Abstract

Gas and electricity are key driving forces for regional integration in Latin America, but the physical barriers and the differing pace of the deregulation and re-regulation process for both sources of energy in the different countries, complicates the adequate operation of energy markets. This paper analyzes the barriers that affect the development of energy markets and establishes the importance of eliminating these barriers to allow economic growth and a better standard of living for the region.

Scenarios faced by the Latin American energy sector are strongly impacted by globalization, political and economical instability, technological development, stricter environmental standards and the need to supply markets at competitive prices.

Market competition and energy integration allow for a more efficient allocation of resources, and contributes to regional optimization, but this process needs clear, transparent and harmonized regulations in order to be successful.

The importance of natural gas as a source of power generation and industrial applications has increased significantly for technological and environmental reasons. However to ensure reasonable market prices and a stable supply of the resource physical and regulatory barriers must be removed. The process needs to facilitate the improvement of natural gas pipeline and power transmission infrastructure and to develop a framework of clear transparent and harmonized regulations. In particular the differences between natural gas market regulations and power regulations constitute significant barriers to the development of efficient markets. This process of removing physical and regulatory barriers will promote economic development and a better standard of living for countries in the region.

Background Regional integration in the Southern Cone is a reality in a global world today. Fifteen years ago Brazil and Argentina began a process of integration based on the strategic idea of improving the conditions of their participation in the world economy, envisaging coordination among countries as a central instrument in the process.

During the 90's, changes in the world affected conditions of the integration process. The worldwide consensus based on the idea that the elimination of frontiers and economic controls would impel general prosperity, promoted a very important opening of the economies of developing countries.

The idea of changing the rules that govern international economic flows was abandoned in favor of the need to adapt national policy strategies to existing rules.

BLOCK 3 - - FORUM 16 141

BARRIERS THAT AFFECT THE DEVELOPMENT OF ENERGY MARKETS IN THE SOUTHERN CONE OF LATIN AMERICA

The end of traditional funding sources of infrastructure industries in the regional countries together with the need for a f

This content is only available via PDF.
You can access this article if you purchase or spend a download.