Brazil natural gas sector faces regulatory shifts over fracking and competition

Brazil's natural gas sector is facing significant regulatory shifts regarding competition and extraction methods. The Petroleum, Natural Gas and Biofuels Commission of the OAB-RJ has requested that the Superior Court of Justice (STJ) resume and conclude deliberations on the legality of hydraulic fracturing, or “fracking”. The commission argues that federal authority should prevail over state and municipal bans on the practice, asserting that mineral resources belong to the Union and that environmental risks should be managed through the standard federal licensing process.

Simultaneously, the National Agency of Petroleum, Natural Gas and Biofuels (ANP) is conducting a public consultation on a “Gas Release” program. This initiative aims to reduce market concentration by making gas controlled by Petrobras available to other participants through auctions. Petrobras has expressed opposition to the proposal, arguing that the market is already competitive with its 56% share in the non-thermoelectric gas market. The company also contends that the move does not increase physical supply and could weaken incentives for long-term infrastructure investment due to regulatory uncertainty.