Will Brazil's New Oil Find Slow Progress on Biofuels?
Now that Brazil is poised on the edge of joining the world's big oil powers, some energy analysts and environmentalists are wondering whether its new-found oil abundance will dampen support for renewable energy sources - particularly in the area of biofuels, in which the South American nation has led the way with its sugar cane-based ethanol. According to experts' estimates, the massive deep-sea deposit recently unearthed in the Tupi field by Petrobas, the state-controlled energy company, could harbor as much as 8 billion barrels' worth of light oil and natural gas.
If true, the Tupi find would constitute the largest petrol find in the past 7 years and would rank Brazil as 12th in the world in oil reserves. Yet some analysts are dubious of Brazil's potential to become a large-scale oil exporter in the near future, citing the difficulty inherent in extracting the deep oil deposit and the country's own voracious appetite for oil.The Tupi deposit is located under 7,000 ft of water and over 16,000 ft of various materials, including rock and sand. To drill for such deep deposits, oil companies typically lower drill bits into the seafloor through a network of pipes connected to a floating platform. The main challenge will be penetrating the 1.2-mile layer of solid salt, which is very resistant to drills and which interferes with imaging technologies.
Despite the huge investments that will be required to fund this venture, company officials and analysts believe the trade-off - especially in the wake of ever-increasing oil prices - is worth it. "With a find this size, the cost isn't really an issue. You really just have to do it," said an energy consultant.
Even if the deposit does turn out to contain several billion barrels of oil, it isn't likely to solve the country's energy problems - even in the long-term - and won't make it a leading oil exporter. Because it will likely take several years to reach and begin extracting the deposit - a costly and difficult process - many believe it won't detract Brazil from pursuing its development of ethanol.
"The fact that this big reserve has been discovered and that Brazil is starting to think about being a producer does not mean that Brazil will abandon this," said Emilio La Rovere, an expert on biofuels. While there may be a temporary blip in the level of interest for biofuels as government and industry officials hype up the magnitude of the deposit, Brazilians will, in all likelihood, continue to increasingly rely on sugar-cane ethanol as a primary fuel source.