Full Cost Analysis of Energy Transport Modes in Sao Francisco River Basin in Brazil - A Case Study

Abstract

With the beginning of unconventional exploration and exploitation of natural gas in Brazil, the question of how to transport the product is concerned. Being the transport an essential part to supply energy to consumers, to move towards energy efficiency one should seek sustainability in the logistic process from the production until delivery at final destination. The objective of this study is the regional assessment of two transport modes for natural gas: by pipeline or as secondary energy in the form of electricity. Since society no longer accepts development at any cost, to determine the best mode of transport three other factors have been added to the techno-economic factor, which are environmental and social impacts, and political risks, defining specific methods to internalize externalities. The full cost analysis considers the four factors under a balanced importance degree for planning towards sustainability. A case study deals with the energy transport (natural gas and electricity) to meet consumer markets in the state of Minas Gerais, between exploratory gas fields at Sao Francisco river basin. The research method employs the most relevant elements of analysis within the four dimensions, assigning specific valuations according to transport mode particularities and providing the best product transportation mode. To attend the region demand for energy, full cost analysis points to energy transport in the form of electricity as the best alternative.