One of the very few sectors in Argentina that, amid a steep recession, is actually increasing its production, the government has a lot invested in Vaca Muerta.
Along with big oil companies, the Macri administration is chomping at the bit to make a profit off the region’s reserves, even if it means overlooking the detrimental effects it has on both its environmental policy and a promised shift to renewables.
In spite of campaigning to go green in 2017, calling it “the year of renewable energy,” Macri has made his intentions clear by endorsing multi-million dollar partnerships with several major oil companies over the course of his presidency, including Chevron and Shell in Vaca Muerta — now regarded as the world’s second largest shale oil reserve.
“Arguably, Argentina is one of the last places on the planet where international oil companies can actually get reserves relatively easily,” Paul Horsman, Director of the Buenos Aires Greenpeace chapter, told The Bubble.
It’s true that Vaca Muerta is making a lot of money theses days, and with a recent approval to start exporting natural gas to Chile, the numbers are expected to continue rising. However, when looked at on a cost to benefit scale, the project’s rationality is put into question.
This high level of investment in Vaca Muerta also fails to consider the shifting focus of the world away from fossil fuels and towards renewable energies; and given Argentina’s massive potential for wind energy in the South and solar energy in the North, there are arguments in favor of adjusting the country’s trajectory to conform to this change.
President of Verisk Analytics, Scott Stephenson wrote in an article for Forbes Magazine that, “Players that embrace solar, wind, and alternative sources of energy may find, perhaps counterintuitively, that they just may come out on top of the most massive shift in energy production strategy that we’ve seen in generations.”
However, Argentina is stubbornly marching forth in the opposite direction. The Climate Transparency initiative clocked in the country’s greenhouse gas emissions at 323 MtCO2e per year in 2018 and expected them to grow to 470 mtCO2e by 2030 — an increase that would violate the Paris Agreement signed by Argentina in 2015.
This fervent push towards fossil fuel coupled with low government oversight has lead to a deep impact on the environment and communities surrounding the drilling sites. There are federal regulation in place to keep these problems from happening, however it seems that some level of accountability is lost in the translation from written law to actually caring them out on the local level.
Estas son las fotos del periodista alemán que denunció que lo detuvieron y torturaron por investigar un basurero petrolero en Vaca Muerta. El resto de sus fotos dijo que se las borraron. La empresa Treater había sido denunciada por Greenpeace. Este es el lado B del fracking pic.twitter.com/6TQZFzP6Qg
— Juan Parrilla (@JPParrilla) January 10, 2019
Based on information from the Neuquén Environmental Ministry, there were 934 reported oil spills in Vaca Muerta between January and October of 2018. That’s an average of three spills a day. In the past four years, they reported 3,368 “environmental incidents.”
The latest major spill occurred on October 19 in Bandurria Sur at a rig run by YPF, an Argentine oil company, partnered with Schlumberger, the largest oilfield services company in the world based out of Texas. The official version of events is that there was a pressure overload while workers were adjusting a valve at midnight on Friday. According to the government report, workers weren’t able to get the situation under control for 13 hours, however other sources put the number at around 36 hours. YPF refused to comment on the size of the affected area, but images taken by Greenpeace depict “at least 85 thousand square meters” of land now black from the spill — that’s about 21 acres of contaminated fields.
Horsman comments that these spills are relatively small when compared to the Exxon Valdez or Deepwater Horizon spills in the US, but the frequency of the spills and the fact that they are all localized to the same are can have serious implications in the future due to contaminated groundwater, soil and air.
“When you get thousands of liters of oil flowing into your ground water, that’s a problem,” Horsman said, “but I would argue that it is the ongoing, continued, daily operations of the oil industry that causes the chronic pollution and damage.”
The United Nations Committee on Economic, Social and cultural rights called Argentina out for its careless blunders in Vaca Muerta in their 2018 Fourth Quarter Report, asserting that the “hydraulic fracking project contradicts the government’s commitments under the Paris Agreement, with a clear negative impact on global warming and the enjoyment of the economic and social rights of the world population and future generations.”
They go on to suggest that the state should “promote alternative and renewable energies, reduce greenhouse gas emissions and set national targets with time-defined benchmarks.”
The government currently has a goal to draw 20 percent of its energy from renewable sources by 2025; however, according to a November report done by Argentina’s Electricity Market Managing Company (CAMMESA), only 3 percent of the electricity used in the country comes from renewable energy sources. With six years left until 2025, it would be a miracle if they met that goal.
That being said, the resources are there to make it happen.
The World Energy Council states that Argentina has the most wind farms in the world, and that “the current exploitation of wind energy is not commensurate with its enormous potential.” They estimate that “Patagonia’s wind potential south of the 42nd parallel represents tens of times that contained in the whole of Argentina’s annual crude oil production.”
Similarly, Horsman asserts that Argentina has “some of the biggest solar resources that are very little used” in the North.
To Argentina’s credit, they are not the only country moving in this direction. After Donald Trump pulled the US out of the Paris Agreement in a claim that global warming doesn’t exist, Brazil’s newly elected president Jair Bolsonaro made similar gestures, refusing to host the 2019 UN Climate Change Conference on principle. Furthermore, the Yellow Vest protesters in France recently forced president Emmanuel Macron to suspend his fuel-tax hike made to lower greenhouse gas emissions.
However, with all of its resources, the opportunity to become an example of what the world could look like in the future is at Argentina’s fingertips.
“If you look at the United States, the fracking industry is a financial bust run purely and simply by huge debts,” Horsman said. “You can’t switch oil and gas off tomorrow, but the direction of travel needs to be very clear: that there is no future in fossil fuels, and that the future for Argentina is in using the abundant renewable energy sources that they have here.”