state recovers ownership, possession and total and absolute control" of hydrocarbons. The 2006 announcement was met by applause on La Paz's main plaza, where Vice President Alvaro Garcia told the crowd that the government's energy-related revenue would jump US$320 million to US$780 million in 2007, continuing a trend where revenues had expanded nearly sixfold between 2002 and 2006. Background Gas reserves of Bolivia The central issue was Bolivia's large natural gas reserves and the prospect for their future sale and use. The Bolivian gas reserves are the second largest in South America after Venezuela, and exploration after the privatization of the national oil company YPFB showed that proven natural gas reserves were 600% higher than previously known. The cash-poor, state-owned company could not afford the exploration costs. These reserves mainly are located in the southeastern Tarija Department, which contains 85% of gas and petrol reserves. According to the United States Department of Energy, another 10.6% is located within the department of Santa Cruz and 2.5% in the Cochabamba Department. After further exploration from 1996 to 2002, the estimated size of the probable gas reserves was calculated to be 12.5 times larger, passing from to . This number has declined somewhat to probable reserves. The proven reserves are . With the declining importance of tin mines, those reserves accounted for the majority of foreign investment in Bolivia. The price which Bolivia is paid for its natural gas is roughly US to Brazil and $3.18 per million BTU to Argentina. Other sources state that Brazil pays between $3.15 and $3.60 per million BTU, not including $1.50 per million BTU in Petrobras extraction and transportation costs. As a comparison, the price of gas in the US as a whole in 2006 varied between US, although some years earlier the price of natural gas spiked at $14 per million BTU in California due to lack of pipeline capacity to and within California as well as due to electricity outages. While according to Le Monde, Brazil and Argentina pay US$2 per thousand cubic meter of gas, which costs from $12 to $15 in California. In 1994, a contract with Brazil was passed, two years before 1996's privatization of the 70-year-old, state-owned Yacimientos Petroliferos Fiscales de Bolivia (YPFB). The construction of the Bolivia-Brazil gas pipeline cost US$2.2 billion. A consortium called Pacific LNG was formed to exploit the newly discovered reserves. The consortium comprised the British