Brazil is the 10th largest energy consumer in the world and the largest in South America. At the same time, it is an important oil and gas producer in the region and the world's second largest ethanol fuel producer. The government agencies responsible for energy policy are the Ministry of Mines and Energy (MME), the National Council for Energy Policy (CNPE), the National Agency of Petroleum, Natural Gas and Biofuels (ANP) and the National Agency of Electricity (ANEEL). State-owned companies Petrobras and Eletrobras are the major players in Brazil's energy sector, as well as Latin America's.
Overview
Total energy matrix and electric energy matrix
The main characteristic of the Brazilian energy matrix is that it is much more renewable than that of the world. While in 2019 the world matrix was only 14% made up of renewable energy, Brazil's was at 45%. Petroleum and oil products made up 34.3% of the matrix; sugar cane derivatives, 18%; hydraulic energy, 12.4%; natural gas, 12.2%; firewood and charcoal, 8.8%; varied renewable energies, 7%; mineral coal, 5.3%; nuclear, 1.4%, and other non-renewable energies, 0.6%.
In the electric energy matrix, the difference between Brazil and the world is even greater: while the world only had 25% of renewable electric energy in 2019, Brazil had 83%. The Brazilian electric matrix is composed of: hydroelectric energy, 64.9%; biomass, 8.4%; wind energy, 8.6%; solar electric, 1%; natural gas, 9.3%; oil products, 2%; nuclear, 2.5%; coal and derivatives, 3.3%.
Reforms of the energy sector
At the end of the 1990s and the beginning of the 2000s, Brazil's energy sector underwent market liberalization. In 1997, the Petroleum Investment Law was adopted, establishing a legal and regulatory framework, and liberalizing oil production. It created the CNPE and the ANP, increased use of natural gas, increased competition in the energy market, and increased investment in power generation. The state monopoly on oil and gas exploration ended, and energy subsidies were reduced. However, the government retained monopoly control of key energy complexes and regulated the price of certain energy products.
Current government policies concentrate mainly on improving energy efficiency in both residential and industrial sectors, as well as increasing use of renewable energy. Further restructuring of the energy sector will be one of the key issues for ensuring sufficient energy investments to meet the rising need for fuel and electricity.
Primary energy sources
Oil
Brazil is the world's 8th-largest oil producer. Up to 1997, the government-owned Petróleo Brasileiro S.A. (Petrobras) had a monopoly on oil. More than 50 oil companies were engaged in oil exploration by 2006. The only global oil producer is Petrobras, with an output of more than of oil equivalent per day. It is also a major distributor of oil products, and owns oil refineries and oil tankers.
In 2006, Brazil had the second-largest proven oil reserves in South America after Venezuela. The vast majority of proven reserves were located in the Campos and Santos offshore basins off the southeast coast of Brazil. In November 2007, Petrobras announced that it believed the offshore Tupi oil field had between 5 and of recoverable light oil and neighbouring fields may even contain more, which all in all could result in Brazil becoming one of the largest producers of oil in the world.
Brazil has been a net exporter of oil since 2011. However, the country still imports some light oil from the Middle East, because several refineries, built in the 1960s and 1970s under the military government, are not suited to process the heavy oil in Brazilian reserves, discovered decades later.
Transpetro, a wholly owned subsidiary of Petrobras, operates a crude oil transport network. The system consists of of crude oil pipelines, coastal import terminals, and inland storage facilities.
Oil shale
Brazil has the world's second largest known oil shale (the Irati shale and lacustrine deposits) resources and has second largest shale oil production after Estonia. Oil shale resources lie in São Mateus do Sul, Paraná, and in Vale do Paraíba. Brazil has developed the world's largest surface oil shale pyrolysis retort Petrosix, operated by Petrobras. Production in 1999 was about 200,000 tonnes.