Bolivian energy consumption
Bolivian energy consumption is marked by a diverse energy matrix that includes natural gas, oil, biomass, and renewable energy sources. As of the early 2020s, Bolivia holds the fourth-largest natural gas reserves in Latin America, with significant contributions from the oil sector, although the country has seen a sharp decline in crude oil exports since 2000. Hydroelectric potential also plays a role in the energy landscape, although Bolivia faces challenges in electricity access, particularly in rural areas where biomass remains a crucial energy source.
Historically, Bolivia's energy sector has undergone significant transformations, including periods of nationalization and privatization. The state-owned Yacimientos Petrolíferos Fiscales Bolivianos (YPFB) was established in the 1930s to manage oil production, and it has seen various partnerships with foreign companies. The electricity sector was structured to encourage competition, although nationalization efforts in the mid-2000s aimed to regain control over key utilities.
By 2022, Bolivia's installed electricity generation capacity stood at approximately 4.1 million kilowatts, supporting a consumption of over 10.5 billion kilowatt-hours. The energy production breakdown indicates that oil accounts for nearly half of the energy supply, followed closely by natural gas, while renewable sources contribute a smaller yet growing share. Overall, Bolivia's energy consumption reflects both its rich natural resources and the ongoing challenges of equitable access and infrastructure development.
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Bolivian energy consumption
Official Name: Plurinational State of Bolivia.
Summary: Bolivia owned the fourth-largest natural gas reserves in Latin America as of the early 2020s. While its oil reserves covered domestic demand, the nation only exported 0.8 percent of its crude oil production in 2021, down 88 percent from 2000. It also has hydroelectric potential. The oil and gas industries were partially nationalized in 2006.
Oil began to be exploited in Bolivia by the US company Standard Oil of New Jersey during the 1920s. Since that company did not fulfill all the requirements stated in the concession agreement, the Bolivian government decided to nationalize all its assets in 1937; the state-owned Yacimientos Petrolíferos Fiscales Bolivianos (YPFB), created in 1936 after the Chaco War against Paraguay, assumed oil production. YPFB managed to increase production throughout the next two decades, thanks to new oil discoveries. Moreover, YPFB built refineries, constructed oil pipelines, and reinforced its marketing infrastructure.
By the 1950s, Bolivia had become a modest oil exporter and had built pipelines to Argentina and Chile; the latter was particularly important, because it included access to a seaport (which Bolivia lacks) at the Pacific Ocean and therefore made possible oil exports not only to Bolivia but also to countries beyond South America. In 1955, new oil concessions to the multinationals were granted for 40 years under the 1955 Petroleum Code; this code was abolished in 1969, and concessions were reverted to the nation and their assets nationalized.
The Gulf Oil Company found important natural gas reserves in the 1950s. In 1969, Bolivia and Argentina signed an agreement to build a gas pipeline and supply natural gas to the Argentinean Gas del Estado. However, after the nationalization of the Gulf concession, the construction of the gas pipeline was stopped. In 1971, the Bolivian government managed to settle the issue with Gulf and the building works were reinitiated; moreover, the agreement’s conditions were modified in order to increase purchasing prices for natural gas. In 1972, Bolivia started gas exports to Argentina.
Throughout the 1970s and 1980s, domestic infrastructure was extended to supply gas to the major cities in the country and to generate electricity. During the 1990s, an increase in foreign investment in exploration led to a series of important discoveries, increasing Bolivia’s gas proven reserves fivefold in 2002. Investments were also made to improve gas used in the domestic market. As a consequence of the new discoveries, a purchase agreement was signed with Brazil’s Petrobras and a pipeline was built in order to deliver gas to that country.
Electricity was introduced in the country in the 1920s by the US Bolivian Power Company, later Compañía Boliviana de Energía Eléctrica (COBEE). Initially, it supplied power to streetcars, public lighting, industries, and households in La Paz; it later began to supply electricity in other major cities. In 1963, the Bolivian government created the state-owned Empresa Nacional de Electricidad (ENDE) in order to electrify those regions in the country with no power supply. Nevertheless, Bolivia still has one of the lowest electrification rates in Latin America.
Until the mid-20th century, biomass was the main energy source in Bolivia, and today it still plays an important role in the country’s energy matrix. In 2000, biomass in the form of firewood, dung, charcoal, and forestry, and vegetable residues had a share of about one-third of Bolivia’s total energy consumption. By the 2020s, that figure was at 12 percent. In rural regions, biomass accounted for the majority of total household energy consumption. Given its importance in the countryside and the gap between urban and rural energy consumption, the government introduced in 1997 the National Biomass Program (NBP), with the collaboration of the World Bank’s Energy Sector Management Assistance Program. The NBP, which ended in 2007, aimed at improving use of biomass as an energy source in order to improve living conditions in rural areas through “increasing economic and social benefits derived from efficient production and use of biomass.”
Bolivia’s oil, gas, and electricity industries were privatized throughout the 1980s and 1990s, and foreign investment was encouraged. The electricity sector was reformed to introduce free competition; generation, transport, and distribution activities were separated, and a wholesale market was created. In 2006, the government decreed the partial nationalization of the country’s hydrocarbon industry. Yet, foreign companies were allowed to maintain operations in Bolivia as minority partners of YPFB. In 2010, the Bolivian government decided to nationalize four power utilities in order to increase control over generation activities, considered strategic. In the oil and gas industries, YPFB, which until the 1980s controlled the Bolivian hydrocarbon sector, was capitalized, and joint ventures and other forms of foreign investments were allowed.
According to the CIA World Factbook, Bolivia had an installed generating electricity capacity of about 4.1 million kilowatts in 2022. That figure represents the maximum amount of electricity the nation can produce. The nation consumed more than 10.5 billion kilowatt-hours of electricity. An estimated 47.8 percent of Bolivia’s energy was produced by oil, while 36.3 came from natural gas. About 15.3 percent came from renewable sources.
Bibliography
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"Bolivia." US International Energy Agency, 2024, www.iea.org/countries/bolivia. Accessed 30 July 2024.
“Bolivia: National Biomass Program.” World Bank, documents.worldbank.org/en/publication/documents-reports/documentdetail/467421468202435601/bolivia-national-biomass-program. Accessed 30 July 2024.
"Bolivia." US Energy Information Administration, July 2015, www.eia.gov/international/analysis/country/BOL. Accessed 30 July 2024.
Prada, Paulo. "Bolivian Nationalizes the Oil and Gas Sector." The New York Times, 2 May 2006, www.nytimes.com/2006/05/02/world/americas/02bolivia.html. Accessed 30 July 2024.