March 29, 2018 Brazil sends message against fossils at oil and gas auction

With a secured right to speak during the public session of the 15th ANP Bidding Round, representatives of the No Fracking Brazil Coalition register the opposition of Brazilian society in regard to the use of fossil fuels, and particularly the fracking technique

RIO — The National Oil and Gas Agency (ANP, in the acronym in Portuguese) held the 15th Round of Bids for oil and gas exploration on Thursday (29). A total of 70 blocks were offered in seven sedimentary basins, covering a total area of ​​95.5 thousand km². Representatives of the Brazilian No Fracking Coalition for Climate, Water and Life (COESUS) and Brazil attended the bid to show investors and the government that an energy model totally dependent on fossil fuels is not the choice of the Brazilian people.

“The population said ‘no’ to fracking. Since 2012, we have attended all ANP auctions, fighting against the use of unconventional techniques for the exploration of gas and oil. Due to its tremendous damaging potential in Brazil, we have nicknamed fracking the ‘gas of death’. The investors who choose to support this venture will find strong opposition in court, by the Federal Public Prosecutor’s Office that supports us, as well as by the local legislative branches, and the organized sectors of civil society. Fracking is definitely not a good option. It is not economically feasible as can be seen by what happened in the United States where almost 70% of the sector’s companies went bankrupt. It is not sustainable either from a socio-environmental point of view”, said Juliano Bueno de Araujo, COESUS’ founder and national coordinator.

Twenty companies participated in the auction. Four of them are currently being sued by the New York government for their role in causing climate change: BP, Exxon, Chevron and Shell. Murphy Oil, one of the registered companies, is a partner of Exxon in two deepwater blocks in the Sergipe and Alagoas basins in the northeast region of Brazil, and is currently fracking in the United States.

In addition to the auction today, another one is scheduled for June. ANP believes that the government’s revenue from this year’s auctions may exceed the initial forecast of 3.5 billion BRL. One of the strategies used to attract foreign investments is to grant large tax exemptions to the sector, through Provisional Measure 795, better known as “MP do Trilhão” in Brazil.

The new laws now allow all money invested in oil and gas production to be deducted from the Social Contribution Tax on Net Income and Corporate Income Tax until 2040. In addition, the import of equipment for the sector has also become tax free. The most conservative estimates show that the total tax cut may exceed 1 trillion BRL in 25 years.

The threat of fracking

Many of the blocks offered in today’s auction are located deep underground, which may favor the use of fracking. Fracking is an unconventional method that requires vertical and horizontal drilling for the extraction of oil and gas from shale rocks. Since it uses hundreds of chemical solvents, and because of its proximity to surface and underground water, it is highly contaminating and can cause serious damage to rivers and aquifers, the air, the soil, agricultural activities and also harm the health of people and animals.

In addition to the socio-environmental impact, the technique also requires millions of cubic liters of fresh water that could be better used for human consumption. It also intensifies climate change since it systematically releases methane gas, one of the causes of the greenhouse effect and 86 times more damaging than CO².

Several leading international institutions, including the US Environmental Protection Agency (EPA), have already proved the destructive potential and direct impact caused by fracking. While several countries in the world have banned the technique nationally, Brazil insists on not forbidding its use.

As a result of the No Fracking campaign, more than 380 Brazilian municipalities have already passed laws that forbid the use of fracking in their territories. The movement is expanding to neighboring countries such as Uruguay, Argentina and Paraguay, which share with Brazil the custody of one of the largest freshwater reserves in the world: the Guarani Aquifer.

“The Brazilian government has tried several times to silence our voice, but civil society cannot be silenced. The campaign has gained more and more strength and support from various sectors. The 2015 Paris Climate Agreement established that the world needs to tackle global warming as a matter of urgency, and this puts a clear expiration date on the oil and gas industry. To meet the targets of the Paris Agreement, all our oil and gas must remain in the ground – there is no other option”, pointed out Nicole Figueiredo de Oliveira, director of in Brazil and Latin America.

She recalled that the oil in the pre-salt layers contains about 75 billion tons of carbon dioxide, which corresponds to 18% of all that civilization can still emit if we want to meet the targets of the global climate agreement.