Argentina is slated to receive its third shipment of liquefied natural gas (LNG) from Egypt on July 28, Bloomberg reported July 11. The shipment underlines a burgeoning economic crisis in Argentina as the country changes from a net exporter of natural gas to a net importer. For a country that has always relied on commodity exports for a comfortable cash cushion, this dramatic decline in self-sustainability spells serious trouble. The government cannot sustain the subsidization of domestic consumption forever, and it is quickly running out of cash. Coupled with the ongoing distress in the agricultural sector, Argentina could be facing an uphill struggle to feed its people and keep its lights on in the not too distant future. Argentina began producing more natural gas than it consumed in 1998, following a period of sustained economic growth and increasing investment. Coupled with its status as a transport hub for Bolivian natural gas destined for Chilean markets (the Bolivian constitution prevents the sale of natural gas to Chile), Argentina has enjoyed almost a decade not merely of net exporter status, but also of charging Bolivia transit fees. Fast forward to 2008, and a host of populist policies that were implemented in response to the 1999-2002 economic crisis have begun to take a serious toll. Not only have price caps stifled investment and energy output, they have also boosted consumption habits. Natural gas consumption rose 34 percent from 2000 to 2007, reaching 122 million cubic meters per day. Rising consumption and a free-for-all attitude toward natural gas has led Argentina to rely on natural gas for 54 percent of its electricity generation. Although natural gas production kept apace for several years, it had since leveled off, and recently released data indicates that production began declining before 2007, when production almost exactly equaled consumption. In 2004, Argentina produced 44.9 billion cubic meters (bcm) of natural gas and was able to export 15.6 percent of that, but in 2007 Argentina produced 44.8 bcm and consumed 44.1 bcm. This effectively ended Argentina's status as a net exporter. The decline has affected industries across the country as Argentina has attempted to keep the shortages from affecting the population. The government has tried to make up for electricity shortages by sporadically stopping natural gas exports to Chile and purchasing an increasing amount of electricity from Brazil. (A decline in exports from Bolivia to Argentina has made the situation extra-tight.) But these stopgap measures are insufficient. To keep the lights on, Argentina now has to import more than it exports. Since Argentina is an energy-rich country that should have a competitive advantage in the natural gas market, the degradation of the energy industry is a disaster. The Argentine agricultural industry has experienced a similar squeeze, with price controls crippling the producers' ability to produce locally-consumed products, shifting Argentina's crop set toward export-suitable products that do little to support domestic needs (like soybeans). Recent attempts to fix the problem by levying massive export taxes has sent the industry into complete turmoil and could threaten future harvests — both by pulling farmers away from their jobs and potentially making it more cost-effective to opt out of the market altogether. As long as Argentina was self-sufficient in natural gas, it could afford to allow natural gas consumption to increase. But that has changed and there is nothing to suggest that production levels can be rapidly ramped up, nor that there is a politically safe way to reduce demand. This means not only that Argentina is losing export revenues, but as the trend continues Argentina must also begin expending huge amounts of cash to ensure the delivery of energy (and food) to consumers. But President Cristina Fernandez de Kirchner's populist policies have already put a huge strain on government coffers. Excessive spending has spurred a dramatic increase in the country's debt — just six years after its debt default — with the finance ministry estimating that gross public debt sits at about $144 billion, or 56 percent of gross domestic product. The complete subsidization of the country's energy needs is a burden the government might not be able to withstand. There are other economic indicators that give serious cause for concern. Inflation driven by rising global prices for basic commodities as well as massive government spending is also rising faster than the official numbers suggest, as the government has started to manipulate the consumer price index wholesale by pulling goods off the measurement if their prices rise too high. Furthermore, data released in May indicated that Argentina's trade surplus has dropped by 23 percent year-on-year. Despite these financial barriers, Fernandez's government is locked into its populist policies. Fernandez draws her support from the left, and her and her husband's policies have fostered a dependency on government handouts. Ending those handouts would be political suicide. Energy shortages that hit main population centers are also an unacceptable problem, so the government will continue to shuffle natural gas and electricity around to the country to try to meet demand. But the government cannot keep it up forever, and Argentina is looking increasingly like a country on the brink of being unable to meet its most basic requirements. As production declines across sectors, the government will have to pick up the pace of its expenditures or face wide-scale protests, and the net economic impact could be catastrophic — amounting to economic suicide for Argentina.