Lula government bets on oil despite climate damage – 03/27/2023 – Environment

Despite the campaign and post-election speech that guaranteed that the climate crisis would play a leading role in public policies, the government of Luiz Inácio Lula da Silva (PT) has made new investments in fossil fuels.

Last Friday (24), the MME (Ministry of Mines and Energy) announced plans to scale up national production and make Brazil the fourth largest oil producer in the world —today it is the eighth, according to the Energy Information Administration from the USA.

A particularly sensitive front is oil exploration by Petrobras at the mouth of the Amazon River, which is in the final stages of environmental licensing.

These movements go against the grain of science, which points out that to curb climate change it is essential that dirty energy sources occupy an increasingly smaller space in the global energy matrix.

The most recent report by the UN climate panel (IPCC) states that “a substantial reduction in the overall use of fossil fuels” is needed to bring net carbon emissions to zero—that is, for all CO_two emitted can be reabsorbed. The document is the largest and most advanced study ever made on the subject and aims to guide the development of public policies.

Another survey, prepared by the International Energy Agency, points out that in order to reach the goal of zero net emissions by 2050, it is essential that no new fossil fuel extraction projects be authorized.

The IPCC has already pointed out that reaching this goal in the next three decades is one of the most important steps to fulfill the Paris Agreement and limit global warming to 1.5°C.

In a statement, Alexandre Silveira, who heads the MME, refers to oil and natural gas as “the wealth of the Brazilian people that is underground.”

“Without measures to promote its exploration and production, there are no jobs, income or regional development. and Northeast of Brazil”, he says.

The Brazilian equatorial margin is the stretch that goes from Amapá to Rio Grande do Norte, where there are five sedimentary basins that are in the sights of Petrobras. The one closest to the start of exploration is block 59, in the Foz do Amazonas basin, which received an exploration concession from the ANP (National Petroleum Agency) in 2013.

The block is located approximately 160 km from the coast of Oiapoque (AP) and 500 km from the mouth of the Amazon River itself. The oil industry’s interest in it comes from the fact that blocks that have already been drilled in the vicinity, such as in Guyana, have had positive results in terms of oil reserves.

The area is home to immense coral reef systems that were recently discovered and about which little is known. “It is the region where the Amazon River flows into the sea, which takes nutrients to the Caribbean and feeds a very rich biodiversity”, explains Daniela Jerez, public policy analyst for the NGO WWF.

Originally acquired by BP, block 59 is now managed by Petrobras, which is awaiting authorization from Ibama (Brazilian Institute for the Environment and Renewable Natural Resources) to drill an exploratory well. With this, it will be possible to estimate how much oil there is in the place.

The licensing process began in 2014 and is now at an advanced stage — although, according to Ibama, studies have shown concern due to the high environmental sensitivity and logistical challenges for developing the activity in the region.

Petrobras points out that it has been complying with all the requirements and procedures established by the regulatory bodies, licensors and inspectors for granting the authorization.

The oil company also said that the equatorial margin could open a fundamental energy front for the country and that new borders are essential for guaranteeing national energy security and sovereignty.

In the company’s strategic plan for the period from 2023 to 2027, almost US$ 3 billion (about R$ 17 billion) are foreseen for the exploration of the equatorial margin, where it has already acquired other blocks. The total for exploration and production is US$ 64 billion (about R$ 336 billion).

Another US$ 4.4 billion (R$ 23 billion) should go to actions that reduce carbon emissions from the company’s operations. There is no forecast for investment in renewable energy sources, such as wind and solar.

In early March, Petrobras announced profits of BRL 188.3 billion in 2022 – the highest in history not only for the state-owned company, but also among all Brazilian companies. Other major oil companies, such as Chevron, Exxon Mobil, Shell and BP, also had record profits in the period.

“There is a certain fetishism, in our analysis, that oil is the solution for everything. We believe in accelerating the transition and transforming Brazil not only into a producer of green energy, but also an exporter”, says Juliano Araújo, director of the Arayara Institute and the Oil and Gas Observatory. “If we get tied up in oil, we’re going to miss all the windows of opportunity.”

For those who follow this theme, the Lula government’s pro-oil stance is not exactly surprising. In the reports by the Mines and Energy working group of the government transition, for example, there was already talk of expanding oil and gas exploration, including on the equatorial margin.

The goal assumed by the country after the Paris Agreement (the Nationally Determined Contribution, known by its acronym in English NDC) provided for a reduction in greenhouse gas emissions of 37% by 2025, compared to 2005 levels. reduction in gross emissions was only 8.2%, according to data from SEEG (System for Estimating Emissions and Removals of Greenhouse Gases).

During the government of Jair Bolsonaro, the NDC was updated twice, both times referring to changes in the emissions benchmark in the base year of 2005. In practice, the maneuver, which was called “climate pedaling”, makes Brazil reach 2030 with an emission target greater than that provided by the first NDC.

Most of Brazil’s emissions come from deforestation (49%), followed by agribusiness (25%). The energy sector is in third place, accounting for almost a fifth (18%) of the total.

“You have to have a decarbonization schedule, not an increase in carbon. I’m not aiming for zero oil, but we can’t expand, we have to reduce. We have to make a strategic plan that considers the climate crisis”, opines Suely Araújo, senior public policy specialist at the Climate Observatory.

In a press conference last Wednesday (22nd), alongside the Minister of Climate and Environment of Norway, Espen Barth Eide, the Minister of Environment and Climate Change, Marina Silva, was asked about expanding the activities of the Petrobras at the mouth of the Amazon.

“My personal position is that Petrobras must transition to being an energy company. Not just oil exploration,” he said. “We must use these resources to invest in technology, in innovation, in new sources of generation, wind, sun, biomass and the production of green hydrogen. It is a transition process. This does not happen overnight.”

The minister also stated that the energy transition is a challenge worldwide. “We live the paradox of not being able to do without this source of energy generation. But, obviously, we have a sense of urgency to make this transition as quickly as possible.”

_{The Planeta em Transe project is supported by the Open Society Foundations.}