NotiEn - A Newsletter on Energy Policy Issues in Latin America
February 24, 2011Vol 2, Issue 5

Debate and concerns surround Chile's Gas Industry & Belize's Oil Boom

A NOTE FROM THE EDITOR

This issue of NotiEn examines two types of disputes related to energy resources, one that deals with natural-gas subsidies in Chile and the other with control of an area of land with potential crude-oil reserves on the border between Belize and Guatemala.

 

Correspondent Benjamin Witte-Lehbar writes that the Chilean conflict involves a disagreement between the residents of Magallanes, an area of southern Patagonia, and the state-owned Empresa Nacional del Petróleo (ENAP) regarding government subsidies that keep natural gas affordable for the residents of the frigid region.Magallanes residents say the low gas prices are logical given that the fuel--because it is extracted and consumed locally--costs far less to produce and deliver than does gas imported from abroad. 

 

ENAP argues that the subsidies make less and less business sense, particularly because they scare off the would-be investors Chile needs to fund further exploration and thus guarantee a future supply of the raw material.

 

The dispute has created political headaches for first-year President Sebastián Piñera, a billionaire capitalist who is finding out the hard way that dictating energy policy is anything but business as usual.

 

According to correspondent Louisa Reynolds, the potential Guatemalan-Belizean conflict stems from Belize's decision to grant four oil contracts in a border area known as the Adjacency Zone, which extends one kilometer on either side of the 1859 treaty line.During the past two years, Belize has granted 17 oil-exploration contracts--four in the Adjacency Zone--to a wide range of US, British, Irish, and Taiwanese corporations.

 

Guatemalan Foreign Minister Haroldo Rodas admits that there are no legal impediments for Belize to grant oil-exploration licenses in the border area but says that Belize's activities cast doubt on its will to preserve a peaceful relationship with Guatemala as stated in a treaty signed by the two countries.

 

Carlos Navarro - Editor   

In This Issue...
A Note From the Editor
Chile's Tiny Gas Industry a Big Problem for President Sebastián Piñera
Belize's Oil Boom Threatens to Escalate Border Dispute
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Chile's Tiny Gas Industry a Big Problem for President Sebastián Piñera
By Benjamin Witte-Lebhar 
Although it represents just a small slice of the country's overall energy pie, Chile's minor Patagonia-based natural-gas industry is causing major political problems for first-year President Sebastián Piñera, a billionaire capitalist who is finding out the hard way that dictating energy policy is anything but business as usual.

An anomaly in Chile's otherwise privatized energy sector, the state-owned Empresa Nacional del Petróleo (ENAP) extracts a modest amount of natural gas from oil fields it controls in Magallanes, an area of southern Patagonia also known as Region XIII. The homegrown industry is an exception in Chile, which satisfies the bulk of its fuel needs with foreign imports. In the country's more populous central regions, natural gas--used not only for heating and cooking but also for electricity production--comes from overseas in liquid form or through pipelines from Argentina, which has drastically reduced gas exports to Chile in recent years.

But while the small domestic-gas industry may be of little benefit to the bulk of Chile's 16 million residents, most of whom are crowded in the country's central regions, it has proven to be a real blessing for the estimated 160,000 southerners who call frigid Magallanes home. Read more... 

 

Belize's Oil Boom Threatens to Escalate Border Dispute
By Louisa Reynolds 
Belize's decision to grant four oil contracts in a border area known as the Adjacency Zone, which extends one kilometer on either side of the 1859 treaty line, could reignite tensions with
neighboring Guatemala.

During the past two years, Belize has granted 17 oil-exploration contracts--four in the Adjacency Zone--to a wide range of US, British, Irish, and Taiwanese corporations.

"Right now, the only corporation actually producing oil is BNE [Belize National Energy]," says André Cho, director of Belize's Geology and Petroleum Department. RSM Production Corp. drilled two wells in the Orange Walk area, but they turned out to be dry. Meanwhile, French corporation Perenco Limited is about to undertake seismic studies close to Orange Walk.

During the next two years, the Chinese Petroleum Corporation (OPIC), a Taiwanese state owned corporation, will begin to drill for oil below the ocean. In Toledo, in southern Belize, US Capital is planning to carry out further seismic studies and has been granted a 40-km area in the Sarstoon National Park, in the Adjacency Zone. "They haven't started drilling yet", says Cho. Read more...

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Energy Policy, Regulation and Dialogue in Latin America

 

NotiEn is an original newsletter with breaking news that analyzes and digests relevant and contemporary information in energy, alternative energy and energy policies in Latin America. A complimentary service provided by the University of New Mexico as part of LA-ENERGAIA Project funded by the US TICFIA Program