Saturday, December 22, 2007

Saving (or Seeing?) Daylight in Argentina

Anticipating energy shortages in the summer of 2008, newly elected Argentine President Cristina Fernández de Kirchner has proposed a series of energy measures that include modernizing street lighting, turning off unnecessary lighting in office buildings, and raising the temperature levels in air-conditioned buildings--not to mention the return of daylight savings time. All this is well and good, indeed long overdue, but it's questionable whether those measures will be sufficient as long as Argentine energy prices remain so low, in fact largely frozen since the economic collapse of 2001-2.

As it is, natural gas is so cheap that many Argentines have converted their automobiles to run on it. This has advantages, obviously, in reducing pollution, but it's also meant that Argentina has been unable (or unwilling) to meet supply contract obligations with neighboring Chile because of domestic demand. Heating houses with natural gas also remains very cheap.

In reality, Argentina's energy conservation measures are half-hearted and will probably make no real difference over the coming summer or winter (when gas shortages could mean cold apartments in Buenos Aires). Equalizing supply and demand probably also means higher prices that would encourage exploration and use of resources that are not feasible with the present price structure.

In contrast to the United States, where the current regime makes a fetish of increasing supplies (even when the resources don't exist) and ignores the financial and resource savings to be made by sensible conservation, Argentina hopes that a half-hearted set of conservation measures will overcome all the problems that realistic pricing could help solve. For residents, this could mean blackouts; for visitors, it could affect their ability to get around the country.

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