October 6, 2008
Español
Gas...For sale?
On Overthrowing Presidents in Bolivia
Luis A. Gómez
May 29, 2007
La Paz - 

Four years ago, the Gonzalo Sánchez de Lozada government tried to sell gas to Chile, transport it to Mexico and use it to generate electricity in California. He was overthrown. Two years ago, as Bolivia waited for the elections that would change the course of this country’s political history, the people in El Alto and La Paz began to block-off streets because there was not enough gas to cook or heat their homes. One year ago, President Evo Morales announced nationalization. Brazil buys it, Argentina buys it. And many public schools here in Bolivia use it to provide some of South America’s poorest children with hot breakfasts.

This country’s greatest wealth, gas fuels discussions and debates in the media and in public plazas. Because of this, this journalist noticed a few weeks ago that the Morales government seems to have decided to try out an idea that cost Sánchez de Lozada his rule, more than 60 people their lives and put a rebellious (and subsequently violently repressed) city in the world’s spotlight. Can it be? It’s hard to say just yet.

On May 17th Bolivian Hydrocarbons Minister Carlos Villegas told reporters that contact had been made with Petroleos Mexicanos (Pemex)—the second largest energy company in Latin America after Petrobras—in order to develop an “energy relationship” with the Mexicans. In a news report that had repercussions in both countries, the following information appeared:

Since 2006, Bolivians and Mexican energy representatives have been in contact regarding cooperative projects for the exploration, production and industrialization of gas and its export to Mexico.

Doesn’t sound bad. Seems like the Evo government is doing its job, working with all possible clients and allies to create good business opportunities for the Bolivian people. Except it’s not so clear what Pemex wants to do with Bolivian gas. The goliath already exploits or franchises its existing reserves and those newly discovered in Mexico and these easily meet the country’s internal energy demand. Mexico actually have so much gas that it could even sell to the United States—a country whose fuel supply can’t nearly quench its demand.

So would it be in bad faith to think that the idea of exporting Bolivian gas to Mexico might have something to do with Mexico’s intention to supply gas to the southern part of the United Stations (California) in order to generate electricity in the La Paloma plant? It’s hard to believe that the possible alliance between Bolivian and Mexican companies has nothing to do with the original Pacific LNG project —a consortium of three transnationals operating in Bolivia (Repsol, BG y BP) that provoked the bloody massacres of the so-called “Gas War” in September and October 2003. Don’t you think?

Foreign Relations Minister indigenous David Choquehuanca also touched on the gas issue just days after Minister Villegas. Because of Pacific LNG’s history and of the need to use Chilean ports and markets in such a deal, Choquehuanca noted that it would be possible to sell gas to Chile, a country that today can not meet its heating and electricity energy demands.

Minister Choquehuanca’s generosity went something like this: “We ought to either consult the Bolivian people or it should be secured within the framework of the new Constitution (being written by the Constituent Assembly). But either way, it should be the people’s sovereign decision. Besides, the maritime issue is still pending that should be resolved first.” Meaning, Bolivia ought to repeat the July 2004 hydrocarbon referendum to see if the old Chilean enemy—with whom Bolivia has an ancient maritime dispute—should be able to benefit from Bolivia’s gas.

The Chileans took the news well. Though they didn’t concretize anything, they left the door open to the possibility of accepting Bolivian gas given they are facing a winter gas shortage that could cripple Chilean industry. President Bachelet’s spokesman Ricardo Lagos Weber commented that the possible deal would be “a win-win situation. We’d be happy and they would get a good sale.”

“They?” Who are “they?” Bolivians? Their government? Or the transnationals? Just one or a combination of the three? Does this correspondent have no basis on which to think badly of the Evo Morales government? I hope so, because the internal demand for gas in Bolivia still isn’t being met. And the law that would restructure the state company YPFB remains stuck in Parliament. That is to say, neither Morales nor Bolivia is in a position to deal with the eventual shortages or the various problems that arise from the simple idea of using Bolivian gas to benefit Bolivians (a slogan the President could be heard using on the 2005 campaign trail).

In fact, on May 29th, the local media (almost as full as gas as Bolivia’s ground) announced that the National Chamber of Industry foresees energy rationing because negotiations with Lula and his people on a new price for the gas going to the Brazilian province of Cuiabá continue in limbo and because Bolivia’s internal demand deficit is going to cause problems during Bolivia’s upcoming winter.

And that’s the situation. While some transnationals happily export Bolivian gas to Argentina and Brazil and while the contracts that emerged from the so-called “nationalization” continue filling-up the state’s treasur, is it wrong to think that in their zeal to make business deals, Evo and his boys are walking in the footsteps of an ex-President who was forced to resign? Or will the people of this country give the current government a chance to do what Sánchez de Lozada couldn’t: sell to the highest bidder before ensuring that Bolivians benefit from the gas themselves? We shall see…