Mr President,
Honourable Ministers,
Excellency Secretary General,
Esteemed delegates,
Ladies and gentlemen,
It is with great respect and appreciation that I extend my heartfelt thanks to HE Andrés Rebolledo Smitmans, Secretary General of OLADE, for the gracious invitation to participate in this distinguished Ministerial Meeting, and to HE Omar Paganini, minister of Industry, Energy, and Mines of the Oriental Republic of Uruguay, for the warm hospitality and excellent arrangements.
On the occasion of the auspicious OLADE’s landmark fiftieth anniversary, I am delighted to deliver the warmest congratulations and best wishes from the Gas Exporting Countries Forum.
The GECF applauds OLADE for its exceptional dedication to fostering sustainable development, enhancing energy integration, and fortifying energy security across Latin America and the Caribbean.
We are proud of the cooperation with OLADE, which has been further strengthened through the signing of a Memorandum of Understanding on the 27th of July, 2023, in Caracas.
Four distinguished nations—the Plurinational State of Bolivia, the Republic of Peru, the Republic of Trinidad and Tobago, and the Bolivarian Republic of Venezuela— are members of both the GECF and OLADE.
Ladies and Gentlemen,
The Latin American and Caribbean region is a striking example of energy’s crucial role in sustainable development. The region's diversity of economies illustrates how energy acts as a catalyst for economic growth and social progress, underpinning advancements in education, healthcare, industry, and agriculture. In harnessing its vast array of energy resources, the region adopts a comprehensive approach to development, recognizing that a secure, reliable, and sustainable energy supply is essential to the specific needs of each country and region, in light of their unique national circumstances, natural resources, capabilities, and priorities.
The last four years have further emphasized this crucial importance of energy. The convergence of the coronavirus pandemic, economic and financial stresses, and geopolitical shifts has propelled the energy trilemma to the forefront of policymakers' agendas: how to simultaneously ensure energy security, energy equity, and environmental sustainability.
This intricate balancing act is challenging for all nations, yet it poses particular complexities for Latin America and the Caribbean, where the need to alleviate poverty, create jobs for the youth, and ensure inclusive growth is intensified by the imperative to safeguard its delicate environment, reduce greenhouse gas emissions, and adapt to climate change.
A recent UN report warns that the world is behind schedule in achieving most Sustainable Development Goals by 2030. While there have been positive steps, progress is too slow or reversed for many goals. Latin America and the Caribbean feel this challenge even more acutely, as high inflation, increasing interest rates, and growing debt complicate their progress.
Similarly, a recent evaluation undertaken as part of the first Paris Agreement’s global stocktake reveals that, despite some progress, significant gaps in implementation persist in key areas including mitigation, adaptation, finance, technology transfer, and capacity building.
Latin America and the Caribbean's situation is unique as its greenhouse gas emissions mainly arise from agriculture and land use, not from the energy sector. The region is critical for carbon capture due to its large forests and is well-endowed in metals and rare minerals essential for expanding electrification of energy systems.
According to the latest GECF Global Gas Outlook, global primary energy consumption is expected to rise by 22% in the period to 2050, underpinned by a global population increase of 1.7 billion, primarily in developing countries, and a doubling of the global economic output, surpassing 200 trillion US dollars.
Clean, available, flexible, and versatile, natural gas, alongside renewables, acts as a catalyst for attaining sustainable development goals and ensuring just and cost-efficient energy transitions.
Natural gas serves as a sustainable alternative to traditional biomass like wood and dung for cooking, thus reducing indoor pollution and deforestation. By replacing coal, it improves air quality and cuts greenhouse gas emissions and pollutants. It stabilizes power systems reliant on intermittent sources like wind and solar and compensates for hydropower shortfalls during drought periods. It lowers emissions from industrial high-temperature processes, and underpins global food security by being a vital feedstock in fertilizer production.
The GECF expects a remarkable 36% increase of natural gas demand over the period to 2050, and its share in the global energy mix to rise from 23% in 2021 to 26% in 2050.
Even under the accelerated decarbonisation scenario, demand for natural gas is projected to increase, albeit at a slower rate.
In the Latin America and Caribbean region, the GECF forecasts that natural gas consumption will witness a twofold increase, reaching 320 billion cubic meters by the year 2050. While the region is well endowed in natural gas resources, turning them into supply requires to prioritize consistent and timely investments across the entire value chain.
Our analyses indicate that in order to meet the surging global demand for natural gas, substantial investments nearing the magnitude of $10 trillion USD will be required by the year 2050.
Natural gas projects are capital intensive, with long lead times and payback periods. Furthermore, without investment, natural gas supply declines rapidly at an average rate of 4% to 5% per annum. It is thus clear that not investing in natural gas today creates the risk of supply deficits tomorrow and high prices as well. This unfairly penalizes developing countries, obstructing their legitimate aspirations to harness natural gas resources for poverty eradication and socio-economic development.
Ladies and gentlemen,
The Latin American and Caribbean regional cooperation is pivotal for unlocking the full potential of its vast natural gas resources. With some countries possessing rich gas deposits and others offering growing markets, joint initiatives in infrastructure and market development are crucial. By pooling technical expertise and financial resources, the countries can bolster energy security and access, and drive regional economic growth. This collaboration is also essential in harmonizing regulatory environments, facilitating cross-border gas trade, and fostering investments in the gas value chain, thereby strengthening the region's energy independence and economic resilience.
The recent agreements between Trinidad and Tobago and Venezuela on the Dragon gas field exemplify how infrastructure and resource sharing contribute to regional energy development for the benefit of all. The agreement between Bolivia and Venezuela is another perfect illustration of such positive effects.
The role of OLADE in regional energy cooperation is unique. As OLADE marks its 50th anniversary, its continued commitment to promoting energy integration and shaping a sustainable energy future for the region deserves commendation.
Thank you for your attention.