Peru may use army to end protests at energy sites

LIMA, Aug 18 (Reuters) - Peru's government threatened on Monday to send in the army to break up protests at energy installations that indigenous groups surrounded a week ago to denounce laws they say will take away tribal lands.

The government issued a decree for the provinces of Cusco, Loreto and Amazonas, allowing it to order the armed forces to disperse protesters.

Talks held last week between the government and indigenous rights groups faltered. Tribes are upset with a law President Alan Garcia passed earlier this year that makes it easier for big companies to buy land owned by communities.

It lowers the bar for investors that want to buy or lease communally held land from two-thirds of a community's support to a simple majority.

The law was passed as part of Peru's free-trade deal with the United States, and indigenous groups fear large mining and energy companies will snap up their land.

The protests involved some 500 people who surrounded two energy installations: an oil pipeline in northern Peru owned by state-run company Petroperu, and a lot of Argentine company Pluspetrol that sits in the Camisea natural gas field in southern Peru.

Pluspetrol said gas output in Peru has not been affected.

The protests started just as Peru's energy supplies entered a period of tightness.

In the last few weeks, Peru has experienced two blackouts as spiking demand, a shortage of rains and poor infrastructure have combined to crimp power supplies.