Brazil - Energy and power



In 2001 drought created an energy crisis in Brazil, which is strongly dependent on hydroelectric power and also the third-largest consumer of electricity in the Western Hemisphere. As of 2002 the country's per capital energy consumption was equal to that of all other South and Central American countries combined. From June 2001 through March 2002, power was rationed allowing the country to avoid rolling blackouts. Brazil is one of the world's leading producers of hydropower.

Total installed capacity increased from 4.8 million kW in 1960 to 8.5 million kW in 1968 and to 73.4 million kW in 2001. Production for 2000 was 339.5 billion kWh, of which hydropower contributed 89%. Consumption of electricity was 360.6 billion kWh in the same year. Brazil's hydroelectric potential is estimated at 16.5 billion kW, three times its current capacity. Construction of the Itaipu Dam on the Paraná River took place between 1975 and 1982; this joint Brazilian-Paraguayan project, the world's largest hydroelectric plant, attained its full capacity of 12.6 million kW in 1986, at a cost of $15 billion. About 70% of Brazil's population is served by Itaipu, which generates about 75 billion kWh per year. Each of Brazil's nine turbines (Paraguay controls the other nine) at Itaipu has a capacity of 700,000 kW, which can be transmitted up to 1,000 km (620 mi) away. Brazil regularly purchases a large portion of Paraguay's half of its Itaipu electricity production.

Brazil's oil reserves, estimated at 8.4 billion barrels as of 2002, are the second-largest in South America, surpassed only by those of Venezuela. The government-owned Petróleo Brasileiros (Petrobrás), established in 1953, formerly had a monopoly over the exploration and development of petroleum reserves; the 1988 constitution guaranteed the maintenance of state monopolies in the petroleum and electricity sectors, despite rampant privatization. In 1995, however, Brazil's Congress and Senate approved a constitutional amendment ending the government's oil monopoly, and allowing foreign companies to drill, prospect, import, export, refine, and transport oil. The government was to maintain at least 50% of Petrobrás' voting shares, plus one. In August 2000 the government sold a 29% stake in the company but remained the majority shareholder. Brazil's government hopes to raise large amounts of money and attract foreign investment through the privatization of the oil sector, in order to pay off the national debt. Brazil's first nuclear power plant, built with US help near Rio de Janeiro and known as Angra 1, began operations in May 1985. It was followed by Agra 2, which took 23 years and $10 billion to complete and became operational in 2000. Construction was begun on a third plant, Agra 3, but halted. However, it was possible that work on the facility would resume following the energy shortages of 2001. As of 2002, it was estimated that five more years would be needed to finish the plant and bring it online. Nuclear generation of electricity only accounted for about 1% of production in 1994. Estimates of uranium reserves were put at 163,000 tons in 1991, the fifth largest in the world.

Foreign participation and investment formerly were forbidden by Brazilian law; however, in the mid-1970s, exploration was opened to foreign companies through risk contracts, and the petrochemicals industry was opened to foreign participation. The National Petroleum Agency (ANP), created in 1997, is charged with opening up the oil industry to both foreign and domestic private interests. By 2001, production totaled 1.6 million barrels per day. However, at 2.2 million barrels per day, consumption still outstripped production, and oil imports were necessary, mostly from Argentina and Venezuela. As of 2002 Brazil had 13 crude oil refineries.

Natural gas production was reported at 7.4 million cu m (261 million cu ft) in 2000. As of 2002, gas reserves totaled 221 billion cu m (7.8 trillion cu ft). In 1975, the government initiated a program to develop alcohol from sugarcane as an energy source. In the 1980s, 80% of the country's cars and light vehicles were powered by alcohol, although slumping oil prices and persistent financial problems within the alcohol industry prompted the government to freeze production at the 1985 level of 11.1 billion liters (2.9 billion gallons). By 1995, the production of gasoline-powered vehicles had shifted to 95% from the almost entirely alcohol-powered production of 1989. Alcohol still has an important function to maintain diverse sources of fuel for the transportation sector. Most transportation fuel sold in Brazil is a mixture of 22% ethanol and 78% gasoline. As of 1999, Brazil produced 200,000 barrels per day of ethanol.

The absence of good coking coal is a handicap to industrial plans, and Brazil must import coal for its steel industry. As of 2002 it was estimated that coal imports could double within the following ten years. Coal consumption in 2000 was estimated at 23.5 million tons.

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