Alternative Energy Powerhouse Brazil Finds Big Oil
Source: Associated Press, Bradley Brooks (8/23/09)
". . .the biggest Western Hemisphere oil discovery in 30 years—has Brazilians saying, "Drill, baby, drill. . ."
An enormous offshore field in territorial waters—the biggest Western Hemisphere oil discovery in 30 years—has Brazilians saying, "Drill, baby, drill," while environmentalists fear the nation will take a big leap backward in its hunt for crude.
There has been virtually no public debate on the potential environmental costs of retrieving the billions of barrels of oil, a project one expert said will be as difficult as landing a man on the moon.
"The government is whipping Brazil into a euphoria that this is going to be a solution for all our societal problems," said Sergio Leitao, director of public policies for Greenpeace Brasil. "Brazil is no longer seriously looking at alternatives."
Home to the bulk of the Amazon rainforest, Brazil for decades has developed alternative energy as an issue of national security following severe energy shortages in the 1970s. It uses hydroelectric power for more than 80% of its energy needs, is the world's largest exporter of ethanol, and nine out of every 10 cars sold in the nation can run on ethanol or a combination of ethanol and gasoline.
A U.N. study found that in 2008, Brazil accounted for almost all of Latin America's renewable energy investment, to the tune of $10.8 billion.
But since the national oil company Petroleo Brasileiro SA, or Petrobras, discovered the massive Tupi field off the coast of Rio de Janeiro two years ago—estimated to hold 5 to 8 billion barrels—it is the development of oil fields that has gone into overdrive.
Thirty years ago, more than 85% of Brazil's oil came from foreign sources. Today, it is a net exporter.
Leitao, of Greenpeace, wonders if the billions of dollars needed to develop the offshore finds will be worth it should the price of oil fall.
"At the beginning of the 20th century, we were the largest producers of rubber in the world. People were lighting cigars with money," he said. "But the hangover came quickly because the English started producing rubber in Asia. The prices fell and our fortunes ended.