Electric power generation reached 39.8 billion kWh in 2000, up from 6.9 billion kWh in 1968; about 46% of the power production was hydroelectric, and all but 2.5% of the remainder was from fossil fuels. Electricity consumption was 37.9 billion kWh in 2000. Installed capacity in 2001 was 9.7 million kW. Within South America, Chile is exceeded only by Brazil in its hydroelectric power potential, much of it located in the heavily populated central part of the country between La Serena and Puerto Montt. The quick descent of Andes-born rivers, together with the narrowness of the country, makes production and transportation of electricity comparatively inexpensive. A severe drought in 1997–1999 created serious power shortages, including rolling blackouts in Santiago, and spurred Chile to try diversifying its power supply. As of 2002, the 570 MW Ralco hydropower project on the Bío-Bío River was slated for possible completion in 2003.
The state lays claim to all petroleum deposits, and a government agency, the National Petroleum Co. (Empresa Nacional del Petróleo—ENAP), manages oil fields in Region XII. ENAP's oil production only meets 15% of Chile's needs and reserves are decreasing. Production, which began in 1945, is concentrated around the Strait of Magellan, both onshore and offshore; the crude petroleum is transported by sea to the refinery at Concón, north of Valparaíso. A second refinery was completed near Concepción in 1965 and, later, a third at Gregorio-Magallanes. As of 2002, production totaled 14,000 barrels per day, with proven reserves of 150 million barrels in 2001. The production of dry natural gas, as a byproduct of petroleum extraction, grew in the 1970s; production in 2000 was 1.1 billion cu m (40 billion cu ft), down from 2.1 billion cu m (75 billion cu ft) in 1997 production. In 2000, Chile imported 231,000 barrels per day of oil, primarily from Argentina, Ecuador, Nigeria, and Venezuela, and 4.1 billion cu m (144 billion cu ft) of natural gas, all from Argentina.
Chile's coal reserves have been boosted by recent discoveries in the Bío-Bío area. Reserves (estimated at 1,302 million tons in 2000) are now believed adequate to supply Chile's needs for 100 years. A number of petroleum-fired electric generators have recently been converted to coal.