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3638 - Energy Integration in Latin America: Interdependence and Obstacles on the Way to Regional Market Development

The main goal of the report is to underline the advantages of the energy integration in Latin America at the same time pointing out the barriers on the way to common market and disadvantages of energy interdependence of the region.

Latin American countries together represent a considerable surplus in the production of crude and gas - vitally important sources of energy in the region and in the world as a whole. However, these resources are concentrated in very few countries what is critical in terms of regions interdependence.

The aspect of “energy integration” is nothing new to Latin America. The integration of region’s energy markets has been discussed for almost four decades. From the start of 1990s the platform for discussion of energy integration initiatives moved to the continental level: more precisely the proposals were being expressed within the framework of the Americas Summit. At the core of Hemispheric Energy Initiative were the reforms outlined by the Washington Consensus. In the energy sector, it was proposed to eliminate the obstacles to the operation of foreign firms in every branch of the energy industry (exploration and production of gas and oil, distribution and product sales). The thinking was that the liberalisation of energy policies would bring the integration of energy sector among Latin American countries.

However, the results were not achieved and later some countries of the region decided to restore a more active role of the state in energy activities preserving the idea of sector integration. The discussion of the topic moved to regional level and the first South American Presidential Energy Summit took place in April 2007. After this the signs of deeper energy integration seemed to be obvious but still there are many goals to achieve. This was pretty clear when the energy interdependence between Brazil, Bolivia, Argentina and Chile played not the last role in the intensifying of region’s energy crisis in 2008-2009. The energy integration of the region could be an instrument for guaranteeing and facilitating energy supplies, development of new energies and also would help to intensify the diversification of Latin America’s international relations in the field of energy.

Keywords: Regional Integration, Energy, Oil&Gas, Regional Organizations

Author: Nelina, Oxana (Institute of Latin America Russian Academy of Science, Austria / Österreich)

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