On Obama's trip to Chile, he should bring "la buena energía"

President Obama has a scheduled trip to Chile later this month. And in the agenda, clean energy should be a top priority.  Chile is a small country, another world away, but it is on the precipice of an energy policy disaster and its success—or failure—in confronting its energy challenges will likely set a course for South America.

Chile’s energy sector reminds me of some of the opening lines of Robert Frost’s “The Road Not Taken.”  “Two roads diverged in a yellow wood…long I stood. And looked down one as far as I could. Then took the other… having perhaps the better claim, Because it was grassy and wanted wear.” The reader will forgive my edits to the poem, I hope. 

Unfortunately, Chile looks poised to take the more commonly tread route, to a costly and polluted future

When I first visited Chile nearly six years ago, the government was starting to take clean energy seriously- they were reeling from an energy crisis caused by overinvestment in insecure and damaging energy resources: in the 1990s the government approved a series of highly controversial hydro-electric projects, and then made a big bet on natural gas generation by building pipelines to bring gas from Argentina. After huge investments hydro and gas, Chile has spent much of the last decade struggling through droughts and gas line cut offs by the Argentines.

As a result, Chile’s energy prices have yo-yoed and pollution problems worsened as gas plants had to convert to run on exorbitantly expensive and dangerously dirty diesel fuel.  At first, policy makers seemed to take energy efficiency seriously- creating an energy efficiency agency, starting an energy consumption labeling program and subsidizing efficient lighting. They even seemed interested in renewable energy- setting a renewable energy standard, which, though small, was and remains the first of its kind in Latin America.  This makes eminent sense as Chile has some of the best solar resources in the world and high potential for geothermal and onshore wind.  Some of these resources are commercially viable now, without subsidies, and could be quickly brought on line to diversify supply and keep down energy costs.

When President Piñera came into office in 2010 many signs seemed pointed at continuing clean energy efforts, but so far the Piñera administration has failed to deliver:

  • The new government promised a new renewable energy target of 20% by 2020, but has yet to get it finalized, let alone produce a legislative proposal.
  • Is energy efficiency falling off the map? When I first arrived in Chile the energy efficiency agency was buzzing with bright young professionals researching opportunities and eager to bring real gains, but the after 6 years the agency still hasn’t published a single energy efficiency standard.
  • Missed opportunities: After the terrible earthquake of 2010, Chile should have focused on building homes and businesses that saved Chileans from the high costs of energy, but there are few signs that the government took this on.
  • The dirty road…taken: just last week the government approved a HUGE new coal plant, Castilla, that if built would be over 13% of Chile’s total electric generation capacity.  Building this coal plant would be a colossal mistake- the same mistake Chile (and the rest of the world) has made far too many times before- based on the same lie: In the long run, fossil fuels are not cheap or reliable.
  • Piñera’s administration is increasingly exploring the “nuclear option.” Talk of nuclear power- the most expensive and risky energy ever conceived of- should seem laughable in a small country with no nuclear regulatory infrastructure whatsoever, where free-market economics has such prominence. Except that apparently the government isn’t in on the joke.
  • More choices ahead: Within the year Chile will have to decide on a series of coal and hydro-electric projects including the “dams to nowhere” proposal to damn rivers in Patagonia- over 1300 miles from the electric central electric grid!

Fortunately, Chile can choose a far cleaner, greener path--and this is why Obama’s trip is so important.  There are small signs and bigger signs that the governments is still thinking about better energy policy. It should redouble its efforts: Chile can tap efficiency resources in the mining, industrial, commercial and residential sectors and work to cut demand growth, instead of forever relying on the next big, expensive energy project.  It can balance its energy portfolio by relying on its own national renewable resources, which happen to be among the best in the world.

Taking the path to a clean energy future will require bold leadership of the sort Piñera and Obama both promised.  Since taking office the two leaders have shown mutual interest in global cooperation on clean energy. Now is the time to deliver. Next year leaders from around the world will meet at the “Rio + 20” Earth Summit: Obama and Piñera should be the first to commit to a hemispheric clean energy plan that maximizes energy efficiency, sets and enforceable targets for renewable energy and ends investment in dirty energy projects.