UPDATE - Brazil Amazon Gas Pipeline Work to Start in January
Date: 08-Dec-04
Country: BRAZIL
The center-left government of President Luiz Inacio Lula da Silva is building the 383 km (240 mile) pipeline from the town of Coari to Amazonas state capital Manaus to drive economic growth and development among the 20 million people who live in Brazil's Amazon region.
"This gas pipeline is a mandatory project to guarantee energy supply," Sven Wolf, head of Petrobras' oil and gas production in the Solimoes River area, told reporters visiting the company's Urucu gas and oil extraction plant 650 km (404) miles southwest of Manaus.
Environmentalists say the project to replace the use of diesel in Manaus electricity production should provide cheaper, cleaner energy but fear it could accelerate deforestation and harm communities unless carefully managed.
"Unless Petrobras makes terrible mistakes, it's controllable," said Roberto Smeraldi, director of Friends of the Earth in Brazil. "Of course Petrobras' history is full of terrible mistakes."
Petrobras is Brazil's record holder for environmental fines. But the company has made the Urucu plant a showcase for efforts to clean up its act after a huge oil spill in Rio de Janeiro's Guanabara Bay and pollution of two rivers in southern Brazil between 2000 and 2003.
Wolf said the Coari-Manaus pipeline, which extends an existing Urucu-Coari pipeline, would have safeguards to avoid bringing prostitution and disease to local communities and to minimize deforestation. The safeguards will raise the project cost by 5 percent to $430 million.
The project will be 20 percent financed by Petrobras and 80 percent by other investors.
Petrobras will give $15 million to Amazonas state to compensate seven local communities affected by the pipeline, which is due to be completed in December 2006.
The aid, allocated for health, sanitation and small businesses, will be supervised by 50 organizations in an effort to prevent misuse of funds.
Construction of a more controversial natural gas pipeline from Urucu to Porto Velho in Rondonia state has yet to be granted an environmental permit.
Environmentalists fear the proposed 522 km (324 mile) pipeline through the heart of the Amazon rainforest could open up the jungle -- home to 30 percent of the planet's animal and plant species -- to illegal logging, settlement and mineral extraction.
Petrobras expects the project to gain approval from Brazil's environmental agency Ibama and work to start in 2007, said Ken Wheeler, marketing manger for the Solimoes River area.
"We are aiming at January 2007," Wheeler told reporters.