Launched last May 25, in the São Paulo State Legislature, the Parliamentary Support Group for Natural Gas unites players from the sector and showed the inadequacy of São Paulo’s legislation on the subject

Representatives of the three natural gas distribution companies active in the State of São Paulo (Comgás, Gás Brasiliano, and Gás Natural Fenosa), of the Regulatory Agency for Sanitation and Energy of the State of São Paulo (ARSESP), of the State Department of the Treasury, of the Paulista Association of Ceramic Coating (ASPACER), of Vehicular Natural Gas (GNV), among other institutions interested in the subject, met at the São Paulo Legislature for the launch of the Parliamentary Support Group for Natural Gas (FGAN), on May 25.

On that occasion, the entities committed to setting up a positive agenda for energy in the State of São Paulo. Professor Júlio Meneghini, Scientific Director of the FAPESP-Shell Research Centre for Gas Innovation (RCGI), was present for the launch. The date for the first meeting of the FGAN was set right away, for the following June 27, and shall organize working groups to study the various aspects of natural gas in São Paulo.

The FGAN is coordinated by Representative João Caramez (PSDB) and has been joined by more than 30 Representatives from different parties. Caramez opened the launch event by presenting the leadership, composed of Antônio Henrique Costa Gross, Executive Manager of Institutional Relations of Comgás; Walter Fernando Piazza Jr., CEO of Gás Brasiliano; Bruno Ambrust, President of Gás Natural Fenosa; Eduardo Almeida Mota, Adjunct Director of the State Department of the Treasury; and José Bonifácio de Souza Amaral, Director of ARSESP.

The Representative stressed the quality of transitional fuel for natural gas, and its role as an instrument for competitiveness and stated that natural gas reserves and technological advances present a great alternative for countries that historically export energy sources to become self-sufficient. He also said that it is necessary to update State’s legislation regarding natural gas and discuss taxation issues.

“The State of São Paulo, with its enormous potential for production in the Santo Basin (Bacia de Santos), requires the efforts of lawmakers and representatives of agencies from the government and society in order create an environment that stimulates investments and large-scale availability, as well as expansion, thus generating jobs, wealth, and tax income.” According to him, natural gas needs to be seen as an instrument for social-economic development, as an essential fuel that induces competitiveness for São Paulo’s industry.

Eduardo Almeida Mota, Adjunct Director of the State Department of the Treasury, emphasized that the concern of SEFAZ is to fight for fair taxation. “Natural gas will be taxed, one way or another. Today, we deal with legislation that was created within the context of 1960. It did not provide for the new forms of commercial transactions that we now have. There is a difference between the physical flow of natural gas and the legal flow. We set up a working group that is active at CONFAZ and has been in discussions for two years, but has not yet arrived at a consensus regarding how the legislation will be adapted,” he said, adding that it is necessary to call the players into the discussion, think through a new form of taxation, raise the awareness of the Governor of the State, and take the subject to the Federal level.

Market – The representatives of the three concessionaires for distributing natural gas made brief presentations regarding the services provided by each one and listed the challenges and opportunities for the São Paulo natural gas market. “It is important that a market be developed to take to the distribution systems. It is the development of the market that makes the distribution systems expand. The regulatory agency of the State of São Paulo very aptly established prudent investments: the distribution systems that pay their own way, where the system is viable, should be expanded. And in order to develop that market, Gás Brasiliano has done extensive prospecting and research,” stated Walter Fernando Piazza Jr., CEO of the company.

He emphasized that, due to the fact that the company’s concession area is in a sugar cane region, he has worked intensively for the use of natural gas in the sugar energy sector. “The potential natural gas consumption is estimated to be 7.1 million cubic meters per day in this sector alone. That is the drive behind the natural gas industry in northeastern São Paulo, which is the area that we serve. What’s more: this sector leaves a residue, called “vinasse”, from which we can produce biogas, or biomethane, which is used just like natural gas. Our area has the potential of generating 5 million cubic meters of biomethane per day. And that is a totally renewable fuel that can be injected into the natural gas system.”

Piazza Jr. states that, among the R&D initiatives of Gás Brasiliano, there are projects that use biomethane in hybrid electrical plants (where natural gas makes energy production possible) and also use natural gas as the fuel for the trucks that take the sugar cane to the mills, as well as projects with the ceramics industry (substituting electric ovens), shoe manufacturers, and others.

Antônio Henrique Costa Gross, from Comgás, called attention to the fact that Brazil has already reduced the use of fuel oil by 50% in the States that have industrial capacity. “In São Paulo, that reduction is now 90%. Today, only isolated industries burn fuel oil. The others are burning natural gas. All of this is equivalent, in avoided CO2 emissions, to 20% of what was established by the State Policy on Climate Change (PEMC).”

According to Bruno Ambrust, President of Gás Natural Fenosa, which is active in a region of the State that is responsible for only 4% of the GDP and covers 25% of the State’s territory (including the Ribeira Valley-Vale do Ribeira), taking natural gas to all of the cities in his region implies improving the legislation with regard to the so-called “virtual gas pipe lines” (trucks that carry compressed natural gas). “We believe that setting deadlines so that you can arrive with a gas pipe line at a given municipality is a barrier. If it’s not viable, it will be a burden to the system. In the past, we didn’t have the GNL and GNC technologies that exist today, therefore you could only arrive with a conventional gas pipe line. Today, they allow loading large quantities of liquid and compressed gas. And without impacting the cost, because there is no investment in gas pipe lines,” he says.

New Technologies – Julio Meneghini, Scientific Director of the RCGI, reiterated that the role of the Centre is to help make possible the very high production potential of the Santos Basin. “We have to put that natural gas on the market. Therefore, I would point out, among our 29 projects, those whose objective is to separate the CO2 from the CH4 molecules. We are developing filtering membranes, on a molecular scale, that function as sieves to filter out the CO2. And also a supersonic separator that would care for this separation by using the thermodynamic properties of the gases, via a device where carbon dioxide is condensed out. These are important technologies, because the natural gas coming from pre-salt wells is rich in CO2. But we don’t need CO2, not even of other gases: just methane.”

He also emphasized the potential of natural gas to generate clean energy, even though it is a fossil fuel. “Of all the fossil fuels, natural gas is the most apt for generating clean energy, energy with an emissions balance of zero. All you need to use is such new technologies as CCS, for example. The Parliamentary Group needs to have all of these perspectives and possibilities in mind. The RCGI will help the work of the FGAN wherever necessary, in terms of the technical-scientific and logistics parts.”