Brazil, Energy, and the Atlantic Basin Opportunity
For the past half century Brazil has pursued energy security. Though it is the largest transportation fuel producer in South America, on a national level the country relies heavily on renewable sources, such as hydropower. With the support of the transatlantic community, Brazil can take a leadership role in creating an Atlantic basin biofuels market, focused on decreasing carbon emissions, increasing energy security, and investing in global development.
In its pursuit of energy security, Brazil struck a hydrocarbon bonanza with the offshore, ultra deep-water "pre-salt" reserves. The pre-salt discoveries promise to more than quadruple Brazil's 14.5 billion barrels of booked reserves and boost oil and gas production from 2.3 to 3.5 million barrels a day by 2020. Already Brazil is the largest transportation fuel (petroleum and biofuels) producer in South America with one of the largest annual production increases in the world. Future increases in production can be expected to place the country as one of the largest non-OPEC producers of petroleum, consolidate its regional energy leadership, and create an opportunity for Brazil to exert greater geopolitical influence within the Atlantic basin, but not limited to it.
Brazil's future prospects as a petroleum exporter stand in contrast to the present national energy matrix, which features large contributions from renewable hydropower; expanding sources of alternative renewables, such as solar and wind power; and a demonstrated success in producing both ethanol and biodiesel to displace petroleum-based transportation fuels. Hydropower, along with other renewable sources, constitutes 86 percent of all power generation while, all together, renewable energy sources comprise 45 percent of the national energy matrix. This country of 200 million people continues to deepen its use of renewable energy while also diversifying its sources to meet the mounting national demand for energy, ramping up petroleum production, and grappling with the controversies pitched over the construction of mega-dam projects in the Amazon basin, such as Belo Monte, or the environmental risks associated with the expanding ultra deep-water drilling operations. Ironically, it is this unique combination of Brazil's low carbon path toward energy security, its global leadership in climate change negotiations, and its mammoth pre-salt oil and gas discoveries that place it near the center-stage of transatlantic relations in the twenty-first century.
Together with the United States and the European Union, Brazil is positioned to take a leadership role in creating an Atlantic basin biofuels market that decreases carbon emissions and increases energy security while steering greater investment, innovation, and technology toward the developing countries of Africa, Latin America, and the Caribbean. The 2007 Brazil-U.S. bilateral biofuels cooperation accord served as a first step between the largest biofuel producers in the world, but there are many more opportunities for Brazil to engage both the US and the EU to liberalize trade in biofuels, collaborate on the development and commercial standardization of second generation biofuels, and team together to create opportunities for rural development and energy security for the poorest of the Atlantic basin nations, without jeopardizing food security. Brazil cannot achieve such outcomes alone, but its increasing transportation fuel production, coupled with its recently earned international leadership create a unique Atlantic basin opportunity to address climate change, encourage low-carbon development, and manage the mounting risk of political instability in the Middle East (and ensuing petroleum price volatility), while advancing the liberalization of biofuel trade, developing co-generation technologies for energy-poor nations, and deepening its own international assistance throughout Africa and Latin America in concert with the US and the EU Indeed, as Paul Isbell argues, Brazil now holds the option of exerting a greater leadership role, with the support of such Southern Atlantic partners as South Africa and Angola among others, to create a "southern Atlantic renewable energy space" that would provide a socio-economic foundation for the development of innovative energy and manufacturing industries.
Brazil's challenge lies with incorporating the US and Europe within a broader project of economic and political cooperation that lies well beyond the current fancy for trade agreements as a cure for the economic downturn. Brazil may lack the economic and political resources to take full advantage of the Atlantic basin opportunity, but its energy producing potential will certainly transform transatlantic relations for decades to come. The question is whether the US and the EU can retool their respective understanding of Brazil's place in the world and take full advantage of this new Atlantic basin opportunity.
Mark S. Langevin, Ph.D. is Director of Brazil-Works, International Advisor to the Brazilian Association of Cotton Producers (ABRAPA), Associate Adjunct Professor of Government and Politics at the University of Maryland-University College, and Associate Researcher at the Centro Universitário de Brasília (UniCEUB).
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