LATIN AMERICA A faultline spreading south and full of grim prospects

Sep 01, 2007 | 12:03 PM |

With electrical energy rationing in Argentina having stretched to three months—bringing down steel production and overall economic growth—the alarm bells are ringing throughout Latin America.

Chile, partly dependent on now-uncertain supplies of imported fuel—including natural gas from Argentina—and which is facing a water supply shortage to boot, has acknowledged that energy problems threaten the continuation of its recent buoyant economic growth rates.

Venezuela is having difficulty implementing its ambitious South American gas pipeline project, possibly because of political misgivings on the part of its Latin American neighbors.

Prices of Bolivian natural gas have skyrocketed since the government nationalized its oil and gas industry in May 2006.

And a report from Brazilian think-tank Instituto Acende Brasil, published in early August, said that the probability of Brazil facing a new round of blackouts by 2011 is now up to 32 percent.

The warning bells grew louder in Brazil with the revelation that oil and gas producer Petrobras SA has insufficient natural gas to honor a contract with local thermal power stations. In addition, initial free-market auctions in late July to sell sugar-cane-based biofuel aroused scant buyer interest.....