Economy & Energy
Year IX -No 52:
October - November 2005   
ISSN 1518-2932

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Espirito Santo will turn into Bolivia


Carbon Balance in the Greenhouse Effect Gases Emissions in Energy Use and Transformation in Brazil:

 Analysis of Results and Conclusions.


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Alternative to the Additional Protocol of the IAEA Nuclear Safeguards Agreement

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Espirito Santo will turn into Bolivia

Genserico Encarnação Júnior

I returned to my home state, already retired, in 1997 after three decades of traveling across the country. I came to participate in the state government that had then reached half of its mandate.  I found it loaded with projects to which I enthusiastically adhered. 

Among the projects, stood out those of the energy area, of which I am an expert. The main were:

1 - Construction of the Cabiúnas (RJ) - Vitória (ES) gas pipeline to take in the natural gas from the Campos basin and casually from other sources;

2 - Utilization of part of this gas in the mining-metallurgical complex of great Vitória, and its expansion, with the construction of a thermoelectric power plant;

3 - Development of the Peroá and Cangoá natural gas fields, in the north of the state, to be used in the thermoelectric power plant to be constructed in that region;

4 - Establishment of a gas utility company for natural gas distribution to substitute the present concessionaire in order to satisfy the consumption increase of  natural gas from the new sources; and

5 - Establishment of an agency for regulating the public services in the state.

I will not try to explain why these initiatives did not materialized as described above. Some of them are being carried out even though aiming at different directions and purposes. However, the main causes of inertia were, no doubt, privatization of the company that would be the main consumption center, the Companhia Vale do Rio Doce, and the economic and political weakness of the state.

The main purpose of the projects was to increase the natural gas market in the state. The native gas would be used here and complemented with gas from elsewhere.

This agenda was discontinued by the following administration that was more enthusiastic about the perspective of exploring and producing petroleum and gas in the costal part of the state. In fact, the expectations are becoming a reality but it seems that petroleum will be refined elsewhere and the gas will serve other markets.

We will keep the royalties, a small participation in investments and some correlated services. Most of the benefits of the new industry - the so-called aggregated values to an extractive activity - will go to the neighboring states that are economically and politically more important.

The previous agenda, one must admit, foresaw a less noble use of gas. For example, processing iron ore pellets is not the best way to use gas, or to use it for electricity generation. However, that use would give a better anchorage for its projects and the thermoelectric plants would increase our autonomy in the fragile situation regarding electric energy offer in the state in the national context that is fragile as well. The noble uses of natural gas are as raw material for the chemical industry and for residential use (including its transformation into LPG - liquefied petroleum gas), industrial, commercial or vehicular uses.

Today the agenda is a different one. The Peroá and Cangoá fields are under development not for electricity generation (the interconnection with CEMIG - MG attenuates the fragility of the state that is at the end of the south-southeast-center-west line) and the present connection of our gas pipelines to the two systems (north and southeast) aims at distributing to other places most of  the gas produced here. These places were already short of the product because of the vigorous growth of the national market. Espirito Santo, even counting on the Bolivian gas, was destined to be the cushion of the Brazilian natural gas market.

Considering the recent events in Bolivia, the gas supply from that country is in jeopardy. Petrobrás is worried and is carefully watching the flow off of Espirito Santos´ production, increasing the local investments.

That´s the danger! Espirito Santo will turn into Bolivia because it will supply its gas to the Brazilian thirsty (what would be the appropriate term for gas?) market.

The Bolivian population is against this exploitation situation when its precious reserves of natural gas are drained to a neighbor country.

If some measures are not taken to change this situation, which I believe would come too late, the scenario described here would come true.

This is the future of Espirito Santo. It would turn into Bolivia but without the brave Bolivian people.


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Tuesday, 11 November 2008

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