Howard's End: Waiting For Rain In Brazil

Brazil is facing an unprecedented energy crisis as a result of severe drought with banks estimating that for every 10 percent of energy cutbacks, industrial production falls by 7.7 percent. Maree Howard writes.

With a record setting drought already forcing the Brazilian government to order 20 percent across-the-board cutbacks of electricity consumption in the most populated three-quarters of the country, analysts are forecasting that if rain does not restore the water levels behind the hydro dam reservoirs, the November deadline will have to be extended.

But a Parliamentary Investigatory Commission has heard that foreign funded environmental groups stopped investment in hydroelectric projects in Brazil which would have added up to 12,000 megawatts in new capacity.

The Commission was told that eighty-five percent of financial resources of Brazilian environmental groups comes from foreign foundations, corporations and governments along with fifty-one percent of the budget of the Brazilian government's own Environmental Ministry.

An angry Senator Gilberto Mestrincho ( PMDB Amazonas) responded to the Senate Journal saying that with the current energy crisis, the environmental groups got what they wanted: to stop the growth of Brazil.

A full-blown Parliamentary investigation is now underway.

In trying to avoid rationing by rolling blackouts, the Brazilian government has adopted a plan to force consumers to cut back use by imposing California-style increases in electricity prices for those who fail to conserve.

Households must reduce their electricity consumption by 20 percent from their average usage of last year; industries by 15 - 25 percent depending on the industry.

For now, there will be no general blackouts and those who consume no more than 200 kilowatt-hours a month will not pay a higher price.

However, anyone consuming 201 to 500 kwh a month, will pay a 50 percent surcharge, while those consuming more than 500 kwh a month, will face a 200 percent surcharge on their electricity bills.

Financial incentives are offered to those who cut their consumption by more than 20 percent.

But consumers who fail to reach their targeted cuts will have their electricity completely cut off for three days and repeat offenders will suffer up to six-day mandatory cuts to supply.

Lawsuits against the plan have already been filed by everyone from consumer and homemaker associations to the Brazilian Lawyers Association. Labour unions, staring mass redundancies in the face, have also announced protest actions.

And global energy giants linked to oil and energy-man US President George W. Bush, have positioned themselves to make a killing on the catastrophe, according to Brazil's Valor Economico.

The paper noted that Enron and El Paso Energy are situated "to benefit greatly from the energy shortage ravaging Brazil" when they start up two Brazilian thermal generating plants next month that will sell into the wholesale energy market.

"Higher profits from these plants are expected," Valor said.

Enron is a company close to the hearts of the Bush family with several top-level officials of the former President Bush Snr administration working for Enron either as officers or consultants with George Snr himself, collecting numerous lucrative speaking fees from the company. Enron also financially supported Dubya's presidential bid.

Texas-based Reliant Energy, who has former President Bush Snr's Secretary of State James A. Baker III on its board, charged California $1,900 per megawatt hour for electricity in May this year - power the State urgently needed to avoid blackouts.

California Governor, Gray Davis, publicly accused Reliant Energy of price-gouging.

Brazil is in deep trouble and the cuts in energy use are looking like a 15 -16 percent overall plunge in industrial output. Coupled with an outbreak of foot and mouth disease across Brazil, Argentina and Uruguay, the South American continent is in dire straits.

Meanwhile, faced with the spectacular failure of deregulation in California, Massachusett's, Pennsylvannia, Brazil, Australia, and New Zealand the deregulation mafia has been working overtime looking for someone to blame for not making the politicians fully deregulate.

Now, some global energy companies are also pushing another insanity designed to separate the public from its money.

It's called "negawatts."

They are promising to set-up auctions in which people can auction-off their unused energy by selling the electricity they would have used in their factories if they shut down production or close the factory.

This means that a company who owns an aluminium smelter, for example, could shut down production, selling the electricity they would have used in their smelter for a tidy profit.

The energy guru's are absolutely determined to keep jacking-up energy prices through deregulation, and now, there is the "negawatt" scam to convince people that deregulation will somehow put money back in their pockets.

But the only ones getting rich are the energy generating companies, their Wall Street and City of London financial controllers and the politicians they keep on tap in their back pockets.

Our government could solve the electricity problem in New Zealand tomorrow by allowing new hydro dams already on the drawing board to proceed. They will take time to complete but unless our politicians have a direct order to God for rain each year, the scenario we face today will be repeated.

I wouldn't like the public to have a perception of bad or no planning as part of my legacy if I were Energy Minister Pete Hodgson.

But then, the Government owns the major SOE power generators already, and as old John D. Rockefeller said, "Competition is a Sin."

Don't look for a political solution to our energy problems anytime soon.

ENDS

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