exchanged signs

Image: Min An
Whatsapp
Facebook
Twitter
Instagram
Telegram

By JEAN MARC VON DER WEID*

The government embarks on the strategyéstrategy to expand the use and research of petroleum under the éconsignment gide "the petroil é ours”, is of a nationalism grotesque and left

The article “Ibama x Petrobras”, posted on May 26, 2023, on the website the earth is round, generated requests for clarification on several points, which I will now address.

The first doubt concerns the volume of fossil fuel reserves and the expectation of their depletion. Let's start by clarifying what these fossil fuels are and the weight of each type in the world market.

There are several types of oil, and until today the most used in the world is the so-called conventional, which still represents about 75% of the supply of all liquid fuels, about 75 million barrels per day (Mb/d). This is oil explored on dry land or in shallow waters, extracted from wells by the pressure that exists in these reservoirs. It is a medium density oil, neither too light nor too heavy, and the vast majority of refineries in the world are designed to work with this raw material.

The so-called unconventional oil is of the heavier type, such as that from Venezuela and that extracted from the oil sands of Canada, or lighter, such as that from the ultra-deep waters of the pre-salt basins along the Brazilian coast. Heavy oil currently represents 7% of the total supply of liquid fossil fuels (7 Mb/d). The pre-salt represents less than 2% of the total offer.

There are alternatives for these fuels that have been intensely explored since 2008. The most important one is what is called shale gas, or shale gas, whose largest producer in the world, by far, is the United States. Shale gas currently represents 10% of the total supply (10Mb/d). Very secondarily, there is the alternative of biofuels, today essentially ethanol from sugarcane or beetroot and biodiesel from legumes such as soy, palm (dendê) or rapeseed. They represent close to 3% of the offer (3 Mb/d).

As I wrote in the previous text, the peak of conventional oil production worldwide occurred between 2006 and 2008. Since then, supply has stabilized at this level, oscillating around the peak. Since then, the constant increase in demand has been met with the growth in the supply of unconventional oil, the shale gas and biofuels.

According to the same geographers who estimated the peak date for conventional oil, the peak of all liquid fuel sources will be reached by 2030, with a non-negligible possibility that it will be brought forward to 2025 due to falling investments in all types of oil in the period of world recession caused by the COVID pandemic.

I am not going to repeat what has already been said in the other article, just remember that the depletion of reserves is due to the increasing difficulty in finding new deposits, even with the latest generation equipment scanning land and sea several times and with a precision of up to one meter, even at high depths. New wells are rare and are much smaller than those discovered up to 1960. In general, they are located in places with enormous access difficulties, as is the case of the pre-salt layer, or the North Sea and Gulf of Mexico basins.

Oil obtained under these conditions is more expensive to locate, explore and refine in most cases. These higher costs point to the biggest threat posed by the downturn of the oil cycle: before, long before production starts to fall, prices will skyrocket, as has happened and is happening with increasing frequency.

It is considered that with oil above 150,00 dollars/barrel a world financial crisis is established that will make 1930 and 2008 seem like years of bonanza. This value was reached in 2008, for two months, and then dropped. There was certainly a speculative effect, but the decrease in supply generated brutal increases in prices between 2002 and 2008, going from 19,00 to 130,00 dollars (on average for the year). The supply crisis was overcome with the increase in the production of non-conventional oil and alternative fuels, but the upward pressure on prices was resumed, now due to higher production costs and the low return on energy investment of these other types of oil or products. alternatives.

Some observations I received stated that the expectation of the peak reinforces the logic of drilling in the controversial well off the coast of Amapá. That is, if there is going to be a shortage, it is better to have more. This is ignoring the side effects of fossil fuel use on global warming, not to mention the risks to the region's marine ecosystems. More than that, it means prolonging our economy's dependence on this input that is about to become extinct.

A more defensible argument points to the usefulness of using this endangered resource to finance the transition to its replacement. However, without a very concrete plan on the steps to carry out this replacement, we will end up leading our economy to the moment of the supply crisis caused by the depletion of reserves, which would be brutal without this transition.

It is not a policy to replace fossil fuels that the government is presenting. He just talks about green energy, citing wind and solar as one of his (generic) goals. This has no impact on the reduction in gasoline and diesel consumption. On the other hand, the government makes a whole auê to lower fuel prices and proposes the launch of a popular car. Both measures go against the grain of any policy of replacing oil with another form of energy.

It is good to remember that the transport matrix in Brazil, both for people and cargo, is more than 80% dependent on gasoline or diesel, the rest being covered by the supply of ethanol and biodiesel. And replacing it completely with biofuels is a total impossibility, unless food production is abandoned or deforestation is carried out on a large scale, and even under these conditions this would be doubtful. Eletric cars? It could be, but the costs are still very high and it is already considered that the world's lithium reserves will not be able to replace more than 1/4 of the world's fleet.

A plan to convert the use of fossil fuels would have to start by analyzing the energy matrix of our transport system and adopt a radical solution to reduce the impact of the rarefaction and disappearance of this input. It will be essential to say goodbye to individual cars, except for well-defined functions and situations. It will take heavy investment in collective urban and interurban transport infrastructure (subways, trains, electric buses). And transform the cargo transport system, today centered on trucks, replacing them with trains, waterways and cabotage.

Investment in this radical transformation of transport will be high and will compete with investment in finding and exploring new oil wells. Let's remember that between tests, infrastructure assembly, drilling and oil extraction we can count on at least a decade, when the fuel supply crisis should already be installed. Where should Petrobras invest its hefty profits? In buying back Petrobras Distribuidora? In buying back the refineries almost donated by Michel Temer and Jair Bolsonaro? In my opinion, it should not invest in what is destined to remain unused in a much shorter time than this investment would be amortized.

It can be argued that it is not up to Petrobras to finance the energy transition, since it is an oil company and that its shareholders are concerned with profits and not with this transition. True, but the government is Petrobras' main shareholder and may seek a legal redefinition of the company's scope. In any case, at least that part of the distribution of profits which corresponds to government actions may be employed as the government sees fit.

The government will have to create a body responsible for preparing the decarbonization plan for the Brazilian economy, particularly with regard to the use of fossil fuels. An emergency plan, with well-defined stages and goals, as well as the concrete measures to be implemented, is an extremely urgent need that should possibly be undertaken by the BNDES together with the Ministry of the Environment.

While this plan is not formulated and put into practice, precautionary measures will have to be taken to gradually reduce dependence on fossil fuels. The main one, within the reach of the government, is the increase in the prices of diesel, gasoline and gas. Exactly the opposite of what the government is doing. The argument of economists and politicians is that this will have an impact on inflation and impoverish the poorest. To avoid this effect, it is possible to subsidize certain activities: public passenger transport, urban and interurban buses, taxis and apps would pay lower prices, as well as freight transport and agricultural machinery.

Individual use cars would pay the full rate. I remind you that these subsidies have to enter the transition plan with a deadline for being abandoned. Investments in public transport infrastructure would have to be stimulated with strong public funding, aiming to expand the urban network of trains, electric buses and subways and the national network of trains, waterways and cabotage navigation with a view to eliminating or greatly reducing truck transport. .

The use of cooking gas should also be subsidized for the poorest consumers and not through a subsidy to distribution companies, which would benefit both the richest and the poorest. The gas replacement plan should include financing the expansion of electricity supply and replacing gas stoves with electric stoves, subsidized for the poorest. Obviously, it will be necessary to encourage large-scale domestic production of this type of equipment.

The production of individual use cars should be strongly induced towards the production of low fuel consumption vehicles, eliminating SUV models. This while the production of electric cars and the infrastructure for fueling do not advance. I don't think it's possible to stick to market solutions, where those who have money travel in individual electric cars and those who don't travel by train, metro or electric bus. Public authorities have a duty to limit the use of individual cars, even electric ones, but they also have an obligation to favor the creation of an excellent urban and interurban mobility system.

Another point raised by readers of the previous article is about the difference in dates between production peaks and the moment when supply begins to decrease.

As I have already written, the peak of production in the United States in 1970 or the world peak in 2008 did not imply immediate drops in the supply of conventional oil and this should be repeated when the peak of production of all types of liquid fuel, between 2025 and 2030. If production is maintained at peak levels, the moment when the fall will occur is postponed, but when it does come it will be abrupt and the more abrupt the greater the extension of production at its maximum. On the contrary, if reserves start to be saved, with a gradual decrease in supply year after year, there will be more time to carry out a planned substitution of gasoline and diesel for energy from other sources, preferably sustainable.

Oil companies are betting on selling their product “up to the last drop” and are little concerned about the catastrophic effects of an abrupt drop in supply. Several of them are adopting a policy of restricting investments in new wells, given the very high costs of these residual sources, preferring to fully explore the oil reserves already in production. And they are investing in alternative sources for when the oil cycle implodes. It may be a good strategy to maintain profits, but the price for humanity will be fatal, either due to the brutal impact of an abrupt transition in the world economy, or the greenhouse effect of gas emissions during this final stage of the use of fossil fuels.

Other readers protested against the idea of ​​not exploring an already identified wealth that could bring a lot of resources to the country. It is ignoring the fact that oil has other uses, with lesser impacts on the environment and on global warming. Indeed, let us remember that a quarter of all oil consumption is not intended for use as fuel, but as raw material for various industries (petrochemicals, pharmaceuticals, plastics, clothing and dozens of others) that are extremely important in today's world. Burning all reserves as fuel will not only paralyze transport when it runs out, but also paralyze a large industrial park.

There were those who thought that my assessment of what could happen in the world at the time of a sudden drop in the supply of oil was “catastrophic”. I pointed to the possibility of final reserve wars, with the most militarily powerful countries appropriating sources located in weaker countries. But it's easy to imagine the reaction of the United States, for example, when the wells start to dry up. The temptation to use force to guarantee an extension of the supply of fuel for American cars will be great and the first targets will be Venezuela and Brazil. And the countries in the Middle East and Africa, where the US would have to compete with the Europeans, who do not have oil on their territory.

Russia would also be tempted to reoccupy former Soviet Union countries with oil reserves. And what will China do, whose national production and reserves are totally insufficient for the immense demand of its industries and transport system? It is the design of a world of high instability and with enormous risks of a general conflict, as everyone will have their finger on the trigger, disputing the last reserves for national use.

For some readers, this analysis is contradictory to the one in which I point to a giant financial crisis even before the abrupt drop in oil supply begins. It pointed to the fact that the financial crisis I announced would imply a world recession, and this would decrease the demand for oil and cause a drop in prices. This would extend the timeframe for exploiting the last reserves. The observation is correct, but it only means that the deadline would be extended and not that the crisis would be avoided. And the price to pay would be brutal, especially for the poorest countries in terms of capital and natural resources.

Prolonging the use of oil as a fuel will always be the worst of all worlds, as it is very clear that if current reserves are exploited “to the last drop”, the world will heat up well above 1,5º C more, given as the limit from which this process goes out of control and begins to feed back.

1,5º C more is already guaranteed by 2030 and probably before that date. The 2º C must be reached before 2050 and the 3, 4 or 5º C more must be reached during the second half of the century, if nothing is done immediately and radically. According to IPCC scientists, an increase of 2º C will destroy civilization as we know it and the other increases will make planet Earth unbearable, with the probable extinction of Homo Sapiens (not so sapiens like that) and even most forms of life.

Faced with this immense risk, allowing the profit of a few to prevail over the interest of the entire world population is suicidal. But that's what governments around the world are doing, under pressure from the powerful oil industry lobby. This is what we are witnessing right here, with the government embarking on the strategy of expanding the use and research of oil under the aegis of the motto “oil is ours”. This nationalism is not only grotesque, it is sinister.

*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).


the earth is round exists thanks to our readers and supporters.
Help us keep this idea going.
CONTRIBUTE

See this link for all articles

10 MOST READ IN THE LAST 7 DAYS

______________
  • About artificial ignoranceEugenio Bucci 15/06/2024 By EUGÊNIO BUCCI: Today, ignorance is not an uninhabited house, devoid of ideas, but a building full of disjointed nonsense, a goo of heavy density that occupies every space
  • Franz Kafka, libertarian spiritFranz Kafka, libertarian spirit 13/06/2024 By MICHAEL LÖWY: Notes on the occasion of the centenary of the death of the Czech writer
  • Introduction to “Capital” by Karl Marxred triangular culture 02/06/2024 By ELEUTÉRIO FS PRADO: Commentary on the book by Michael Heinrich
  • Impasses and solutions for the political momentjose dirceu 12/06/2024 By JOSÉ DIRCEU: The development program must be the basis of a political commitment from the democratic front
  • The society of dead historyclassroom similar to the one in usp history 16/06/2024 By ANTONIO SIMPLICIO DE ALMEIDA NETO: The subject of history was inserted into a generic area called Applied Human and Social Sciences and, finally, disappeared into the curricular drain
  • Strengthen PROIFESclassroom 54mf 15/06/2024 By GIL VICENTE REIS DE FIGUEIREDO: The attempt to cancel PROIFES and, at the same time, turn a blind eye to the errors of ANDES management is a disservice to the construction of a new representation scenario
  • The strike at federal Universities and Institutescorridor glazing 01/06/2024 By ROBERTO LEHER: The government disconnects from its effective social base by removing those who fought against Jair Bolsonaro from the political table
  • A myopic logicRED MAN WALKING _ 12/06/2024 By LUIS FELIPE MIGUEL: The government does not have the political will to make education a priority, while it courts the military or highway police, who do not move a millimeter away from the Bolsonarism that they continue to support
  • Hélio Pellegrino, 100 years oldHelio Pellegrino 14/06/2024 By FERNANDA CANAVÊZ & FERNANDA PACHECO-FERREIRA: In the vast elaboration of the psychoanalyst and writer, there is still an aspect little explored: the class struggle in psychoanalysis
  • Volodymyr Zelensky's trapstar wars 15/06/2024 By HUGO DIONÍSIO: Whether Zelensky gets his glass full – the US entry into the war – or his glass half full – Europe’s entry into the war – either solution is devastating for our lives

AUTHORS

TOPICS

NEW PUBLICATIONS