- 2004 Argentine energy crisis
The Argentine energy crisis was a
natural gassupply shortage experienced by Argentinain 2004. After the recessiontriggered by the economic crisis and ending in 2002, Argentina's energy demands grew quickly as industryrecovered, but extraction and transportation of natural gas, a cheap and relatively abundant fossil fuel, did not match the surge.
According to estimates, 50% of the electricity generated in Argentina depends on gas-powered plants. The national energy matrix has no emergency reserves and by 2004 it was functioning at the top of its capacity. At this point, barely emerging from the seasonal low demand caused by summer, a large number of industrial facilities and power plants started suffering intermittent cuts in their supply of natural gas. Between February and May the cuts amounted to an average of 9.5 million m³ a day, about 13% of industrial demand, and by the end of May they grew to a maximum of 22 million m³. The most seriously affected regions were the capital, certain regions of the province of Buenos Aires, and the province of La Pampa.
As winter approached, the Argentine government announced that it would restrict natural gas
exports in order to preserve the supply for internal consumption, both domestic and industrial, in compliance with the Hydrocarbons Law. These export cuts would seriously harm Chileand affect Uruguayand Brazil.
The Chilean Minister of Economy and Energy, Jorge Rodríguez, warned Argentina that supply contracts with Chilean companies must be fulfilled. This caused a mild diplomatic crisis. Chile imports more than 90% of its natural gas from Argentina and depends heavily on it to generate electricity; it has shifted the focus from
coaland oiltowards gas, and had five gas pipelines built for the specific purpose of getting gas from Argentina.
The energy crisis was blamed on a number of factors. Former Argentine President
Néstor Kirchnerattributed it on lack of investment on the part of the private companies that exploit the resource (such as Repsol YPF), and the concomitant lack of pressure from past governments on those companies.
The private corporations contended that their profits after the collapse of the Argentine economy were severely hurt by the freezing of domestic and industrial fees since 2002. Natural gas remained at the same price during the
inflationary process caused by the devaluationof the Argentine peso, while the prices of gasolineand dieselwere adjusted upwards, which increased the demand for gas as a cheap alternative fuel and at the same time discouraged its production. In addition to this, a larger part of the supply of natural gas was required to compensate for a smaller yield of hydroelectricity.
The exporters complained that heavy export tariffs compounded with the price freezing and prevented them from investing on more surveyance and further exploitation, thus leaving them unable to keep up with demand. However, the government and critics of the neoliberal model of the Menem administration point out that the privatized companies obtained huge profits during the
In order to diminish the impact of the crisis, three measures were suggested: buying natural gas from
Bolivia, which has abundant reserves of it; directly buying electricity from Brazil, which generates a large part of it using hydroelectric power plants; and importing oil from Venezuela.
For historical reasons, Bolivia would not sell natural gas to Chile. Moreover, it lacks the infrastructure to convey it. A projected gas pipeline that would transport massive amounts of gas to Argentina was delayed by the critical political situation in Bolivia during
2003. Moreover, some people and organizations in Bolivia have expressed strong disagreement about the idea of exporting gas, calling the energy crisis "a fiction".
The Venezuelan Chávez administration, which is politically close to the Argentine government, signed energy accords that including sending
fuel oiltankers to Argentina at reduced costs, through PDVSA (the Venezuelan state oil company). Fuel oil (imported or otherwise) is, in any case, considerably more expensive than natural gas.
In addition to industrial supply, Argentina employs
Compressed Natural Gasfor stoves, ovens, etc., and as fuel for over 1.4 million natural gas vehicles. While the possibility of restricting domestic usage was considered, it was deemed unnecessary and disruptive.
Argentina's lack of energy independence due to the full privatization of the fossil fuel market into an
oligopolywas noted as a major cause of the crisis. The national government reacted by creating a new oil company, Enarsa, with 53% of state control and full exploitation rights over offshore areas.
As 2004 passed with no major disruptions, some people claimed that the so-called "energy crisis" had in fact turned out a minor complication, inflated by the government and the media. In a broader context, though, it is still true that investments on exploitation of energy resources, as well as energy production and distribution, are insufficient. In March 2005, President Kirchner admitted that "for a long time the possibility will remain that we must move on the brink
[of a crisis ]". However, the government also pointed out that remedies are on the works, and that Argentina is better prepared than in 2004 to face problems with energy generation.
In the meantime, fuel oil supply from Venezuela has continued, amounting to 50 million
tonnes sent in two ships (in April and May) by PDVSA, in a coordinated effort with the Brazilian oil company Petrobrasand the Electrical Market Management Company of Argentina (Cammesa).
Analysts and officials, such as former President of Uruguay
Jorge Batlle, have remarked that a full-fledged protocol for energetic integration of Mercosurshould be outlined and brought into action as soon as possible to coordinate energy production and distribution in the region.
"In Spanish unless otherwise noted."
* [http://news.bbc.co.uk/hi/spanish/business/newsid_3573000/3573451.stm Argentina: crisis energética] (26 March 2004)
* [http://news.bbc.co.uk/hi/spanish/business/newsid_4528000/4528637.stm Argentina teme crisis energética] (9 May 2005)
* [http://waste.ideal.es/crisisenergetica.htm Peligro... crisis energética]
* [http://bolivia.indymedia.org/es/2004/05/9039.shtml Crisis energética - Ficción asesina]
* [http://www.eco.unc.edu.ar/ief/observatorio/nov04-valquez.pdf ¿Cómo impacta la crisis energética argentina en el mercado eléctrico?] - A paper by Carlos Santiago Valquez, Instituto de Economía y Finanzas, Facultad de Ciencias Económicas, Universidad Nacional de Córdoba, Argentina.
* [http://infoleg.mecon.gov.ar/infolegInternet/anexos/15000-19999/16078/norma.htm Ley Nº 17.319] - Text of the Hydrocarbons Law of Argentina.
* [http://www.iangv.org/default.php?PageID=130 IANGV] - Worldwide statistics on natural gas vehicles.
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