Brazil Puts Biodiesel in Its Tank

Brazil is encouraging the cultivation of castor-oil plants and
dendê palms in the poorest regions of the country in order to
produce biodiesel. According to the Brazilian government, this
program might generate over 150 thousand jobs in 2005. Biodiesel
can also be used to generate electricity in isolated communities.

Ana Paula Marra

The Brazilian government wants to authorize the introduction of biodiesel fuel on the domestic market by the end of this year. Biodiesel can be added to mineral diesel at a 2 percent ratio without infringing the warrantee on diesel vehicle engines. Representatives of the sector met today with President Luiz Inácio Lula da Silva to discuss the matter.

The utilization of biodiesel in Brazil is intended to add a new fuel to the country's energy matrix, on the basis of self-sustainable projects that take into account price, quality, assured supply, and a policy of social inclusion.

According to the Minister of Mines and Energy, Dilma Rousseff, through the National Biodiesel Production and Use Program the government is developing criteria for the implantation of social incentive instruments.

The idea is to encourage the cultivation of castor-oil plants and dendê palms in the poorest regions of the country. These products are essential to the production of biodiesel.

It is estimated that producing enough biodiesel to supply the 2 percent mixture can generate over 150 thousand jobs in 2005, especially in the family farming sector. Biodiesel can also be used to generate electricity in isolated communities.

The introduction of the new fuel on the domestic market will reduce diesel imports, which currently amount to approximately 9 percent. Besides supplying the domestic market, farther down the road the program envisions exporting the product, which is already used in the United States and some European countries, such as France and Germany.

Gas and Oil Up

Petrobras's average production of petroleum and natural gas in domestic and foreign fields increased 1.7 percent in July, compared with June, and 1 percent, compared with July, 2003. Overall daily production averaged 2,059,443 barrels last month.

Domestic production totaled 1,792,356 barrels/day, 2 percent more than in June, but stable in comparison with July, 2003. Domestic petroleum production alone accounted for 1,520,963 barrels/day, 1.9 percent more than in June.

The explanation is that three new wells came on line recently, two in the South Marlin Field and one in the Bicudo Field, increasing daily production by 37.1 thousand barrels.Despite the new wells, last month's production fell 1.6 percent short of the figure for July, 2003.

In the eight foreign countries in which Petrobras operates, the volume of oil and natural gas produced in July was 267,087 barrels/day, 0.2 percent less than in June but 9.2 percent more than in July, 2003.

Consumption of natural gas rose 26.2 percent in Brazil in the first semester. In June, 37.2 million cubic meters were consumed, a 3.9 percent increase compared with May.

According to the Brazilian Association of Piped Gas Distributors (Abegás), the demand in June was greater in all regions of the country and all consumer segments.

The positive result was due to the increased output of thermoelectric power plants (which consume natural gas) in the Northeast, despite the rains that have affected the region in recent months; low temperatures in the South and Southeast regions; and increased industrial consumption, reflecting the economic recovery.

In comparison with May, the drop in temperature raised commercial consumption by 21.6 percent and residential consumption by 41.1 percent. The industrial sector consumed 1.4 percent more in June, and automotive consumption rose 2.5 percent.

According to the assessment made by the Executive Secretary of the Abegás, Derly de Oliveira Bittencourt, the figures show that the piped natural gas industry has been registering substantial growth in recent years and the energy matrix has been changing.

At the 5th Energy Business Encounter, August 11, in the capital of São Paulo, entrepreneurs and representatives of the sector discussed the potential of natural gas as a cheaper and cleaner energy source.

Bittencourt used the occasion to reiterate the need to create the so-called "gas law" as a parameter to regulate taxation, distribution, gas transport, and the final cost to consumers.

Ana Paula Marra works for Agência Brasil (AB), the official press agency of the Brazilian government. Comments are welcome at lia@radiobras.gov.br.

Translated from the Portuguese by David Silberstein.