Now, with the photo ops over, Argentina is left to prepare for natural gas and power shortages in coming months with stopgap, expensive solutions and with the mere hope that this year's winter isn't as harsh as the last one.

Even Brazil's compromise offer to sell Argentina extra electricity on an emergency basis does nothing to improve the outlook during the coldest months of July through September, observers say. According to an Argentine industry official familiar with the administration of Argentina's national power grid, the power sale arrangement is no different from a Brazilian facility that Argentina tapped "many times" last year.

"It's the same as last year," the official said. "Watch the temperature on one hand, and on the other keep an eye on rainfall around the Uruguay and Parana" Rivers, which feed the massive Yacyreta and Salto Grande hydroelectricity plants, he added.

Last winter, the extreme cold weather, which produced the first snowfall in Buenos Aires in nearly a century, led to widespread power and gas restrictions for industrial users. Government planners ordered energy restrictions for factories in order to avoid residential cuts.

Although industrial production took a hit during July, the coldest month last year, the government reported last week that the economy expanded by 8.7% in 2007 - a fifth-straight year with growth above 8%.

More Fuel Oil And Diesel Reliance

In a bid to offset this year's expected shortages, Argentina plans to crank up its already heavy use of fuel oil and diesel to run power plants, the industry official said. That's an expensive solution: the multi-fuel plants would run far more efficiently on cheaper and cleaner natural gas.

Last year, Argentina's power grid used 1.9 million metric tons of fuel oil and 626,000 cubic meters of diesel, according to national power grid operator Cammesa. This year, planners aim to use up to 2 million metric tons of fuel oil and 1.4 million cubic meters of diesel, the industry official said.

Planners "are anticipating the arrival of more ships this year, which can be handled at those levels," the official said.

Argentina began to run into natural gas shortages during cold weather months in early 2004. Initially, power plants were able to use natural gas during warmer months, although generation has increasingly become dependent on fuel oil and diesel.

"Right now we are consuming (diesel and fuel oil) as if it were winter," the industry official said.

Energy demand has jumped as Argentines, flush with cash after five straight years of 8.5%-plus economic growth, snap up new electrical appliances and gas heaters. A six-year-old government rates freeze largely still in place for residential energy users has done little to encourage energy conservation - or spark much needed expansion projects by energy and utility companies.

In turn, the government has absorbed the jump in global oil prices by heavily subsidizing the nation's energy sector. Those subsidies are expected to climb this year as fuel oil and diesel imports rise, eating into the gains made on the fiscal revenue side by sharp hikes in commodity export duties.

Extra Generation Plans

In addition to relying on more fuel oil and diesel, energy planners are also scrambling to increase generation capacity.

Two new 800-megawatt power plants funded by a government-run trust fund set up with private power company profits are slated to come on line midyear.

Additionally, Argentina's state-run energy firm Enarsa has called for bids for 22 smaller-scale power plants with capacities ranging from 20 MW to 100 MW at various locations nationwide. The first of these projects have already become operational.

Large companies, meanwhile, have increasingly turned to self generation, installing small-scale power plants of their own, some of which use wind power or alternative fuels such as peanut shells, according to local media reports.

The industry official said that despite overall shortages, private companies can find gas and fuels by paying top-dollar prices not controlled by the government.

"There is surplus fuel oil in the market right now, although it is tougher in the winter," he said. "It's complicated; industries have to come up with their own generation in order to isolate themselves from the problem."