The limits of rapid growth

ARTICLE: “Scarcity in the midst of surplus: Thanks partly to ethanol from sugar cane, Brazil aims to be an energy superpower. But can it keep its own lights on?” The Economist, 18 August 2007, p. 31.

Brazil, doing well on fuel for cars, facing electricity shortages because it relies so heavily on hydroelectric generation by dams and that’s weather dependent, with dry years leading to shortages.

Big near-term alternative is local gas from Bolivia, but there you have Evo Morales nationalizing that industry, which means FDI will stay away, other than the bucks coming from Chavez. So harder to keep expanding production as currently promised in deals with Brazil and Argentina.

Meanwhile, Morales and Bolivia are pissed about plans for more dams, saying it will raise water levels in Bolivia to bad ends (more disease, etc.).

Tricky business for Brazil, huh? You start developing and pretty soon you start running into the same dynamics that other advanced countries have long had with energy providers.