
South America planning gas pipeline CBC \|\| January 20, 2006 [KDR: They could not have tried harder to make this sound like a horrible idea. Too bad the CBC is not this critical of US sponsored pipelines.] Leaders across South America are considering construction of a huge network of natural gas pipelines that would criss-cross the continent, allowing them to wean themselves from their dependence on North American and European energy companies. But their show of brotherhood could backfire if this expensive dream becomes reality. The network they hope to build could turn the continent's neighbours against each other as they compete for clients. The presidents of Brazil, Argentina and Venezuela are discussing plans for an 8,000-kilometre pipeline from Caracas to Buenos Aires through Brazil's Amazon rainforest, complete with a link to Bolivia. "This pipeline is vital for us," Venezuelan President Hugo Chavez says. Venezuela and Bolivia "have gas for 200 years" and can supply fuel to Brazil and Argentina, where demand is increasing for power, cooking and cars. But such a pipeline could also set Bolivia and Venezuela on an economic collision course, because Bolivia is already the biggest exporter of gas to Brazil and wants to increase exports to Argentina through another, much shorter proposed pipeline. By joining the much larger pipeline, Bolivia "would be tying their production prospects to whatever Chavez wants to dictate," said Andres Stepkowski, a Bolivia-based oil industry consultant with four decades of experience in South America. But Chavez dismissed that idea. "There is no desire to compete. I don't think there is any fear in Bolivia. Rather there's joy that this project is going to integrate us all. You wait and see." Article Posted at www.KnowledgeDrivenRevolution.com Bolivia lost a big export opportunity when plans fell through to build a multibillion-dollar pipeline over the Andes to the Pacific Ocean, where the gas would be liquefied for shipment to Mexico and Southern California. The chief complaint was a longstanding cross-border conflict: many Bolivians still seethe over the 19th-century war with Chile that left them landlocked. Bolivia's vice president-elect, Alvaro Garcia Linera, would prefer a pipeline to the Pacific through Peru. That route would be more politically palatable, since the pipeline would also supply destitute Indian communities in Bolivia's highlands where gas is scarce. But Bolivia may be too late. Peru is already tapping its own gas fields in the Andes, and hopes to start shipments in 2007, said Pietro Pitts, editor-in-chief of Venezuela-based LatinPetroleum.com, which monitors the region's petroleum industry. If a Bolivia-Peru pipeline is ever built, the two countries "would be fighting for the same markets, Mexico and the United States. It's a race to see who's going to get that gas first," Pitts said. "Why would Peru want to let Bolivian gas get through unless it charges a lot for the pipeline?" Petroleum industry experts have many reasons to doubt these pipelines will ever get beyond the planning stages: sky-high construction costs, immense technical challenges, regional political instability, and the brutal economic fact that gas-producing nations won't want to compete with each other for the same markets. Just last week, the estimated cost of the Venezuela-Argentina pipeline was raised from $10 billion US to between $18 billion US and $20 billion US. But the technological challenges of building a pipeline through the Amazon, not to mention environmental concerns, could push the cost to as much as $40 billion, according to industry experts. "You try building a pipeline through that mud. It can be done, but the price would be so outrageous no project can live with it, not even Chavez," Stepkowski said. About KDR \| \| Home \| \| Weekly Features Archive	Weekly Weekly Features Archive
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South America planning gas pipeline

CBC || January 20, 2006

[KDR: They could not have tried harder to make this sound like a horrible idea. Too bad the CBC is not this critical of US sponsored pipelines.]

Leaders across South America are considering construction of a huge network of natural gas pipelines that would criss-cross the continent, allowing them to wean themselves from their dependence on North American and European energy companies.

But their show of brotherhood could backfire if this expensive dream becomes reality. The network they hope to build could turn the continent's neighbours against each other as they compete for clients.

The presidents of Brazil, Argentina and Venezuela are discussing plans for an 8,000-kilometre pipeline from Caracas to Buenos Aires through Brazil's Amazon rainforest, complete with a link to Bolivia.

"This pipeline is vital for us," Venezuelan President Hugo Chavez says. Venezuela and Bolivia "have gas for 200 years" and can supply fuel to Brazil and Argentina, where demand is increasing for power, cooking and cars.

But such a pipeline could also set Bolivia and Venezuela on an economic collision course, because Bolivia is already the biggest exporter of gas to Brazil and wants to increase exports to Argentina through another, much shorter proposed pipeline.

By joining the much larger pipeline, Bolivia "would be tying their production prospects to whatever Chavez wants to dictate," said Andres Stepkowski, a Bolivia-based oil industry consultant with four decades of experience in South America.

But Chavez dismissed that idea.

"There is no desire to compete. I don't think there is any fear in Bolivia. Rather there's joy that this project is going to integrate us all. You wait and see."

Article Posted at www.KnowledgeDrivenRevolution.com

Bolivia lost a big export opportunity when plans fell through to build a multibillion-dollar pipeline over the Andes to the Pacific Ocean, where the gas would be liquefied for shipment to Mexico and Southern California.

The chief complaint was a longstanding cross-border conflict: many Bolivians still seethe over the 19th-century war with Chile that left them landlocked.

Bolivia's vice president-elect, Alvaro Garcia Linera, would prefer a pipeline to the Pacific through Peru. That route would be more politically palatable, since the pipeline would also supply destitute Indian communities in Bolivia's highlands where gas is scarce.

But Bolivia may be too late. Peru is already tapping its own gas fields in the Andes, and hopes to start shipments in 2007, said Pietro Pitts, editor-in-chief of Venezuela-based LatinPetroleum.com, which monitors the region's petroleum industry.

If a Bolivia-Peru pipeline is ever built, the two countries "would be fighting for the same markets, Mexico and the United States. It's a race to see who's going to get that gas first," Pitts said. "Why would Peru want to let Bolivian gas get through unless it charges a lot for the pipeline?"

Petroleum industry experts have many reasons to doubt these pipelines will ever get beyond the planning stages: sky-high construction costs, immense technical challenges, regional political instability, and the brutal economic fact that gas-producing nations won't want to compete with each other for the same markets.

Just last week, the estimated cost of the Venezuela-Argentina pipeline was raised from $10 billion US to between $18 billion US and $20 billion US. But the technological challenges of building a pipeline through the Amazon, not to mention environmental concerns, could push the cost to as much as $40 billion, according to industry experts.

"You try building a pipeline through that mud. It can be done, but the price would be so outrageous no project can live with it, not even Chavez," Stepkowski said.

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