14 October 2007

SOUTH AMERICAN GAS PIPELINE WILL CONNECT CARIBBEAN WITH PACIFIC OCEAN

The presidents of Colombia, Venezuela, and Ecuador announced Friday Oct. 12th that new Ballenas-Maraciabo international pipeline will be extended across Colombia to create the first transoceanic pipeline on the continent.

Speaking at the inauguration Friday, President Chavez said that plans were ready to connect the pipeline with Central America and the Andean countries of Ecuador, Peru, and Bolivia. The announcement names the city of Popayán in southwestern Colombia as the pipeline's next destination where it will then be extended south to the Ecuadorian border city of Tulcán, in the highlands of Ecuador's central valley.

President Chavez also announced plans to connect the pipeline with Panama and from there head north into Central America, expanding the Union of South American Nation's (Unasur) plans to create a regional energy grid to supply the continents increasing energy needs.

Energy shortages are already affecting the southern cone where natural gas shortages in Argentina have led to supply cuts in gas exports to Chile. According to figures published by the New York Times, Argentina has cut over 90 percent of its supplies to Chile 79 times this past winter forcing power plants and factories to switch to diesel and fuel oil to make up for lack of natural gas.

The repeated cuts have strained relations between Santiago and Buenos Aires and caused the highest number of dangerously smoggy days in the capital city of Santiago in seven years. The cuts are also contributing to increased inflation in Chile, expected to reach 6.4 percent this year.

Although Argentina's president Nestor Kirchner refuses to admit that government price fixes have discouraged much needed investment and development in the energy sector, leading to decreased production, analysts say that his policies are responsible for Argentina's soaring inflation. While official government figures predict that inflation will grow between 7 and 11 percent, The Economist puts the figure at 12.6 percent and the New York Times quoted private economists who predict national inflation will be closer to 20 percent.

All of this is occurring in the context of a continental push for greater integration launched by the 12 presidents of South American nations in 2000. The success of the movement so far has been mixed with the northern half of the continent moving forward on projects like the Ballenas-Maracaibo pipeline while the southern cone remains bogged down in conflicts like that between Argentina and Chile.

Photo By: ABN, Venezuela