Abstract.

The option of increasing the share of natural gas in the energy mix has only recently become a serious policy in Brazil. The Brazilian "natural gas fever" was triggered by the construction of the Bolivia-Brazil gas pipeline, being intensified with the 2001's electricity shortage. The Brazilian government pushed forward a strong power generation program based on large gas-fired units, also giving a boost on the establishment of a important initial domestic demand for gas. Nevertheless, given the uniqueness of Brazil's electricity sector, strongly dominated by hydropower generation, the paper tries to demonstrate that the penetration of gas-fired power plants in Brazil may not represent a coherent long-term energy policy. On the other hand, it indicates that alternatively the natural gas can substantially contributed to abate low efficient thermal uses of electricity. The paper points out the several advantages of using directly the natural gas to reduce inadequate electricity uses instead of employing the gas to produce more electricity and keep feeding high energy inefficiency. The distributed use of gas requires nevertheless the construction of heavy infrastructures for developing a strong gas capillarity towards final consumers.

Eventually, the paper concludes showing the difficult choice that Brazil must make between "bubbling water" or using the gas to abate a "bubble of electricity".

Introduction

Natural gas was always seen as the poor relation among the fossil fuels in Brazil. When Petrobras, the Brazilian national oil company, came across natural gas during its exploration and production activities, it usually expressed disappointment. Natural gas was difficult and expensive to transport, store and distribute, while the market was not well defined because natural gas could affect the market position of the fuel oil produced by the national refineries.

Recently, natural gas has become a more important energy option which will make a significant contribution to the Brazilian energy supply. Natural gas is a versatile energy source and has advantages in terms of economics, availability and environmental impact. Regional integration with neighboring countries such as Argentina, Bolivia and Peru can offer new prospects for the Brazilian natural gas industry. The huge quantities of gas available and its great advantages in many final uses are likely to transform natural gas into an significant energy source which will change the Brazilian energy mix and feed Brazil's economic growth.

However, natural gas use is still restricted by important barriers. This paper identifies the obstacles which may prevent greater penetration of gas

This content is only available via PDF.
You can access this article if you purchase or spend a download.