Brazil’s energy industry seems to be caught in a moment of deep ambivalence--on one side of the issue, they are breaking records in terms of renewable resources and green energy; on the other, they are pushing hard revive fossil fuels and bring hundreds of thousands of jobs back to the struggling oil and gas industry.
This month the Brazilian Ministry of Mines and Energy released astonishing figures that put Brazil right at the forefront of the green energy movement. The Boletim de Monitoramento do Sistema Elétrico (Electric System Monitoring Report) shows that renewable energy sources made up 81.9 percent of the country’s installed capacity for energy production (160,381 megawatts in total), and a whopping 87.8 percent of total Brazilian energy production in the month of June.
The vast majority of Brazil’s energy production is hydropower, clocking in at 63.7 percent of the total energy generated in June. The second biggest source of renewable energy comes from biofuels produced at biomass plants which use materials such as sugarcane bagasse, rice husk, and wood waste to make organic fuels. Wind farms accounted for another 8.1 percent of the energy produced in June, and solar clocked in at just one percent (although the solar sector is already showing signs of growth).
Despite these amazing figures, Brazil is not leaning into their success in the field of green energy. The nation’s oil and gas industry is finally showing signs that it is coming out the other side of an economic crisis brought on by recession, low oil prices, and reduced investment. Now, as economic conditions improve, foreign investors are returning to the fold and analysts are predicting a major turnaround is just around the corner for Brazilian fossil fuels.
Half a million new jobs are going to be added in the oil and gas industry by 2020, according to a study carried out by the Brazil Development Bank. A separate study conducted by the Federation of Industries of the State of Rio de Janeiro said that thanks to greater flexibility in local regulations, several new projects will be able to take off, creating more activity and a further increase in jobs in the oil and gas industry. Related: Venezuela Takes Unprecedented Action To Stabilize Currency
Particularly large growth is predicted in Brazil’s upstream exploration and production sector (E&P), with 44 offshore productions systems slated to begin operations in by 2030. Just one of these units, located in the south eastern state of Espirito Santo will create around 1,000 when assembly begins under Petrobras, Brazil’s largest oil company, in 2020. Another major site of a potential employment boost is the city of Macaé, located at the heart of the Brazilian offshore drilling industry. Several international oil and gas companies had backed off their activity in the area when gas prices were at their lowest, but now they are likely to ramp up production once again.
Brazil’s position on the precipice between two opposing visions for energy--renewable and traditional--is representative of a larger conflict in today’s energy industry. We’re in a strange and unprecedented moment where even Big Oil is acknowledging and in many ways preparing for a world that is moving away from fossil fuels, while simultaneously we are facing more demand for oil, gas, and coal in this decade than ever before.
Just look at the headlines: scientists are making major biofuel breakthroughs while the U.S. turns its back on biomass, Asia is leading the renewable energy race as Japan re-embraces coal, India and China are facing unprecedented numbers of cars on the road and ever-higher demand for gasoline but are leading the charge for electric cars. Everywhere you look in the energy sector, contradiction rules. Brazil is not the exception, but the rule.
By Haley Zaremba for Oilprice.com
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