Brazil New Gas Law Policy Brief
1 BRAZIL ’ S NEW GAS LAW
INSTITUTE OF THE AMERICAS POLICY BRIEF
The development of an independent natural gas market in Brazil has long been a goal for the government and industry alike. But it has also been traditionally marginalized by the oil sector and the heavy centralization of production and infrastructure in the hands of Petrobras. For decades the potential of natural gas as an energy source was neglected. In 1997 the Brazilian government introduced the Oil Law, which opened the Exploration & Production market, and where natural gas was treated as an oil by- product. Two years later, in 1999, the Brazil-Bolivia gas pipeline (Gasbol) went into operation, forming an important milestone for the consolidation of natural gas in the Brazilian energy matrix. By 2009 the first Gas Law was enacted. At the time I was a director at ANP (the national regulator), responsible for the natural gas segment and I know from firsthand experience that drafting of the bill was not an easy task. Since 2013 the industry has called for more ambitious and comprehensive regulation specifically for natural gas, and by 2016 there were early results of this movement with the launch of the Gas to Growth initiative.
natural gas sector and to decrease the participation of the State in the sector. The new gas law is a direct consequence of the work started by the Gas to Growth initiative. In April 2021, Brazilian President Bolsonaro enacted the new gas law (nº 14.134/2021), which establishes a new legal framework to restructure the natural gas sector in Brazil. This new regulatory framework presents the conditions to improve economic competitiveness in the segment, encourage the participation of new agents, promote market decentralization, foster opportunities for new investment and the monetization of the pre-salt gas, reduce bureaucracy and lower costs for the consumers. The purpose of this Policy Brief is to set forth an analysis of the new gas law, its implementation and how it will impact the Brazilian oil & gas market. The new gas market in Brazil Natural gas is considered a key fuel in the global energy transition and currently accounts for 12% of the Brazilian energy matrix. It is expected to become a fundamental driver in the country’s reindustrialization because it can be employed in several industries, such as clay and glass, pulp and paper, metals, fertilizers, cement and petrochemical industries.
The program’s objective was to propose feasible measures to improve the normative framework of the
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