Panama Energy
Panama is important to world energy markets because the Panama Canal is a major transit center for oil shipments and a potential choke point. Panama has major petroleum free zones with large capacity to store petroleum products as well as a strategic location for small refineries to serve regional export markets. Panama is key to plans to connect the electricity and natural gas grids of North and South America.
Panama has negligible hydrocarbon energy reserves and imports over 70% of its energy. Virtually all oil is imported, and the country neither produces nor consumes natural gas.
In June 2000, neighboring Colombia's Senate approved a bill allowing natural gas exports, which previously had been banned. This paved the way for the possible construction of a gas pipeline leading from offshore Colombian gas sources directly to Panama
Electricity
Electricity generation accounts for most of Panama's domestic energy production, with hydroelectric generation alone accounting for 75% of the country's total energy production. In 1998, the state-owned electricity company, IRHE, was privatized. There are currently eight electricity generators and three distributors operating in Panama. Foreign company involvement in the Panamanian electricity sector includes U.S.-based El Paso, AES, Enron and Constellation, Canada's Hydro Quebec, and Spain's Union Fenosa. EGE Fortuna, owned by El Paso and Hydro Quebec (51%) and the Panamanian government (49%), is the country's largest generator, with 300 megawatts (MW) of hydropower. Transmission remains in the hands of the government through the publicly-owned Etesa company. Also in 1998, a regulatory body was created, Ente Regulador, to oversee the electric, telecommunications, and water sectors.
Electricity demand is expected to grow significantly in the coming few years, and new projects are planned to help meet this demand. In May 2000, the Inter-American Development Bank (IDB) Private Sector Department approved its first project in Panama. The IDB loaned $59.8 million to IGC/ERI Pan Am Thermal Generating Limited (PATG) for the construction and operation of a 96-MW, $92-million thermal electric plant near Panama City. Construction of AES's $200-million, 132-MW Esti hydroelectric project in Panama's Chiriqui province began in early August 2000. Esti is made up of two hydroelectric plants, Guasquitas and Canjilones, on the Chiriqui river. in 2002, Etesa awarded the construction of a $80 million transmission line to transport power from Esti.
Investment projections for the next 10 years in Panama’s electric sector are estimated in US$1 billion.
Central America has been discussing plans to link the region's electricity grids. The Sistema de Interconexion Electrica para America Central (SIEPAC) project calls for the construction of transmission lines connecting 35 million consumers in Panama, Costa Rica, Honduras, Nicaragua, El Salvador, and Guatemala. The project remains in the planning stages, and consultants involved in the project estimate that the line could become operational by 2003 at the earliest. SIEPAC could cost an estimated $300 million.
Panama has become increasingly concerned about its environment. With the 1998 electricity restructuring, the government also restructured its environmental regulatory framework. National Environmental Authority (ANAM) became the government agency responsible for the implementation and administration of environmental law. ANAM holds significant enforcement authority, in contrast to the regulatory body that preceded it.
Petroleum
Petroleum is one of the largest commodities (by tonnage) shipped through the Canal and accounted for 16%-17% of total canal shipments during fiscal years 1996-1998. Some coal is shipped through the canal as well, accounting for 5%-6% of total Canal traffic. Over 10 million short tons passed through the canal in fiscal year 1998 (down from over 12 million short tons in fiscal years 1996-1997), with almost 80% going from the Pacific to the Caribbean.
Trans-Panama Pipeline
If transit were halted through the Canal, the Trans-Panama pipeline (Petroterminal de Panama, S.A.) could be re-opened to carry oil in either direction. This pipeline is located outside the former Canal Zone near the Costa Rican border, and runs from the port of Charco Azul on the Pacific Coast (near Puerto Armuelles, southwest of David) to the port of Chiriqui Grande, Bocas del Toro on the Caribbean.
It was opened in October 1982 as an economical alternative to the Panama Canal for transporting Alaskan oil across Panama en route to Gulf Coast ports. Transit time from Alaska to the U.S. Gulf Coast via Panama is about 16 days, whereas a tanker would take 40 days to reach the Gulf Coast from Alaska if rerouted around Cape Horn (the southern tip of South America). More than 2.2 billion barrels of Alaskan crude oil has been transported through the 81-mile pipeline.
However, the 860,000-bbl/d pipeline was closed in April 1996 after Alaskan oil shipments to the Gulf Coast declined with falling Alaskan oil production (Alaska now produces about 1 million bbl/d) and increased oil consumption on the west coast of the United States, especially in California. In addition, the decision to allow Alaskan oil to be exported outside the U.S. reduced the incentives to ship Alaskan oil to the Gulf Coast. There has been some discussion of reversing the direction of the pipeline to allow Caribbean oil producers a less expensive outlet to Pacific destinations.
ENERGY OVERVIEW
Oil Production (1999E): 1,000 barrels per day (bbl/d)
Oil Consumption (1999E): 52,000 bbl/d
Net Oil Imports (1999E): 51,000 bbl/d
Crude Refining Capacity (1/1/00): 60,000 bbl/d
Coal Consumption (1998E): 60,000 Short tons
Electric Generation Capacity (1/1/98): 1.05 million kilowatts
Electricity Generation (1998E): 4.5 billion kilowatt/hours
Electricity Consumption (1998E): 4.3 billion kilowatthours
ENVIRONMENTAL OVERVIEW
Total Energy Consumption (1999E):
0.16 quadrillion Btu* (<0.1% of world total energy consumption)
Energy-Related Carbon Emissions (1999E):
2.5 million metric tons of carbon (<0.1% of world total carbon emissions)
Per Capita Energy Consumption (1999E):
56.2 million Btu (vs U.S. value of 355.8 million Btu)
Per Capita Carbon Emissions (1999E):
0.88 metric tons of carbon (vs U.S. value of 5.5 metric tons of carbon)
Energy Intensity (1999E):
19,685 Btu/$1990 (vs U.S. value of 12,638 Btu/$1990)**
Carbon Intensity (1999E):
0.31 metric tons of carbon/thousand $1990 (vs U.S. value of 0.19 metric tons/thousand $1990)**
Sectoral Share of Energy Consumption (1998E):
Industrial (16.2%), Transportation (46.5%), Residential (36.3%), Commercial (1.0%)
Sectoral Share of Carbon Emissions (1998E):
Industrial (24.7%), Transportation (41.0%), Residential (32.2%), Commercial (2.1%)
Fuel Share of Energy Consumption (1999E):
Coal (1.0%), Oil (78.4%), Natural Gas (0.0%)
Fuel Share of Carbon Emissions (1998E):
Coal (1.5%), Oil (98.5%), Natural Gas (0.0%)
Renewable Energy Consumption (1998E):
41 trillion Btu*
Number of People per Motor Vehicle (1998):
9.8 (vs U.S. value of 1.3)
Status in Climate Change Negotiations:
Non-Annex I country under the United Nations Framework Convention on Climate Change (ratified on May 23rd, 1995). Ratified the Kyoto Protocol on March 5th, 1999.
Major Environmental Issues:
water pollution from agricultural runoff threatens fishery resources; deforestation of tropical rainforest; land degradation.
Major International Environmental Agreements:
Biodiversity, Climate Change, Climate Change-Kyoto Protocol, De-certification, Endangered Species, Hazardous Wastes, Law of the Sea, Marine Dumping, Nuclear Test Ban, Ozone Layer Protection, Ship Pollution, Tropical Timber 83, Tropical Timber 94, Wetlands, Whaling.
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