For Chile and Argentina, it was the chilliest of winters, and not just on the thermometer.
During one of the coldest South American winters in decades, Argentina almost daily cut more than 90 percent of the natural gas it sends to Chile along pipelines that connect the two countries.
Power plants and factories in this smoggy capital were forced to switch to diesel and fuel oil, which belch more air pollution and have nearly quadrupled the cost of producing electricity.
Santiago reported its highest number of dangerous smog days in seven years.
Argentina's actions have chilled relations between the two countries. But the impact of South America's energy crisis is far broader. Across the region, concerns about energy are roiling national politics, generating tensions between neighbors and emerging as one of the biggest brakes to growth and integration.
"Bottlenecks in energy supply will be a critical policy concern in Latin America over the next two to five years," said Christopher Garman, the Latin America director at Eurasia Group, a New York-based consulting firm.
Energy concerns are at the top of the agenda for the region's leaders, most of whom have high popularity ratings, thanks largely to buoyant economies riding a wave of higher commodity prices.
But the steady economic growth of recent years has increased energy demand, while governments have failed for a decade to invest enough in natural gas exploration and new power plants.
BRAZIL LOOKS TO CANE
Brazilian President Luiz Inacio Lula da Silva is particularly preoccupied with the risk of power shortages.
In an interview last month, he said the region's gas woes were reason to support new hydroelectric power plants and projects to produce electricity from sugar cane.
"I do not want to make Brazil dependent on gas," he said.
The alternatives are to raise consumer prices and impose austerity measures. Politicians have been reluctant to do either, and history shows why.
When Brazil suffered an energy crunch in 2000, for example, then president Fernando Henrique Cardoso implored consumers to conserve, and imposed penalties on those who did not.
In the end, a major crisis was averted -- but the government's approval rating dropped by a third, and da Silva -- not Cardoso's chosen successor -- was elected in 2002.
Argentine President Nestor Kirchner has steadfastly refused to raise his country's gas and electricity prices, which are among the lowest in the world, ahead of the Oct. 28 election.
Kirchner's wife, Cristina Fernandez de Kirchner, is the leading candidate to succeed him.
Instead, his government placed wintertime energy-use restrictions on industrial customers and cut off its neighbor to the west, Chile.
Kirchner's strategy has satisfied voters and kept Argentina's economy humming, for now.
ARGENTINE WOES
But the low prices for gas and power in Argentina have scared away needed foreign investment in energy development and raised fears of runaway inflation.
Moreover, while the government refuses to impose on residential consumers to cut back, Argentina's energy demands are rising faster than supplies.
Power plants have little or no spare capacity and are suffering from a lack of maintenance, increasing the chances of brownouts or blackouts, said Sylvie D'Apote, an analyst with Cambridge Energy Research Associates.
Argentina's economy, which is expected to grow this year by about 8 percent for a fifth straight year, is struggling with rising inflation pegged by private economists at nearly 20 percent, more than double official government claims.
The president has publicly denied that there is even an energy crisis, noting that residential consumers have yet to feel a pinch.
Instead, it is Chile that is being squeezed.
With few energy resources of its own, Chile had come to rely on Argentina for natural gas. The neighbors signed contracts in 1994, giving Chile a cheap source of fuel and a way to help clean Santiago's notoriously smoggy air.
Argentine officials now say the Argentine Congress never approved the energy accords, making them nonbinding. The Chileans call that claim ludicrous.
The energy situation is already contributing to inflation in Chile, which is expected to be 6.4 percent this year.
CHILE TO DIVERSIFY
Faced with few options, Chilean President Michelle Bachelet, is moving on several fronts to diversify her nation's energy supplies.
Two terminals for liquefied natural gas should be completed by mid-2009.
Chile is also opening up some land for oil and gas exploration, though it historically has found little.
Bachelet recently received a government-financed study exploring the prospects for building nuclear power plants, which the next government will have to decide whether or not to do.
A Ministry of Foreign Affairs official yesterday said that a delegation that visited China for an APEC meeting did not receive any kind of treatment that downgraded Taiwan’s sovereignty. Department of International Organizations Director-General Jonathan Sun (孫儉元) said that he and a group of ministry officials visited Shenzhen, China, to attend the APEC Informal Senior Officials’ Meeting last month. The trip went “smoothly and safely” for all Taiwanese delegates, as the Chinese side arranged the trip in accordance with long-standing practices, Sun said at the ministry’s weekly briefing. The Taiwanese group did not encounter any political suppression, he said. Sun made the remarks when
The Taiwanese passport ranked 33rd in a global listing of passports by convenience this month, rising three places from last month’s ranking, but matching its position in January last year. The Henley Passport Index, an international ranking of passports by the number of designations its holder can travel to without a visa, showed that the Taiwan passport enables holders to travel to 139 countries and territories without a visa. Singapore’s passport was ranked the most powerful with visa-free access to 192 destinations out of 227, according to the index published on Tuesday by UK-based migration investment consultancy firm Henley and Partners. Japan’s and
BROAD AGREEMENT: The two are nearing a trade deal to reduce Taiwan’s tariff to 15% and a commitment for TSMC to build five more fabs, a ‘New York Times’ report said Taiwan and the US have reached a broad consensus on a trade deal, the Executive Yuan’s Office of Trade Negotiations said yesterday, after a report said that Washington is set to reduce Taiwan’s tariff rate to 15 percent. The New York Times on Monday reported that the two nations are nearing a trade deal to reduce Taiwan’s tariff rate to 15 percent and commit Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to building at least five more facilities in the US. “The agreement, which has been under negotiation for months, is being legally scrubbed and could be announced this month,” the paper said,
MIXED SOURCING: While Taiwan is expanding domestic production, it also sources munitions overseas, as some, like M855 rounds, are cheaper than locally made ones Taiwan and the US plan to jointly produce 155mm artillery shells, as the munition is in high demand due to the Ukraine-Russia war and should be useful in Taiwan’s self-defense, Armaments Bureau Director-General Lieutenant General Lin Wen-hsiang (林文祥) told lawmakers in Taipei yesterday. Lin was responding to questions about Taiwan’s partnership with allies in producing munitions at a meeting of the legislature’s Foreign Affairs and National Defense Committee. Given the intense demand for 155mm artillery shells in Ukraine’s defense against the Russian invasion, and in light of Taiwan’s own defensive needs, Taipei and Washington plan to jointly produce 155mm shells, said Lin,
RSS