While diplomats were hard at work at the UN climate talks in Bonn this past November, the UK government succeeded in lobbying Brazil into awarding Royal Dutch Shell and BP Oil the rights to pump oil from the country’s highly productive pre-salt regions. The Brazilian government is now considering a bill which would give the fossil fuel giants a tax break of up to $300 billion. While oil barons have cheered the deal, conservationists have warned that the move directly contradicts efforts to reduce global emissions: development of the oilfields, which are estimated to contain a whopping 176 billion barrels of crude oil, could use up 7% of humanity’s global emission budget, if global warming will be kept below 2C.
The Climate Concerns at Stake
In October of this year Shell and BP Oil both scored big bids for the rights to explore in Brazil’s pre-salt region. Brazil’s goal in drawing in foreign investment is to help pull the country out of its current economic crisis and promote economic development. While this investment is likely to help the economy, environmentalists have voiced their concerns that unearthing this oil could speed up climate change and would use up a large part of the world’s carbon budget.
“The country is… increasing emissions and opening itself up to big oil with billionaire subsidies at a time when the country still tries to recover from its worst recession,” said Carlos Rittl, executive secretary of the Brazlian based Climate Observatory, in an interview with The Guardian. According to calculations put forth by the Climate Observatory, the extraction of the 176 billion barrels of crude oil would use the equivalent of 7% of the global emissions budget below 2C and 18% below 1.5C.
Environmentalists have also noted that the action of drilling is not without risk. Pre-salt drilling is challenging and the oil companies need to be certain that the layer is stable enough before the process of drilling and extraction takes place. Commonly known as fracking, the process of hydraulic fracturing holds many dangers, such as contamination of groundwater, methane pollution (which is a greenhouse gas about 30 times as powerful as CO2) and even fracking-induced earthquakes.
In November of 2017, over 120 Brazilian civil society organizations and networks signed a letter voicing their opposition to Brazil’s deal with the oil companies. The letter expresses disapproval of the deal’s impact on the environment, while also stating that a massive tax break to rich oil companies isn’t what Brazil needs right now; the civil organizations argue that this money would be better directed towards the country’s economic concerns where it could be used to rebuild the country after its huge recession.
In an article published by the Climate Observatory, a spokeswomen for WWF-Brazil attacked the proposed deal, stating that it is “taking money from education, health and safety to give to foreign oil companies. Brazil is going against what it has been signaling in the international climate talks.”
What are Brazil’s pre-salt layers?
In one sentence, these pre-salt flats a re a massive deposit of oil and gas formed 100 million years ago when South America, Australia and Antarctica were all one massive supercontinent. As the continents of Africa and the Americas started to separate 150 million years ago, depressions were formed which lead to the creation of large lakes. Organic material from the continents were deposited by rivers into these lakes. While the continents were drifting apart the Atlantic Ocean began to form and left a layer of salt on top of the organic material. This layer of salt held the organic material in place for millions of years during which it turned into oil and gas. Brazil’s pre-salt area is believed to be 800km long and 200km wide, lying 300km off the coast of Santa Catarina and Spirito Santo, a total area of 149,000 square kilometers.
The Sneaky Politics Behind the UK Deal
Earlier this year, the UK’s Department of International Trade came under fire for lobbying Brazil’s Deputy Minister for Mines and Energy, Paulo Pedrose, on behalf of Shell and BP. The move aimed to give the fossil fuel companies the bulk of the licenses for drilling in the pre-salt regions off the coast of Brazil, while also lowering tax rates for the companies. Sensitive information concerning a “private breakfast” to discuss these mining endeavors was sent to Unearthed (a Greenpeace publication) where it was also confirmed that Brazil’s Paulo Pedrose “is already lobbying its relevant counterparts within the Brazilian government.”
Rebecca Newsom, senior political advisor from Greenpeace, said in a press release: “This is a double embarrassment for the UK government. [The UK government] has been lobbying the Brazilian government over a huge oil project that would undermine the climate efforts Britain has just championed at a major UN summit. Given the important climate leadership the UK has shown, it’s vital that Theresa May’s government speaks and acts with one voice. That means clamping down on a trade department acting like Big Oil’s lobbying arm.”
Still, the breakfast lobbying effort seems to have worked, as Michael Temers’ government in Brazil reworked the bill meant to give tax breaks to oil companies, proposing a tax relief of up to $300 billion for companies which develop in offshore drilling before 2040. The bill as it stands would give the Brazilian government one of the lowest revenue shares in the world for each barrel of oil extracted.
Jennifer Morgan, executive director Greenpeace, summed up the situation in a press release: “this is a terrible sign, more important than speeches are the practical actions that can drive us to fight climate change. With this bill, Brazil will make the global responsibility to reduce emissions even more difficult than it already is.”