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Argentina: The Gas-To-Power Option

Maximo Fonrouge, Carlos Valiente-Noailles, Oil & Gas Development in Latin America (1999)

Only ten years ago, a sleeping giant -the Argentine energy system- was waiting to be awakened in Argentina. Such system was extremely regulated and very inefficient, characterized by winters without sufficient provision of gas and summers of brownouts and blackouts. Utilities were state owned and administrations misused them as tools of erratic economic policies. There was no serious energy policy designed to cover the country needs.

The giant was awakened. In the early nineties the state owned natural gas transportation and distribution company and the electricity utility company serving the Buenos Aires area were both privatized. An ambitious deregulation program accompanied these major changes.

This paper will attempt to highlight the decisive influence of privatization and deregulation policies in changing the energy sector, as well as the importance of the legal framework in achieving an efficient system, where natural gas and power are key sources in the construction of an energy policy.