Oil in Brazil and the world: analysis under diverse aspects.

international | environment | opinion/analysis Thursday November 23, 2006 17:59 by Tim Sauer - BCDS

Brazilian government must suspend, while the sector is reorganized, the rounds of licitations of areas promoted by ANP.

Oil in Brazil and the world: analysis under diverse aspects.

The engineers Sergio Xavier Ferolla and Paulo Metri had published the book "Not all our oil are ours", where they alert Brazilian society on what it is occurring in the sector of oil in Brazil and the world. In the specific case of Brazil, the analysis has covered, mainly, the years of 1995 until today. Some topics treated in the book are shown to follow.

The oil suppliment is faced by the great nations as excellent element in its geopolitical and strategical plannings. The social scientist Ana Esther Ceceña of the Institute on Economic Research of Mexico, in the work "Strategies of domination and maps of construction of the world-wide hegemony", says that: "For the generals of the Department of Defense (DoD) of the United States,…, the hegemony presents itself as an inappellable objective and its search confines it to the project of the best strategies to assure it. Its mission consists of defending the national interests of the United States in any circumstance and any part of world-wide geography. The hegemony, in this case, defined directly as domination or freedom to do and to undo, anything anywhere, it does precede the formularization of its politics."The scientist continues: "The vital interests of the United States, around which it organizes all the activity of the DoD, includes: 3) to assure the unconditional access to the decisive markets, the supply of energy and the strategical resources; …" These affirmations serve to us to understand that the planning of the suppliment of oil to a country with the characteristics of Brazil requires geopolitical and strategical planning.

The works that contain the future estimates of the world-wide production of oil are divided in two groups that show very different values. At a side, we have the forecasts of magazines and technical associations of the sector, of petroliferous companies, the Department of Energy (DOE) of the American government and International Energy Agency (IEA) of the OCDE. The forecasts of this set of entities are tranquilizing, therefore they guarantee that, in the next 20 years, at least, will exist oil at reasonable prices, without necessity of great efforts of conservation or substitution. DOE, for example, places the price of the barrel, in 2020, little above of US$ 22. At the other side, exists the group of the "independent authors", made up of geologists and geophysicists pensioners, university professors, consultors, former petroliferous companies employees, that although believe age of oil can last 40 years more, guarantee to be near to finish the age of cheap oil. The first work in this direction that gained space in a magazine of technical reputation, the Scientific American of March of 1998, was Colin Campbell's and Jean Laherrère's "The end of cheap oil". Other publications had appeared, later, and they all, besides don't believe many of the reserves declared for countries and companies, they alert for the fact that the curve of the world-wide production of oil passes for a maximum, between 2008 and 2015, point from which the price of the oil will have strong trend of hight, as consequence of the declining production. Today, the IMF, the bank of investments Goldman Sachs, the unsupicious periodical Financial Times, the former-president of the Federal Reserves Bank, Alan Greenspan, they already openly admit increasing prices of the barrel of oil coming soon.

The growth of the world-wide demand of oil does not present no signal that will stop, therefore the developed countries do not have strong programs of conservation or substitution of derivatives and some developing countries as China and India, they have growth of the consumption above of the world-wide average. If the paradigm of consumption for inhabitant of derivatives of China will be the current index of the United States, the world will not have oil to supply the world-wide demand. On the other hand, China is free to search the development model that it judges better for its society, which will cause, in the market of oil, disputes of prices, suppliment agreements firmed between countries with diverse compensations and warlike confrontations.

Technological developments aiming at the discovery of new energy source, abundant in the nature, capable to supply great blocks of cheap energy, that comes to substitute the derivatives, are not promising. Besides, exist in the world, today, alternative energies, that thus are only called by being more expensive than the oil derivatives, but if these do become very expensive it will make possible the substitutions. However, the countries that launch theirselves too early in the alternative energies, detriment to use oil existing in its territories and not compromised with exportations, will lose comparative advantage in the world-wide commerce and will not satisfy their societies.

With regard to the Brazilian situation, the authors of the book had showed, appealing to the History, that exists one strong entailing of periods where measures of great social impact had been taken and periods where the national sovereignty was exerted in its fullness. It is clear that this stroll for History was made looking specificly for the energy sectors and of oil. Today, Petrobras, with the reserves that it possesss, guarantees the suppliment of oil to the country, for the next 15 years. In this period, the foreign companies, who had bought areas at auction bid, licitated on an inconsequential way, by Brazilian government, if they do discover oil, will export it, therefore the contracts of 30 years of validity signed with them for the ANP allow the exportation of the "discovered" oil. It is said, also, of proper Petrobra's to come to export oil, what will reduce the period of self-sufficiency of the country. As Brazilian reserves are small, when compared with the ones of the Arab countries, for example, Brazil will have in the future to import, at bigger prices, the oil that it has exported previously. Besides, in the hypothesis of Petrobra's no longer to be able to supply totaly the country, the foreign companies could be obliged to complement the national supplying, but for the international price, according to the contracts.

Finally, the book alerts for the worse that can happen, if brazilian oil is exported, that will be a predatory exploration of the national reserves, leaving vulnerable the country, that will not have financial and warlike resources to assure the oil suppliment from the international suppliers, when the picture of scarcity and tensions reveals itself in the world-wide scene. Thus, it is necessary to make a strategical planning for the sector of oil in the country, taking in account geopolitical components. Before the beginning of the planning, the government must suspend, while the sector is reorganized, the rounds of licitations of areas promoted by ANP.

The told facts are unknown for majority of our society and, if they will not be corrected, they will bring negative repercussions for brazilian people, in the short, medium and long run. The laws referring to the sector of oil in Brazil, created after 1995, and the contracts of concession signed by the Brazilian government with the winning companies of auctions of areas leave Brazilian society unproctected since our oil can freely be exported by who "discovers" it. Thus, not all our oil is ours...

All described subjects are deepened in the book, where great bibliography also exists, allowing the interested reader to find addresses for continuation of the research on oil subject.

The Lieutenant-Brigadier-of-air (General-of-air) Sergio Xavier Ferolla is electronic engineer, formed by the Technological Institute of the Aeronautics, he was commander and manager of studies of the Superior School of War (1993-94), head of the Higher State of the Aeronautics (1995-96) and minister of the Superior Military Court. The mechanical engineer Pablo Metri formed in the Pontifical Catholic University at RIO DE JANEIRO and obtained the degree of Master of Science in industrial engineering at Georgia Institute of Technology. He was a manager of Rio de Janeiro State's Company of Technology and of Nuclear Industries of Brazil, and works in the National Commission of Nuclear Energy. The book is edited by Paz e Terra and has 268 pages.