Mexico’s 2013 energy reform has led to pledges of almost $200 billion of private investment and renewable power auctions garnering bids to provide electricity at record-low prices. The Mexican government should continue to build on the successes of the reform, César Hernández, former Mexican undersecretary for electricity, and Jorge Castilla, managing director for Mexico at Accenture, said at an event hosted by the Inter-American Dialogue, the Embassy of Mexico, and the Energy Policy Research Foundation.
2018 has been a year marked by great political uncertainty for Latin American energy markets. Oil prices are up, creating strong incentives for investment, rising US natural gas exports are creating a new source of flexible, cheaper energy for Latin American consumers, and the cost of wind and solar energy is declining dramatically. However, Latin America continues to face uncertainty in energy policy as new governments take office in many countries and geopolitical tensions between the US and China are on the rise. With many questions on the table, government officials, corporate representatives, and analysts gathered on October 25 at the Inter-American Dialogue to assess the future of energy policy in the Western Hemisphere.
The next few years will see a major shift in the hemispheric natural gas trade, as increased US LNG exports increasingly displace volumes from other exporters.
The government of Neuquén—Argentina’s top oil and gas producing province and home to the country’s huge shale play Vaca Muerta—is implementing a detailed plan to eliminate barriers to hydrocarbon development, Governor Omar Gutierrez said at an Inter-American Dialogue panel discussion. This includes facilitating equipment imports by removing customs tariffs, gradually eliminating consumer subsidies for natural gas, and signing a new labor agreement between the provincial government and labor unions.
The less than 3 percent of Colombia’s population that lacks electricity lives mainly in areas of the country that have long been controlled by the FARC and other armed groups, such as Chocó in the Pacific, La Guajira on the Caribbean coast, and Putumayo in the Amazon. Not coincidentally, Colombians without access to electricity also have higher rates of poverty, fewer basic public services, and lower education levels than the rest of the country.
Latin America faces many challenges in developing its energy resources and providing clean, affordable and reliable energy. With presidential elections in Brazil, Mexico and Colombia next year, there is considerable uncertainty about future energy policy, as potential candidates in these countries have presented widely varying energy and economic policy platforms.
As Latin America moves towards reducing greenhouse gas emissions and fulfilling its Paris commitments, it must also work to meet rapidly growing electricity demand, which is projected to almost double by 2040.
Lisa Viscidi, Director of the Energy, Climate Change and Extractive Industries Program, testified before the US House of Representatives Committee on Foreign Affairs on the subject of “Energy Opportunities in Latin America.”
Mexico’s energy reform has led to a remarkable boost in investment, and the expected increase in the country’s crude oil production will strengthen energy security not only for Mexico but also at the regional level.
Cuts to Washington’s energy engagement could undermine the connections that help support U.S.–Latin American cooperation on issues from security to immigration. When it comes to weakening energy integration in the Americas, there are few winners.
President-elect Donald Trump has vowed to overhaul US energy and foreign policy in ways that could have important impacts on energy relations with Latin America and the Caribbean.
Latin America faces some of the toughest obstacles to halting energy emissions, but many countries in the region also have among the best opportunities to reach climate goals.
Given their close proximity to the United States, LAC countries are well-positioned to capitalize on the surplus of US gas exports and current buyer’s market.
The surge in US natural gas production as a result of the shale boom has implications for gas and LNG markets all over the world.
High electricity costs are a critical impediment to economic growth and competitiveness in Central America and the Caribbean.