July 08, 2005

Reflexions on Gas and China

MABB © ®

It is a fact that in the near future natural gas (NG) will become an important source of energy in the world, as the world seeks to make itself less dependent on oil.

A "few" facts highlighting this trend can be found in the October 2004 World Energy Outlook Report from the IEA. I just take some significant facts from this extensive report on world energy.

For example, a prognosis for 2030 of NG demand in the world looks astounding. For North America, NG use will rise 45%, while in Europe it will rise 64%, also in Russia it will rise 50% and more strikingly in Asia it will rise 220%.

This should have a direct impact in Bolivia, whether Bolivians want it or not. The world's appetite for NG is insatiable and will devour anything it remotely resembles NG. Natural Gas is the preferred form of energy in the developed world and, as we've just seen, it is likely to remain "the preferred" form of energy.

Which takes me to my second point. As we have seen, Asia will demand a major part of the world's NG resources. China alone is expected to drive that demand. That is why the international relations between China and Latin America are seeing an increase in activity like never before. The Chinese government is courting Latin American government like Chile, Venezuela and Brazil to increase their relations. China has even been to Bolivia offering huge amounts of investments in oder to secure much needed resources.

However, the Chinese-Latin American relations has one simple dimension, i.e. resources. The Chinese need resources to keep growing and Latin America has them in plentiful quantities.

All this matters for Bolivia because, as we already know, it has the second largest proven natural gas deposits in Latin America. That means, NG is there, in the middle of Bolivia's affairs, at least for the next 50 years. The challenge is whether Bolivians can take this opportunity and use their resources to achieve development.

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