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64 | DAVID MARES ENERGY, DEVELOPMENT, AND REGIONAL INTEGRATION | 65 coal. Coal is not often part of the discussion, even though coal is in the back- ground as a major energy source for the region. Colombia is a world power in terms of coal and there is technological development in the area of ‘clean coal’. When Chile became concerned about the cutoff of gas supply from Argentina, one of the alternatives was to turn its power plants into coal-fired plants. The major economic factor stimulating efforts to promote energy integration is not efficiency (as it might be in the case of the United States and Canada) but rather, disparities in levels of economic development. Many of the largest and fastest grow- ing economies in the region (Brazil, Chile, and now Argentina) have lacked domes- tic sources of energy to fuel continued growth. However, many of the countries with high levels of poverty (Bolivia, Ecuador, Peru and Venezuela) have a surplus of easi- ly accessible energy resources. It seems natural to expect that it would be to the mutual advantage of all parties to develop a regional energy market. Perhaps once these economic development drivers create a regional market, efficiency considera- tions may modify the way that market functions, but the current driver is definitely the search for economic growth. Despite the availability of resources, however, the region is unlikely to be self-suf- ficient in energy. The trajectory for economic and population growth indicates that the regional demand for energy will continue to grow. But the disparities in access to energy and the domestic institutional context within which energy policy is made suggest that regional production will not be sufficient to meet that demand. Because there has been energy cooperation across the region, integration does not start from ground zero. Venezuela has made concessionary sales of petroleum to the Caribbean and Central America, as has Mexico to Central America. There are cross- border investments in the energy industry as well, as reflected, for example, in Venezuela’s investment in an oil refinery in Nicaragua. Countries are also cooperat- ing in developing the infrastructure to deliver energy. The Plan Pueblo-Panama from Mexico to Panama is a treaty with some component parts that have already been implemented. An initial phase linking the Guatemalan and Mexican electrical grids is already under construction, with the Mexican side completed and the Guatemalan scheduled to come on line in late 2008. Table II presents data on power imports and exports, revealing that some energy integration has already taken place. In 2002, Argentina was already exporting power to Brazil, Chile, and Uruguay; Colombia to Ecuador and Venezuela; Paraguay to Argentina and Brazil; Uruguay to Argentina; Venezuela to Brazil. Power is a very important component of energy integration because energy is useful to the extent that it is turned into power that can be used. If a country can export power, it is gen- erating value-added to its primary resource. TABLE 2. SOUTH AMERICAN POWER IMPORTS AND EXPORTS 2002 (GWh) TO Ecuador Paraguay Peru 56 F R O M Argentina Argentina Boliva Brazil Chile Colombia Ecuador Paraguay Peru Uruguay Venezuela Total Imports Boliva Brazil 751 35443 0 416 36609 Chile 1768 Colombia 1768 8 56 0 Uruguay 559 Venezuela 549 0 559 556 Total Exports 5299 0 0 0 618 74 42336 0 1909 423 Source: Business News Americas, “Energy Integration in Latin America” Note: Differences between totals and individual figures are from rounding figures off. 6143 1908 8015PDF Image | Energy and Development in South America
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