Amazon be damned: deforestation undermines future viability of Brazil’s hydropower projects

Erin Brodwin – Scientific American, 05/15/2013

The Amazon Basin is the epicenter of the world’s hydropower plants—the same gushing rains that give the region its lush foliage make it a prime destination for developers seeking to capitalize on this allegedly renewable energy source. But the long-term sustainability of these projects, which use the natural flow of water to generate electricity, is now under scrutiny.

A new study of the Belo Monte Dam, one of the world’s largest hydropower energy complexes currently under construction on the Xingu River in the eastern region of the basin, found that large-scale deforestation in the Amazon poses a significant threat to a dam’s energy-generating potential.

Although many studies have examined the impacts of deforestation on the immediate vicinity of hydropower projects, less attention has been paid to its effects on a regional scale. In fact, earlier studies found that a loss of trees within the water basin of hydropower sites increased the energy-generating capacity of the dam in the short-term, because less trees were available to suck water from the ground and export it outside the watershed in a process known as evapotranspiration.

Read more…

Total and BP outbid oil rivals for Brazil Amazon coast licenses

Rodrigo Orihuela, Juan Pablo Spinetto – Bloomberg, 05/14/2013

BP Plc (BP/) and Total SA (FP), Europe’s biggest oil companies after Royal Dutch Shell Plc (RDSA), won exploration rights in the Amazon basin as Brazil’s first oil auction in five years attracts a record level of bids.

Total, based in Paris, gained exploration access to operate five blocks at the Foz do Amazonas basin in northern Brazil together with partners BP and Petroleo Brasileiro SA, the oil regulator said today. London-based BP won an additional license to operate a block at the same basin in partnership with Petrobras, as the state-controlled oil company is known.

Brazil, home to the largest crude discovery in the Americas in more than 30 years, is holding its first oil exploration round since 2008, attracting more than 60 prospective bidders for a total of 289 blocks in 11 basins. The country is set to break the $1.1 billion record in auctioning licenses, according to Joao Carlos de Luca, the head of the Brazilian Oil Institute.

Read more…

The rights and wrongs of Belo Monte

The Economist, 05/04/2013

The biggest building site in Brazil is neither in the concrete jungle of São Paulo nor in beachside Rio de Janeiro, which is being revamped to host the 2016 Olympics. It lies 3,000km (1,900 miles) north in the state of Pará, deep in the Amazon basin. Some 20,000 labourers are working around the clock at Belo Monte on the Xingu river, the biggest hydropower plant under construction anywhere. When complete, its installed capacity, or theoretical maximum output, of 11,233MW will make it the world’s third-largest, behind China’s Three Gorges and Itaipu, on the border between Brazil and Paraguay.

Everything about Belo Monte is outsized, from the budget (28.9 billion reais, or $14.4 billion), to the earthworks—a Panama Canal-worth of soil and rock is being excavated—to the controversy surrounding it. In 2008 a public hearing in Altamira, the nearest town, saw a government engineer cut with a machete. In 2010 court orders threatened to stop the auction for the project. The private-sector bidders pulled out a week before. When officials from Norte Energia, the winning consortium of state-controlled firms and pension funds, left the auction room, they were greeted by protesters—and three tonnes of pig muck.

Since then construction has twice been halted briefly by legal challenges. Greens and Amerindians often stage protests. Xingu Vivo (“Living Xingu”), an anti-Belo Monte campaign group, displays notes from supporters all over the world in its Altamira office. James Cameron, a Hollywood film-maker, has chimed in to compare Brazil’s dam-builders to the villains in “Avatar”, one of his blockbusters.

Read more…

Brazil throws troubled ethanol industry tax breaks, credit

Alonso Soto, Reese Ewing – Reuters, 04/23/2013

Brazil’s government threw its sugar-ethanol industry a lifeline on Tuesday, by cutting taxes and sweetening credit for the struggling sector it hopes will resume investments in new biofuel plants to bolster output.

Finance Minister Guido Mantega, who announced the measures, said he expected a recovery in the ethanol industry could also help curb stubborn consumer inflation by bringing down fuel prices and reducing Brazil’s dependence on gasoline imports.

The reduction of the so-called PIS/Cofins – payroll and social security taxes – and interest rates on loans is expected to help ethanol groups such as Louis Dreyfus, Bunge , Cosan and others offset production costs that have risen steadily in the last decade.

Read more…

From Brazil to Wikipedia

Yuri Takkteyev – Foreign Affairs, 04/21/2013

Last month, the San Francisco–based Wikimedia Foundation, which maintains Wikipedia, announced that it was changing the way some of the site’s more complex pages are configured. Prior to this, these pages were built using Wikipedia’s own homegrown template language. Over time, however, the system proved too limiting — for example, editors had to come up with nearly a page of code just to determine the length of a piece of text. By 2011, the foundation’s engineers had started looking for a better solution. One of the options was embedding the popular JavaScript language, used in most web browsers. The engineers looked especially closely at the version of JavaScript developed by Google, the Internet behemoth based in nearby Mountain View, in the heart of Silicon Valley. But they eventually looked farther afield, settling on Lua, a programming language developed by a trio of researchers in Rio de Janeiro, Brazil.

How did a programming language from the global South manage to make it into one of the world’s most popular web sites? Lua’s story, as it turns out, tells a lot about the globalization of software development and the difficulties faced by innovators in developing countries.

I first heard of Lua eight years ago, when I traveled to Rio de Janeiro to interview software engineers for a research project that was recently published as a book, Coding Places. While in Rio, I met “Rodrigo,” who worked on a free and open-source web platform. He surprised me by telling me that the project was based on a new programming language, Lua, developed by a small team at Pontifícia Universidade Católica do Rio de Janeiro (PUC-Rio), where Rodrigo had been a student.

Read more…

Brazil: The creaking champions

Joe Leahy – Financial Times, 04/21/2013

In 2010, when 60 Minutes came to Brazil to do a piece on the “World’s Next Economic Superpower”, the US television programme chose Eike Batista as the ambassador for the country.

“You know, in the last 16 years, Brazil has put its act together. This is it. Hello, time for Americans to wake up,” Mr Batista said with trademark brashness.

In retrospect, the discovery by primetime TV of Brazil’s economy should itself have been a sell signal for investors that a long boom in Latin America’s biggest economy, fuelled by high commodity prices and credit, was peaking.

Read more…

 

Rio: loser in Brazil’s oil royalty row

Thalita Carrico – The Financial Times, 03/15/2013

The credit ratings agencies have become the latest to weigh into the debate over Brazil’s oil royalties bill, with Fitch warning this week it could lead to a review of the ratings of Rio de Janeiro.

Rarely has a new law inspired so much bitter disagreement between Brazil’s states. The controversy potentially has implications over whether Rio de Janeiro will be able to successfully host the World Cup final next year and the Olympics the following year.

The argument is over how states and municipalities should split their share of revenue from Brazil’s burgeoning offshore oil wealth. The majority of states argue the present regime favours the so-called “producing states”, particularly those near the vast deepwater fields of South-eastern Brazil: Rio de Janeiro, Espírito Santo and São Paulo.

Read more...

Amyris joins Bonsucro, the leading sustainability standard for sugarcane

Amyris, Inc., 03/11/2013

Amyris, Inc. (Nasdaq:AMRS), a leading renewable chemicals company, announced today it has joined Bonsucro, the world’s leading sugarcane sustainability standard. Amyris is the first advanced biofuels and chemicals company of its kind to join Bonsucro, paving the way for certification of Amyris’s renewable products.

“Amyris is committed to delivering No Compromise® renewable products that enable sustainable growth for our customers. Bonsucro has emerged as a respected certification standard for sugarcane products, and membership paves the way for assuring our growing and diverse customer base of the sustainability of our supply chain,” said Joel Velasco, Amyris’s Senior Vice President.

“With our certification system recognized under the European Commission’s Renewable Energy Directive and the 26 Bonsucro-certified sugarcane mills in Brazil, Bonsucro certified volumes are set to grow. We welcome Amyris’s leadership to broaden the scope of second-generation renewable products that could be certified under Bonsucro,” said Nick Goodall, Bonsucro’s Chief Executive Officer.

Read more…

Brazil Congress overturns veto on oil royalty bill

Reuters, 03/07/2013

Brazil’s Congress has overturned a presidential veto of a controversial oil and natural gas royalty bill, stripping billions of dollars in revenue from producing states, which have threatened to contest the bill in the courts.

While originally aimed at giving non oil-producing states a fair share of Brazil’s future oil wealth, the new law cuts the share of oil royalties also received from existing production contracts by states and cities bordering maritime fields and redistributes the income among all 27 states and 5,500 municipalities.

By altering existing oil contracts, the new law risks poisoning future debates with states over tax reform and mining. The law could create fresh uncertainty for oil companies operating in Brazil as well, and delay the South American nation’s plans to tap huge subsalt fields and become a major world oil producer.

Read more…

Brazil’s Petrobras: latest subsalt oil find opens new frontier

Jeff Fick – Dow Jones Newswires, 02/26/2013

Brazilian state-run energy giant Petroleo Brasileiro (PBR, PETR4.BR), or  Petrobras, said late Monday that a new subsalt oil discovery opens a new  exploration frontier in the Santos Basin, where billions of barrels of crude  have already been discovered.

The first well drilled in the offshore BM-S050 block, dubbed Sagitario, was  found to contain high-quality oil, Petrobras said. Petrobras operates the block  with a 60% stake. The local unit of BG Group PLC (BG.LN) holds 20%, while Repsol  Sinopec Brasil retains the remaining 20%.

The discovery is significant because it was made to the west of the cluster  of oil discoveries made deep under a thick layer of salt off Brazil’s Atlantic  Ocean coast in the mid-2000s. The Lula field, which holds estimated recoverable  reserves of between 5 billion and 8 billion barrels of oil equivalent, or BOE,  and is currently producing about 100,000 barrels a day, and the Sapinhoa field  that started pilot production earlier this month both sit due east of the  Sagitario discovery. Sapinhoa is estimated to hold recoverable reserves of 2.1  billion BOE.

Read more…