Management of disaster risks derived from very large fuel subsidies to natural gas in Argentina

A.D. GONZÁLEZ

CLIMATE CHANGE AND DISASTER RISK MANAGEMENT

Springer Verlag

Lugar: Berlin Heidelberg; Año: 2012; p. 463 - 473

Through a system of heavy subsidies, natural gas in Argentina has one of the lowest prices in the world. Residential users get the lowest price per m3 delivered, but the price for businesses is low as well. For comparison, prices for residential use in 24 countries listed by the International Energy Agency (IEA, 2011a) averages $0.79/m3; while in Argentina the price ranges from $0,02/m3 to $0,10/m3, the lowest for the coldest regions where consumption in buildings is higher. Since 2003 the price per unit energy of residential gas is 10-20 times lower than diesel, 5-10 times lower than firewood, and 10-20 times lower than electricity. As a consequence, customers have been misled by low bills and have solved the inefficiencies of buildings and appliances by very high consumption, postponing what otherwise were needed refurbishments. No public awareness exists on this situation. Attempts made by the government in 2009 to raise prices ended in public protests and court demands, and the largest increases had to be withdrawn. There are high risks of social unrest due to lacking education and options to fuel consumption. Recent serious social unrest on the event of higher gas tariffs in Punta Arenas, south of Chile, confirmed the behaviour observed in 2009 in Argentina. In both, no energy conservation measures have been done. Other risks include reduction or extinction of gas reserves, unsustainable budget to support subsidies, discouragement of renewable energies, and pressure on native forests for firewood. Education and dedicated energy conservation measures are proposed to manage disaster risks derived from decades of subsidies.