Argentina cuts gas supply to Chile as energy crisis worsens

Argentina suspended Wednesday [11 Jul 2007] natural gas shipments to neighbouring Chile to ensure domestic supplies as one of the coldest winters in recent history grips Argentina, Chile, Uruguay and the south of Brazil. "Argentina has been exporting in a way that defies reason and it doesn't even have enough gas to meet its domestic demand," said Gustavo Calleja, former undersecretary of fuels between 1983 and 1986.

Argentina's demand for energy has soared with four years of sustained economic growth exceeding 8%. At the same time, lower-than-expected rainfall has cut electricity output at hydro-electric dams. In winter, gas consumption jumps as Argentines use the price-controlled fuel to heat poorly insulated homes, while demand for electricity also rises, increasing the gas needs of power generators. Argentina is in the throes of a cold wave that on July 9 saw Buenos Aires' first snowfall in almost 80 years. Chile, the world's largest copper producer, receives almost all the natural gas it needs from Argentina.

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