177. CROSS-BORDER ISSUES

Paraguay is an interesting case-study in energy issues. According to the DOE and the Oil and Gas Journal, it has no coal, no oil, no natural gas and no nuclear. The country would seem to be a prime candidate for electrical blackouts, but (it turns out) they are not. Paraguay is the joint owner of the largest electrical generating facility in the world, the Itaipu Dam (12.6 Gwatts):

From the DOE:

In 2002, Paraguay consumed 2.5 billion kilowatthours (Bkwh) of electricity, the fourth lowest level of power consumption in South America. Paraguay generates nearly all its electricity from one hydropower plant, Itaipu, which provides about 94% of Paraguay's relatively small electricity demand. The Yacyreta and Acaray hydropower plants, as well as six small thermal-fired plants, supply the remainder of the Paraguay's power demand.

Although Paraguay consumes a relatively small amount of electricity, the country ranks as the fourth largest electricity producer in South America, behind Brazil, Venezuela and Argentina. In 2002, Paraguay generated 48.4 Bkwh, of which 95% was exported, mainly to Brazil. In 2002, Paraguay's net electricity exports of 45.9 Bkwh were the second largest in the world, behind only France.Source

Paraquay is like France, a country with a strong natural advantage in the post-peak period.

But let's compare it with one of its neighbors. Uruguay also has no coal, no gas, no oil, no nuclear. So how are they going to keep the lights on? Primarily with hydro, but beyond that, they're in a bit of trouble. Here's the DOE data on Uruguay:

Generation Facilities
Four hydroelectric facilities provided the bulk of Uruguay's electricity generation in 2004: Terra (0.53 Bkwh), Baygorria (0.40 Bkwh), Palmar (0.98 Bkwh), and Salto Grande (2.85 Bkwh). The remainder of the country's electricity generation comes from thermal power plants, which UTE only calls upon during peak demand, or when weather conditions suppress output from its hydroelectric facilities.

Under normal weather conditions, Uruguay's hydroelectric plants cover the country's electricity demand. However, seasonal variations can leave Uruguay at a severe power deficit, forcing the country to rely upon imports or costly oil- and diesel-fired generators. In 2001, UTE announced a tender for a new, 400-megawatt (MW), natural gas-fired power plant that would help diversify the country's electricity supply. However, a combination of factors forced Uruguay to withdraw the tender in early 2005, including the election of a new president in early 2005, questions regarding the future of natural gas imports from Argentina, the cost of the facility ($200 million), and the construction time (26 months) of the project.Source

The DOE has a link on those "questions regarding the future of natural gas imports for Argentina", and clicking on it, we find this:

Issues Concerning Imports
Due to natural gas shortages, Argentina has recently begun interrupting its natural gas exports to Uruguay and Chile. This has raised concerns in Uruguay about the future security of its natural gas supply and jeopardized plans to increase domestic natural gas consumption. Uruguay has negotiated with Bolivia about building a natural gas pipeline between the two countries as an alternative to Argentine imports.Source

This is just one manifestation of a wider phenomenon.

Monday, November 28, 2005. Page 6.
No More Cheap Gas, Russia Tells Neighbors
Russia said Friday that it would stop supplying subsidized energy to some former Soviet republics and charge them at world rates, putting further strain on the Commonwealth of Independent States.Source

Russia is interesting because it's using the stick-and-carrot approach. Ukraine, Georgia and Moldova (who have become increasingly friendly with the West) had their subsidies removed, while "Belarus, whose autocratic leader Alexander Lukashenko is on good terms with Moscow, also enjoys subsidized gas rates, but these are not being renegotiated."
Another case is Chavez, who is well-known for supplying cut-rate oil to Cuba, and even poor citizens in the U.S. This is a similar phenomenon, and illustrates a trend counter to the usual hype about resource war: nations helping other nations with fuel. (In fact, I am more and more of the opinion that this will be the most immediate challenge of peak oil. It's not enough for the U.S. to think only of itself. Some nations might not pull through without assistance.)
Of course the phenomenon has its other face too, and it's even emerging (at least in embryonic form) between the U.S. and Canada:

It may or may not have struck you as interesting that, although Alberta has oil reserves estimated to be in excess of 1.6 trillion barrels, our gas prices are skyrocketing along with the Americans’. We aren’t the ones with an oil shortage, so why are we paying the price?

What came with NAFTA and the FTA (a Canada-U.S. free trade agreement) was the obligation to sell over 60 per cent of the fuel produced in Canada to America. Our oil prices are also tied to theirs — we are unable to charge Americans a different price for our oil than we charge Canadians. We have surpassed Saudi Arabia to become America’s main supplier, but we exert nowhere near the influence over oil prices that OPEC countries do.

Saudi Arabia and Venezuela, along with other oil exporting countries, give their own citizens a better price for oil and gas than they charge for export. The fact that we are unable to do the same started to become a nuisance around the time gasoline prices first pushed over the dollar mark.Source

-- by JD