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Consultation over energy is the key issue to US-Brazil Relations and the alliance


Langevin, 2012

[Mark, Ph.D., Director of Brazil Works and Mark is also Associate Adjunct Professor of Government and Politics at the University of Maryland-University College, Energy and Brazil – United States Relations, 8-20-12, http://www.brazil-works.com/energy-and-brazil-united-states-relations/]



Energy has often played a central role in Brazil-United States bilateral relations. In the first half of the twentieth century the United States based Good Roads Movement, fueled by the American Road Builders Association and the American Automobile Association, paved the way for U.S. oil companies and auto manufacturers to bring fossil fueled cars to Brazil (Downes 1992). In the decades following World War II, the U.S. strategic petroleum reserve and the “Atoms for Peace” program pulled the largest nations of the Western hemisphere toward a close strategic orbit, including Brazil. It was not until the first OPEC oil embargo in 1973 and the nuclear deal between Brazil and West Germany that bilateral relations slumped as Brazil placed its national energy security ahead of its special relationship with the U.S. (Gall 1976:155). Since this critical juncture, Brazil has sworn off nuclear weapons, become a world leader in biofuels, discovered massive offshore “pre-salt” hydrocarbon reserves, and become a major international leader in climate change policy negotiations.¶ Throughout the engagement and turbulence of Brazil-U.S. relations, particular private sector interests and national foreign policies have swirled to elevate energy affairs toward the top of the bilateral agenda. Both Brazil and the U.S. have called for greater cooperation on energy matters in the past several years and under different administrations. In 2007 then Presidents Luiz Inácio Lula da Silva of Brazil and George W. Bush of the U.S. celebrated the biofuel boom by signing theMemorandum of Understanding between the United States and Brazil to Advance Cooperation on Biofuels to foment bilateral cooperation. During the 2008 U.S. presidential campaign then candidate Barack Obama promised an “Energy Partnership of the Americas” to deliver up regional energy security in close cooperation with Brazil (Spencer 2009). In April of 2009, the U.S. Export-Import Bank extended a $2 billion facility to enable Brazil’s nationally controlled energy company, Petrobras, to obtain favorable financing for the purchase of U.S. manufactured drilling equipment (United States Export-Import Bank 2011). In May of 2011 the facility became operative and the Ex-Im Bank approved a request from JP Morgan Chase, acting as lender, to finance over $300 million in Petrobras’ purchases of U.S. manufactured products (Ibid.).¶ In March of 2011 Brazilian President Dilma Rousseff hosted U.S. President Obama to herald the establishment of a “strategy energy dialogue.” Clearly, both Presidents Rousseff and Obama are keen on energy as a leading issue in bilateral affairs. This should come as no surprise since Dilma is the former Secretary of Energy for the state of Rio Grande do Sul, former Minister of Mines and Energy, and former Chair of Petrobras’ Board of Directors. Obama has also emphasized the vital role of renewable energy and energy security in domestic and foreign affairs, both as candidate and as president. Today, both nations’ foreign policymakers recognize the key role of energy as a bilateral and global issue of strategic importance; and the establishment of the bilateral Strategy Energy Dialogue makes energy a pivotal matter for some time to come. This discussion paper examines this fundamental bilateral issue and evaluates the challenges and opportunities for deepening bilateral and bi-national cooperation through the current set consultative mechanisms, including the Strategic Energy Dialogue, across the subsectors of petroleum, ethanol, and electricity generation-transmission-distribution (GTD).

Cooperation over energy issues is key to overall relations


Joseph, 2012

[Regina, Reuters, America’s path to alternative energy runs through Brazil, 3-30-12, http://blogs.reuters.com/great-debate/2012/03/30/americas-path-to-alternative-energy-runs-through-brazil/]



On Apr. 9, President Obama will welcome President Dilma Rousseff to the United States on her first official visit to the U.S. Brazil, which overtook the UK in 2011 to become the world’s sixth-largest economy, has South America’s second-largest proved reserves of oil after Venezuela (and the 15th-largest in the world at 12 billion barrels of crude). If Brazil is equally engaged as a U.S. partner (together with Canada and Mexico), a Western hemispheric energy corridor could be built by treaty or convention, designed to harness the collective’s combined fossil fuel capacity. Ultimately, these countries have the technological and industrial reserves needed to jump-start the renewables sector as a replacement for its inevitably diminishing hydrocarbon analog.¶ The consequences of such a partnership would extend far beyond the energy sector. Commodities that will be in even greater demand, like food and water, could serve as an even more powerful security link among the countries of the Americas, especially considering the global agricultural dominance of Brazil and the U.S., and the freshwater reserve dominance of Brazil and Canada. Such a collective could also serve as an important hedge against the pressures that other rising powers like China and Russia will exert on energy, food and water supplies.¶ But before that optimistic scenario can evolve, Obama would need to consider flip-flopping on the U.S. position vis-a-vis President Rousseff’s upcoming trip. The U.S. is denying her and her delegation the status of a “state visit,” which would confer a specific high-level value to the meeting, ostensibly as punishment for the policy indiscretions of Rousseff’s ex-boss and mentor, Brazil’s former President Luiz Inacio “Lula” da Silva.¶ Moreover, American promises of support for India’s United Nations Security Council permanent seat bid, contrasted with American “acknowledgment” for Brazil’s own bid, rankle in Brasilia, according to my reporting and others’.¶ The current U.S. foreign policy stance toward Brazil carries a residual whiff of the U.S.’s 1950s-era developmental economics approach to Latin America, as opposed to the more robust economic amity extended to Asian rising powers. But by the same token, for real improvement in crucial bilateral relations, Brazil will need to change its own hidebound left-wing political tendencies – the kind that recently led Rousseff, a former political prisoner, to excoriate America’s Guantanamo policy while remaining mum on Cuba’s own history of oppression during a state visit to Havana this past January. Only mutual acknowledgment by Brazil and the U.S. of perceived double standards by the other will break the unspoken diplomatic deadlock that threatens the potential for both to advance together.¶ The administration’s shortsighted, hasty approaches to Brazil parallel its initial shortsighted, hasty approach toward Keystone XL’s approval. Perhaps Obama will forge a new perspective with a different eye to the former as he did to the latter, and in so doing, preserve America’s future security.

Cooperation over energy is key to relations


Langevin, 2012

[Mark, Ph.D., Director of Brazil Works and Mark is also Associate Adjunct Professor of Government and Politics at the University of Maryland-University College, Energy and Brazil-United States Relations A Discussion Paper, 8-20-12, https://docs.google.com/file/d/0B7MqlY1WLL8eZnJUNGxxZlpSQi1KcGRlYUlOeHRRZw/edit?pli=1]



Energy has long been a challenge and an opportunity for Brazilian and U.S. diplomats and lawmakers seeking to intensify bilateral cooperation. In many ways, bilateral energy cooperation has largely developed through Brazil’s quest for energy security and its overlap with U.S. energy production, consumption, and research and development (Langevin 2010). Contemporary bilateral energy relations are still informed by the oil shocks of the 1970s which devastated Brazil’s balance of payments position and challenged U.S. foreign policymaking. By 1980 Brazil was importing 83 percent of its petroleum consumption, valued at some 47 percent of all of the nation’s export revenues (Empresa de Pesquisa Energética 2008). This overwhelming strategic energy deficit led Brazilian policymakers to double up on efforts to achieve energy security and place energy production as the lynchpin of national development planning. Petrobras persisted in its mission to discover oil in Brazil and around the world. Successive governments, both military and civilian, teamed up with sugarcane growers and automobile manufacturers to insure the success of the now famous Programa Nacional do Álcool(National Ethanol Program) or Pró-Alcool (Moreira and Goldemberg 1999). Brazil’s campaign to achieve energy security took on geopolitical proportions as the military regime launched an aggressive plan to develop a national nuclear energy program in the early 1970s. This program depended in large measure on transfers of U.S. capital and technology until the blockbuster nuclear reactor construction deal reached with the West German government in 1975.¶ In 1972 Brazil and the U.S. signed a bilateral agreement to cooperate on “peaceful” uses of nuclear energy. The agreement led to the construction of Brazil’s first nuclear reactor by the U.S. based Westinghouse as well as the absolute dependence upon the U.S. Atomic Energy Commission (AEC) to supply Brazilian reactors with enriched uranium. As Gall (1976) reports, the Brazilians were largely satisfied with their relationships with the U.S. government and Westinghouse. However, in 1974 rising commercial demands surpassed AEC’s uranium enrichment capacity thereby leading the commission to suspend new contracts for uranium sales to Brazil. Evidently, AEC’s decision to effectively limit Brazil’s access to enriched uranium served to “tip” Brazilian policymakers toward the surprising strategic deal with West Germany. This case is emblematic to the extent that it demonstrates both the importance of bilateral cooperation to advance Brazil’s national development goals as well as the pragmatic and political limits to such sector specific cooperation in the absence of a broader strategic partnership.¶ Since Brazil’s return to democratic rule in the 1980s, successive U.S. and Brazilian administrations have accelerated the pace and amplified the scope of cooperation on energy matters. Foreign Minister Luiz Felipe Lampreia and U.S. Secretary of State Madeleine Albright signed a memorandum of understanding in 1997 (Republica Federativa do Brasil 1997) that recast bilateral nuclear energy cooperation to allow for expanding commerce and exchange of information, technology, equipment, and reactor fuels, all within the context of Brazil’s signing and ratification of the Nuclear Non-Proliferation Treaty (NPT).¶ Brazil and the U.S. intensified talks on energy cooperation during the overlapping period of the administrations of President Lula and U.S. President George W. Bush, from 2003 to 2009. In 2003 then Minister of Mines and Energia, Dilma Rousseff, and U.S. Secretary of Energy Spencer Abraham signed a modest MOU to establish and guide a series of consultative mechanisms to facilitate exchanges on hydrogen fuel cell technology, carbon sequestration, bio-fuels, and electricity transmission (Republica Federativa do Brasil 2003). The Lula-Bush presidential diplomacy reached its high point in 2007 with the presidents signing of the Memorandum of Understanding to Advance Cooperation on Biofuels in São Paulo (U.S. State Department 2007). Lula described the MOU in the pages of the Washington Post,¶ “We are launching a partnership to enhance the role of ethanol fuel in our countries’ energy mixes while moving to make biodiesel fuel more widely available. Simultaneously, we are creating opportunities to expand these programs onto the global stage (Silva 2007).”¶ The bio-fuel MOU recognizes the “strategic importance” of ethanol as a transportation fuel and proposes to unleash “a transformative force in the region to diversify energy supplies, bolster economic growth, advance social agendas, and improve the environment.” Although this agreement did not include biofuel trade liberalization between these two largest producers and consumers of ethanol, it did raise expectations that both nations were moving toward a partnership based largely on energy issues.¶ Upon his election in November of 2008, U.S. President Obama followed through on Lula’s vision by accelerating bilateral energy consultation and cooperation. In July of 2010 Minister of Mines and Energy Márcio Zimmermann and Secretary of Energy Chu signed an agreement to establish a U.S.-Brazil Bi-national Energy Working Group and Joint Action Plan to attain¶ “the mutual benefits of cooperation on a broad range of energy-related subject areas that will contribute to the individual, bilateral, and regional energy security, economic sustainability, and capacity to combat the effects of climate change(U.S. Department of Energy 2010).”¶ The working group is focused on five basic issue-areas, including: renewable energy, energy efficiency, oil and gas and coal, civilian nuclear power, research and development collaboration between each country’s research institutes. This cooperative effort may not lead to any strategic cooperation, but it does set up a collaborative process for better understanding each nation’s energy interests, related private sector activities, government policies and programs, and overlapping positions on global issues related to energy security and climate change.

Energy is a key issue for US-Brazil Relations


Langevin, 2012

[Mark, Ph.D., Director of Brazil Works and Mark is also Associate Adjunct Professor of Government and Politics at the University of Maryland-University College, Energy and Brazil-United States Relations A Discussion Paper, 8-20-12, https://docs.google.com/file/d/0B7MqlY1WLL8eZnJUNGxxZlpSQi1KcGRlYUlOeHRRZw/edit?pli=1] /Wyo-MB

Interestingly, the 2001 CFR task force did not mention the importance of energy as either a bilateral or regional policy priority. In sharp contrast, in 2011 the CFR composed another independent task force that issued the report, “Global Brazil and U.S.-Brazil Relations,” and asserted that “energy is and will remain a critical component of Brazil’s economic and political agenda, driven by rising per capita energy consumption, development of substantial domestic energy resources, and the need to expand existing energy infrastructure. Brazil’s investment in this industry is a primary example of its domestic and international agendas reinforcing each other. The United States and Brazil have common interests in improving energy efficiency, reducing carbon intensity, promoting the development of biofuels, expanding the use of natural gas, and managing offshore oil exploration and development(Council on Foreign Relations 2011:31).”¶ This most recent CFR report acknowledges Brazil’s noteworthy rise as a global power in the last decade and analyzes the multiplying importance of energy at the global, bilateral, and national levels of policymaking for both countries. In many respects, this CFR taskforce recognized and the Obama administration is carefully measuring Brazil’s newly gained geopolitical weight earned from the discovery of the massive, offshore pre-salt hydrocarbon reserves in 2006. There are other energy issues of mutual interest, but it is petroleum that now drives foreign policy discussions and offers the greatest challenges and opportunities for bilateral partnership.

Energy is uniquely key to the new relationship


Bodman et al 11

[Samuel W. Bodman and James D. Wolfensohn, ChairsJulia E. Sweig, Project Director, The Council on Foreign Relations (CFR) is an independent, nonpartisan membership organization, think tank, July 2011

Independent Task Force Report No. 66 “Global Brazil and U.S.-Brazil Relations”, http://www.cfr.org/brazil/global-brazil-us-brazil-relations/p25407?cid=emc-BrazilTF_pressrelease-taskforce-07_13_11, \\wyo-bb]

President Obama’s visit to Brazil in March 2011 heralded a new phase of the U.S.-Brazil relationship. With agreements that touched on a wide range of issues—including trade and finance, infrastructure investment, civil aviation, energy, labor, education, and social concerns— presidents Obama and Rousseff signaled to their respective countries that this bilateral relationship is poised to evolve into a robust and mature friendship among equals. Yet most of the concrete deliverables announced during the trip reflected only the low-hanging fruit of cooperation. If the United States and Brazil are invested in a serious and deepening relationship, their conversation must continue. As in U.S. relations with such powers as India, China, Russia, or Germany, frank and highlevel dialogue with Brazil will allow both countries to identify, acknowledge, and manage issues of potential disagreement, which should not destabilize the relationship in its entirety.


Energy is a key component to the relationship


Bodman et al 11

[Samuel W. Bodman and James D. Wolfensohn, ChairsJulia E. Sweig, Project Director, The Council on Foreign Relations (CFR) is an independent, nonpartisan membership organization, think tank, July 2011



Independent Task Force Report No. 66 “Global Brazil and U.S.-Brazil Relations”, http://www.cfr.org/brazil/global-brazil-us-brazil-relations/p25407?cid=emc-BrazilTF_pressrelease-taskforce-07_13_11, \\wyo-bb]

The Task Force finds that energy is and will remain a critical component of Brazil’s economic and political agenda, driven by rising per capita energy consumption, development of substantial domestic energy resources, and the need to expand existing energy infrastructure. Brazil’s investment in this industry is a primary example of its domestic and international agendas reinforcing each other. The United States and Brazil have common interests in improving energy efficiency, reducing carbon intensity, promoting the development of biofuels, expanding the use of natural gas, and managing offshore oil exploration and development. The Task Force applauds the formation of a bilateral Strategic Energy Dialogue, announced by Obama and Rousseff, to address a broad range of energy issues, including the safe and sustainable development of Brazil’s deepwater oil and gas resources, as well as cooperation on biofuels and other renewals, energy efficiency, and civilian nuclear energy. The dialogue aims to encourage energy partnerships, create jobs in both countries, make energy supplies more secure, and help address the challenge of climate change.17 The Task Force urges both countries to ensure that this initiative becomes a self-sustaining endeavor that brings together government officials, regulators, and the private sector to engage in conversation, cooperation, and collaboration where appropriate.

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