Welcome to the June edition of Energy Panorama. We begin this month’s newsletter with a note of welcome for the incoming president of the Institute of the Americas, Richard Kiy, and an expression of gratitude to Ted Gildred III as he winds down his term as interim president. More details on the new IOA president, Richard Kiy, below.
This month’s featured report “The Day After: Latin America’s response to key energy issues derived from COVID-19” by principal author Roger Tissot is a detailed analysis based on policy and political trends likely to impact several countries’ oil industries as they emerge from the COVID-19 health crisis; how the region arrived at the pandemic crisis and how countries responded and the key emerging trends that are likely to influence policy decisions in Latin America and the so-called “day after.”
We are also pleased to share the summary report and synopsis derived from the discussions at the Virtual XXIX La Jolla Conference, as well as several of the panel videos and news coverage.
The Virtual La Jolla Conference convened as the implications of COVID-19 and the massive shock to the global oil market and its impact across the hemisphere were being felt. The discussion focused on whether the energy transition was being accelerated or delayed, the role for the region’s NOC’s particularly in recovery, the potential for key plays such as Guyana, the Pre-Salt, Vaca Muerta, Camisea and fracking in Colombia. A cross-cutting and recurring debate over whether habits and consumption had temporarily or permanently changed yielded a variety of replies. How countries and energy policymakers are navigating the dual crises were very much on display and, as expected, differed from Mexico to Chile to Peru to Uruguay to Argentina.
Our assessment of the energy transition continued this month and clean hydrogen in Latin America was at the center of two articles – one in Spanish and one in English – by Cecilia Aguillon, Director of the IOA’s Energy Transition Initiative.
Clean Energy in Mexico, our webinar series in collaboration with the Mexico Institute at the Wilson Center, kicked-off with John McNeece’s presentation of our jointly-published paper “The Economic and Strategic Arguments for Renewable Energy in Mexico.”
We also convened a virtual panel discussion focused on the energy sector in Bolivia and outlook for the next administration featuring representatives from the major political parties vying in the September election. The event also featured opening remarks from IOA Board member Jose Luis Manzano.
We are also pleased to continue to bring you the insights of IOA Board member Chris Sladen and his essays written for ANZMEX, of which there were two released in June.
We look forward to our collaboration with CEBRI in Brazil on a unique virtual panel on July 15, as well as our partnership with IPD Latin America and Global Event Partners for the second Madrid Energy Conference set for Sep 28-Oct 2, being presented and held online this year.
Richard Kiy Named President of the Institute of the Americas
Bolivia’s October 2019 election resulted in accusations of fraud, protests, counter accusations of flawed models and the president’s departure. Evo Morales left office – and the country – after more than 13 years in power replaced by Jeanine Añez in charge of a transitional government with elections pending. The arrival of the COVID-19 pandemic added another layer of complexity to the election calendar. But, now, the parties have agreed to hold the presidential election on September 6. With the pandemic and lockdown to confront the virus, the economy and recovery are critical themes for the next administration.
How Bolivia’s government manages the energy sector will be a key element to the broader economic development strategy and recovery in the coming months and after the new team takes office. Natural gas, a long-time generator of income for the Morales government, slumped in 2019 as part of a global commodity downturn. How a new government approaches the role of the state and specifically the national oil company, YPFB, will be important to understand, as will the energy relationship that Bolivia has developed with its neighbors, principally Brazil and Argentina. The facets of the global energy transition and the incorporation of renewable energy and further diversification of the country’s energy matrix also deserves attention from policymakers and the next team.
Among the energy-related challenges that a new Bolivian government will face are stimulating exploration for new reserves and establishing new avenues for gas exports. Brazil is increasingly awash in Pre-Salt gas, while Argentina is developing huge reserves of shale gas, leaving Bolivia with smaller markets for its landlocked supply. Under Morales, the government promoted a new pipeline to Paraguay.
Beyond natural gas, Bolivia has been trying to develop its extensive lithium reserves. Its fledgling effort recently sputtered with the government’s repeal of a joint venture agreement between Bolivia’s state-owned lithium company YLB and Germany’s ACI Systems to tap brine lithium from the Uyuni salt flats.
To better understand how the next administration will confront the energy challenges and role of the sector to drive economic development and recovery, we are pleased to convene a panel of Bolivian energy experts from across the political spectrum. The representatives will discuss their respective parties vision for the energy sector, their platform, and how, if elected, they will address the sector and what policy measures and steps they will take.
Join us for a virtual panel with Richard Botello, President of YPFB (pending); Miguel Antonio Roca, Spokesman for Comunidad Ciudadana and Coordinator of the Economic Team and Candidate for Congress from La Paz; Oscar Barriga, former president of YPFB and advisor to the MAS party.
Jose Luis Manzano, an IOA Board Member and Chairman of Integra Capital, will offer opening remarks and insights on the context for the global energy sector and in the Southern Cone.
The virtual panel webinar will be held Tuesday, June 30 at 9:00am San Diego (12:00 pm La Paz; GMT/UTC – 8 hours). The webinar will include a discussion and Q&A session with the audience.
El Futuro del Sector Energético de Bolivia – Perspectivas para la próxima administración
Las elecciones de octubre del 2019 en Bolivia resultaron en acusaciones de fraude, protestas, contra acusaciones de modelos defectuosos y la salida del presidente. Evo Morales dejó el cargo, y el país, después de más de 13 años en el poder, reemplazado por Jeanine Añez, quien quedó a cargo de un gobierno de transición con elecciones pendientes. La llegada de la pandemia COVID-19 agregó otra capa de complejidad al calendario electoral. Pero ahora, los partidos acordaron realizar las elecciones presidenciales el 6 de septiembre. Con la pandemia y cuarentena para enfrentar el virus, la economía y la recuperación son temas críticos para la próxima administración.
La forma en que el gobierno de Bolivia maneje el sector energético será un elemento clave para la estrategia general de desarrollo económico y de recuperación en los próximos meses y después de que el nuevo equipo asuma su cargo. El gas natural, un generador de ingresos durante mucho tiempo para el gobierno de Morales, se desplomó en el 2019 como parte de la caída del mercado mundial de productos básicos. Será importante entender cómo un nuevo gobierno aborda el papel del estado y específicamente la compañía petrolera nacional, YPFB, al igual que la relación energética que Bolivia ha desarrollado con sus vecinos, principalmente Brasil y Argentina. Las facetas de la transición energética global y la incorporación de energías renovables, así como una mayor diversificación de la matriz energética del país, también merecen la atención de los encargados de formular políticas y del próximo equipo de trabajo.
Entre los desafíos relacionados con la energía que enfrentará el nuevo gobierno boliviano están estimular la exploración de nuevas reservas y establecer nuevas vías para las exportaciones de gas. Brasil está cada vez más inundado de gas Pre-Sal, mientras que Argentina está desarrollando enormes reservas de gas de esquisto, dejando a Bolivia con mercados más pequeños para su suministro sin litoral. Bajo Morales, el gobierno promovió un nuevo gasoducto a Paraguay.
Más allá del gas natural, Bolivia ha estado tratando de desarrollar sus extensas reservas de litio. Este nuevo esfuerzo recientemente produjo resultados con la derogación por parte del gobierno de un acuerdo de empresa conjunta entre la compañía estatal de litio YLB de Bolivia y ACI Systems de Alemania para explotar el litio de salmuera de las salinas de Uyuni.
Para comprender mejor cómo la próxima administración enfrentará los desafíos energéticos y el papel del sector para impulsar el desarrollo económico y la recuperación, nos complace convocar a un panel de expertos en energía bolivianos de todo el espectro político. Los representantes discutirán la visión de sus respectivos partidos para el sector energético, su plataforma y si son elegidos, cómo abordarán el sector y qué políticas y pasos implementarán.
Unase a nuestro panel virtual con Richard Botello, Presidente de YPFB (pendiente); Miguel Angel Roca, Vocero de Comunidad Ciudadana y Coordinador del Equipo de Economía y Candidato a Diputado por La Paz y Oscar Barriga, expresidente de YPFB y asesor del partido MAS.
José Luis Manzano, miembro de la Junta del IOA y presidente de Integra Capital, ofrecerá unas palabras de apertura y perspectivas en el contexto del sector energético global y del Cono Sur.
El panel virtual se llevará a cabo el martes 30 de junio a las 9:00 am San Diego (12:00 pm La Paz; GMT / UTC – 8 horas). El panel incluirá una discusión y sesión de preguntas y respuestas con la audiencia.
By Cecilia Aguillon Cecilia Aguillon is Director of the Energy Transition Initiative at the Institute of the Americas in La Jolla, California
The Providencia Solar company, El Salvador. Latin America counts some of the globe’s most abundant and cost competitive renewable energy resources including hydroelectricity, solar, and wind. Credit: Edgardo Ayala / IPS
LA JOLLA, California, Jun 22 2020 (IPS)
The COVID-19 pandemic and crisis has led to increasing attention and clamor to redouble efforts toward an energy transition that would help the world reduce C02 emissions. In many countries of the region, how to manage hydrocarbons, but with an eye on the energy transition has only been accentuated. We believe clean hydrogen is part of that broader policy and reconstruction debate.
Clean hydrogen markets can be a key part of the economic recovery from the COVID-19 pandemic, accelerate the decarbonization of Latin America’s electricity and transportation sectors, attract investment and create jobs. Indeed, the possibilities for oil and gas companies to produce and deliver hydrogen should facilitate and accelerate its adoption in Latin America particularly when combined with the region’s considerable renewable energy upside. (more…)
A major public policy debate is underway in Mexico over the role of clean energy for the country’s power market. There are major ramifications for Mexico’s economy and its climate goals. The Lopez Obrador administration has been aggressively pushing to revise the regulatory and investment framework for renewables in Mexico for months, but has ramped up their efforts since late April. Recent delays of approved projects and the prioritizing of state power firm CFE and the use of hydrocarbons to generate electricity have set off heated debate and legal challenges, and led to great uncertainty in Mexico’s power sector.
To further the discussion of clean energy in Mexico and to address the issues at the core of the government’s oppositional posture, we are pleased to launch this new webinar series.
The series will draw upon the expertise of the Mexico Institute at the Wilson Center and its decades of experience fostering high-level research and efforts to inform public policy with the experience and reach of the Institute of the Americas to shape and inform public policy surrounding energy and environment in Latin America and deep experience in Mexico.
Our jointly-published paper “The Economic and Strategic Arguments for Renewable Energy in Mexico,” authored by lawyer and policy expert John McNeece, will anchor our discussions. The paper and its rigorous analysis will set the stage for a high-level policy debate, through a series of webinar presentations, that will address the issues set forth by the administration and discuss the future of clean energy in Mexico. John McNeece will kick-off the series on June 11 with a presentation based upon his report.
The Clean Energy in Mexico webinar series will provide a research-based platform for further analysis and discussion of these critical issues with the objective of informing and shaping the public policy debate.