The natural gas industry and its regulation in Latin America

This article analyses the systems of regulation of the natural gas market in Argentina, Bolivia, Chile, Colombia and Mexico, which are the Latin American countries that have made most progress in this field, and it also presents some information on countries which had not yet defined their regulatory systems at the time of writing, such as Peru and Venezuela. First of all, it describes the situation of the natural gas industry worldwide and defines Latin America's place in it. It then studies the changes that have taken place in natural gas regulation systems in the region in the 1990s, especially with regard to the treatment given to exploration and production, and industrial processing, transport and marketing. The main features of the natural gas markets in the countries studied are then described, as well as the systems adopted for restructuring the industry, with special emphasis on the role of natural gas in regional energy integration. Finally, the article analyses the main features of natural gas regulation and the principles underlying it; the structure and powers of the regulatory bodies; the mechanisms for fixing the prices of extraction, transport and distribution; the different forms of subsidies, and the tax regime.