Colombia's new president likely to face hurdles in achieving ambitious energy agenda: experts

Colombia's newly elected president will have a hard time achieving his ambitious energy agenda as his political coalition will remain fragile, experts said July 27 during a panel discussion.

However, observers are concerned he might end up creating instability and legal chaos if he succumbs to the temptation of trying to change everything by decree, they said.

Gustavo Petro Urrego, who won the presidential election June 19, has promised he will ban fracking and halt new projects for oil and gas exploration as he begins the transformation of Colombia's economy from one based on fossil fuels to one focused on clean technologies.

These goals are hard to achieve, and even more so in a short period of time, experts said during a panel discussion organized by the Inter-American Dialog, the US-based think tank.

As Colombia's presidents cannot be reelected, their four-year terms give them little room for maneuver and the president might look for quick wins to please his electorate, they said.

"Petro could try to achieve something that does not depend on other powers," said John Padilla, a managing director at Colombia-based consultancy IPD. The relationship with Venezuela is an issue that is of relevance to the population and could be resolved in the short term giving Petro a "quick win", Padilla said. The war on drugs is another issue where he could find solutions, improving the relationship with the US, he said.

Karla Schiaffino Perez, senior analyst for the Americas at global consultancy Verisk Maplecroft, agreed with Padilla that Petro could look for achievements to please his support base and keep his political coalition together. Schiaffino said that even banning fracking or halting future rounds could be achievable as it would really have no real impact on the country's finances or crude output in the short term.

"It would be the low hanging fruit, and the country's crude output is already decreasing" she said, adding that other goals, such as accelerating the transition of the electricity matrix, would be much harder to achieve.

Observers said during the discussion that some members of Petro's recently elected cabinet have already recognized the president's ambitions are challenging.

Jose Antonio Ocampo, who will serve as new finance secretary in Petros government, has recently said that energy transition in Colombia needs to be more gradual to avoid economic shocks, Schiaffino noted.

Padilla highlighted other discrepancies between Petro's ideas and the recent comments from Ocampo who said that while halting crude exploration could be considered, gas is a completely different commodity and Colombia cannot afford to stop its exploration.

According to official data, Colombia's gas reserves could run out by the time Petro leaves office at current consumption levels.

Jose Zapata, a partner at law-firm Holland & Knight, said during the panel that investors will be interested in how other segments of society, like the private sector, the courts, and the international institutions, exercise a counterbalance to the president.

Governments in Latin America continue to believe that they can solve problems by issuing laws and decrees, but that is a mistake that has been proven elsewhere, Zapata said.

"One of my main concerns is that we get a zillion new laws under Petro; that does not address problems, it only creates a legal mess," he said.