Argentina launches “Total Energy” plan to avoid blackouts

Argentina in the midst of its worst energy shortage in decades launched Friday the announced “Total Energy” program which basically subsidizes oil corporations liquid fuels sales to industry with the purpose of ensuring the supply of gas to home consumers.

“Given the necessity to maximize the use of the different components of the Argentine energy matrix, and with the purpose of guaranteeing its adequate rotation, thus contributing to the continuous growth of the country and its industries”, reads the core and motives of Resolution 459/07.

The “Total energy” program which was advanced Thursday afternoon in Government House during a meeting of President Nestor Kirchner, First Lady Cristina Kirchner, Planning Minister Julio De Vido and representatives from oil corporations Repsol-YPF, Petrobras and Esso, has an estimate cost of 930 million Argentine pesos equivalent to 320 million US dollars. The duration of the plan is 90 days.

“Beginning this weekend oil companies will offer manufacturing industries the possibility of replacing gas energy with liquid fuels, at the same price they are currently paying for gas”, said Planning minister Julio De Vido.

“Many industries and companies have the possibility of self generating but they can’t face the cost of the alternative fuel”, added the minister.

In spite of the fact that heavy oils also seems to the scarce, according mainly to farmers, De Vido seemed confident that the initiative would help save 5 million cubic metres per day of gas which transformed into electricity means “a plus of 800 MW”.

Electricity generating plants working on natural gas are estimated to produce an additional 20% energy compared to when consuming heavy liquid oils.

According to the resolution the 320 million US dollars “will be destined to cover the difference between the purchasing price for the regular provision of any energy source and the acquisition of substitute liquid fuels”.

However De Vido was confident about the end solution for the Argentine economy and the government finances.

“The final cost of the program will obviously be highly compensated because the economy will keep growing. The impact is forecasted to be neutral, and could even be favourable for the Treasury because of the higher tax revenue from a growing economy”, he added.