Ibama x Petrobras



Short and long term options

Last March I wrote two texts on the energy crisis and the global warming crisis, under the general title of “Everything that we didn't discuss in these elections, but that will fall on us in the short term”. Both can be read on the website the earth is round. Perhaps because I have already dealt with these themes in depth, I have not included them in the series, published between April and May, “The trap”. The titles are: “The energy crisis” and the “Climate crisis”. In fact, I did not expect that we would have such a heavy impasse and so soon, with Petrobras asking for a research concession, with a view to exploring oil at the mouth of the Amazon and receiving a technical refusal from IBAMA.

The conflict between developmentalists and environmentalists, symbolized in the people of Marina Silva and a lineup of politicians and government technicians, will have to be arbitrated by President Lula and the history of past positions of the latter does not predict the adoption of the correct solution, that of IBAMA , in my opinion.

Unfortunately, the government's political and technical body assumes a so-called developmentalist position, but this concept needs to be qualified. For a long time, a vision of the economy focused on the pursuit of economic growth as the goal of society was adopted, what I call “pibism”. In this conception, everything that favors GDP growth is seen as positive, regardless of its environmental impacts, be they global warming, contamination of water and soil, destruction of biodiversity, among others. Before the scientific world woke up to the immense risks to the planet caused by limitless economic growth, such a view could still be discussed. Today, it is a dangerous anachronism.

We are living on the edge of a process that is already causing devastating effects around the world and that promises to expand its impacts to the point of irreversible destruction of the conditions for maintaining civilization as we know it. The vast majority of politicians, however, and not only in Brazil, keep their eye on the effects of their decisions in the very short term, avoiding facing the dangers that have been accumulating over us, but that the electorate does not perceive. Instead of opening the educational debate with society and presenting the problems in order to increase social awareness of the imminent catastrophe, preference is given to “more of the same” in economic development. With an eye on the next elections, the government avoids working on solutions for the future, a future that is already knocking on our doors, and insists on formulas that will take us more quickly to disaster.

The “green” varnish adopted by the Lula government, in addition to being generic and not very concrete, did not resist the first onslaught of the traditional interests of big capital. With no government program discussed with society before, during and after the elections, Lula waves with zero deforestation in all biomes, with the promotion of the use of renewable energies and with a vague plan for reforestation of “degraded areas”. And that's all.

And, at the same time, it discusses the intensification of oil exploration (and not only at the mouth of the Amazon River), the stimulus to the use of gasoline and diesel with lower prices, investment in shale gas production in Argentina, the exploitation of potassium in indigenous lands in the Amazon, the production of popular cars and the stimulus to unsustainable forms of agricultural production. These are contradictory signs and will not cease to be seen as such, not only among us but internationally.

It is possible that the cynicism of the leaders of the countries that are insisting on the preservation of the Amazon (one of the few cases of an environmental issue widely known to the public in Europe, the United States and Japan) will allow them to turn a blind eye to the expansion of the use of fossil fuels in Brazil, as long as zero deforestation is adopted. It is an inconsistency, where emissions of greenhouse gases are held back in the Amazon and, at the same time, emissions of the same gases are increased when burning gasoline, diesel and gas. But as political leaders around the world practice the same inconsistencies, the Brazilian government can come out unscathed. But the planet will pay the price for these inconsistencies. And all of us and our children, grandchildren and great-grandchildren even more so. A lot more.

There is, however, a process already under way that could affect the entire world capitalist system in the coming years in a devastating way. This is precisely oil and, secondarily, other fossil fuels. And I'm not talking about the known catastrophic environmental impact of using these fuels, but their imminent unavailability.

For many years, what has been called “peak” oil has been discussed. This is the moment when the expansion of consumption exceeds the level of renewal of reserves for these inputs. The expression was coined by the American geologist Marion King Hubert, in the 1950s. Studying extraction rates and new well discoveries in the United States, Marion King Hubert predicted that the peak of American production would occur in 1970, which in fact occurred. . The same calculation was made by two other geographers, Colin Campbell, English and Jean Laherrère, French, in 1998. The forecast was that the world peak of the production of what is called conventional oil would occur in 2008, which in fact also happened.

Conventional oil is the most abundant and easily accessible oil with a high ratio between energy obtained and invested in researching new wells and exploring them, known as EROI. And it is also the highest quality type of oil, technically identified as Brent. Unconventional oil is considered to be obtained in deep waters (Gulf of Mexico, Norway) and ultra deep waters (Brazil) or the heavy type such as Venezuela (mouth of the Orinoco). Unconventional oil has a much lower EROI and a much higher cost to obtain.

Everyone remembers the financial crisis of 2008, whose most important symbolic expression was the bankruptcy of one of the largest and most traditional American banks, Lehman Brothers. Controlling this crisis has cost central banks in the United States and the European Union trillions of dollars. This crisis was attributed to the excessive exposure of the financial system to real estate loans of the so-called “subprime”. However, little attention was given to the fact that the price of oil had been rising year on year since 2002 (19,00 dollars per barrel) until 2008 (130,00 dollars in annual average, with a maximum of 150,00 dollars in July ).

More recent studies indicate that the increase in oil prices was what caused inflation and interest rates to rise and property values ​​to fall, leading mortgage borrowers to insolvency. Prosaically, the explosion in the price of gasoline led these indebted people, in a society where mobility is essentially via cars, to have difficulties in paying their debts when their expenses with fuel soared by 500% in a few years.

Prices fell from these very high levels, but never returned to the levels of the end of the last century, far from it. And they only fell because the production of non-conventional oil increased, whose higher costs were covered by the rise in conventional oil prices. Other alternative sources of “oil” also became profitable and were intensively exploited, from oil sands to shale gas or shale gas. With the exploitation of these sources, the Americans became self-sufficient in oil again, but with much higher costs, not only due to the extraction operations themselves, but also due to the need to liquefy the product. These accounts do not include the immense environmental costs of these forms of production.

But this good news does not deceive specialists, as the rate of identification of new wells is low and those already in operation quickly run out. The same Campbell and Laherrère predict that the peak of all types of oil, conventional and unconventional (including the pre-salt), should occur by the end of this decade, more likely around 2025, given the drop in investments in research of new wells caused by the COVID crisis. Less than two years from now!

What happens when you reach the peak? Will the oil supply start to fall? Not so with peak conventional oil. With an immense effort to scrape the bottom of the taxo and increase extraction techniques to suck “up to the last drop from each well”, what happened was the unstable maintenance of the volume of oil extracted at the peak. As there is no expectation among scientists and the owners of the world's major oil companies that new discoveries of considerable deposits can happen and as non-conventional forms are in accelerated depletion, keeping the pace of extraction at its maximum point just means that there is an equivalent acceleration of the decline in reserves.

Incidentally, the level of these reserves (of all types of oil) has been stagnant since 1964, whereas the level of conventional oil reserves has been stationary since 1960! At the same time, the demand for oil tripled in this interval. This means that reserves are being depleted more and more quickly and a point is approaching where the volume offered will simply start to fall sharply, instead of little by little if there were not this policy of “sucking up to the last drop”.

The impact of a sudden crisis in oil supply cannot be overlooked when it is known that worldwide: virtually all productive activities, more than 30% of electricity generation for heating or lighting, more than 90% of land transport , sea and air, depend on this fuel.

The impact in terms of economic disorganization would unfold in social disorganization, in wars for access to dwindling resources, in failure of states, in misery, hunger, disease. A scene of desolation with the four horsemen of the apocalypse galloping undaunted. Think of multiplying the 2008 crisis by a hundred and it would still be a moderate scenario for what may come. Let us remember that that crisis was over, but that even so, almost 180 million new hungry people entered the FAO hunger map that year, that popular uprisings took place in more than 30 countries and that in more critical places, such as the Middle East and North Africa, several regimes were overthrown.

Crises of sudden cuts in access to oil occurred in two countries, Cuba and North Korea, at the end of the last century and are an example of what can happen on a planetary scale. In both, more than 10 years of severe restrictions on access to essential consumer goods such as food, clothing and medicine and services such as transport, sanitation and electricity were only crossed by the fact that they were authoritarian regimes and with strong control of the population.

If we don't want this dantesque picture to fall on us, we have to stop short-term pretense and boldly launch ourselves into the debate for a quick exit from dependence on oil.

From the outset, green energies will be important, but wind and solar energy have limits and do not cease to have environmental impacts, especially on the scale necessary to constitute a significant part of the solution. A plan for urban solar panels on a national scale would be more important than the current “electric farms” that occupy areas where nothing else can be produced. And let's leave the bioenergy talk to the fools. Even sugar cane has an energy balance bordering on negative. While there are no advances in the production of marine biomass in large quantities, it is not possible to discuss the production of alcohol without it replacing food production.

There is talk of green hydrogen as a perfect technological alternative in terms of energy balance and sustainability, but I have not yet seen calculations of its large-scale potential and its environmental risks.

In the meantime, we have to act to reduce energy demand. Reducing losses and waste is an important step, but it only scratches the surface. Substituting individual transport for collective transport will have to be done and this means simultaneously an investment in improving urban mobility systems and restricting the use of individual cars. And let's forget about this “popular car” zucchini. In the immediate future, it will be necessary to raise and not lower the price of gasoline and diesel, subsidizing strategic sectors in this transition: truck drivers, taxi drivers, huberistas, couriers of all kinds.

And investing heavily in changing the cargo transport matrix with a view to putting an end to intercity heavy cargo transport and replacing it with trains, waterways and cabotage. Agribusiness producing basic foodstuffs could also be subsidized during an energy transition in rural production systems. But the exporting agribusiness does not need that.

BNDES and Petrobras should finance decentralized industrial production in Brazil, within a strategy of shortening the distance between production and the market. And this stimulus should be aimed at essential products for the well-being of the population. It's a lot to be changed and what I pointed out are nothing more than examples of the line to follow. In any case, it is necessary to rethink Petrobras' role, and it certainly should not be that of drilling wells in any and every part of the country and producing oil until the last drop.

*Jean Marc von der Weid is a former president of the UNE (1969-71). Founder of the non-governmental organization Family Agriculture and Agroecology (ASTA).

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