In the latest EIA (Energy Information Administration) analysis, it was revealed that Brazil is the eighth largest consumer of energy in the world, representing 2.2 percent of the world’s total consumption of energy. The country also accounts for 1.9 percent of total energy production in the world with a production of 9.5 quadrillion BTU.
Table 1: Total primary energy consumption (quadrillion btu)
Brazil’s sources of energy
Total primary energy consumption in Brazil has increased by more than one third in the past decade because of sustained economic growth, according to EIA numbers. Brazil’s largest share of primary energy consumption lies in fossil fuels. However, Brazil is one of the largest countries in the world with a strong focus on renewable energy and environmentally efficient energy consumption. As a result, 39 percent of total energy consumption comes from the second largest source of energy, which is renewable resources.
Figure 1: Total primary energy consumption in Brazil by fuel type in 2011
Fossil fuels – The primary source of energy
In 2012, Brazil proved to be the largest producer of liquid fuels in South America. “Brazil had 13 billion barrels of proven oil reserves as of January 2013, the second-largest in South America after Venezuela. The offshore Campos and Santos Basins, located off the country’s southeast coast, hold the vast majority of Brazil’s proved reserves. In 2012, Brazil produced 2.7 million barrels per day (bbl/d) of liquid fuels, of which 78 percent was crude oil,” says the EIA.
Petrobras, a government-owned firm, is the dominant player in Brazil’s crude oil market. The market has not opened up since 1997 when the government allowed competitors to operate in the market. Royal Dutch Shell was the first company to enter the Brazilian market, but now almost all the international oil giants are operating on the hydrocarbon-rich sands of the South American nation. These include Chevron Corporation (NYSE:CVX), Repsol SA (ADR) (OTCMKTS:REPYY) (MCE:REP), BP plc (ADR) (NYSE:BP) (LON:BP), Anadarko Petroleum Corporation (NYSE:APC), El Paso LLC (NYSE:EP), Galp Energia SGPS SA (ELI:GALP) (OTCMKTS:GLPEF), Statoil ASA(ADR) (NYSE:STO), BG Group plc (ADR) (OTCMKTS:BRGYY) (LON:BG), Sinopec Shanghai Petrochemical Co. (ADR) (NYSE:SHI) (HKG:0338), Oil & Natural Gas Corporation Limited (NSE:ONGC), and TNK-BP HOLDING MOSCO (OTCMKTS:TNKBF).
Brazil’s offshore areas have proven to be richer than the onshore oil fields, and so 90 percent of the country’s oil production is in very deep water. “Most Brazilian oil is currently produced in the southeastern region of the country in Rio de Janeiro and Espírito Santo states. Six fields in the Campos Basin (Marlim, Marlim Sul, Marlim Leste, Roncador, Jubarte, and Barracuda) account for more than half of Brazil’s crude oil production. These Petrobras-operated fields each produce between 100,000 bbl/d and 350,000 bbl/d,” says the EIA.
Focus on Ethanol
Brazil is the second largest producer and consumer of ethanol because of its wealth of sugar cane crops. However, ethanol production declined in recent years. The EIA explains this phenomenon: “A combination of high world sugar prices, a poor sugar cane harvest, and underinvestment resulted in a precipitous decline in ethanol production in 2011.”
Figure 2: Brazil ethanol production 2002-2012
However, the government has greatly encouraged the production of ethanol. The blend requirement for gasoline in Brazil has been raised to 25 percent in May 2013 to reduce the country’s dependence on petroleum imports. “Most of Brazil’s cars are capable of running on pure ethanol or gasoline that is blended with 20 percent to 25 percent ethanol by volume,” reports the EIA.
Brazil and Energy
Brazil is the third largest in terms of electricity consumption in the Americas behind the United States and Canada. In 2011, the country overturned the situation to its favor by becoming a net exporter of crude oil for the first time in its history. The country has a strong focus on renewable resources as a source of power, but it needs to increase its focus in order to maintain its position as a net exporter of crude oil.