Black Gold, Green Promises: Brazil's Climate Paradox

Can oil be used to fund its own demise and finance the energy transition? This is the belief of President Luiz Inácio Lula da Silva, who advocates for oil exploration in the Equatorial Margin, a region located near the mouth of the Amazon River.

For Lula, this objective is not incompatible with his ambitions to transform Latin America's largest country into a global leader in the fight against climate change, with just one month to go before COP30, which will be held in Belém, Pará.

“The world is not yet ready to live without oil,” the president said in a podcast.

"I'm against fossil fuels, whenever we can do without them. Until we can [...] It's with oil money that we'll be able to make biofuels, ethanol, green hydrogen, and other things," he said earlier this year.

Brazil is the eighth largest global oil producer and Lula wants Petrobras to be “the largest oil company in the world.”

Furthermore, it urges world leaders to step up the fight against global warming and has promised zero deforestation by 2030.

Critics say the president's position is contradictory. Others consider it pragmatic.

“It is becoming increasingly clear that emerging countries […] will not be able to count on developed countries to finance the climate change adaptation agenda,” said Jorge Arbache, professor of economics at the University of Brasília (UnB).

“It is much more difficult to force a country like Brazil to not extract oil […] than to say the same thing to Norway, which has already become rich,” he added.

For Arbache, the question should be how to use this oil “and within what environmental parameters.”

– 'Historical mistake' –

The paradox is especially evident on the country's northern coast, where a branch of the Amazon, the world's mightiest river, hundreds of kilometers long, flowing with muddy freshwater flows into the Atlantic Ocean, a meeting visible from space.

After a license for oil exploration in this region was denied in 2023, Petrobras recently passed a key test required by Ibama (Brazilian Institute of Environment and Renewable Natural Resources).

The company said in a statement that it expects to receive authorization soon, even if it means partially revamping its wildlife protection plan in the event of an oil spill.

Petrobras hopes to find new deposits in the Equatorial Margin, a huge maritime area near the mouth of the Amazon and where Guyana has emerged as a major oil producer in less than a decade, after the discovery of large reserves.

The state-owned giant estimates that it would be “unlikely” for an oil spill in this region to reach the coast and that there would be no “direct impact” on indigenous communities.

“There is no such thing as sustainable oil, period,” Suely Araújo, former president of Ibama and coordinator of the NGO Observatório do Clima, told AFP.

"We are in the midst of a climate crisis, with a host of extreme events, and the option to continue indefinitely increasing oil production is a huge mistake, a historic mistake," he stressed.

– Export the problem –

If Petrobras finds oil at the mouth of the Amazon, the new block could take a decade to come into production.

The International Energy Agency (IEA) predicts a drop in oil demand from 2030 onwards, so continuing to drill is economically risky, estimated Suely Araújo.

Furthermore, oil revenues have not proven capable of solving the country's "social problems," he stressed.

The Federal Court of Auditors (TCU) warned this year about “severe dysfunctions” in the distribution of royalties from oil revenues, which multiplied by 40 between 2000 and 2022.

Brazil is one of the largest emitters of greenhouse gases, although its energy matrix is ​​predominantly renewable.

Almost half of emissions are due to deforestation and another 25% to the agricultural industry, said Felipe Barcellos e Silva, a researcher at the Institute of Energy and Environment.

According to calculations by Shigueo Watanabe Jr., a specialist at the ClimaInfo Institute, burning the estimated reserves in the Equatorial Margin could result in the release of an additional 2.5 billion tons of CO₂ into the atmosphere, more than Brazil's emissions for an entire year.

It is “incoherent to talk about a transition linked to destruction,” said environmentalist Neidinha Suruí, who has dedicated decades to protecting indigenous lands.

"What the president is doing is contributing to climate change and the destruction of the planet. I hope he changes his attitude," she told AFP.

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