Colombia is at a critical crossroads regarding its natural gas supply, with projections that indicate a possible significant shortage starting in 2025. Rodolfo Anaya, president of the Vanti Group, warned during the Congress of the National Association of Public Service Companies and Communications (Andesco) on the urgent need to modify the current regulation to avoid this crisis.
The current regulation requires a profound review to allow greater flexibility in the commercialization of natural gas. It is essential that producers have the ability to offer gas directly and temporarily to meet immediate demand, as well as the possibility of designing products with a mix of supply sources. This approach would not only ensure continuity of supply but also keep prices competitive and stable. In this sense, Anaya stressed the importance of creating a sustainable pricing structure that encourages the development of all market segments, including the residential, commercial, industrial and mobility sectors. An appropriate pricing structure should reflect real supply costs and allow differentiation according to market type.
The suggested regulatory adjustments are crucial to avoid natural gas shortages in Colombia. First, flexibility in marketing allows producers to respond quickly to fluctuations in demand, avoiding potential disruptions in supply. A sustainable pricing structure guarantees that supply costs are covered, allowing the operation and expansion of the natural gas system to be maintained without depending exclusively on the volatility of international prices.
In this context, in which the import of natural gas from Venezuela is imminent to cover the projected deficit, as Ricardo Roa, president of the Ecopetrol Group, announced at the same Andesco Congress. The regulation must clearly define the conditions and responsibilities for importation, as well as establish financing mechanisms and distribution of additional costs. This measure is vital to ensure continuous supply and avoid excessive dependence on domestic production, which is currently not sufficient to meet future demand and to reduce vulnerability to possible interruptions in domestic production. It is also necessary to implement incentives for the exploration of new deposits and the exploitation of existing resources, especially in offshore areas, which is essential to guarantee long-term supply.
However, the implementation of these regulatory adjustments faces several limitations, starting with interim appointments of the commissioners of the Energy and Gas Regulatory Commission (CREG), about which we have spoken together with other experts in other publications and on which on this occasion we want to take advantage of to emphasize the need for its proper functioning to enable the adoption of a regulatory framework that aligns the economic interests of the different market actors, including producers, importers and consumers.
The proper functioning of the CREG is also necessary to generate adequate incentives that promote the action of these actors to resolve the lack of adequate infrastructure for the import and distribution of gas. The current infrastructure is insufficient to handle the projected demand and requires significant expansion, which implies substantial investments and time for its development.
Finally, the regulatory framework must be adjusted by the CREG to counteract distrust in the international market, especially the dependence on gas imports from neighboring countries such as Venezuela, which presents obvious geopolitical and economic risks and consequently requires the formulation of policies that allow long-term gas supply from other sources.
Acting in a timely manner in the implementation of these regulatory adjustments offers several advantages. Firstly, it favors the country’s energy security by guaranteeing a constant supply of natural gas, avoiding interruptions that could negatively affect the industry and Colombian homes. Additionally, a well-designed pricing structure will help keep prices stable and affordable for consumers, protecting them from abrupt increases that could result from shortages. The adoption of a clear and favorable regulatory framework can attract investments in the energy sector, promoting the development of infrastructure and the exploitation of new gas fields. Likewise, the long-term availability of natural gas is crucial for the transition towards a more sustainable energy matrix, since this is a source of clean energy that can complement the others that we have available in the country.
Failure to act in a timely manner in the implementation of these adjustments could have serious consequences for the country. Inaction could lead to a shortage of natural gas starting in 2025, which would force supply to be rationed and affect all economic and social sectors. Gas shortages can result in significant price increases for consumers, affecting the domestic economy and the competitiveness of industries that depend on this resource. Furthermore, regulatory uncertainty can deter potential investors, delaying the development of new infrastructure and the exploration of energy resources. Finally, without a regulatory framework that promotes national production and efficient imports, Colombia could become excessively dependent on external suppliers, which implies additional risks in terms of energy security.
In conclusion, it is imperative that Colombia adopt regulatory adjustments in the natural gas sector in a timely manner to avoid an imminent energy crisis. The implementation of these measures will not only ensure security of supply and promote economic stability but will also contribute to the sustainable development of the country. Decisive and coordinated action is essential to ensure a safe and stable energy future for Colombia.
Juan Manuel Cuellar, Partner Energy & Natural Resources Environmental Law
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