The 33rd Latin American Energy Conference in La Jolla, California

This year’s theme, “Enlightening the Path to Transformation,” was fitting for a corporate event set in a nonprofit, quasi-academic environment. However, one might question how much “light” and what kind of “transformation” can realistically be expected in the Latin American context. Held at the Institute of the Americas, the conference was intense, spanning two days and nights of presentations, seminars, and debates. You can find the program here: La Jolla Energy Conference Program.

The conference covered a wide range of topics, from oil in Guyana to U.S. interest in Latin American cooperation, with major debates on decarbonization, regional integration, geopolitics, electrification, low-carbon fuels (like Sustainable Aviation Fuel, or SAF), natural gas, and the financing required—from billions to trillions. There were also deep dives into specific national policies and opportunities within the energy sector. The closing session highlighted critical minerals, with a focus on lithium and the role of batteries in electric vehicles (EVs). Unsurprisingly, China came up frequently, being the major buyer and processor of minerals used in EVs, solar panels, and battery technologies.

The "Big Debates"

A key takeaway from the conference was that oil will continue to be a significant factor for decades, and Latin American countries are eager to capitalize on their resources while global demand remains strong. Guyana, for instance, has emerged over the past five years as a major oil producer, going from zero to over 600,000 barrels per day, with expectations to triple or quadruple production within two to three years—all despite having a population of under 1 million.

The dream of integration in Latin America remains elusive. Regional infrastructure is lacking, and investment roadblocks are immense. For example, Argentina’s vast Vaca Muerta gas fields, frequently discussed at past conferences, still lack the pipelines needed to deliver gas to Brazil and Chile. Similarly, Chile, Argentina, and Bolivia—prime lithium suppliers—compete with each other and face difficulties in funding clean mining, industrialization, and the production of battery components.

Presenters were also realistic about the challenges of decarbonization and slowing climate change. Companies like ERM, which specialize in advising on climate and environmental impacts, stated that Latin America, along with the rest of the world, is not on track to meet emission reduction targets. In Latin America, the transition has started, but the goals seem too distant, the efforts too late, and the resources inadequate. Fires, floods, droughts, and other climate-related damage were particularly noted as major ongoing concerns for Brazil.

Biofuels and Financing

Biofuels, promoted as a decarbonization tool, remain uncompetitive with traditional fuels. Although costs are expected to decline, Latin American countries are fiscally constrained, suffering from high interest rates and weak credit ratings. Promised climate change funding has not been delivered, and dependence on China has yet to yield significant investment in addressing climate concerns.

The transition to renewables, the reduction of emissions, and the continued use of oil and gas must all occur within specific national contexts, each with its own regulatory and institutional frameworks. The conference explored these dynamics country by country.

National Contexts: Brazil, Argentina, Colombia, Mexico, and More

In Brazil, Nelson Narciso, a non-resident scholar from Rio de Janeiro, noted that Brazil already boasts an energy mix reliant on renewables—an achievement most nations are targeting for 2050. Wind, solar, and biomass sectors, along with hydropower, now generate over 90% of the country’s nearly 200 gigawatts of installed capacity. However, as he spoke, São Paulo was recovering from a major blackout, illustrating the ongoing challenges even in a country with such potential. Still, Brazil has an opportunity to regain global relevance, particularly as it hosts this year’s G20 meeting and next year’s COP 30 in Belém, located on the Amazon River.

Argentina, under the Milei government, continues to seek foreign investment to develop Vaca Muerta, but while inflation has decreased, poverty has worsened. Investor confidence remains low, hindering major projects in gas, lithium, and infrastructure.

In Colombia, left-wing President Gustavo Petro struggles with low approval ratings. The country needs investments in energy, but inconsistent policies, licensing delays, and bureaucratic hurdles have resulted in deteriorating infrastructure and energy shortages, particularly in Bogotá. Like many other Latin American nations, Colombia faces internal conflicts between federal and local authorities over resources and their allocation.

In Mexico, Claudia Sheinbaum has taken over from López Obrador (AMLO), whose nationalist policies often discouraged foreign investment. Although constitutional guarantees for capital investments exist, investor interest waned during AMLO’s tenure. It remains to be seen how Sheinbaum will restore transparency and incentivize much-needed investments in both traditional and renewable energy sectors. Presenters expressed doubt about her ability to enact meaningful reforms.

Peru’s Camisea natural gas project is a case study in both potential and pitfalls. Though the intention has been to use natural gas for national energy needs, the project has been marred by corruption scandals, especially with Odebrecht’s involvement. Political instability and bureaucratic challenges have further stymied progress.

The Latin American Paradox

Latin America remains a paradox, with immense potential but numerous obstacles. The Institute of the Americas has been shedding light on these issues for over three decades, driving conversations on the region’s energy transformation. During this time, significant discoveries of oil have been made and extracted, and natural gas has been put to use—though much of it is still flared and wasted. While renewable energy is expanding, and there is growing awareness of the need to preserve the environment, political apathy and slow institutional development persist.

The continent’s economies remain challenged by high interest rates, currency instability, and dependence on China for exports of primary commodities. This reliance has inhibited industrialization and the development of an autonomous retail and service sector. Rising debt, both domestic and foreign, leads to inflation, which in turn drives greater poverty and capital outflows. Meanwhile, China continues to expand its influence through selective financing, often directed at projects serving its own interests.

In contrast, U.S. investor interest in the region remains low, largely due to the high risks. While Guyana’s offshore oil boom is a clear exception, attracting billions from Exxon, the story elsewhere in the region is one of political uncertainty and bureaucratic obstacles.

Conclusion

Returning to the conference theme: There is light, and there is knowledge—but the path to real transformation remains fraught with challenges.

Special thanks to the Institute of the Americas, Jeremy Martin, and the energy staff for another illuminating conference.