THE FORMER MINISTER of Mines and Energy, Tomás González, currently director of the Regional Center for Energy Studies (Cree), mentioned that the country only had gas reserves for 8 years. In this regard, the director maintained THE NEW CENTURY, that this situation is based on information from the government itself, taking into account the latest reports on reserves.
This situation comes at a time when the country will receive the impact of the ‘El Niño’ phenomenon starting in July and when there is talk that energy rates will necessarily increase or that rationing may occur, a situation that González himself and the government have ruled out.
However, under this scenario, the energy sector continues to be concerned about the idea of not signing new exploration contracts,
reserves
THE NEW CENTURY: You said about the reserves that we only have gas for 8 years. Is there a possibility that this period will be extended, and what should be done about it?
TOMÁS GONZÁLEZ: I am not saying the 8-year period, these are data presented by the Government with respect to the last report that was published last year.
ENS: What can be done to increase these reserves in the medium term?
TG: The country has to explore, we have to find gas, we have to develop contracts, we have to bet on all our gas reserves because this is a business and those who don’t look can’t find.
ENS: What should be done to convince the Government that it is necessary to continue with the exploration contracts?
TG: The Government must be realistic and look at the numbers and realize that this is not a different issue from what one tells them, reality is stubborn, they don’t like it, but it is reality and the data is saying that we have to make a big effort , the energy transition must be at a minimum cost and gas is essential, we have to develop further exploration.
ENS: Do you think that now with the arrival of ‘El Niño’, there are possibilities of rationing?
TG: Well look, the system is designed so that this does not happen, as a country we learned the lesson of 1991 and 1992, what happened was very traumatic for the country and we took the actions and made the investments so that this would not happen again. It is necessary to take into account what the Comptroller said in this regard and that the cause of the blackout was that it was a totally public system, which did not make the planned investments. The country learned those lessons. Since that happened, the system has not been paid because it is designed so that it does not happen, but that does not mean that there is no pressure due to the increase in demand. The best thing that can be done is to coordinate with the companies to make sure and deliver all the energy that can be delivered, of course not with the higher rates that are being talked about now, but normally when the phenomenon of ‘El Niño’ occurs ‘, They increase.
ENS: Why are the rates being pushed up?
TG: It is good that people are very aware of what this ‘El Niño’ phenomenon means. That means that there is less rain and when there is less rain, less electricity is generated with water. Colombia depends a lot on water to generate electricity, so when the search normally has to resort to energy that is more expensive and that is why energy prices begin to rise. The energy distribution companies in different parts of the country are exposed to buying energy on the stock market, with higher prices, and the users of those markets will receive this impact. It is necessary to keep in mind that energy is purchased from companies and there are two ways: one is through contracts; those who sell and buy energy sit down and make the transaction and negotiate at a price, that is the one that remains, whether energy is high or low. In times of scarcity, energy prices rise, such as when there is a shortage of food, prices rise.
ENS: Has this uncertainty discouraged many companies that want to invest in this sector in the country?
TG: Government statements on rates in which there is no clarity about what is going to happen and the issues of the contracts have generated uncertainty, and that is what companies look at when they want to invest. If you are not clear about what the price at which energy is going to be sold will be, then until there is that clarity, then investment slows down and we are seeing that in the electricity sector and in hydrocarbons there have been signs of not wanting to make new contracts. That is why it is very important that the Government understands the signals they give. Investors and companies are not going to take risks.
ENS: There are some rating agencies that have warned about the intention of the government to intervene in service rates. Does that worry companies?
TG: Those warnings are certainly worrisome, of course! It’s the same thing we’re talking about, what investors want is to be clear about what the rules are going to apply to them, so when you don’t have that clarity, you get nervous and no investment is going to be risked. Investors have to be sure of what they are going to invest in and be clear and transparent about what is going to happen, otherwise they will look elsewhere where they can invest, that is the market.
Box
New fuel sources
A report by the Regional Center for Energy Studies (Cree) and TGI shows that if new contracts are not signed, the country would have to import a large part of the gas consumed in the country by 2030.
Colombia must seek and find new sources of natural gas in the short and medium term as it moves towards a responsible energy transition. This is perhaps one of the major conclusions of the most recent report by the Regional Center for Energy Studies (Cree) and TGI, which details that future scenarios show growing demand and limited supply if growth is not encouraged. development of this sector.
The 38-page document shows, in summary, that the demand for natural gas has sustained growth until 2050. In a context of a scenario of less decarbonization, the analysis highlights that this market is expanding almost three times, which is why it is seen which will be a fundamental axis in the energy future of Colombia.
“Sectorally, gas plays a different role in each case. In electricity generation ‒which must be decarbonized first‒ it reaches its peak in 2040 in the two scenarios with the least restrictions, but disappears from 2030 when the pressure to decarbonize is stronger. In transportation, the demand for gas behaves similarly to that for generation, with the peak in 2040 for the two scenarios with the least restriction,” the report states.
According to the latest report from the National Hydrocarbons Agency (ANH), in 2021 gas reserves amounted to 4.5 Cubic Terapies (TPC), which correspond to an 8-year self-sufficiency. Of these, only 3.16 TPCs are tested.
Although efforts have been made in recent decades for the country to maintain its self-sufficiency in gas and oil, Cree and TGI warn that the Reserves/Production ratio has fallen 20% since 2015. Likewise, they consider that in the event of not taking action In the short term, undesirable scenarios could be generated that alter the formation of prices for this fuel.