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Southern Cone energy crisis will hit regional integration

July 18, 2007

Even if the government of President Néstor Kirchner denies that Argentina is suffering from an energy crisis, some newspapers like Clarín are forecasting that the crisis will last to the end of September.   

Whether the government wants to admit or not that Argentina is suffering from an energy crisis isn’t the point. Any sensible analyst could tell from 2004 that the situation is untenable.

How are you going to fuel economic growth and not invest in proving up reserves and new infrastrcture like pipelines? It’s like driving a car on a freeway blindfolded.

A sign that matters are getting exceptionally worse is an annoucement by Chile’s Energy Minister Marcelo Tokman, who announced that the government will launch soon an energy savings plan that will be in force till 2010

The announcement is significant since it’s the first time the government of Michelle Bachelet has revealed such a plan. The last time a government made such a revelation was during the energy crisis of 1998-99.

One of the interesting questions that the energy crisis will leave Southern Cone countries like Brazil, Argentina, Paraguay, Uruguay and Bolivia is the blow it will have on regional integration.

Will Chile ever allow itself to be so dependent on another country for gas? What about Brazil and its gas imports from Bolivia? Uruguay?

The impact will be far-reaching and long-term.

2 Comments leave one →
  1. Silvana permalink
    July 29, 2007 5:04 pm

    I’m a student who bumped into your site while doing some online research on the role of energy in Chile’s relationships with its neighbors. I’m particularly interested in geopolitical considerations and have found your posts useful as I have no expertise in this field. Would you be able to refer me to any sources that deal with energy and geopolitics in Chile? Perhaps this is not a fair question, but any help would be appreciated.

    Many thanks!

  2. etessieri permalink*
    July 29, 2007 11:55 pm

    Hi Silvana, many thanks for your post. Historically you could start from the War of the Pacific and Chile’s relations with Peru and especially Bolivia after that war. As you know, Bolivia and Chile severed diplomatic relations in 1978 when negotiations to give Bolivia an outlet to the Pacific Ocean fell through after Peru objected to giving land that was formerly part of the country. Since Chile imports over 70% of its energy and Argentina has scaled back gas supplies, the country has to find new sources. Bolivia would be a natural choice but this isn´t possible because of the geopolitical conflict.
    Why don’t you give me a specific question? Many thanks.

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