A South American cold snap is causing Chileans to pay up to four times more for heat and electricity, and could spur the government to speed reconciliation with its bitter – but gas-rich – foe, Bolivia, observers say.

As temperatures dropped to near-record lows in recent weeks, neighboring Argentina has had to cut off some gas shipments to Chile in order to meet its own domestic demand.

Now, an increasingly disgruntled Chilean public is pressing the government to seek gas deals with other countries, including Bolivia.

"I believe that we need to leave behind these historic feuds once and for all and start an open and frank dialogue with Bolivia," said Chilean senator Nelson Ávila after the latest round of gas cuts last month. "Bolivia has some of the largest natural-gas reserves on the planet, and we could easily benefit from them."

In 1995, Argentina promised a cheap, steady supply of natural gas to satisfy Chile's residential, industrial, and electricity-generating needs.

Still, what was then perceived to be the cure-all to Chile's energy woes has since morphed into one of the country's biggest problems. Today, Chile imports nearly 100 percent of the commodity from its Andean neighbor. This winter's cold temperatures have exposed this dependency.

"Depending on Argentina is wishful thinking; they do not even have enough gas to meet their internal demands," Eduardo Frei, president of the Chilean Senate, told reporters recently.

In response to the shortages, many Chilean businesses, particularly electricity-generating companies, have reluctantly switched to diesel fuel. The situation reached a low point in June, the first month since the 1995 agreement that Chile used no natural gas to generate electricity. Diesel costs up to four times as much as natural gas and pollutes far more.

The consequences have been disastrous: electricity bills have risen sharply. Some industry analysts expect them to rise by as much as another 13 percent by winter's end.

Additionally, Santiago, the country's capital and largest city, has experienced a sharp spike in air pollution, including its smoggiest day since 1999.

New solution with an old foe?

In light of the increased pressure to find new energy sources, the Chilean government has begun to explore purchasing natural gas from neighboring Bolivia.

On the surface, this partnership seems like an ideal match. Chile needs natural gas to satisfy internal demands.

Bolivia, which has South America's second-largest natural-gas reserves, also stands to benefit from better ties: The country is seeking more potential gas customers as well as foreign investment to help modernize its gas-industry infrastructure.

But the two countries have a long legacy of diplomatic feuds.

Chile and Bolivia have had icy relations since the War of the Pacific in 1883. At that time, Chile took Bolivia's access to the Pacific Ocean, a loss that soured relations. Diplomatic ties were eventually broken off in 1978 over Bolivia's insistence on regaining access to the sea.

'First step toward reconciliation'

In spite of this sensitive history, relations between the two nations have thawed in the last year. Since Chilean President Michelle Bachelet and her Bolivian counterpart, Evo Morales, assumed their respective positions in 2006, officials from both countries have tried to boost dialogue and reconciliation.

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