The past two decades have brought dramatic swings in the pace and extent of Latin American natural gas and electricity integration. Enthusiasm among the region’s investors and governments has waxed and waned as the economic and political drivers of cross-border investment and cooperation have evolved. Recent technological developments that have unlocked shale gas resources in the United States will be extended to Latin America. At the same time, renewed political momentum for regional economic cooperation and trade also extends to the energy sector. As a result, a new phase of regional energy integration is gathering pace, but it will be very distinct from what was seen two decades ago.
The 1990s saw a surge of energy integration in Latin America as the region’s economies stabilized after the tumultuous 1980s. Greater economic openness and liberalization across the continent facilitated a wave of investment in power transmission lines and natural gas pipelines that steadily linked the region’s substantial energy resources with its growing demand.