OBELA Analysis

With the recent formalisation of the Regional Comprehensive Economic Partnership (RCEP), Latin America and the Caribbean (LAC) has the opportunity to access the world's largest economic bloc. It is an opportunity and an alternative for LAC blocs to coordinate and use this new market as a catapult for recovery from the COVID-19 crisis. 

However, in the two centuries of LAC's history, repeated efforts at economic integration and multilateral cooperation have failed to materialise into a project.  Integration has been truncated by a combination of internal factors such as the conflict between the primary-export and industrial sectors and the principle of due obedience that obliges Pan-Americanism.

Ecuador is the most recent example of US interference in the internal politics of the region's countries.

Hydrogen is considered a renewable energy source option and the route to follow in the change of the energy matrix to replace gas at industrial level and to be used in fuel cells for transport vehicles and to generate other fuels. Hydrogen production for energy purposes is classified into 5 colours, 4 by origin and one by treatment. There is grey, brown, black, green and blue hydrogen.

Using hydrogen as a key energy carrier will require a huge increase in production volume and a new and complex infrastructure to supply it to users. Countries with wind, solar and hydropower infrastructure will have a competitive advantage in green hydrogen production.

Green hydrogen is the best fuel option we have towards environmental recovery and several projects have been implemented in the Latin American and Caribbean region to produce sustainable energy with the intention of meeting the Sustainable Development Goals.

The international natural gas market has seen changes in the last quarter of 2020: an increase in supply by the French company TOTAL in Mozambique; a slight recovery in the international price; and changes in South American contracts for export destinations. 
In Latin America, the main supplier of gas in its gaseous form is Bolivia, and the two major suppliers in its liquefied form are Trinidad and Tobago. Bolivia has had contracts with Argentina and Brazil since the 1970s. With Argentina it was revised in 2021. Trinidad and Tobago has an outward-oriented oil industry and exports to the US, Spain, the Dominican Republic and China. Peru is making efforts to stop exporting to Mexico.

Latin American countries will continue with natural gas production because of its importance in electricity generation, international trade and tax revenues.