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Shale gas threatens renewables revolution

The shale gas revolution in the US could turn the tide against the market for renewable energy in Latin American just as governments are focused on uncorking the vast reserves of non-conventional energy in their region.
Solar energy and wind power projects abound in Latin America. The Peruvian government claims the country has the potential to generate as much as 30,000MW from geothermal, solar and wind projects. It already has four solar photovoltaic plants operating and three wind farms on the way. 
Uruguay is, by far, the most advanced.  It is likely to become the first country in the world with an energy grid that is not just based on renewables, but on wind power.  Uruguay will invest up to $7bn on changing its energy matrix, focusing primarily on wind power to supplement existing hydroelectric generating capacity.
While the calculations for non-conventional renewable sound promising, changes underway for shale gas development in the US could trigger a revolution in the supply of renewables.
“The shale gas revolution in the United States is going to recreate the way the region thinks about power generation,” said Robert Kartheiser, an attorney focused on energy projects at New York law firm Allen & Overy LLP. 
He said the shale revolution did not have to be limited to North America. In addition to the Eagle Ford liquids-rich shale in Mexico are Ponta Grossa in Brazil, Vaca Muerta in Argentina and La Luna/Capachu, shared by Colombia and Venezuela.
The country everyone is watching is Mexico, as it moves ahead with its sweeping energy reform. While attention has focused on the state-owned oil company, PEMEX, the reform could unlock vast quantities of shale gas in the country. 
The vision includes pipelines crisscrossing the US-Mexico border moving gas. The next step is exports. More than 30 liquid natural gas (LNG) plants are being built or in the planning stages on the US southern coast for gas exports. The obvious markets are, at the moment, Central American and the Caribbean.
Panama is currently in the process of planning an LNG import facility and a combined cycle power plant that would generate 600MW using natural gas as feedstock.
The expansion of the Panama Canal will also help move fuel. No LNG currently passes through the canal, but that will change in 2015 when the expansion is complete.
The US Energy Information Administration said in January the rapid growth in US gas production would have a huge impact on fuel patterns in the region.
The question is developing regulations that allow these resources to be exploited, which is something that has not started. Only Argentina has taken initial steps to review norms for exploiting Vaca Muerta’s untapped resources.
Even countries touting their renewable potential are focusing efforts on gas, whether conventional or shale. Peru will award in June the contract to build a second gas pipeline in the south of the country to move gas produced by the Camisea gas fields and adjacent blocks. 
The government likes the $4bn that will be invested to build the pipeline and the possibilities it creates for power generation and manufacturing. And it likes the royalties gas leaves behind. The Camisea consortium has paid $6.4bn in royalties since it began operating in August 2004.

Category/ies:News, Regional News.
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