Lessons learned from Brazilian natural gas industry reform

Mathias, Melissa Cristina; Szklo, Alexandre

doi:10.1016/j.enpol.2007.08.013

Cited by 24 publications

(3 citation statements)

References 25 publications

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“…On the one hand, onshore natural gas potential production faces challenges related to the expansion of the gas transportation grid, given its high upfront costs and the monopolistic nature of the Brazilian market (Camargo et al, 2014;Mathias and Szklo, 2007). On the other hand, transporting the production of offshore pre-salt associated gas to consumer centers is costly, given the far distance from the coast (round 300 km).…”

Section: Oil and Gasmentioning

confidence: 99%

Climate policy scenarios in Brazil: A multi-model comparison for energy

et al. 2016

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a b s t r a c t Available online xxxx JEL classification: H23 C88 Q40 Q54 C61 C63 C68 O57 Keywords: Climate policy Low-carbon energy scenarios Mitigation alternatives BrazilThis paper assesses the effects of market-based mechanisms and carbon emission restrictions on the Brazilian energy system by comparing the results of six different energy-economic or integrated assessment models under different scenarios for carbon taxes and abatement targets up to 2050. Results show an increase over time in emissions in the baseline scenarios due, largely, to higher penetration of natural gas and coal. Climate policy scenarios, however, indicate that such a pathway can be avoided. While taxes up to 32 US$/tCO 2 e do not significantly reduce emissions, higher taxes (from 50 US$/tCO 2 e in 2020 to 162US$/tCO 2 e in 2050) induce average emission reductions around 60% when compared to the baseline. Emission constraint scenarios yield even lower reductions in most models. Emission reductions are mostly due to lower energy consumption, increased penetration of renewable energy (especially biomass and wind) and of carbon capture and storage technologies for fossil and/or biomass fuels. This paper also provides a discussion of specific issues related to mitigation alternatives in Brazil. The range of mitigation options resulting from the model runs generally falls within the limits found for specific energy sources in the country, although infrastructure investments and technology improvements are needed for the projected mitigation scenarios to achieve actual feasibility.

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Section: Oil and Gasmentioning

confidence: 99%

Climate policy scenarios in Brazil: A multi-model comparison for energy

et al. 2016

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“…After the first wave of reform failed to induce openness in the gas industry, the literature emphasized the need to reformulate the regulation of the sector, ensure non-discriminatory access to the transport network and promote changes to encourage infrastructure expansion. While some proposals defended the maintenance of the authorization regime for the exploration of the transport activity (Ana et al, 2009), others supported a change to the concession regime (Mathias & Szklo, 2007). The second wave of reforms started from the consensus that light-handed regulation was not sufficient to deal with the monopolistic presence of Petrobras in the entire industry (Cordeiro et al, 2012); however, it resulted in an overly centralized and complex coordination for access and expansion of the infrastructure (Ferraro & Hallack, 2012).…”

Section: Introductionmentioning

confidence: 99%

Waves of regulatory reforms and winds of uncertainties in the Brazilian natural gas industry

Romeiro

Amorim

2022

Competition and Regulation in Network Industries

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The natural gas industry in Brazil has undergone three waves of reforms since the late 1990s regarding liberalization and market opening. The gas law approved in 2021 reinforces the unbundling between transport and commercialization of natural gas and guarantees third-party access to essential infrastructure. The new legal framework achieves the vertical separation of upstream and midstream segments but does not reach the downstream segment subject to state regulations. The exit of the incumbent (Petrobras) from the network segments opens space for new entrants, but may remain with a high commercialization share. Vertical and horizontal integration in the distribution segment can compromise this industry’s restructuring. This article identifies three possible scenarios for the evolution of liberalization after the last reform. A successful path will depend on the implementation and enforcement of the new gas law, on adequate economic signals for network and consumption expansion, on harmonization of state regulations, and on the effective opening for the construction of a national gas market. The role of natural gas in Brazil’s energy transition is still an open issue that will affect the industry’s evolution in the coming years.

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“…To our knowledge, this methodology was mostly applied to agricultural commodities' markets, with few applications to energy markets. Therefore, by applying this methodology to the European gas market we argue that this can be used in energy markets to evaluate transaction costs and asymmetric price responses, providing case studies for other markets that plan to go through liberalization processes, like the Brazilian market (Mathias and Szklo, 2007) or the Chinese market (Ishwaran et al, 2017).…”

Section: Introductionmentioning

confidence: 99%

Price Adjustments and Transaction Costs in the European Natural Gas Market

Garaffa¹,

Szklo²,

Lucena³

et al. 2019

The Energy Journal

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The presence of long-term contracts indexed to oil prices is a key feature of the evolution of the European natural gas industry. During the 2000's, the European Commission (EC) promoted reforms to establish a single and integrated natural gas market, leading to the development of short-term regional markets based on hubs. This paper tests the hypothesis that asymmetric price responses in the continental European hubs derive from transaction costs. By applying linear and nonlinear error correction models, it assesses the price transmission dynamics and the degree of integration between the German, the Belgium and the Dutch spot markets. The models identified cointegration relations, price asymmetries and transaction costs in these markets. Results show a high degree of integration across regions, with prices converging rapidly to their long-run equilibrium. However, asymmetric price adjustments reveal the presence of transaction costs in the German regional hub.

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Lessons learned from Brazilian natural gas industry reform

Cited by 24 publications

References 25 publications

Climate policy scenarios in Brazil: A multi-model comparison for energy

Climate policy scenarios in Brazil: A multi-model comparison for energy

Waves of regulatory reforms and winds of uncertainties in the Brazilian natural gas industry

Price Adjustments and Transaction Costs in the European Natural Gas Market

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