Cold snap prompts Chile to seek gas deal with old foe Bolivia

The latest sign of rapprochement came last week, when Chilean Energy Minister Marcelo Tokman and Bolivian Hydrocarbon Minister Carlos Villegas met in Bolivia's capital, La Paz, to discuss energy integration.

The two ministers discussed cooperation on geothermal energy at length. But they decided to put off detailed discussions about gas until a later date, which has not yet been set.

Chilean politicians and officials have spoken out in favor of the renewed dialogue.

"I think that last Monday's meeting was a very important first step toward reconciliation," says Paula Vasconi, an official at Terram, a Chilean think tank that promotes environmental protection and sustainable development.

Still, Ms. Vasconi went on to vocalize Chilean concerns over the talks' most serious sticking point: Bolivia's territorial demands. Chile has tried to keep its energy discussions separate from landlocked Bolivia's desires for sea access, and this could represent a point of contention in future negotiations.

"I think that these talks could lead Chile and Bolivia to establish diplomatic relations once again," says Vasconi. "But it all depends on how Bolivia deals with the sea access issue. If things with that issue do not get too complicated, then there could be very positive results."

Temperatures go down, prices go up

This winter, Santiago's Meteorological Association has recorded some of the coldest temperatures since 1984. In early July, temperatures dropped to as low as 23 degrees F. in Santiago's outlying Pudahuel neighborhood.

The Nation Energy Commission (CNE) warned Chilean consumers in late July that their electricity bills will rise another 6 to 7 percent in August.

Also, some industry sources say higher generation costs could translate to higher electricity bills through October.

Chilean Finance Minister Andrés Velasco announced that the government will distribute funds to the poorest 40 percent of the Chilean population in order to defray the higher costs. Each family will receive 800 pesos ($1.40) in two installments. According to Mr. Velasco, this plan will cost the government more than 800 million pesos ($1.55 million).

But these payments only go so far; for 140 kilowatts of electricity, monthly electricity bills can easily reach as high as 20,000 pesos ($39) in parts of southern Chile.

For most Chileans, it is becoming more clear that maintaining the status quo is not viable.

"It is horrible. Electricity prices have been going up for a while," says Santiago resident Hugo Velasquez.

"If you look at my past few energy bills, they have gone up considerably for the past two or three months … and now I have to reach a special agreement with the company on how to pay because, if you are late on making your payments, they charge you even more," says resident Carlos Larrain.

"The government is getting used to making decisions in its technocratic circle without taking into account the problems which affect normal people," said Senator Ávila.

But that could be changing.

"The pressure put on the government has undoubtably pushed it to look to Bolivia as a source [for gas]," says Vasconi. "The faster Chile reaches an agreement with Bolivia, the faster Chile can opt for this new energy source for the country."

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