Entities protest against the return of subsidies to pay for gas pipelines

A group of 23 entities linked to the energy and environment sector released a letter in protest at Congress’ attempt to reintroduce Brasduto, the Fund for the Expansion of Transport and Production Gas Pipelines.

Its main function is to organize the granting of subsidies for the construction of a network of gas pipelines dedicated to supplying thermal plants.

In the letter, the entities state that “amendments motivated by specific and private interests determine the creation of Brasduto through the bill for the modernization of the electricity sector, PL 414/2021”.

According to the entities, the report on the project, to be presented in the coming days by Deputy Fernando Coelho Filho (União-PE), will include the Brasduto, seriously harming the principles of the original proposal.

It would not be the first time that the proposal to create a pro-gas pipeline fund ended up being part of a project in progress. It was also added to the project that addressed the hydrological risk in energy production, approved in 2020, but ended up vetoed by President Jair Bolsonaro (PL) after also suffering much opposition from the energy sector.

The rule approved, and later overturned, provided that 20% of the resources obtained in the pre-salt layer, currently earmarked for education and health, would go to the pipeline implementation fund. The FPE (State and Federal District Participation Fund) and FPM (Municipal Participation Fund) would receive another 30%.

The forecast is that R$ 100 billion could be withdrawn from the social area to fund the new pipeline infrastructure.

Supporters of Brasduto argue that the pipeline network in Brazil needs to be expanded, as an alternative to generate jobs and expand development in more remote regions.

Opponents, in turn, claim that it makes no economic sense to create a network of gas pipelines with public money to supply thermal plants far from consumer centers, as the expenses would be greater than the return, benefiting only private groups that have gas businesses in areas with little attractive.

As the name implies, the project in progress proposes to modernize the sector to guarantee cheaper energy, both for domestic consumers and for industry. It is also based on encouraging clean energy in the context of climate change and the transition in the energy market towards a cleaner generation.

In the assessment of the entities, the approval of the new law is urgent. However, the insertion of the Brasduto via jabuti, as it is called an amendment unrelated to the original project, goes against what is desired, reinforces the letter.

“The financing of gas pipelines does not keep any relation with the object of the PL”, it affirms of the text. “We therefore request the preservation of the electric sector modernization guidelines indicated in the rapporteur’s original text, without the inclusion of a parliamentary amendment that provides for any subsidy to the so-called Brasduto.”

LIST OF SIGNATORY ENTITIES

• Signatory organizations:
• Association of Large Industrial Energy Consumers and Free Consumers (ABRACE).
• National Association of Energy Consumers (ANACE)
• Terrazul Alternative Association
• Friends of the Earth – Brazilian Amazon
• Center for Indigenous Work (CTI)
• National Council of Electric Energy Consumers (Conacen)
• Climainfo
• Environmentalist Group of Bahia (Gambá)
• Brazilian Institute for Consumer Defense (IDEC)
• Instituto Polis
• Climate and Society Institute (iCS)
• Arayara International Institute
• International Institute of Education of Brazil (IIEB)
• Institute of Energy and Environment
• Institute of Energy and Environment – (IEMA)
• Choices Institute
• International Energy Initiative – IEI Brazil
• Climate Observatory (OC)
• Healthy Hospitals Project (PHS)
• Health and Joy Project
• Society for Wildlife Research and Environmental Education (SPVS)
• WWF