expansion of natural gas in new real estate projects is the result of various Algás initiatives, like the free consulting service offered to contractors when it comes time to plan the gas network project and the partnership signed with the Association of Real Estate Market Companies of Alagoas (Ademi-AL). He said that one of the results of this partnership could be seen in the most important prize in the state's real estate market, the Prêmio Master. "Doubtlessly, 2006 was a fundamental year for setting the pace of natural gas expansion in the residential market of Maceió. Today, all the buildings launched in the region serviced by gas are delivered ready to distribute this energy source."

 

The executive explained that, due to the advantages like convenience, efficiency, greater security and economy, the Alagoas architects are including solutions with gas in their projects and more and more the builders of Maceió incorporate the use of this energy source in their undertakings. The architect Sandra Leahy recommends the use of the system to her clients. "For the guaranteed supply, economy and functionality," she summarized. Another innovation is that, of the almost 18,000 residential units contracted by Algás, 842 already using the system of individualized gas measurement

 

 

 

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