Brazil energy crisis could wreck Rousseff economic agenda

January 9, 2013

Anthony Boadle – Reuters, 01/08/2013

President Dilma Rousseff cut short her vacation on Tuesday to deal with a budding energy crisis that could wreck her efforts to restore vitality to Brazil’s economy this year.

Rousseff denies there is any risk of electricity shortages or rationing stemming from a historic drought that has left hydroelectric dams short of water. But some independent analysts disagree, saying it depends on whether summer rains finally arrive in coming weeks.

Even if the worst is avoided, the crisis has already pushed up electricity prices on the spot markets and could torpedo Rousseff’s delicately balanced economic agenda. She is trying to revive an economy that likely grew less than 1 percent last year, while also keeping a lid on inflation now running above 5.7 percent.

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Anaylsis: Brazil’s once-envied energy matrix a victim of “hubris”

January 8, 2013

Jeb Blount – Reuters, 01/07/2013

Just five years ago, Brazil‘s mostly “green” energy landscape was the envy of nations dependent on dirtier sources of power and the pride of a government that believed it was leading the country to economic superpower status.

Three-quarters of electricity came from renewable hydro power and the main automobile fuel was home-grown sugarcane ethanol. Plus, Brazil had just found massive oil fields off its coast, putting it on a path to become the world’s No. 3 oil producer after Russia and Saudi Arabia by 2020.

Today, the outlook is much darker. Oil output is falling, ethanol production has plunged, and fears have recently returned of electricity rationing that could further depress a stagnant economy and embarrass President Dilma Rousseff.

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