|Welcome to the March edition of Energy Panorama. We spent the last week of the month in Buenos Aires for our two-day Roundtable.
Our Roundtable featured keynote remarks from Secretary of Energy Gustavo Lopetegui (see presentation below), participation by Deputy Assistant Secretary Elizabeth Urbanas from the US Department of Energy, the president of state energy firm YPF, the chairmen of Argentina’s national electricity and natural gas regulators and several other private sector representatives and government officials.
Across two days and several high level panels there was intense discussion of oil and gas issues as well as the emerging role for the lithium market and the broader contours of how the global energy transition is unfolding in Argentina. A unique lunch panel featured a debate with renowned political analysts and their insights on the intersection of energy and politics as the country heads into a presidential election this October.
Not surprisingly, much of the discussion centered on the ongoing structural adjustments and reforms enacted by the Macri administration, particularly those aimed at subsidies and fiscal incentives both in terms of consumers but also energy producers.
Vaca Muerta and the country’s success in developing the massive unconventional resource potential was also heavily debated. Though important gains have been made to reduce logistical and operation costs, continued focus on efficiency measures and creating a more competitive ecosystem is a must, panelists underscored. There is no doubt that further efforts are required to boost the amount and capabilities of service and equipment providers, but also to greatly increase the number of operators in the country’s oil and gas sector.
Furthermore, how to create sufficient infrastructure to “move the molecules” remains a key piece to the challenge. Gains have been made utilizing long-inactive pipelines and infrastructure and reopening natural gas exchanges with Chile and Brazil in the short to medium term makes eminent good sense.
A majority of panelists agreed that the key to fully monetizing Vaca Muerta’s potential was to fully plug Argentina into the global liquefied natural gas (LNG) market. To do so will require all segments of the country’s energy sector to participate in the strategic development of the resource – the government, YPF, private sector participants, regulators and civil society. The technology, geography and volumes, not to mention contractual arrangements, are but a few of the elements that will require attention and crucial decisions in the coming months and years. Further, one panelist argued that political consensus and a law supported across party lines stipulating and protecting investment in such a major infrastructure project is needed to reduce the so-called country risk component.
Beyond the fiscal impacts debated, Argentina’s energy sector is also undergoing a broader transformation and disruption brought about by global trends. Indeed, the policy efforts aimed at increasing renewable energy deployment through the government’s RenovAr program was discussed. Panelists agreed that the effort to date had been important but a thorough cost benefit analysis was required in order to best consolidate and determine the gains and to continue forward momentum. Moreover, a new distributed generation law passed last year is being developed for implementation. Benchmarking against international examples from California to Germany to Chile were discussed during the Roundtable.
And, of course, the role that mobility and electric vehicles are playing in the discussion of energy and emissions reduction is an increasing topic for debate in Argentina. Programs and goals set by the City of Buenos Aires, but also efforts made at the provincial level, have led to an uptick over the last year or so in options for citizens to utilize electric transportation, both mass transit and individual vehicles.
Finally, the topic of lithium featured an illuminating discussion of the potential for Argentina to position itself as a global player. However, the market is still quite small, prices are volatile and the number of projects that exist solely on paper far exceeds the reality that global headlines portray for lithium. But as several panelists argued, therein is the opportunity for oil and gas companies to bring to bear financing and operational insights to the sector and perhaps facilitate some of the dormant projects and boost the development of Argentina’s lithium market.
p>March also featured participation in a panel at the Mexico Institute at the Wilson Center in Washington, DC focused on energy under the AMLO administration and our analysis and commentary on the question of distributed generation in Argentina as well as part of our podcast series.
Argentina Energy Roundtable
In the News
|The Institute of the Americas Energy & Sustainability program wrapped up February and kicked off March in Mexico City. Our Roundtable counted two days of debate and discussion focused on the energy agenda for the new administration, understanding self-sufficiency goals, how to define energy security and the state of the country’s energy sector as the Lopez Obrador administration reaches the 100-day milestone.
An update on the efforts to combat fuel theft was the topic of a closing keynote address by Alfonso Durazo, Secretary of Security and Citizen Protection. We also convened a unique half-day dedicated to workforce development and talent creation for Mexico’s energy sector together with our partner ANUIES, Mexico’s association of universities and higher learning institutions. Event photo gallery and presentations are available below. An event report and policy paper will be published in late March.
Our webinar series this month also focused on Mexico and examined natural gas. The webinar was a follow-up to a two-part report series that we published by John McNeece and his assessment of the burgeoning US-Mexico natural gas trade and risks associated with the spike in imports into Mexico from US gas fields and an ever-growing pipeline infrastructure footprint. He was joined by Veronica Irastorza for the webinar.
Below we also include IOA Board Member and former BP Mexico chief Chris Sladen’s latest ANZMEX Energy Matters column and his views on the outlook for oil production in Mexico.
As Colombia launched its first major renewable energy auction at the end of February, we weighed in on the key issues for possible bidders and the outlook for the tender.
Our podcast series turned to Venezuela and the unfolding political developments in the country as Juan Guaido, the leader of the national assembly, declared himself interim president and was quickly recognized by a long list of countries in the hemisphere. We spoke to UCSD Distinguished Professor of Political Science David Mares for his insights and views.
At the end of March, we host our annual Argentina Energy Roundtable in Buenos Aires. This year’s event will be divided into two days with oil and gas the focus on March 27, particularly the advances in the country’s unconventional resource development and the future of natural gas including possibilities for moving beyond regional natural gas exports to LNG. Discussion of developments around lithium and energy transition, the RenovAr program and mobility trends will comprise the agenda for the March 28 sessions. The election year backdrop will also figure prominently.
Mexico Energy Roundtable
Opinion & Analysis
In the News
|Happy New Year and welcome to the first installment of Energy Panorama for 2019.
We are very pleased to share this month’s featured report LNG and the Panama Canal: Should Another Expansion Already Be on the Drawing Board? The report was prepared during the fall 2018 quarter as part of a research project by Melisa Uzcategui-Ebner, Timona Ghosh, and Edgar Kelly-Garcia, graduate students at UC San Diego’s School of Global Policy & Strategy (GPS).
The Panama Canal’s third set of locks opened in June 2016. By the end of the canal’s fiscal year last September, LNG transits had contributed significantly to a record-setting year of 442.1 million tons crossing its waters. Beyond an assessment of the current state of LNG usage in the canal, the report analyzes a series of elements associated with the possibility of another expansion using the third set of locks as a reference. Where the Panama Canal fits in the larger geopolitical outlook could be greatly determined by its future expansion, how such an additional expansion is financed and if LNG continues to grow in importance for the canal’s operations and financial well-being.
Our webinar series kicked off the year with Mexico Oil Outlook 2019 and a new format with a virtual panel. It was a lively discussion and debate with John Padilla, Managing Director, IPD Latin America and Gonzalo Monroy, Managing Director, GMEC with insights and analysis on the issues of oil production, refining, fuels infrastructure and investment as the new year unfolds in Mexico.
Our podcast series delved into fuels and finance in Mexico in an interview with Marco Cota, CEO of Talanza Energy.
Following up on our Roundtable in Bogota last year and podcast with energy ministry officials in December, we published an analysis of the outlook for renewable energy in Colombia as the first auction takes place. We also contributed our insights to understanding the changes in Argentina’s energy secretariat as the new year arrived.
Our webinar series continues on February 6 with Mexico: Natural Gas Outlook 2019. John McNeece, the author of a two-part analysis of US-Mexico natural gas trade will present his research and particularly the risks to Mexico presented by its growing reliance on imports from the US, and how those risks may be mitigated. He will be joined by Veronica Irastorza, Associate Director at NERA Economic Consulting in Mexico City.
We head to Mexico City for our first Roundtable of the year on February 28/March 1 and Buenos Aires on March 27-28 for our annual Energy Roundtable.
Opinion & Analysis
In the News
|Season’s greetings from La Jolla! We are pleased to share the latest installment of Energy Panorama for your holiday reading pleasure.
We concluded the year with our annual program in collaboration with the Inter-American Dialogue in Washington, DC and a discussion and panel at the National Press Club. This year’s event focused on the changes in the US Congress and what it may entail for US-Latin American energy issues but particularly the new USMCA trade agreement and the broader US-Mexico bilateral relationship. Below are links to an event summary and highlight video.
As part of our podcast series and a follow-up to our Colombia Energy Roundtable, we spoke with Julia Gutierrez in the Ministry of Mines and Energy for an update and insights on Colombia’s first renewable energy auction.
We will also take advantage of our final edition of the year to look back and share selected reports, podcasts and webinars that we produced this year, as well as insights from our diverse programming across the hemisphere. Consider it a curated compendium of the 2018 IOA Energy & Sustainability Program.
We look forward to seeing you in 2019 and we wish you and yours a joyous and peaceful holiday season!
Washington, DC Event Summary
Washington, DC Event Video
Select Reports from 2018
Select Videos from 2018
Select Opinion & Analysis from 2018
Select Podcasts from 2018
Select Webinars from 2018
|Our featured report, Mexico’s Growing Reliance on US Natural Gas, is the second part of an analysis by our colleague John McNeece, a fellow at the Center for US-Mexican Studies. In Part II he reviews the booming cross border trade in natural gas, contemplates the risks to Mexico presented by its growing reliance on imports from the United States, and how those risks may be mitigated.
The change in government in Mexico was a key theme for our webinar and podcast series and as we convened discussions of the incoming Lopez Obrador administration’s outlook for the energy sector. Below are links to recordings of this month’s webinar and podcast series, as well as highlights from our panel hosted at the Institute of the Americas at the end of the month and a panel at the University of San Diego.
Our analysis of the 2013-14 energy reform measures in Mexico were featured as part of a book published by the Mexico Institute at the Wilson Center. Jeremy Martin wrote one chapter and co-wrote another and participated in the book launch event in Mexico City on November 28. A link to the English and Spanish versions are available below.
The political transition in Mexico is not the only one occurring as Brazil prepares to welcome a new president in January. Our view on what the Bolsonaro government signifies for the nation’s energy sector was published this month in the Inter-American Dialogue’s Energy Advisor.
We were also delighted to convene Clean Energy in the Californias: SB 100, Electrifying Everything & Cross Border Implications, a roundtable aimed at facilitating cross border collaboration. We will continue our support of dialogue between energy stakeholders in California and Baja California as we head into 2019 and possible formalized cooperation between the two state governments.
Additionally, the formal signature of the USMCA trade accord increases focus on how each country’s legislature will respond. Indeed, we look forward to our program on December 11 in Washington, DC and discussion of the new Congress in the US and what it will mean for Latin American relations and particularly energy.
Opinion & Analysis