Brazil Searches For More Energy

by Larry Rohter

LTAMIRA, Brazil - Nearly 2,000 miles to the south, in the huge cities of Rio de Janeiro and São Paulo, electricity is being rationed and blackouts are a greater threat. But government planners say they see a solution here in the heart of the Amazon basin, where they hope to harness its network of rivers into a new source of power.

As a starter, Brazil is speeding up plans to build the world's third-largest dam east of here on a bend in the Xingu River; if built, that would increase the country's hydroelectric capacity 15 percent.

Thus far, the only thing that the government's ambitious program has managed to generate is fierce opposition among people living in the region. "The Brazilian government is about to commit another crime against the Amazon," local environmental and religious groups argued in S O S Xingu, a call to resistance. In responding to the power crisis, they say, the government is investing in "megaprojects whose target of priority is the rivers of the Amazon because the rivers of other regions are in a state of collapse."

Opponents of the dam project maintain that it is economically inefficient and would devastate jungles, rivers and wildlife, uproot Indians and settlers, and impede navigation. To the contrary, government planners say, not only can the region's huge energy resources be safely tapped, but also the necessity to do so is mounting.

Over the last five years, electricity consumption in this nation of 170 million has grown at a 5.3 percent annual pace, far exceeding the growth of supply. This year, a severe drought has lowered water levels in the reservoirs used to generate electricity, and mandatory rationing was imposed in June. That required consumers around the nation, business and individuals, to cut their consumption by varying amounts or face fines or a suspension of service; in most of the country the mandated cut was 20 percent.

"Not all of the potential of the Amazon basin can or should be developed," said Paulo César Magalhães Domingues, energy planning manager for Eletronorte, the state- run power company overseeing the dam project, which is known as the Belo Monte Hydroelectric Complex.

But he said that since the government had decided it needed new generating capacity, Belo Monte had become "an indispensable part of that effort."

Everything about the project is cast in a huge scale, beginning with an annual output of 11,000 megawatts. In addition, to minimize the area to be flooded, a pair of canals about a quarter-mile wide and seven and a half miles long are to be built to connect two sections of the Xingu River in what company officials describe as perhaps the largest excavation project since the Panama Canal.

Belo Monte is budgeted at $6.6 billion and scheduled to begin producing power in 2008.

Of that total cost, $3.9 billion is for construction of the dam complex itself and $2.7 billion is to string transmission lines to the industrial cities in the south, which will be main consumers of the new supply.

Critics of the project say those projections are wildly optimistic and point to the Tucuruí project, also in the Amazon, 175 miles east of here on the Tocantins River. Budgeted at $4.7 billion when construction began in the late 1970's, that project has now cost more than $10 billion, according to independent estimates.

In addition, opponents dismiss as a ruse the government's statement that Belo Monte will generate 11,000 megawatts. In reality, they say and Eletronorte officials acknowledge, the plant's production will be severely curtailed during five months of the Amazon dry season, giving the plant an average annual production of less than 5,000 megawatts and raising doubts about its economic viability.

In contrast to previous gigantic dam projects in Brazil like Itaipú, at 12,600 megawatts the world's second largest hydroelectric power plant, built with Paraguay, and Tucuruí, the government hopes to keep costs down by bringing in private investors as majority partners. But that has fanned doubt about the government's willingness to keep the promises it is making and its ability to control the activities of the managing company.

"Up north, it is more complicated to attract capital to this sort of thing," President Fernando Henrique Cardoso said in a recent interview. "But we want to attract investment to new undertakings like Belo Monte, which can be another Itaipú and which we are determined to carry out."

Opponents of the project also argue that Brazil, which relies on dams to generate more than 90 percent of its electricity, needs to diversify into sources of energy like solar and wind power and biomass. But Eletronorte officials say hydropower is much cheaper than those and safer than nuclear energy, which Brazil is also developing.

Company officials say they have made a good-faith effort to minimize disruption to the Amazon's delicate environment and to address local concerns, for instance, redesigning the project so the area to be flooded has fallen by more than two-thirds, to 155 square miles. They also dispute local complaints about environmental damage that construction might cause.

"The truth is that a lot of the area that is going to be flooded has already been deforested," said Sílvia Gonçalves Ramos, a sociologist and economist who is in charge of community outreach for the project.

Indeed, that is true, the critics say. They fear that Belo Monte will only worsen the devastation. New development, they say, will bring an influx of sharp business practices from the south and increase in social tension, as they say occurred at Tucuruí.

"Belo Monte can only accelerate the exodus of small farmers and unleash a whole process in which large ranching and logging interests would come in," said Bruno Kempner, coordinator of the Movement for the Development of the Trans-Amazon and the Xingu, a farmers' rights group. "They've already marked out parcels of land as large as 2.5 million acres around the dam site, some of which are occupied by settlers who have lived there for many years."

There is also talk of building an industrial park in order to attract manufacturers to the area, which is far from good highways or other transport links. Local people say they fear the only companies likely to be interested are heavily subsidized, intensive users of energy, like aluminum producers.

"If this project is only going to produce energy, then it is not good for us," said Vilmar Soares, president of the local Commercial, Industrial and Agricultural Association. "There has to be some value added, in the form of new jobs being generated, that improves the quality of life." He hopes for an infusion of good-paying, permanent jobs.

Those objections notwithstanding, the government seems determined to move ahead. The National Council for Energy Policy, which is charged with dealing with the electricity crisis, issued a decree last month declaring Belo Monte to be of "strategic interest" to Brazil; it ordered Eletronorte to complete all impact and feasibility studies by the middle of December.

"This project really shows what the rest of Brazil really wants from the Amazon," said Lucio Flávio Pinto, editor of Amazon Agenda, an independent newsletter that covers the region. "It's a colonial model in which we supply brute energy and all other kinds of raw materials to the south, but don't get any of the benefits of development and remain poor and backward."

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