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Why Petro's Green Policy in Colombia Could Be a Big Mistake

During his victorious campaign for president of Colombia, the leftist Gustavo Petro claimed that the country’s “three main exports” are “three poisons”.

“The most powerful is coal, which they extract from the Caribbean, La Guajira and Cesar . Then the oil, which they take from Piedemonte Llanero [sub-região colombiana], and then the cocaine”, he declared.

During his government, Petro plans to start an energy transition, in which the Colombian economy in 15 years would stop being dependent on fossil fuels and would favor clean energy sources.

“ We will gradually de-escalate economic dependence on oil and coal. In our government, the exploration of unconventional reserves will be prohibited, fracking pilot projects and the development of reserves at sea will be stopped. No new licenses will be granted for the exploration of hydrocarbons, and large-scale open pit mining will not be allowed”, points out the ex-guerrilla’s government plan, which also provides for a compensation policy so that coal and oil reserves do not be explored.

Entrepreneurs in the Colombian energy sector and experts believe that these targets could cause great damage to public accounts and the country’s economy in the coming years.

According to the Colombian Association of Petroleum and Gas (ACP), if only the current contracts for the exploration of hydrocarbons are maintained, in 2026 Colombia would need to start importing gas and 2028, oil for domestic consumption.

Alexandra Hernández Saravia, vice president of economic affairs and regulatory frameworks of the ACP, highlighted in an interview with the newspaper La República the side effects that this situation would cause.

“When a country needs to spend more than energy, this impacts savings beyond the gas bill and household costs. There is a macroeconomic issue: the sector supports the dollar, the cost of food, inputs and credit cards”, he argued.

The veto of new licenses would result in a loss of US $45 billion in exports in ten years, estimated the ACP.

According to the news site La Silla Vacía, oil and its derivatives accounted for 52% of Colombian exports in the first quarter of this year and 8.5% of foreign direct investment in 52 .

“Making a very rapid transition [de matriz energética] can leave Colombia without the necessary resources to finance the same transition, but also to overcome poverty numbers” , former Minister of Mines and Energy Tomas González, now director of the Regional Center for Energy Studies, pointed out to La Silla Vacía.

According to the ACP, if carried out , Petro’s energy policy would generate fiscal losses in four years that would represent 40% of what the Colombian government spends on pro social grams.

“Colombia has oil and gas, we are not big producers, but there are important resources. The European context taught us not to depend on other countries for energy supply”, warned Francisco Lloreda, president of the ACP.

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