bolivia’s nationalization of natural gas by: andrew switkay, ed wons, andrew mong, dillon farrell
TRANSCRIPT
Bolivia’s Nationalization Bolivia’s Nationalization of Natural Gasof Natural Gas
By: Andrew Switkay, Ed Wons, Andrew Mong, By: Andrew Switkay, Ed Wons, Andrew Mong, Dillon FarrellDillon Farrell
Energy in South Energy in South AmericaAmerica
Economic growth in recent years is partially Economic growth in recent years is partially driven by rising prices for commodities such driven by rising prices for commodities such as oilas oil
Only significant exporters of gas are Only significant exporters of gas are Venezuela, Bolivia, and EcuadorVenezuela, Bolivia, and Ecuador
State intervention threatens production levelsState intervention threatens production levels
Lack of cooperation could slow economic Lack of cooperation could slow economic growthgrowth
Natural Gas vs. OilNatural Gas vs. Oil
One barrel of crude oil has about 6x the One barrel of crude oil has about 6x the energy content of 1000 mcf of natural gasenergy content of 1000 mcf of natural gas
Natural Gas is cleaner, safer and more usefulNatural Gas is cleaner, safer and more useful
Lower air emissions, very little water used, no Lower air emissions, very little water used, no dirty water discharge, no substantial amount dirty water discharge, no substantial amount of solid wasteof solid waste
Natural Gas in South Natural Gas in South AmericaAmerica
Bolivia has 2Bolivia has 2ndnd largest natural gas reserve largest natural gas reserve
Resource nationalization troubles the ability Resource nationalization troubles the ability to supply gasto supply gas
Argentina is now dependent on gas imports Argentina is now dependent on gas imports from Boliviafrom Bolivia
BoliviaBolivia 2002 – estimated 54.8 trillion cubic feet2002 – estimated 54.8 trillion cubic feet 2007 – estimated 31.5 trillion cubic feet2007 – estimated 31.5 trillion cubic feet
Brazilian Gas Brazilian Gas ConsumptionConsumption
1010thth largest energy consumer in the world largest energy consumer in the world
Imports 40% of its natural gasImports 40% of its natural gas
Motor vehicles beginning to rely on natural Motor vehicles beginning to rely on natural gasgas
Increasingly high demandsIncreasingly high demands
NationalizationNationalization May 1May 1stst, 2006, 2006
Morales ordered military to occupy energy Morales ordered military to occupy energy installationsinstallations
53 energy installations occupied53 energy installations occupied
Brazil’s Petrobras Co.Brazil’s Petrobras Co.
Silas RodeauSilas Rodeau
Bolivian VP Garcia- est revenue jump to $780 Bolivian VP Garcia- est revenue jump to $780 millionmillion
Along with Petrobras; Repsol YPF, BG Group PLc, Along with Petrobras; Repsol YPF, BG Group PLc, & TOTAL are major gas Co’s in Bolivia& TOTAL are major gas Co’s in Bolivia
October 28October 28thth, 2006 agreement, 2006 agreement
AgreementAgreement Bolivian goal was to raise revenue Bolivian goal was to raise revenue
shares from major fields from 60% shares from major fields from 60% to 82%to 82%
Much resistance from Much resistance from Petrobras Co.Petrobras Co.
Copied ChavezCopied Chavez
Geopolitical EffectsGeopolitical Effects• During early 1990’s, Argentina privatized their During early 1990’s, Argentina privatized their
state-owned energy companystate-owned energy company• Becoming energy dependentBecoming energy dependent• Prices will risePrices will rise
• Southern Gasoduct could help lower Argentina Southern Gasoduct could help lower Argentina dependencydependency
Geopolitical EffectsGeopolitical Effects Brazil uneasy about Brazil uneasy about
the role of Chavez in the role of Chavez in BoliviaBolivia Causing Brazil to Causing Brazil to
take the backstage take the backstage to Boliviato Bolivia
Tensions raise Tensions raise between Bolivia and between Bolivia and PetrobasPetrobas
Geopolitical EffectsGeopolitical Effects
Bolivia’s nationalization involves riskBolivia’s nationalization involves risk Loss of foreign investmentsLoss of foreign investments
Petrobas has created complications between Petrobas has created complications between regions rather than collaborationregions rather than collaboration
Strengthened relations between Bolivia, Strengthened relations between Bolivia, Venezuela, and CubaVenezuela, and Cuba
Weakened relations between Brazil and Weakened relations between Brazil and Argentina, Argentina and BoliviaArgentina, Argentina and Bolivia
Implications for Implications for WashingtonWashington
Traditionally concerned with coca productionTraditionally concerned with coca production Relationships with Peru and ColombiaRelationships with Peru and Colombia
Bolivia’s combating illegal drugsBolivia’s combating illegal drugs
Bolivia’s increase in ties with Venezuela and Bolivia’s increase in ties with Venezuela and CubaCuba
Bolivian’s nationalizationBolivian’s nationalization
Turning down the FTAATurning down the FTAA ALBA alternative (Chavez’s)ALBA alternative (Chavez’s)
Economic ImplicationsEconomic Implications
Rise of UNASURRise of UNASUR•Treaty signed on May 23, 2008Treaty signed on May 23, 2008•Brought together two existing trade blocs Brought together two existing trade blocs (Mercosur & CAN)(Mercosur & CAN)•12 member Union12 member Union•Largest economic, monetary and political alliance Largest economic, monetary and political alliance in the worldin the world•Promotion of South American regional integrationPromotion of South American regional integration
GoalsGoals•Single MarketSingle Market•Development of international infrastructureDevelopment of international infrastructure•Common Defense PolicyCommon Defense Policy
enhancing multilateral military cooperation, enhancing multilateral military cooperation, promoting confidence and security building measures promoting confidence and security building measures fostering defense industry exchangefostering defense industry exchange
•Free movement of visitors & migrant workers among member Free movement of visitors & migrant workers among member nationsnations
Emerging Geopolitical Emerging Geopolitical ForceForce
•One of the Western Hemisphere’s leading One of the Western Hemisphere’s leading multilateral bodiesmultilateral bodies•Combination of countriesCombination of countries‘‘GDPs would reach more GDPs would reach more than $2.3 trillion: 7than $2.3 trillion: 7thth in the world. in the world.•Brazil at the center of UNASUR momentum Brazil at the center of UNASUR momentum •Undermines the Undermines the OAS OAS
•"In a world overpopulated with agencies that generally do not fulfill "In a world overpopulated with agencies that generally do not fulfill the objectives for which they were created, UNASUR became very the objectives for which they were created, UNASUR became very useful and, in addition, laid bare the ineffectiveness of the OAS, an useful and, in addition, laid bare the ineffectiveness of the OAS, an entity that since its creation has operated at the service of US interestentity that since its creation has operated at the service of US interestss””
Late Argentine President Nestor Kirchner Late Argentine President Nestor Kirchner
UNASUR Backs MoralesUNASUR Backs Morales
•2008 Attempted coup of Bolivian President Evo 2008 Attempted coup of Bolivian President Evo MoralesMorales•Emergency meeting in Santiago by Chile president Emergency meeting in Santiago by Chile president Michele BacheletMichele Bachelet•Condemned violence and attacks against Bolivian Condemned violence and attacks against Bolivian democracydemocracy•Created commission of Created commission of ““support and assistancesupport and assistance”” to to Bolivian governmentBolivian government•OAS not involved in peaceful resolutionOAS not involved in peaceful resolution
Brazil’s RoleBrazil’s Role•As one of the major actors of UNASUR, Brazil As one of the major actors of UNASUR, Brazil successfully used it as a regional mechanism that has successfully used it as a regional mechanism that has helped to smooth relations with Boliviahelped to smooth relations with Bolivia•Lula’s close relationship with Evo MoralesLula’s close relationship with Evo Morales
"For the first time in South America's history, "For the first time in South America's history, the countries of our region are deciding how the countries of our region are deciding how to resolve our problems, without the to resolve our problems, without the presence of the United States.” presence of the United States.”
-Evo Morales-Evo Morales
QuestionsQuestions
Do you think the nationalization of Bolivia’s Do you think the nationalization of Bolivia’s natural gas will ultimately lead to economic natural gas will ultimately lead to economic and political stability?and political stability?
Do you think it is possible for the United Do you think it is possible for the United States to regain some of its influence in Latin States to regain some of its influence in Latin American countries prior to UNASUR?American countries prior to UNASUR?
SourcesSources
http://www.cfr.org/energy/energy-bottlenecks-south-america/p16037
http://www.globoscope.ru/eng/content/articles/354/
http://www.thefreelibrary.com/UNASUR+comes+into+its+own,+sets+example+of+Latin+American+diplomacy.-a0246536239
http://www.coha.org/brazil-and-unasur-regional-security-and-the-nation%E2%80%99s-world-sanding-in-the-era-of-rousseff%E2%80%99s-rule/
http://www.boliviainfoforum.org.uk/inside-page.asp?section=3&page=33http://www.boliviainfoforum.org.uk/inside-page.asp?section=3&page=33
https://docs.google.com/viewer?a=v&q=cache:g4ubF6GoqdsJ:www.thedialogue.org/https://docs.google.com/viewer?a=v&q=cache:g4ubF6GoqdsJ:www.thedialogue.org/PublicationFiles/Shifter-CurrentHistory.pdf+&hl=en&gl=us&pid=bl&srcid=ADGEESi3-PublicationFiles/Shifter-CurrentHistory.pdf+&hl=en&gl=us&pid=bl&srcid=ADGEESi3-zDu58Et5v0Stn5zdgtXqUkqmYwZIs6OrX1sqCy4Zv_U8v7w5lwbWsUBi3eJI6mNNHaUrJFxdd0n5foyVlFczDu58Et5v0Stn5zdgtXqUkqmYwZIs6OrX1sqCy4Zv_U8v7w5lwbWsUBi3eJI6mNNHaUrJFxdd0n5foyVlFcMKiKt7LO9ntq5HTISU1ui_u7co0IhmcqlKARL2DfY7zFwqR1&sig=AHIEtbRJ8MYiGqLApgE5AT7b_Xhe6SMKiKt7LO9ntq5HTISU1ui_u7co0IhmcqlKARL2DfY7zFwqR1&sig=AHIEtbRJ8MYiGqLApgE5AT7b_Xhe6Sy6cAy6cA
http://www.cepr.net/index.php/blogs/cepr-blog/unasur-emerging-geopolitical-force/http://www.cepr.net/index.php/blogs/cepr-blog/unasur-emerging-geopolitical-force/