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ENERGY Bolivia's crisis has neighbors worried



Published: Sat, June 11, 2005 @ 12:00 a.m.



Argentina and Chile are looking for other sources for natural gas.

KNIGHT RIDDER NEWSPAPERS

MIAMI -- The political turmoil that pushed Bolivia to the brink of collapse last week has the Andean nation's neighbors searching for other sources of natural gas that could replace Bolivian supplies, which are threatened by the unrest.

The presidents of Argentina and Chile met Friday to discuss other sources of natural gas to tap if Bolivian shipments stop. Brazil's state-controlled oil company, Petroleo Brasileiro SA, or Petrobras, announced that it's also looking at other fuels to generate electricity for much of southern Brazil.

With Argentina and especially Brazil dependent on Bolivia to fill much of their natural-gas needs, millions in the region would feel the impact of reductions in Bolivian exports.

That would cause a domino effect of energy shortages in the region. For example, gaps in natural-gas supplies in Argentina would force it to reduce exports to its western neighbor, Chile, which counts on the inflow, said Jed Bailey, a director of research at the consulting firm Cambridge Energy Research Associates.

Dependence on neighbors

"The downside of regional energy integration is you're relying on your neighbors," Bailey said. "This crisis means countries across the region will be looking elsewhere for their gas supplies."

Almost all of Bolivia's natural gas leaves the country. Of the almost 1.2 billion cubic feet of natural gas produced daily, about 80 percent goes to Brazil, about 10 percent to Argentina and the remainder stays in Bolivia, said Carlos Alberto Lopez, a former Bolivian energy secretary who advises foreign companies.

Over the past month, disputes over control of Bolivia's energy industry, among other issues, have paralyzed the country.

Led by the Movement Toward Socialism Party, indigenous activists, coca growers and miners demanding the nationalization of the country's burgeoning energy industry have effectively shut down the country by blockading roads, preventing Congress from meeting and threatening violence against oil pipelines and facilities.




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