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New Gas Law

House approves urgency regime and New Gas Law should be voted in August

07/30/2020 | 16h17
House approves urgency regime and New Gas Law should be voted in August
Divulgation Divulgation

The Chamber of Deputies took another step to advance the discussion of the proposal that can lower the price of natural gas in Brazil. The deputies approved an urgent request to vote on PL 6.407 / 2013, known as the New Gas Law. The request was headed by deputy Paulo Ganime (NOVO-RJ) and is signed by leaders of other parties such as Cidadania, PSDB, PSC, Patriotas , Republicans and PSL.


As it is now being processed on an urgent basis, the matter, which already passed through the Minas Energy Commission (CME) in 2019, will be analyzed directly in plenary. Paulo Ganime considers that the change in the regulation of the sector can no longer wait and needs to be done as soon as possible to rekindle the country's economy.


“The urgency of PL 6.407 / 2013 is even more necessary because of the pandemic. Not to mention that Brazil is already going through an economic crisis that existed before the pandemic, so the need for investments is very important. Together with the sanitation framework, the natural gas framework can bring investments from within and outside Brazil. Thus, it will generate more jobs and income ”, defends the parliamentarian.


The opening of the gas market, now under Petrobras' monopoly, is seen as one of the engines to resume activities in the industrial sector. Natural gas is used as an input by the chemical industry for the production of fertilizers and replaces other fuels as an energy source. The problem is that low supply and high value are obstacles to expanding marketing. For this reason, currently, more than half of the natural gas consumed in Brazil is imported from Bolivia.


“The Gas Law is one of the most important guidelines for Brazil, both for the question of investments, as well as for the impact on the price of gas, the price of energy and the price of fertilizer. It is also favorable to the environmental issue, because natural gas is much less polluting than oil and helps in the migration of energy based on hydroelectric plants and oil, ”says Ganime.


According to the Mayor, Rodrigo Maia, the trend is that the New Gas Law will be put to the vote in August. The intention is that in the next "two or three weeks", in Maia's words, the parliamentarians can add amendments and approach an agreement. One of the authors of the proposal, Deputy Domingos Sávio (PSDB-MG) states that cheaper natural gas is synonymous with cheaper products for the final consumer.


“Although it deals with natural gas, the PL will have a positive impact on the Brazilian industry. Not only those who already consume natural gas as an energy source, but a series of industries that could replace other, more expensive energy sources with natural gas. The Brazilian industry will become more competitive, will produce at cheaper costs, which ends up benefiting the final consumer, in addition to generating jobs and growth in our economy ”, argues the deputy.


By the end of the monopoly 

Appointed by experts and parliamentarians as the main obstacle to the expansion of the natural gas market in Brazil, Petrobras' monopoly must remain in the past with the approval of the new law. Data from the National Agency of Petroleum, Natural Gas and Biofuels (ANP) show that the company is responsible for the operation of more than 90% of all fuel production, in addition to managing most fields of gas, gas pipelines, thermoelectric plants, carriers, distributors and resellers.


For Domingos Sávio, a scenario in which a single company controls practically all the services offered harms the consumer, who is obliged to pay for a product that could be cheaper if there was competition.


“The current legislation does not at any time favor competition and the emergence of new investors. The gas pipelines, for example, are owned by Petrobras or a certain group, which allows others to use them to transport the gas. There is verticalization throughout the production chain ”, criticizes Sávio.


To correct this problem and expand the infrastructure, the PL 6.407 / 2013 provides for the reduction of bureaucracy for the construction of gas pipelines. The main point of the text is the change in the granting regime, which changes from concession to authorization. In the current model, a company interested in investing in the sector needs to win an ANP auction. In the authorization regime, it is enough to present the project and wait for the agency's approval. The purpose of the change is to unlock investments.


According to the Brazilian Infrastructure Center (CBIE), the Brazilian gas pipeline network has approximately 45 thousand kilometers, of which 9.5 thousand are destined for transportation, that is, for the movement of natural gas from the processing units to the storage facilities. . The distribution network is 35.5 thousand kilometers long and receives natural gas at the delivery point and takes it to final consumers - this infrastructure belongs to state distribution concessionaires.

Font: T&B Petroleum/Brasil 61
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