The new Royalties Law and regional challenges

Suddenly, out of the blue, they discovered that the NSA (National Security Agency) spied on Dilma, her ministers, and Petrobras. "Security issues," said Obama. Issues of business strategy, money, and profit, I maintain.

It's unknown for how long, but oil remains one of the planet's greatest sources of energy and wealth. We live in Brazil's largest oil-producing region, a relatively wealthy region for that reason. It's unknown for how long.

Our region went many years without receiving royalties. Petrobras arrived in Macaé in the 70s. But it wasn't until 1986 that the royalties started to arrive, still timidly. And only at the end of the 90s, almost 20 years after the beginning of the impact – rampant population growth, almost entirely with unskilled labor; urbanization of new areas; heavy truck traffic; demand for more and better public services; traffic; violence; etc. – did the Special Participation fee arrive for the municipalities where the oil and natural gas extraction operating bases are located.

The trend would have been for the oil in the so-called Campos Basin to run out in a few years. But then the pre-salt layer was discovered, and we gained a reprieve. Even so, the National Congress voted and President Dilma Rousseff signed the law that removes a large portion of the royalties from the producing municipalities and distributes them to all municipalities in Brazil, theoretically for health and education.

If Brazilian oil is strategic for the future of the US, what about for our region? And what have we done, with our intelligence, to survive with quality of life and prepare for the future?

Macaé, today, is less dependent on royalty revenue and has managed to improve the use of its own resources with higher tax collection such as property tax (IPTU) and service tax (ISS). It was once the best city in the region in terms of quality of life. Currently, that position belongs to Rio das Ostras, the closest neighboring municipality, which has had less impact, although according to the IBGE (Brazilian Institute of Geography and Statistics) it was the fastest growing in Brazil in the last decade, often functioning as a commuter town for those who work in Macaé, but which has known how to take advantage of resources by investing in having 100% of the municipality with treated sewage or in tourism and culture, creating the Jazz & Blues Festival, for example.

Meanwhile, the RJ-106, the Amaral Peixoto highway, which connects Rio das Ostras to Macaé, despite numerous promises from the State Government, has still not been widened to a dual carriageway, thus hindering the flow of goods used by the onshore and offshore industries and improving the quality of life for the people who face monstrous traffic jams daily and whose right to freedom of movement is violated. The light rail system that Macaé attempted to implement would be an excellent transportation option, not only for the city but for the entire region.

What real actions have municipalities like Carapebus, Quissamã, Casimiro de Abreu, and Campos taken for their strategic development? And how do we interact in a network that can guarantee life and the regional economy today and in the post-oil era?

An important role for the Organization of Oil Producing Municipalities (OMPETRO), currently chaired by the mayor of Campos, Rosinha Garotinho (PR), would be to organize a strategic discussion group on the challenges and potential of our region. This group would then lead to an urgent action group.

What are the competitive advantages of each city? What are the strengths of each municipality? Where to invest? Tourism? Culture? Infrastructure? Education? Technology? Health? How to create hubs where each citizen has access to the best of each sector in their city and neighboring cities, increasing and improving the flow of people, growing the economy, and preparing us for an uncertain future?

Strategic planning is the foundation of everything. Without it, you get nowhere but chaos. We will be eternal firefighters, and in the end, only ashes will remain. This may happen in your lifetime and mine, in the lifetime of our children or grandchildren, but one thing is certain: oil will not last forever.

Either our leaders start preparing now, since a reduction in royalty revenues is already certain as the exploration curve leans more towards the pre-salt than the post-salt; or we will be doomed to a sad fate. This is my appeal. Time will tell.