Oil and the environment: the economic debate of the Colombian presidential election

It was never a romance: the leftist Gustavo Petro has dealt with the oil industry for many years of Colombia, in environmental defense. If he takes the lead, he intends to stop new oil exploration in an economy dependent on black gold.

The 62-year-old senator and former guerrilla, a favorite in the polls for Sunday’s election, assured that his first decision as president was “the cessation of oil exploration contracting in Colombia”.

Thus Peter will accept the demands in favor of energy transfer, when according to the UN the world has three more years left to avoid harmful warming.

But amid rising crude prices due to the invasion of Ukraine, the hydrocarbons union is protesting and predicts millionaire losses.

EarningsThe and losses

Petro aims to keep nearly 150 current contracts to seek new crude reserves. But in the long run the challenge will be replace a sector which makes up a third of the country’s exports with approximately 13.5 billion dollars in 2021.

Blocking new exploration would mean “losses of 18 billion pesos (about 4,500 million dollars) of financial contributions between 2022 and 2026, ”the Colombian Oil and Gas Association (ACP) warned in a report.

In addition, the union contends that Colombia will lose the capacity to be independent by 2028, with millionaires overspending on public services.

The leftist campaign has defended its proposal arguing that the oil sector is already experiencing an inevitable decline by the depletion of reserves and that the global climate emergency requires immediate action.

“What are we exporting? Coal, oil and cocaine. All three produce violenceNot just cocaine. To get oil they are killing communities, “Petro launched in mid -April.

Álvaro Pardo, the candidate’s adviser for energy transfer, clarified in speaking to AFP: “We never said we would reach zero hydrocarbons. (…) Oil exploitation will be reduced to a level of a vital minimum. “

The economist maintains that selfishness is not threatenedbecause the country has proven reserves for the next eight years and contracts that these reserves could increase “for at least 15 more years.”

“Five years ago we made a million barrels a day, now we are at the level of 730,000 – 760,000 barrels. I think we reached a peak and started going down, ”Pardo said.

Renewable energy

Petro proposed to encourage the market for renewable energies such as wind and solar, and “slow down” oil extraction over the next 15 years.

“It’s a gradual transition, well planned”said the adviser.

But replacing oil revenues in Latin America’s fourth -largest economy is a big task.

Manufacturing and agriculture, two sectors that Petro intends to pay for this revenue, they need to double their export capacity to replace oil in the balance of trade, according to the latest report from the statistical authority.

The proposal of the favorite candidate in the polls coincided with competition in the supply of demand, in a tense in the market due to Russia’s invasion of Ukraine.

In Argentina, left-center President Alberto Fernández has projected an increase in oil production of up to 70% over the next five years and declared the country as a “stable future energy supplier” on a recent European tour.

Colombia’s outgoing president, Ivan Duque, is ensuring production could rise to two million of barrels per day for four years.

The conservative president has promoted controversial “fracking” – suspended due to a lawsuit against environmentalists – and offshore drilling. He also called Petro’s energy proposal “populist”, his biggest opponent.

Meanwhile, Brazil’s candidate and former leftist president, Luis Inacio Lula da Silva, takes distance from the Colombian candidate’s proposal.

“Petro has the right to propose what he wants. But in the case of Brazil this is not true. (…) In the case of the world, this is not true, ”Lula, the favorite for the October election, told Time magazine.

In the Colombian presidential race, right-wing Federico Gutiérrez and businessman Rodolfo Hernández, two potential rivals of Petro in a possible run-off at the end of June, They are related to the oil industry.

“If there’s one lesson that the war in Ukraine and the energy uncertainty in Europe are starting to teach us, it’s that the world will continue to need oil and gas for many years,” Francisco Lloreda said. president of the ACP, in an interview with the newspaper El Tiempo.

For his part, Petro’s campaign insists: “We will eliminate them because this is the most reasonable thing to do in the face of the climate crisis, because resources are declining and we just need to enter into an energy transition. , “Pardo stressed.

AFP agency

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