Just Energy Transitions in Latin America and the Caribbean is the central theme of the recently published position paper by Arpel (Association of Oil, Gas, and Renewable Energy Companies of Latin America and the Caribbean).

“Talking about a just energy transition for the region implies recognizing the urgency of promoting initiatives to mitigate climate change within a path that considers the social and economic impacts on developing communities with high levels of unemployment, inequality, and energy poverty,” is one of the key messages expressed in the document, which was drafted by professionals from TGN, Petrobras, EP Petroecuador, OCP Ecuador, S&P Global, Pan American Energy, Petroperú, Staatsolie, and Geopark.

The co-authors of the White Paper themselves presented the key messages and main conclusions during the launch webinar held in early September, where they shared the collective understanding of Arpel's member companies on the significance of justice for the sector in our region.

“Our goal with this document is to open the dialog on this topic, its challenges and opportunities, and to build development pathways for the region in a competitive business environment,” the authors expressed.

“We understand the complexity of energy transitions and are aware that they require real-world transformation that impacts all communities and nations,” they added. They also highlighted that: “We must respect the legitimate right of developing nations to use their hydrocarbon resources responsibly while working on their social and economic development priorities.”

The launch webinar was attended by Claudio Moreno, Head of Social Responsibility at TGN; Patricia Marques, Climate Change Specialist at Petrobras; Lorena Bracho, Energy Efficiency Coordinator at EP Petroecuador; Hugo Cuenca, Energy Management System Specialist at OCP Ecuador; and Rodrigo Vaz, Upstream Director at S&P Global. The session was moderated by Josefina Ibarra, Public Affairs Leader at YPF.

THE ROLE OF NATURAL GAS IN THE REGION

Looking ahead to the energy demand and population growth projections for 2050, Latin America and the Caribbean need an increase in the supply of secure, affordable, and preferably clean energy to support their growing industrialization and meet the basic needs of their expanding population.

Regarding the region's share of global greenhouse gas emissions (8.1%), it is proportional to its share of the world population (8.4%).

On this point, the authors noted that the region has significant potential in renewable energy resources; currently, these account for 33% of the region's total energy supply, compared to 13% globally.

The document states that natural gas can complement the introduction of new energies on the path to reducing GHG emissions.

“Our region has an abundance of this energy source, representing a great opportunity to use it, with appropriate technologies and high operational standards, as an energy source for industry and transportation, and a highly reliable complement to an energy matrix with a high percentage of renewables.”

“If we add the potential of natural gas in the region to the existing renewable energies, we achieve 86% of the available energy. This would significantly contribute to the transition process, providing the energy to offset the intermittency of renewables and replacing part of conventional energies,” said Hugo Cuenca from OCP Ecuador.

In line with the development of natural gas in the region, Claudio Moreno from TGN in Argentina referred to the public-private Presidente Néstor Kirchner Gas Pipeline project, which will transport hydrocarbons extracted from Vaca Muerta and enable the provision of LNG to the world.

DECARBONIZATION AND DIVERSIFICATION OF THE OIL AND GAS SECTOR

In relation to renewable energies, Latin America has the potential to increase its commercial-scale solar and wind energy capacity by over 460% by 2030 if the 319 gigawatts (GW) of new potential projects in the region are realized, according to a 2023 report by Global Energy Monitor.

“Although oil and gas companies have historically been linked to fossil fuels, many of these companies are beginning to diversify their activities into renewable energy sources, carbon capture technologies, and energy efficiency. Their capacity to invest in research and development, combined with their global infrastructure, allows them to lead initiatives that promote a more sustainable energy supply,” said Lorena Bracho from EP Petroecuador.

The authors state that energy transitions could create more than 1 million new jobs in energy supply by 2030, particularly in the electricity sector and in mining and processing of critical minerals, as well as in the oil and gas sectors as the region increases its production.

The White Paper highlights that, while the energy transition offers significant opportunities for job creation in cleaner energy sectors, it also requires a shift in workforce skills. This shift must evolve in an integrated manner with two other fronts: technological development and supplier development.

Patricia Marques from Petrobras emphasized the company's review of its social responsibility policy in light of the just transition, focusing on the goal of reducing energy poverty and fostering sustainable development. “With a principle of total attention to people, it includes guidelines for inclusive dialog and responsible relationships with the communities affected by our business,” she explained.

For his part, Rodrigo Vaz of S&P Global highlighted the need for close collaboration between governments, communities, and the private sector to achieve a just energy transition. He cited as an example the implementation of clear regulatory frameworks that encourage investment in low-carbon energy, as is the case in Brazil with carbon storage, green hydrogen and offshore wind.

From the private sector's perspective, Vaz noted that while companies are ready to invest in clean energy, they still face many challenges in accessing financing and dealing with environmental licensing issues.

Link to the full document: https://www.arpel.org/en/publications/just-energy-transitions-in-latin-america-and-the-caribbean

Link to the launch webinar: https://www.youtube.com/watch?v=yQ5ixFyF3ZM