Bolivia

1
Bolivias Nationalization of Natural Gas

• By Andrew Switkay, Ed Wons, Andrew Mong, Dillon
  Farrell

2
Energy in South America

• Economic growth in recent years is partially
  driven by rising prices for commodities such as
  oil
• Only significant exporters of gas are Venezuela,
  Bolivia, and Ecuador
• State intervention threatens production levels
• Lack of cooperation could slow economic growth

3
Natural Gas vs. Oil

• One barrel of crude oil has about 6x the energy
  content of 1000 mcf of natural gas
• Natural Gas is cleaner, safer and more useful
• Lower air emissions, very little water used, no
  dirty water discharge, no substantial amount of
  solid waste

4
Natural Gas in South America

• Bolivia has 2nd largest natural gas reserve
• Resource nationalization troubles the ability to
  supply gas
• Argentina is now dependent on gas imports from
  Bolivia
• Bolivia
• 2002 estimated 54.8 trillion cubic feet
• 2007 estimated 31.5 trillion cubic feet

5
Brazilian Gas Consumption

• 10th largest energy consumer in the world
• Imports 40 of its natural gas
• Motor vehicles beginning to rely on natural gas
• Increasingly high demands

6
Nationalization

• May 1st, 2006
• Morales ordered military to occupy energy
  installations
• 53 energy installations occupied
• Brazils Petrobras Co.

7

• Silas Rodeau
• Bolivian VP Garcia- est revenue jump to 780
  million
• Along with Petrobras Repsol YPF, BG Group PLc,
  TOTAL are major gas Cos in Bolivia
• October 28th, 2006 agreement

8
Agreement

• Bolivian goal was to raise revenue shares from
  major fields from 60 to 82
• Much resistance from Petrobras
  Co.
• Copied Chavez

9
Geopolitical Effects

• During early 1990s, Argentina privatized their
  state-owned energy company
• Becoming energy dependent
• Prices will rise
• Southern Gasoduct could help lower Argentina
  dependency

10
Geopolitical Effects

• Brazil uneasy about the role of Chavez in Bolivia
• Causing Brazil to take the backstage to Bolivia
• Tensions raise between Bolivia and Petrobas

11
Geopolitical Effects

• Bolivias nationalization involves risk
• Loss of foreign investments
• Petrobas has created complications between
  regions rather than collaboration
• Strengthened relations between Bolivia,
  Venezuela, and Cuba
• Weakened relations between Brazil and Argentina,
  Argentina and Bolivia

12
Implications for Washington

• Traditionally concerned with coca production
• Relationships with Peru and Colombia
• Bolivias combating illegal drugs
• Bolivias increase in ties with Venezuela and
  Cuba
• Bolivians nationalization
• Turning down the FTAA
• ALBA alternative (Chavezs)
• Economic Implications

13
Rise of UNASUR

• Treaty signed on May 23, 2008
• Brought together two existing trade blocs
  (Mercosur CAN)
• 12 member Union
• Largest economic, monetary and political alliance
  in the world
• Promotion of South American regional integration

14
Goals

• Single Market
• Development of international infrastructure
• Common Defense Policy
• enhancing multilateral military cooperation,
• promoting confidence and security building
  measures
• fostering defense industry exchange
• Free movement of visitors migrant workers among
  member nations

15
Emerging Geopolitical Force

• One of the Western Hemispheres leading
  multilateral bodies
• Combination of countriesGDPs would reach more
  than 2.3 trillion 7th in the world.
• Brazil at the center of UNASUR momentum
• Undermines the OAS
• "In a world overpopulated with agencies that
  generally do not fulfill the objectives for which
  they were created, UNASUR became very useful and,
  in addition, laid bare the ineffectiveness of the
  OAS, an entity that since its creation has
  operated at the service of US interests
• Late Argentine President Nestor Kirchner

16
UNASUR Backs Morales

• 2008 Attempted coup of Bolivian President Evo
  Morales
• Emergency meeting in Santiago by Chile president
  Michele Bachelet
• Condemned violence and attacks against Bolivian
  democracy
• Created commission of support and assistance to
  Bolivian government
• OAS not involved in peaceful resolution

17
Brazils Role

• As one of the major actors of UNASUR, Brazil
  successfully used it as a regional mechanism that
  has helped to smooth relations with Bolivia
• Lulas close relationship with Evo Morales

18

• "For the first time in South America's history,
  the countries of our region are deciding how to
  resolve our problems, without the presence of the
  United States.
• -Evo Morales

19
Questions

• Do you think the nationalization of Bolivias
  natural gas will ultimately lead to economic and
  political stability?
• Do you think it is possible for the United States
  to regain some of its influence in Latin American
  countries prior to UNASUR?

20
Sources

• http//www.cfr.org/energy/energy-bottlenecks-south
  -america/p16037
• http//www.globoscope.ru/eng/content/articles/354/
  
• http//www.thefreelibrary.com/UNASURcomesintoit
  sown,setsexampleofLatinAmericandiplomacy.-a
  0246536239
• http//www.coha.org/brazil-and-unasur-regional-sec
  urity-and-the-nationE28099s-world-sanding-in-th
  e-era-of-rousseffE28099s-rule/
• http//www.boliviainfoforum.org.uk/inside-page.asp
  ?section3page33
• https//docs.google.com/viewer?avqcacheg4ubF6G
  oqdsJwww.thedialogue.org/PublicationFiles/Shifter
  -CurrentHistory.pdfhlengluspidblsrcidADGE
  ESi3-zDu58Et5v0Stn5zdgtXqUkqmYwZIs6OrX1sqCy4Zv_U8v
  7w5lwbWsUBi3eJI6mNNHaUrJFxdd0n5foyVlFcMKiKt7LO9ntq
  5HTISU1ui_u7co0IhmcqlKARL2DfY7zFwqR1sigAHIEtbRJ8
  MYiGqLApgE5AT7b_Xhe6Sy6cA
• http//www.cepr.net/index.php/blogs/cepr-blog/unas
  ur-emerging-geopolitical-force/