MercoPress. South Atlantic News Agency

Winter 2007 gas supply to Chile will be worse

Just as most Chileans are beginning to forget this past winter's gas dispute with neighbouring Argentina, Chile's National Energy Commission (CNE) is warning that next year could be even worse.

CNE is currently working on emergency plans for the nation's energy supply. It says significant shortages originally expected to begin in 2008 may begin as early as the first half of 2007.

The CNE said Argentine gas fields report a 30% drop in reserves and Bolivian production has topped out, making it impossible for the country to sell more gas to Argentina. Furthermore, Argentine domestic demands grew by six percent this year.

Making the gas shortage problem all the more volatile are upcoming national elections in Argentina. Argentine politicians can be expected to favour domestic supplies over export contracts.

Argentina has already announced a complete shutdown of natural gas supplies to Chile by 2010. This will make Chile more reliant on coal and hydroelectric energy. In the short term, coal and diesel fuel are expected to replace Chile's natural gas.

By Morten Szygenda (editor@santiagotimes.cl)