New Latin American institution to oversee regional energy integration

Nov 09, 2004 01:00 AM

Latin American governments could create an international institution to oversee the process of regional energy integration, the director of Chile's national energy commission (CNE) Luis Sanchez Castellon told.
Governments in the region are at a "preliminary stage" of building on bilateral agreements "with a certain common objective that in the future could lead to more concrete proposals," he said.

The institution would be responsible for ensuring regulatory compatibility between countries and resolving conflicts if and when they arise, he said.
"Any process of integration requires not just agreements but also international institutions capable of directing the process of integration, and a mechanism to resolve controversies, not just controversies between states but also between states and private companies," Sanchez said. "There is still no concrete initiative on the table, we have to talk and work on this, and eventually the time will come to propose some mechanism to allow this development," he said.

Countries in the region can benefit greatly from energy integration by taking advantage of their comparative advantages in natural energy resources, Sanchez told. Latin American countries could save $ 100 mm/year through energy integration but currently only 0.9 % of the energy demand in the region is met through interconnections, Sanchez said.
New integration projects require clear rules and political stability in neighbouring countries, he said, adding that an international institution would ensure countries respect bilateral agreements.

Chile accuses Argentina of violating a bilateral gas agreement by favouring domestic supplies and restricting gas exports earlier this year.

Source: Business News Americas
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