Central American Economic Development Focus of Recent Energy Security Conference

Washington, D.C.–Panama City was host to CCAA’s recent Central American Energy Supply Security Forum, May 14-16. The primary objective of the event was to bring together senior level officials from the government, public and private sector of North and Central America, to discuss energy resources and alternatives for the region.

As a net importer of energy, a growing Central America is currently faced with high demand for energy but rising costs are causing much pain. Conference attendees reviewed Central America’s energy security and infrastructure successes and challenges; took a realistic look at the role of fossil fuels in economic development; listened to the perspectives of business and industry as major energy users; and noted the current regional regulatory framework that needs to be strengthened to secure the region’s supply needs.

CCAA Trustee, Dr. David Lewis of Manchester Trade, who served as host of the event noted that, “with the exception of Trinidad and Tobago in the Caribbean, Central America as well as almost all other countries in the region has an extremely high dependency on hydrocarbons and very little diversification into other energy resources.” 

A current shortage in hydroelectric production in the region, due to lack of rainfall this season and energy cutbacks have already begun to take place in Nicaragua and El Salvador, it was noted, and Victor Carlos Urrutia, administrator of the National Authority for Public Services of the host country commented that Panama itself was running the risk of having to cut back its energy supply for the same reason. The lack of hydroelectric generation in Panama has caused the cost of alternative energy sources to rise relative to the cost of oil, which is currently approximating $130 a barrel.

The Forum also served as a backdrop for the formal introduction of Chevron’s Bahia Las Minas Tankage Expansion Project. This project would allow for the storage of 2 million barrels of oil in Panama to meet the strategic supply needs of the Central American region.

Though debates on Central America’s long term use of fossil fuels were spirited, it was recognized that the region would be dependent on these fossil fuels for some 60% of its total energy needs for the foreseeable future. The challenge today for both energy companies and regulators is to meet this energy demand with practical, broad-based solutions that promote economic development and energy security while balancing the need to protect the environment.

CCAA is a non-governmental organization that promotes private sector-led economic development in the Caribbean Basin. More information on the organization and the Annual Miami Conference can be found by visiting CCAA's website at http://www.c-caa.org/. 

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