Now Petrobras is the source of all the country’s ills. In Brasilia or Rome, Bolsonaro criticizes it for excessive profits, calls it a “problem” and the threat of privatization.
The multiplication of references to Petrobras in the weeks leading up to COP26 is not anodyne. The government clearly believes that the combination of climate and energy crises can legitimize the oil company’s privatization agenda.​
The sector’s situation is complex. With the abandonment of pension funds and the coordinated actions of shareholders on boards of directors, private oil companies are being confronted with unprecedented pressure from climate activism.
In August of last year, Exxon, the heir to Standard Oil, lost its place on the Dow Jones Industrial Average for the first time in a century. Among state-owned companies, the growing difficulties in attracting new investments create the feeling that they are paralyzed by the challenge of the energy transition. Recent episodes, such as the empty pre-salt auctions, added to the despair.
At COP26, everything indicates that the fossil industry will be designated as the target to be shot down in the next decade. Faced with so many threats, the government intends to present the privatization of Petrobras as the only way to make the assets profitable and provoke a systemic shock in the Brazilian economy.
But this new scam by Paulo Guedes is doomed to failure. The human and technological capital of oil companies may not be easily adaptable to the challenge of renewable energy, and state-owned companies are traditionally averse to investments outside their areas of expertise.
But that is changing, and across the world, from Colombia to China to Scandinavian countries, state-owned oil companies are piloting technological innovation in renewable energy, batteries and carbon capture, while managing oil production and managing the shock of reduction of energy consumption in the long term.
SOEs are also strategic because the fossil industry, unfortunately, will continue to be the mainstay of international relations. Some scenarios estimate that the world will continue to use 100 million barrels a day in 2040.
The trajectory of China, the queen of solar energy and coal, the United States, leader of the campaign for climate attached to shale gas, or Germany, ruled by environmentalists but dependent on Russian gas, show that the geopolitics of green energy it will join the geopolitics of fossil energy, dominant since the industrial revolution.
In Brazil, all political fields need to adapt to the new reality. Proponents of a strong state must retire the dusty slogan of “Oil is ours” and launch a program for Petrobras’ future beyond oil. Liberals have to drop the privatization fetish and accept that it would be suicide for the State to give up the only company with the technological and human capacity to organize the national energy transition.
Even the broken clock is right once a day. Thus, Bolsonaro was right to place Petrobras at the center of the debate on the climate emergency.
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