Video
Brazil has vast oil reserves, but can the Bolsonaro government get the energy to market? Lisa Viscidi tells Richard Miles of CSIS that reforms are already in place that will enable oil production “to take off.” The real obstacles are the financial stability of Petrobras, the shaky state oil conglomerate, and the monopoly that the state has on most aspects of energy production, delivery, and even retail sales.
Revitalizing Brazil’s energy sector will be key to Jair Bolsonaro’s success as president – but so far, he’s had mixed results when it comes to getting reforms through Congress. Unless Bolsonaro learns to work with legislators and ease turbulence within his government, Brazil’s missing energy reforms will continue to threaten its economy, and its politics.
Just as Pemex bonds suffered a downgrading to junk status by Fitch, Lisa Viscidi, director of the Energy Program, sat down with Nathaniel Parish Flannery of Forbes to discuss the state of Mexico’s energy sector, including oil and gas, regulators, and renewables, seven months into the AMLO administration.
Video
The development of energy resources is an integral component of many of Latin America’s economies, from established producers like Colombia and Brazil to newcomers to the global energy market like freshly oil-rich Guyana. However, policymakers and energy companies throughout the region must devise solutions to a variety of fiscal, political, social, and environmental hurdles to ensure successful and sustainable projects, explained speakers at an Inter-American Dialogue event on May 10.
Regulators and private companies will continue to play important roles in the development of Mexico’s energy resources despite President Andrés Manuel López Obrador’s focus on strengthening state-owned companies and enhancing “energy sovereignty” by reducing dependence on energy imports from the United States. This was the key message from speakers at “La nueva política energética de México,” an Inter-American Dialogue event in Mexico City.
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.
Video
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.
Video
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.
Video
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.
