Rio forum raises hopes for Brazil-US energy cooperation

Rio de Janeiro city will host the first US-Brazil Energy Forum next week, with the participation of Brazilian energy minister Bento Albuquerque and his US counterpart Dan Brouillette.

One highlight of the event is the expected signing a memorandum of understanding between Brazil’s nuclear association and the US Nuclear Energy Institute, while another highlight will be the announcement of a letter of intention between state-run Eletronuclear and Westinghouse, which could indicate new nuclear power investments in the South American country.

Brazil is currently looking to resume works on the 1.4GW Angra 3 nuclear power plant with a private investor. Companies from the US, France, South Korea, China, and Russia have expressed interest. Studies found investment demand will be around 15.5bn reais (US$4.1bn), adding to the 9.9bn reais already invested. Westinghouse is seen as a potential partner since it is responsible for around half of the world's operating nuclear reactors and has shown interest in the Angra plant. Albuquerque also mentioned the possibility to build eight nuclear power plants in Brazil. 

The oil and gas market presents other opportunities for Brazil-US cooperation. The US is currently the second-largest importer of Brazilian crude oil, behind China, and is likely to be an important ally as the South American country increases production and could become the world's fifth-largest oil and gas exporter by the end of this decade.

Oil trade between the countries is increasing, since Brazil produces heavy oil but does not have refinery infrastructure to process all of its output and most refineries on the US Gulf coast are importing heavy oil, due to their high coking and desulfurization capacity. Between January and November 2019, Brazilian crude oil exports to the US amounted to US$2.79bn, while in the same period the South American country imported US fuel oils for US$5.21bn and gasoline for US$1.28bn.

Another field for potential collaboration is energy efficiency. Last year, representatives from the US Department of Energy visited Brazilian power regulator Aneel and discussed new technologies, such as smart grids, electric cars, batteries for energy storage and renewable power sources.

Brazil is also a significant market for US ethanol exporters. It raised from 600Ml to 750Ml the amount of US ethanol that can be imported duty free and the US is expected to reciprocate with Brazilian sugar imports.

Improvements to US-Brazil energy cooperation were announced as part of Brazilian rapprochement in March 2019 when President Jair Bolsonaro visited Donald Trump in the White House.