SPECIAL SESSION 8

IS LATIN AMERICA ACHIEVING A SUSTAINABLE ENERGY DEVELOPMENT PATTERN THAT MIGHT FAVOR REGIONAL INTEGRATION?

Questions & Answers

Mr. Pierro: We have had a party to end up early. And we’ve had the chance to hear six top people responsible of the energy sectors in Buenos Aires, and this is a matter of pride for us. And we would like for the World Energy Council to always be a place where we can meet and talk very loud and clear about our problems. The World Energy Council is concerned not only about the global energy issues but, as Gerald was saying, it has divided the world in regions and it has tried for the people responsible of these regions to find a consensus among the countries making up those regions. We have many questions to deal with. We have gone over time 10 minutes so I have to sum up the questions. And I’ll try to ask only two of the questions. It would be interesting to stay longer.

The first question will be addressed to the Minister of Energy of Brazil. When we talk about energy matrix or grid or mix, are we talking about a regional one, or are we talking about a national one? In other words, are we thinking that integration forces us to define a regional matrix and hence to define strategies around that?

Mr. Vasconcelos Lima: I believe that an actual integration means that we have to talk about a regional matrix and not only about a domestic one. Because the fact that we work in an integrated fashion with the potential each country has is going to improve our own productivity in the use of available energy resources. In other words, when a country produces gas at a lower cost and we use that gas in our common energy matrix, and another one produces hydroelectrical power at a lower cost and we’re using that as well in our matrix, I think that is the road we have to follow, for that agreement has a sum above zero so that we have a greater productivity. Brazil believes in the possibility of working together to have a regional energy matrix and that each country in its own specialty will make it possible for everybody to win.

Mr. Pierro: The second question is also for you, Jose. I’m trying to sum them up because we have so many. This is an interesting question for Latin America. What do investors think about the meaning of sustainability? And in this particular case, from what I see, they are thinking that if sustainability is to uphold the rules of the game and legal framework and therefore to give faith or trust to the investors to make sure that the risks are as little as possible.

Mr. Vasconcelos Lima: Well, we have also talked about this before the meeting. I think that there are three main aspects in this issue of sustainability, as we would say in Portuguese. To begin with, in Latin America we have to walk to solve the first point that is universalization, which means that all the population may have access to electrical power, which is a factor that can never be absent of somebody’s life. The second issue is the environmental sustainability. In other words, whatever the generation fashion is, it has an impact on the environment and therefore it is necessary for those investments for the production of electrical power to take into account the environment, so that the future generations may take advantage of the same environment. And third, the financial and economic sustainability of the investments that have been actually carried out. Of course, we want a competitive system, a system with private investments. Therefore, we have to find rules of the game that are clear enough and stable enough to attract investors, both national and foreign, so that we find different ways to solve the energy problem. So sustainability has to be based on these three pillars: universality, environment and economic and financial balance of the system so that it generates new investments. Thank you.

Mr. Pierro: Thank you, Jose. There are many questions for Francisco Barnés de Castro. I am going to ask one. It says, I’m going to sum it up, ‘Considering you have more experience in regional integration in the particular case of the NAFTA, when you talk about the energy importing levels, is that good or bad? Aren’t we having a strategic plan with the US on the development of the region?

Mr. Barnes de Castro: I believe in a regional market. The issue of the exchange or trade is of mutual benefit. There are moments when it’s good to import, others when it’s good to export. And the same product at some point in time becomes more convenient if you import it and at other points in time it is better if you export it. In the particular case of North America, the specific issue of energy is one that by Mexican request was left aside. And nowadays, when electrical power and gas are closely linked, and the world, not only our country, is moving toward regional markets, we have a work commission between the Secretary of Energy and the Department of Energy of the US to identify the best opportunities and to find the mechanisms to speed up interconnections for mutual benefit of both parties. And, again, here I would like to say something that has been said by Minister Gordell of Canada. It’s not a question of talking about an energy policy of the country because every country has its own policy and each of these three countries is very jealous of our own. The issue here is to explore the opportunities to enlarge them and to develop a North American market. And the same holds true when we are talking about Central America, where the Puebla-Panama program mentions the integration issue as one of the main issues. And that we will definitely find solutions inasmuch as what the Minister of Uruguay was saying is true, that we have a long- term strategy and not that we only vouch for the short-term issues. I don’t know if I’ve answered the question, sir.

Mr. Pierro: Thank you, Francisco. There are many other questions, especially for Francisco. This exhibition is open till 9 p.m. so you can keep making technical questions to him. I’m going to give them to you. But I want to thank all of you, the six Ministers who have been here with us this afternoon, for taking part in this meeting. It is our meeting, it is not the Argentine meeting. It is the meeting made by Latin America in Buenos Aires. That is the way we thought about it from 1995 onwards. You are home, that is what we want to offer you. And, therefore, this meeting has been for us not only very enriching but it’s a meeting among friends who talk about things just like Minister Abreu said, with our thoughts, our difficulties, our mistakes and our virtues. I thank you on behalf of the Argentine Committee for coming here. We are going to call it to an end. Thank you very much.