14, November, 2011

Gas Sector Investment Policy: The Latin American Experience

Since gas is a cheaper and more environmentally-friendly energy source, Latin American countries have pursued various investment policies to successfully develop the gas sector, including a strong focus on regional integration.

This brief presents a concise overview of the Latin American gas industry, focusing on its policy experience and performance. In particular, it reviews the advantages and disadvantages of the region’s three different policy models: state-led, private, and state-private.  It describes the evidence suggesting that in LA the state-private model has been most economically and politically successful. Finally, it discusses the focus on regional integration that is a particular feature of the Latin American case. The lessons learned will be useful for African and South Asian policymakers interested in boosting their own gas sectors.

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Key Lessons:

  • The state-private model seems to have been the most successful, achieving a fair balance between economic needs and national political concerns.
  • Regional integration has been key to further developing the Latin American gas sector.
  • (Español) Las expectativas nacionales de contar con combustible barato no deben desbaratarse priorizando exclusivamente las exportaciones. El objetivo es lograr un equilibrio exportación-importación para maximizar la producción y el consumo de gas a nivel nacional y regional, evitando conflictos políticos.
  • (Español) El caso de América Latina también muestra un ejemplo interesante de cómo la integración regional puede contribuir a lograr un equilibrio exportación-importación a nivel nacional y regional.

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