Committee on International Relations
U.S. House of Representatives
Henry J. Hyde, Chairman

CONTACT: Sam Stratman, (202) 226-7875, March 1, 2006

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For IMMEDIATE Release

Western Hemisphere Energy Security
Burton
Schedules Thursday Oversight Hearing
 

BACKGROUND - The growing leftward political shift in Latin America has raised concerns among some analysts about the potential negative effect of leftist or populist politics on energy production and investment in the region. The populist government of Hugo Chávez in oil-rich Venezuela has asserted firmer state control over the state-run oil company. The newly-elected government of Evo Morales in Bolivia, who has pledged to nationalize the gas sector, has called for foreign companies to be “partners, not owners” of the country’s significant natural gas resources. Elections this year in Peru and Mexico could have a significant impact on the future direction of these countries’ energy sectors. At issue in Mexico is whether the new government will advance reform of PEMEX, including allowing partial foreign ownership in the company, in order to boost exploration to increase the country’s declining oil reserves. Further continued political instability, popular protests, and ongoing trade disputes with foreign oil companies may discourage foreign investment in the volatile Andean region, specifically in Ecuador and Bolivia. The populist trend in several Latin American countries means that foreign companies are having to pay increased taxes and royalties. Some observers fear that this could slow foreign investment in the region’s energy sectors, while others contend that foreign companies will continue to invest where there is a likelihood of profit and that populist governments might even encourage foreign investment. Some energy-producing countries in the region, like Brazil and Colombia, follow a private/capitalist model for energy investment that allows foreign companies to own and operate energy concessions. Across the region, there is continuing underinvestment in energy infrastructure, with some analysts maintaining that many countries are at risk for widespread electricity shortages. This need for foreign investment may heighten competition for access to Latin America’s oil and gas resources, especially from countries like China and India. 

WHAT:                             Subcommittee Oversight Hearing:
                                          Western Hemisphere Energy Security

                                          Subcommittee on the Western Hemisphere, U.S. Rep. Dan Burton (R-IN), Chairman

WHEN:                             2 p.m., Thursday, March 2, 2006

WHERE:                           Room 2172 Rayburn House Office Building

WITNESSES:                 Panel I:

                                           Honorable Karen A. Harbert,
                   Assistant Secretary,
                   Office of Policy and International Affairs,
                   U.S. Department of Energy;

                                           Panel II:

                                           Eric Farnsworth,
                   Vice President,
                   Council of the Americas;

                                           Sidney Weintraub, Ph.D.,
                  
William E. Simon Chair in Political Economy,
                   Center for Strategic and International Studies; and

                                           Anne Korin,
                   Co-Director,
                   Institute for the Analysis of Global Security.

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