Colombia candidate would hasten energy transition

Colombia's leftist presidential front-runner Gustavo Petro is vowing to stop awarding oil exploration contracts in a bid to restructure Colombia's economy away from hydrocarbons, sparking a backlash from the oil industry.

"Coal and oil will come to an end whether we like it or not, and then move toward a transition so that the economy goes from a dependence on coal and oil to clean energy," Petro said at a recent mining conference.

A former Bogota mayor and guerrilla, Petro is the favorite in a broad field candidates for May 2022 elections to replace conservative incumbent Ivan Duque in August next year. Petro's main rival is likely to be Oscar Ivan Zuluaga of the conservative Centro Democratico party that supported Duque.

Petro says state-controlled Ecopetrol's transition plans must be accelerated toward renewable energy, and Colombia needs to leave 80pc of its coal reserves underground if it wants to fulfill a global pledge to keep warming below 1.5°C. He wants coal-producing states La Guajira and Cesar to expand solar and wind projects instead, a trend that is already underway there.

The candidate of the Colombia Humana party bore the same anti-oil and coal pledge in his last run for the presidency in 2018 when he lost to Duque. But the idea now has more traction at a time when the world is under pressure to transition away from fossil fuels to limit rising global temperatures.

In an 18 November presentation at the Colombian oil chamber's oil and gas summit, the IEA's director of the Office for Energy Markets and Security Keisuke Sadamori acknowledged the "major challenge" facing oil producers like Colombia while urging a swifter transition to clean energy systems.

Oil is the main source of government revenue in Colombia, bringing in about 20 trillion pesos/yr ($5.3bn/yr). The oil sector, which represents 2.1pc of total GDP, accounts for 32pc of export revenue, according to mines and energy minister Diego Mesa.

Drill baby, drill

Predictably, Colombia's oil industry lambasted Petro's anti-hydrocarbons platform, urging a gradual transition instead.

"We need to make an intelligent transition and not outright prohibit oil exploration as this would only hurt Colombian pockets," said Colombian oil chamber (ACP) executive president Francisco José Lloreda.

Julio Cesar Vera, the ministry's former hydrocarbons' director, said Petro's "populist" proposals would torpedo the economy. "How would Colombia replace the 20 trillion pesos that come from the hydrocarbon's sector? We want an energy transition process for the country, and we are moving towards this, but it has to be done responsibly, allowing Colombians to make a sustainable use of the resources it has," Vera said.

Alejandro Martinez, president of LPG association Gasnova, warned that an industry shutdown would mean fuel like propane used for cooking would need to be imported, driving up prices.

Community and environmental groups endorse Petro's fast-track energy transition plans. Francisco Girarlo, an economist with indigenous advocacy group Akubadaura said Colombia sooner or later must change its economic model.

"Colombia must consider changing its productive structure because the exploitation of hydrocarbons and coal must end. After we have been dependent on these for 30 years, it is very hard to make this transition, but it must be done, with serious consequences at the beginning," he said.