EIA report summarizes Brazil's rise as energy producer

By Susanne Retka Schill | October 03, 2013

Brazil has made great strides in increasing its total energy production, particularly oil and ethanol. In a recent analysis, the U.S. Energy Information Administration noted that Brazil is the eighth largest energy consumer in the world, and the third largest in the Americas, using 2010 statistics for all countries. The country has become the 10th largest energy producer in the world.

The report, which covers all energy sectors in Brazil, said Brazil produced 2.7 million barrels per day (bbl/d) of liquid fuels in 2012, of which 78 percent was crude oil. Liquid fuels production in Brazil declined slightly in 2012, and in March, the country launched a 10-year energy plan to nearly double oil production in the next decade.

Brazil is the second largest producer and consumer of ethanol in the world after the United States, producing 405,000 bbl/d of ethanol in 2012. Last year’s ethanol production matched the declined 2011 levels caused by a combination of high world sugar prices, a poor sugarcane harvest and underinvestment.  The precipitous decline in ethanol production in 2011 forced Brazil to import corn ethanol from the United States.

The Brazilian government has taken measures to prevent future ethanol supply shortages, and increase government involvement in the sector, the EIA reported. In May 2013, the government raised the blend requirement in gasoline back to 25 percent. Most of Brazil's cars are capable of running on pure ethanol or gasoline that is blended with 20- 25 percent ethanol by volume. Brazil also brought regulation of the ethanol sector under the jurisdiction of the national petroleum agency (ANP) and announced plans to expand the presence of Petrobras, the state-controlled oil company, in the ethanol market. In the medium term, Brazil plans to export ethanol to the United States, which recently removed tariffs on Brazilian sugarcane ethanol.

In its discussion of imports and exports, EIA noted that Brazil’s economy grew rapidly in 2011, driving up fuel demand. “At the same time, reduced ethanol production and rising ethanol prices caused Brazil to import additional supplies of refined products from the United States,” the report said. EIA projects consumption will exceed production through 2014. Brazil import nearly 470,000 bbl/d of refined production in 2012, of which 166,000 was from the U.S. Overall, Brazil imports rose 6 percent from the previous year and 219 percent compared to the level five years earlier. Argentina was the number one exporter of products to Brazil in 2012, followed by the U.S. and Algeria.