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Natural gas regulation and policy in Brazil: Prospects for the market expansion and energy integration in Mercosul

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  • Leal, Fernando I.
  • Rego, Erik E.
  • de Oliveira Ribeiro, Celma

Abstract

The study comprises an analysis of the most relevant oil and gas (O&G) legislation and policy, focusing on the development of natural gas (NG) infrastructure and market in Brazil. The paradigms for the study were the regulatory frameworks of the O&G industry in Brazil and Argentina, since they are relevant members of the Mercosul economic block. A comparative assessment was performed in order to better understand the bottlenecks and drawbacks for the NG market expansion in Brazil, considering successful examples of recent legislation advances of other countries. Also, the sanction imposed by ANEEL Resolution n. 583 of 2013 on natural gas suppliers, due to the lack of supply for thermoelectric utilities was evaluated. Since current calculations have introduced asymmetries concerning the indicators employed, while using parameters intrinsic to the electricity sector, an alternative formula was proposed, decreasing the sanction value on the supplier without compromising the contract neutrality. The regulatory framework analysis indicates that further strategic planning and investment, as well as adequate policy changes are required, in order to ensure a long-term energy policy aimed at the sustainable development of the NG industry in Brazil. This process is aligned with a transition towards a lower emission energy system, and should consider the expansion of energy integration in Mercosul to explore the potential of its members' comparative advantages.

Suggested Citation

  • Leal, Fernando I. & Rego, Erik E. & de Oliveira Ribeiro, Celma, 2019. "Natural gas regulation and policy in Brazil: Prospects for the market expansion and energy integration in Mercosul," Energy Policy, Elsevier, vol. 128(C), pages 817-829.
    • Handle: RePEc:eee:enepol:v:128:y:2019:i:c:p:817-829
    DOI: 10.1016/j.enpol.2019.01.030
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