How Energy Enhances Brazil’s Position

Energy-rich Brazil has an opportunity to have a leading role in the international system and compete with developed countries.

Brazil has vast natural resources and is widely known for its renewable energy generation capacity. The majority of energy sources come from water, wind and solar resources, biomass and thermoelectric enterprises as well as ethanol and biodiesel plants. It also has two nuclear plants and a third one under construction. Hydropower plants are a determinant factor in Brazil’s energy matrix, which is widely developed and includes bi-national partnerships beyond Latin America’s borders.

Brazil also has Natural Gas Vehicles, gas and oil production. According to the US Energy Information Administration Brazil has the second largest proven oil reserve in South America. The discovery of the “pre-salt” layer in 2007 changed the Brazilian oil market, and Petrobras now has multi-billion investments which aims to sustainably increase Brazilian production to 30 billions of barrels in the following years, according to the Brazilian Governmental Portal for Energy.

Brazil has an opportunity to have a leading role in the international system and compete with developed countries. Moreover, this is a unique opportunity to lead in introducing efficient and sustainable clean energy generation methods to the rest of the world.

In the past decade, the impacts of climate change have intensified with more frequent and stronger hurricanes and storms, droughts and desertification. Thus, the old methods based on the industrial revolution which heavily used coal and crude oil need to be replaced for sustainable alternatives.

Furthermore, oil reserves are finite and most countries have already started looking for alternative energy sources. The US has invested massively and improving its shale gas production – not only as an alternative to oil imports – but to become self-sufficient in energy production.

Brazil is seizing this opportunity through big investments with renewable energy power

Brasília has allocated billions to new biomass, wind power, solar plants and hydropower plants to expand its energy capacity. It is also focusing on renewable energy policies such as the national plan for inverted energy taxes in domestic productions.

European countries are also devoting greater attention in renewable energy. Germany announced a ten-point plan for energy and environmental policy by closing nuclear plants and investing in renewable energy. In addition, the EU has the 20-20-20 targets: an energy plan to have a 20% reduction of greenhouse gas emissions from 1990 levels to raise 20% of the share of energy consumption production from renewable resources. Consequently, this plan will improve 20% of the bloc’s energy efficiency and serve as another potential market for Brazil.

Even big oil producer countries have realized that the future relies in cleaner energy sources and they are looking into new methods to diversify their energy matrix and guarantee long-term sustainable power. Saudi Arabia announced a plan to produce all its energy from renewable and low-carbon sources, showing an interest to invest in non-fossil fuel enterprises. For Brazil, this could be a multi-billion market opportunity to export its clean energy methods.

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In Africa, there are also opportunities for partnerships. Brazil has invested in sugarcane plantations for ethanol production in West Africa. According to the Brazilian Agency for Communication, Petrobras has already been working in seven countries in oil related enterprises, as well as developing partnerships for the production of bio-fuels.

Thus, Brazil has a unique opportunity to lead the path with clean energy not only by exporting it but transferring the technology and expertise that could be adapted in other countries. The world is experiencing accelerated growth in Asia, especially in the Southeast where countries have climate conditions similar to Brazil. For instance, Laos has large hydropower potential, which is attracting companies from China, France, Japan, Norway, Russia, South Korea, Thailand, the US and Vietnam.

Furthermore, The Project Connecting the Americas 2022, proposed by President Obama at the 6th Summit of the Americas, is a commitment to achieve universal access to electricity by 2022 through partnerships. This concept was developed within the frame of the Energy and Climate Partnership of the Americas to promote regional efforts towards low-carbon development, energy security and climate change. According to the International Energy Agency, the project is estimated to demand $700 billion in investments in the energy sector excluding Canada and the US.

The Ministry of Planning notes that Brazil has already committed to invest $13.7 billion in integration works from 2012 until 2022. Thus, the Energy Partnership of the Americas is a step forward to work closely in projects of regional development with its allies in partnerships such as the South American Community of Nations, the Community of Latin American and Caribbean States, the Common Market of the South and the Union of South American Nations, while enhancing economic and political ties with countries from the three American continents.

In conclusion, the energy sector represents great prospects for Brazil to play a global leadership role. Political and economic ties could be strengthened through its foreign policy of partnership diversification and regional integration, reaffirming its place in the international economy.

This article has been updated since original publication in Sharnoff’s Global Views.

Tamara Santos is an independent researcher. She earned a BA in International Relations from La Salle University and a MA in Conflict Resolution in Divided Societies from King’s College, London. Follow her on twitter @tamara_ds. Read more articles by Tamara.