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Chile goes off the beaten path with its energy pitch


by Ryan Holeywell, Houston Chronicle, July 2, 2014

Minister Maximo PachecoTypically when foreign energy ministers visit Houston, they urge the city’s oil and gas community to invest in their countries, promising potential bounties of resources in return.

In recent months, officials from Ireland, Mexico and the United Kingdom have visited the city to push oil and gas sector investment and make various versions of the same pitch.

But Máximo Pacheco Matte, Chile’s energy minister, struck a dramatically different tone Wednesday.

“We’re probably the poorest country in Latin America in terms of fossil fuels,” Pacheco said at a breakfast at the Four Seasons hotel downtown.

Indeed, when it comes to production of oil and natural gas, Chile is dwarfed by other South American countries such as Brazil, Colombia and Venezuela. Instead, Chile’s energy sector is focusing its efforts on developing renewable resources to power its electrical grid. Chile’s government has set an ambitious goal to increase the portion of the nation’s energy demand met by renewable sources – things like solar, wind and biomass generation – to 20 percent by 2025, all while reducing electricity prices.

“It’s a very ambitious goal, but it’s doable,” Pacheco said.

Today, renewable sources make up less than 10 percent of Chile’s energy use now and were virtually nonexistent in the country a decade ago. As part of a delegation of Chilean officials in Houston, Pacheco was scheduled to meet with officials from Exxon Mobil Corp. and Duke Energy.

His agenda also included a tour of Cheniere Energy’s liquefied natural gas terminal in Sabine Pass and a visit to a Fayetteville Shale gas field in Arkansas operated by Houston-based Southwestern Energy.

Earlier in the week, he was part of a group that met with President Barack Obama, Secretary of State John Kerry and Secretary of Energy Ernest Moniz.

For Pacheco, the focus on renewable resources is a no-brainer. The country has a long western coastline, good for wind power generation; the Andes mountains on the east, with potential geothermal power; and the Atacama Desert to the north, a natural fit for solar generation.

“We need to use the resources we have,” Pacheco said.

U.S. investors

He and others from the delegation are encouraging U.S. investment in the country as it works to develop those resources while upgrading its transmission grid and linking it to Peru, Colombia and Ecuador.

U.S. companies are heeding his call. Arizona-based First Solar announced last month that it had received financing to support construction of its 141-megawatt Luz del Norte solar power plant in Chile. The project is slated to be the largest solar power facility in Latin America, company officials say.

Missouri-based SunEdison announced last month it had secured financing to build a 73-megawatt solar power plant in Chile.

“Chile welcomes U.S. know-how in the implementation of these ideas,” Pacheco said.

Strong link to Texas

Chile already has an important relationship with the energy sector in Texas as one of the largest importers by volume of diesel and gasoline refined on the Gulf Coast, said Jorge Pinon, director of the University of Texas-Austin Latin America Energy Program, a sponsor of Wednesday’s event.

That relationship could expand, as Pacheco said Chile is interested in U.S. shale gas as a replacement for diesel, a main source of power generation in the country. Historically, Chile has depended on Argentina for natural gas, but that neighboring nation has limited exports since it experienced a domestic natural gas shortage in 2004.

“The energy revolution in the U.S. is something we’re following with a lot of admiration,” Pacheco said.


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