Thursday, December 31, 2015

Extreme weather affecting Colombian energy policy

Colombia has been apprehensively awaiting the impact that the El Niño weather phenomenon would have on the country’s climate. This year’s El Niño has drastically cut rainfall in the country, severely lowering the water levels of Colombia’s Magdalena and Cauca rivers. Colombian President Juan Manuel Santos warned that the country might have to impose a limit on domestic water consumption as well as ration energy, as Colombia receives 70% of its energy from hydroelectric dams.

Colombia had expected to bridge its energy shortfall with a new natural gas importation agreement with neighboring Venezuela, but Venezuela state oil company PDVSA announced that it had temporarily stopped natural gas exports to Colombia. PDVSA explained that the changing climate meant that they needed to hold onto the natural gas to generate electricity domestically. Reuters noted that the export agreement provides for the two countries to supply their own markets before exporting.


Earlier this week, Colombian daily El Espectador interviewed Leonardo Villar, director of Colombian think tank Fedesarrollo. Villar spoke about Colombia’s prospects for 2016, and the likely difficulties the country will have in the coming year. Speaking on the price of oil, he said, “It is very difficult to predict oil prices, like exchange rates. Just a few months ago, there was speculation that it would go down more and there was a rise. Everything depends on circumstances out of Colombia’s control. … We need to get used to a low price, whether it is $30 or $50.”

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