Colombia has no choice but to turn to fracking

New Ecopetrol president Juan Carlos Echeverry staked out a very aggressive position for himself and for Colombia state-run oil company Ecopetrol in an interview with the press. He said, ““If we take the decision not to use the [hydraulic fracturing] technology, we are deciding to leave oil in the ground. Can we afford it? My answer is no.” Manuel Rodriguez, former Colombian Minister of the Environment, accused the Colombian government of improvising its policy on fracking. In any case, this would not mean a quick fix for the country’s ailing industry: according to Ecopetrol’s estimates, it would be five to six years before the country saw its first barrel of oil from fracking.

Unfortunately for Colombia, the country does not appear to have any alternatives to just doubling down on its economic growth strategy of the last 15 years. According to a study released by the Center for Thought on Competitive Strategies (Cepec), it would take Colombia 17 years to double the value of its non-mining or energy exports. The purpose of the report is to demonstrate that Colombia needs to act quickly and decisively to promote its export sector and start to lesson its overdependence on its mining and hydrocarbons sectors.

Nonetheless, net foreign investment in the country fell by 25% for the first trimester of 2015, as compared to the same period last year. Surprisingly, the main driver of the fall was not investment in mining and hydrocarbons, which only fell by 11.7%, but rather foreign investment in public and private Colombian stocks, which plummeted by almost 60%.