Striking gas in Bolivia

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0:52Rodrigo Paz won Bolivia's presidential election last month with a message of renewal and a reckoning.

1:01Bolivia today is a day of democracy but it's also been a day of decision because we decided to change we decided to renew the challenges are difficult but we Bolivians stand firm they squandered the gas the lithium never came and here we are putting the homeland first

1:27In November, we begin our struggle to put an end to this crisis, this poverty. He went on to promise fuel delivery as his first act in office.

1:41When we are in government, we will deliver petrol and diesel so that the economy doesn't stop, so that business doesn't stop. This is one of our commitments, and we will honour it with the support of the people. From November, there will be petrol.

1:58Meanwhile, the previous government had held a new gas field found in the north of the country as the answer to Bolivia's economic and energy woes. But with production at all-time lows, can the new president get the energy industry back on track, or will he pursue alternatives? I'm Constance Mallory, and you're listening to the documentary Striking Gas in Bolivia, from the BBC, World Service.

2:34Cheers, fireworks and chants echoed into the night as Rodrigo Paz claimed victory. Thank you. Today, democracy won. Today, Bolivia won. Today, Bolivia won. Today, Bolivia won. And we will only think of Bolivia.

2:57The centrist candidate defeated the right-wing former president Jorge Tutuquiroga in Bolivia's presidential runoff, winning 54.6 % to 45.4%. After nearly 20 years of left-wing rule under the movement towards socialism, Bolivians rejected more state-led populism. But a majority also turned their back on the right's promise of international monetary fund-backed shock therapy and deep fuel subsidy cuts. Instead, they chose what PAS describes as a steadier path. Restoring fuel supplies, decentralising power, reviving stalled lithium projects and stabilising the economy without triggering unrest. Whether he can pull it off remains to be seen.

3:41Rodrigo Paz becomes Bolivia's 67th president and inherits a gas sector in freefall. Exports have dropped 37 % over the past decade, according to Fundación Jubileu, an independent Bolivian research group focused on public finance and energy policy. Once a regional energy powerhouse, Bolivia has gone from being a net exporter to a net importer of refined fuels, with foreign reserves nearly exhausted. The gas is, quite simply, running out. Meanwhile, inflation peaked at 24 % in August. So, with prices cripplingly high, many Bolivians now rely on informal markets, buying food, fuel and even dollars from street vendors just to get through the week.

4:26With gas exports down, Bolivia is short on dollars, and that means less money to import petrol and diesel. The result? Fuel shortages, long queues and rising public anger. In the Bolivian capital La Paz, the impact of the country's economic crisis is felt everywhere you go. Marcos Rodriguez is 45 and works in customer services. He's going to be late for work, but his boss is letting him have some time out to buy petrol. The queues are so long you have to take the opportunity when you can in Bolivia. I got here at eight. I've been in the line for about an hour. I expect I got another hour, hour and a half ahead of me.

5:12But then I have a full tank and not have to worry about that next week. They've fled the country so much we have to queue for everything. We even have to queue to buy bread. In the past, you could buy a lot of things with 100 bolivianos. Now you get half of even less for the same amount of money. We hit rock bottom and all that left to do is get up and start climbing back up.

5:43Yara Naera Montesinos-Catacora is 29 and works in a bank.

5:51I used to have a different job. I worked as a lawyer, but because of this crisis, lots of clients didn't have the money anymore to pay for my services. So, I made the sad decision to close my legal practice and look for a more stable job. I'm finishing my second degree right now and thinking about the possibility of moving to Chile, depending on how things are by the end of the year, because it's pretty tough. It's sad, but I don't think there are any other options, you know, when things go downhill. And the way things are going here, it's just getting worse. I'm waiting to see what happens these first months with the new government, and I'll make a decision accordingly.

6:38She's hopeful the new president will focus on finding more resources. Although we probably still have gas in Bolivia, we have a lot of resources. We don't know how much. We're not exploring it. So we can't generate economic benefits, can we? I think that's what happened. Obviously, with new exploration now, we could find gas, and maybe it could be a lifeline for our country. But we'll have to see what this new government's policies are about that. We later meet a grandma who's waiting for her new grandson's birth certificate. Cristina Rodriguez-Yucra is 62. Everything's got more expensive. Prices are sky high.

7:22It's impossible to live in Bolivia. Things are difficult. And a new president's coming in. We don't know how he's going to handle things. My husband has a small amount invested and it earns him very little. 3 ,000 Bolivianos, in fact. Those 3 ,000 cover electricity, water, gas, and that's it. It's not enough for food. Everything is expensive in the shops. According to the World Bank, Bolivia has a population of over 12 million, a GDP of$49.7 billion, with growth slowing to just 1.4 % in 2024, and a life expectancy of 69 years.

8:10to understand where Bolivia is now we need to look at both the long-term and short-term history of its energy sector historian Carmen Solis who spent years studying Bolivia's natural resources and political shifts has been tracing the country's energy story across centuries this history of extractivism that, you know, starts really with silver in the colonial period. In the 16th century, Potosí, these mines, these famous mines of Potosí produced 60 % of the world's silver. Then Bolivia started exporting tin in the late 19th century, and tin was so important for World War I and for World War II.

8:50And in the second half of the 20th century, gas has been at bay. And the second thing that I also think is very telling is the tension and I will say almost the political consciousness of Bolivians about the question of having access to their own resources. So especially in terms of gas, Bolivia was the first country that nationalized gas in Latin America in 1937. Then Bolivia nationalized gas again or hydrocarbons in 1969 and again with Evo Morales in 2006. It really is talking to you about the tension and how important it is for Bolivians to partner with foreign investors, but to have a sense that they get something out of those resources.

9:38Over the past 25 years, Bolivia's energy story has swung between nationalisation and market reform. Gas exports soared in the early 2000s, and the boom brought real social benefits. Cash transfers, public investment, and a drop in poverty. My name is Mauricio Medinazelli. I am a Bolivian economist. I was a hydrocarbons minister 2005-2006 before Mr. Evo Morales. After that time, I became international consultant. Till 2015, there was a huge change in the energy matrix, using more natural gas inside households for taxi drivers in the transport system and in the power generation. Almost 50 % of the power generation in Bolivia came from natural gas thermoelectric plants.

10:30There was a huge effort to bring natural gas to the families. So they did a very good job on that. mistake. So for about 14 years, things went well. The prices were high. Exports were on the rise. Brett Gustafsson is a political anthropologist. He's written extensively about the country's gas boom in the 2000s. Morales used a lot of those revenues to invest in things that benefited humble people. Something as simple as installing a gas line into a kitchen so that people could have access to natural gas in their kitchens for cooking, investment in infrastructure, hospitals, soccer fields, schools, direct cash transfers.

11:13That's also not a socialist project. That's a World Bank suggestion as well that, you know, if people are poor, give them money. So in the case of Bolivia, there were several programs, one to help school children buy school supplies, one to help elderly folks who didn't have a formal retirement plan to get a yearly payment to women who are expecting to give birth, who'd help prenatal and postnatal care, which did have an impact. But the gains were short-lived. As production slowed and prices fell, Bolivia's extractive model began to show its limits. So since 2015, we have experienced a decrease in the natural gas production, and now we are suffering an economic crisis because of that.

11:57Basically underlying is kind of a geological fact that Bolivia had discovered a couple of massive gas fields and that gas is running out. And it's not entirely clear that there's a lot more. Bolivia was once central to South America's gas supply. But things have changed. The point is that Brazil and Argentina, which bought most of Bolivia's gas, they were exporting something like 70%. Brazil and Argentina are now producing a lot of their own gas. And it's almost a slap in the face. Argentina is now exporting gas through the pipeline, through Bolivia to Brazil, because Bolivia is not exporting as much.

12:38And Argentina now has extra gas to sell because it's been fracking in an area called Bacamuerta. And so Brazil is now buying some of its gas from Argentina. Because the lack of production and the lack of production of natural gas is associated with the lack of production of gasoline. That's why we have to import right now a lot of gasoline and also diesel oil from other countries. And the main problem in the country is the subsidy on energy prices, which is really very low. That created a lot of problems in the supply of this product. And also, because of the decrease in natural gas exports, we are facing a hot currency problem.

13:26There are no US dollars in the country. So the market has created a black market for US dollars. I'm Costas Malouet, and you're listening to the documentary, Striking Gas in Bolivia, from the BBC World Service.

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14:23Back in 2021, President Luis Arce launched Bolivia's Upstream Reactivation Plan, a push to revive gas exploration after years of decline. The plan reviewed more than 40 exploratory areas across the country. North of the capital, the Mayaya Centro X1 well was drilled as part of that effort, and the former president boasted that they'd struck a big gas find. But its viability is questioned by some. They drilled this well in a new frontier. Álvaro Ríos was Bolivia's minister of hydrocarbons under President Carlos Mesa in 2003-2004. I would say it's a good stratigraphic well. It gave us what is the geology underneath, but it's not a new discovery.

15:11They found some gas, but they didn't run the long-term test. And if they don't run the long-term test and they don't drill two delimitation wells, at least two or three, they cannot give you the size of the field, which only one well. The government announced every year a huge discovery. Economist and former minister Mauricio Medinacelli again. What the people is facing on the street is the opposite. A huge discovery of natural gas, we don't have gasoline. A huge discovery of oil, we don't have. A huge discovery of this, we don't have US dollars. The people now, they don't believe of huge discoveries.

15:53I've been speaking to Javier Esquivel, a geologist and former manager at the state energy company YPFB. I think Bolivia needs to open its mind to alternative energies. It's a resource-rich country, especially with lithium, which should be treated as a national priority, not just gas. Lithium should also be studied. There's also big potential in geothermal energy. Some wind and hydro projects exist, though not at the scale of other countries.

16:28So what does a new government need to do first?

16:34First Constance, we need clear exploration policy. It means opening up the sector to new investors.

16:45But what about Mayaya? You worked on that field, didn't you? so we drilled what we called a stratigraphic well later classified as exploratory and yes hydrocarbons were discovered but as you know in the oil world a discovery that isn't economically viable isn't really a discovery so is mayaya not a realistic option then

17:14so scientifically maia is a very important find geologically speaking but for gas production we still need much deeper analysis at least two or three more wells plus studies of the tamachi structures and the copacabana limestones it's a major geological finding but certainly not a mega field more studies and drilling are needed that's not to say there's no gas I'm convinced there is. It'll take a lot more work to make this area economically viable. But outside the presidential palace, we found current oil workers who believe the Mayaya field can work. Here's the leader of the La Paz oil workers, Vladimir Condori.

18:00I work on the Maya X1, X2 well for two years. The Maya well is very different, very technical, and it is the well that is going to generate economic development at the regional and national level because it has good production tests. There are good reserves in the Altiplano, in the north of Bolivia. This is going to be the economic development that will change the countries, economic fate.

18:32My name is Joshua Bellola, Bolivian economist, part of the economic team of Rodrigo Paz, the new president of Bolivia. What we know about Mayaya is that gas was indeed discovered and reserves have been estimated. However, this field still needs to be fully developed and requires logistical infrastructure. There is another project soon to be confirmed, the Vermejo X-46, well drilled to a depth of 3 ,900 meters. In reality, Bolivia must reformulate its entire hydrocarbon policy. We must ensure both domestic supply and the capacity to increase exports. At present, the country faces a serious energy risk, one that could even result in shortages of electricity and liquefied gas.

19:30The newly discovered Mayaya Centro field, north of La Paz, overlaps with the southwestern edge of the Amazon basin and is home to large indigenous communities. They have often seen their homes and way of life upended in the search for gas and other energy resources. And they're worried. Rose Alipaz Kuki is an indigenous leader from the Bolivian Amazon. Living in constant uncertainty and it's what is going to happen with your life or with your community, with the women telling us we don't want to, they are going to get in here because we are going to disappear. Where are we going to live? Constant stress, feeling that your life is threatened.

20:17Sometimes we feel that we are talking to nobody when we are just warning about the danger of these big projects in our territories. They are going to affect us first. Then the environmental impact is for all the country and for the humanity. It's not just for us. From my perspective, Advisor to President Rodrigo Paz, Joshua Billiot again. Indigenous peoples must be granted private ownership of their land and supported in agricultural and livestock development. They must be recognized as equal before the law and provided with access to productive credit, which would grant them greater economic freedom and autonomy.

21:13President Rodrigo Paz faces tough decisions. Double down on gas, pivot to renewables, or open the door to foreign investment and try to do both. There's no money in the Treasury, or not very much. Brett Gustafson again. And there's a lot of dependence on importing diesel fuel and importing gasoline that the government has long subsidised. So there is no easy solution to it. And what about lithium? Bolivia does have a lot of lithium, but it's kind of like that gas trapped up there in the Amazon lowlands. You don't just sort of dig it out and sell it. It's not that simple. So a lot of technical processes to get it out of the ground.

21:56Lithium is a strategic resource that could position Bolivia as a key player in a global supply chain for batteries and electric vehicles. It is important to remember that most of Bolivia's lithium reserves are located in the Uyuni Salt Flat, a globally renewed tourist destination considering one of the world's natural wonders, and the excessive use of water could completely destroy it. The challenges are significant, but we are aware that Bolivia must accelerate its entry into the global lithium market. Any development must be negotiated with the regions of Oduro and Potosí. Rodrigo Pazquez emphasised that the country's future development will be regionally driven.

22:50A lot of companies are trying to exploit this lithium. Economist and former minister Mauricio Medinaceli again. But doing the numbers is not even closer to the natural gas industry. it's almost 10 times smaller than the natural gas business that we had 10 years ago. Yes, we are still a natural gas country, but also important, we are still a mining, mineral export country. So we have a lot of gold, we have a lot of silver and thin. So is there another way? There is an emerging environmental movement and consciousness in Bolivia supported by NGOs and by some indigenous organizations that's relatively small.

23:38Certainly there are spaces of alternative thinking. I would probably try to find a way to support some of those initiatives, rethinking smaller and medium scale economic activities, rather than simply focusing on drilling, cutting, deforesting, and trying to sort of extract your way out of an economic crisis. People are very concerned about the environment. Former Minister Alvaro Rios again. But in order to be concerned about bringing more renewable energy into the country, but if you don't have how to go to work, you don't care about the environment. You need your gasoline in your car, and you need your diesel in your truck.