capacity of 175 MMcf/d. The gas project would be built with private, foreign, and national oil company participation at an estimated cost of US$1 billion. In addition, the possibility of building a gas pipeline from southern Bolivia to northern Chile has been discussed.
One of the greatest challenges facing Chile today is to reconcile its growing energy needs with the rising dependence on energy resources imported from volatile markets. While imported crude oil accounts for a significant portion of its needs, the country may soon start importing natural gas. In order to reduce its overall dependence on imported energy, Chile's energy policy focuses on actively promoting diversification and more efficient use of energy resources (oil, gas, coal, and firewood).
In terms of diversification of energy sources, the government is placing emphasis on two principal areas. The first is the introduction of gas into new markets. The government is promoting the use of natural gas in the central and northem regions, which have the largest concentrations of potential consumers. The second is the development of nonconventional energy sources such as geothermal and other renewable energy. Chile is well positioned to become the leading Latin American country in the use of nonconventional sources as its investment climate and economic growth are very attractive to foreign investors. The Chilean legislative branch is now in the process of developing a legal framework for investment in this area.
Chile is also well situated to increase its efficiency in the use of energy resources. The government is providing incentives to promote the transfer of efficient energy use technologies to small and medium users in the country. Special emphasis has been placed on improving the efficiency of coal and wood utilization.