But innovative uses must be found that promote energy efficiency, warn RCGI experts at FIESP Event

Brazil’s natural gas production is growing, especially after pre-salt petroleum wells went into operation. However, the domestic market is unable to use everything that is being produced in Brazil, mainly because Brazil still holds a contract for importing Bolivian natural gas, which will be in effect at least until 2019. In 2017, we reduced our imports of LNG; nevertheless, it is necessary to expand the use of this energy source on the domestic market, under penalty of having to speed up complex solutions of injecting natural gas into offshore rock formations or even wasting Brazilian gas by flaring.

In the opinion of experts meeting for the workshop “Innovative Uses of Natural Gas and Promoting Energy Efficiency in Industry”, which took place at FIESP at the beginning of March, the industrial market continues to be a mother lode for the expansion of gas usage in Brazil. In order for the expansion of the industrial consumption of natural gas to take place, it is necessary that industry, especially in São Paulo, come out of its recession and return to its growth pattern. Furthermore, researchers propose that innovative uses of natural gas be explored and, to that end, the suggestion is that the State of São Paulo take advantage of the so-called Local Productive Arrangements (LPA), as instruments for strategic and energy development.

Organized by the Brazilian Association for Installation Compliance and Efficiency (ABRINSTAL), with the joint support of the Regulatory Agency of Sanitation and Energy of the State of São Paulo (ARSESP) and Comgás, and by the FAPESP-SHELL Research Centre for Gas Innovation (RCGI), the workshop presented the results of a research project that proposed to find innovative uses for natural gas in three industrial sectors: tool and die, metal mechanics, and processed plastics.

“Like any other source of energy, the industrial consumption of natural gas floats according to the nation’s economic situation. It is now experiencing the dramatic effects of our economic situation: for two consecutive years there has been a drop of 3% or more in the nation’s GDP. The Brazilian economy has never shrunk so far, and that brings consequences, from the standpoint of energy consumption,” states Edmilson Moutinho dos Santos, Professor at USP’s Energy and Environmental Institute (IEE) and a researcher from RCGI. “However, in our studies, we also point out that there are more structural and more timely issues in the gas market. There are technological opportunities that are still barely exploited in Brazil and in São Paulo,” he adds.

According to Alberto Fossa, Executive Director of ABRINSTAL and coordinating researcher of RCGI’s Project 22, the conjunctural concerns are not the most important, at least within the scope of the project in question. “The economy is recovering with the beginning of a new growth cycle and the conventional natural gas market will resume. What most concerns us is that conventional consumption, in the medium and long term, is not enough to use the growing offshore production, after the entrance of pre-salt exploration. Production has greatly intensified and, historically, Brazilian consumption is not enough to absorb all the production. On the other hand, it is unlikely, at least over the next ten years, that we will become exporters. We do not seem to have a competitive calling to export natural gas. We need to find intelligent, innovative, and efficient domestic uses for it,” he states.

In order to get an idea of the situation, in less than ten years, São Paulo went from importing all of its natural gas to being a State that is self-sufficient in gas production. On a national scale, the revolution that we are seeing in São Paulo is equivalent to that seen in the global natural gas markets. While the world was preparing to export LNG to the United States, the Americans, with their consistent policies and with the use of much technology, took advantage of a favorable economic situation and expanded their own production of unconventional natural gas. In less than 10 years, the USA has totally transformed itself from possible importers of natural gas into potential exporters of natural gas, thus completely transforming the geopolitics of natural gas.

“Resolving the problems of São Paulo could be a good lesson for Brazil,” summarized the Undersecretary for Oil and Gas of the state of São Paulo. “The introduction of natural gas to the State’s power matrix is important from several perspectives and has been attempted for a number of years. At first, the difficulty of inserting it took place during periods in which doubt reigned regarding the continuity of the supply. So, importing was begun, which caused a bit of instability, but I think that the current reality – and even for several years, now – has shown that the supply is increasingly more secure.”

According to Carlos Lara, Manager of Technological and Operational Efficiency at Comgás, the company now distributes natural gas to the main São Paulo industrial segments. “We serve more than a thousand industries, which represent 66% of the volume of natural gas that we distribute. We are in all the main segments: chemical, ceramics, metallurgy, steel-making…. Besides industries, we also distribute to residences, stores, and the vehicle sector (VNG).”

Moutinho remembers that even before the economic crisis, the industrial gas market was already stagnated. “The stagnation of the last seven years had already shown us the need to open new windows and propose new uses in the industrial market itself. Resolving this challenge is a State and National problem. However, more than a problem, we actually see strategies for us to benefit from a huge opportunity for São Paulo and Brazil. A more intense and innovative use of natural gas will allow the country to move forward in its standards for industrial competitiveness, as well as in terms of energy and environmental sustainability. Actually, we are not talking about trivial strategies, because, besides access to technologies and long-term financial resources, driving the use of natural gas in Brazil equally involves logistical, energy, and environmental dimensions, in order to carry out a coherent public policy.”

Innovative Uses – Moutinho highlights the organization of São Paulo’s industries into APLs and states that we take little advantage of that type of organization. “APLs are productive arrangements formed by economic, political, and social players located in the same region. It is our understanding that, while focusing on the APL concept, a new growth cycle for the consumption of natural gas in São Paulo’s industries is feasible, but it is necessary to face economic, technological, and socio-cultural barriers. The advantage of thinking in terms of productive arrangements is the pursuit of synergy, above all for the distributors, like Comgás. This is a change in focus from supplying a single company/client to supplying an entire sector, which includes partner companies and in which the technologies, the information, and the best practices can spread more easily.” Taking into account the APLs and the innovative uses of natural gas in the industrial sector, he says it is possible that natural gas will play an important role in the nation’s stronger industry competitiveness.

Alexandre Gallo, a researcher for the IEE e RCGI, mapped out the innovative uses that natural gas could have in the three sectors under study. To that end, he evaluated the final use of energy in these industrial sectors. “In the plastic processing sector, the thermal demand (heating and cooling) is responsible for approximately 30% of the energy use, while the demand for a driving force is responsible for 60%. In the metal-mechanics sector, the thermal demand (heating) accounts for 60% to 70% of the energy use, and the demand for a driving force accounts for 30% to 40%. And in the tool and die sector, the thermal demand (cooling) is less than or equal to 15%, while the demand for a driving force is less than or equal to 70%.”

“It is important to look at thermal demand in the two types of processes – heating and cooling – where there are numerous electrical solutions present in the industry, which could be substituted by gas solutions. It is also interesting to observe the driving force in conjunction with the need for thermal demand. I pored over the idea of integrated opportunities: take a look at an industrial plant – or even an APL – and understand in an integrated manner how energy demands can be met.”

In the plastic processing sector, for example, he sees possibilities in both local activities and in integrated proposals. “The adoption of a central heating system, for example, permits meeting thermal demands by substituting specific distribution units by a distribution structure coming out of the center. Another proposal is the use of radiant burners running on natural gas, rather than electricity, which is an opportunity that is also found in the metal-mechanics industry, as is the substitution of electric chillers in refrigeration systems, by an absorption cycle system running on natural gas.

With regard to integration, one of the possibilities is in using natural gas motors to activate air compressors, with heat recovery. Instead of activating electric generators and afterwards feeding electric chillers, the idea is to make use of compressed gas to meet the demands for a driving force and the heat recovered from the motors will supply the cooling systems.”

The use of compressed gas is also proposed in the industrial tool and die complex, where the demand for cooling is mainly met by electric chillers. Gallo adds that, although these processes can be more efficient, in terms of taking advantage of and using energy where, in the end, they result in a savings for the business owner, we still do not see a large movement from electrical systems to gas systems. “The main obstacle is the unfavorable capital cost. The scenario is reverting a little, now, but the high capital cost discourages investments, especially when the investment is in an already existing plant that will have to be converted. When dealing with a new plant, it is more feasible.”