Pitfalls of Fracking in Argentina

With the Vaca Muerta rock formation reaching over 7.4 million square acres, Argentina boasts the second largest shale gas deposit in the world by some accounts. Currently, Argentina is importing more fossil fuels than it is producing, and the exacerbation of this trend will prove unaffordable in the long-run. Argentina’s government has framed natural gas extraction in Vaca Muerta as the key to ending this trend, but there are also some significant issues to consider.

World Map Shale BasinsProponents of natural gas argue that taking advantage of this resource could significantly boost Argentina’s economy, but it is necessary to look at some of the major concerns regarding increased investment in the hydraulic fracking of Vaca Muerta. According to Elizabeth Tedsen, a Senior Fellow at the Ecologic Institute, “the government has courted foreign investment to begin fracking, which has drawn opposition from local governments, environmentalists, and indigenous groups who fear that the environmental damage of fracking will far outweigh any short-term economic and energy benefits.” Other important considerations include the uncertain nature of the natural gas sector, questions of national and provincial sovereignty in light of government deals with American corporations, and the need for effective regulation.

Because natural gas is non-renewable, Argentina’s domestic production of shale gas will inevitably decrease (and eventually disappear) over time. Meanwhile, the demand for natural gas will continue to grow, and Argentina will need to import more and more natural gas as a result. Thus, natural gas may not act as a consistent energy source, which adds another level of uncertainty to Argentina’s already precarious economic situation.

Another matter is whether Argentina’s investment in natural gas undermines local sovereignty, particularly with regard to the government’s deal with Chevron, an American corporation. According to environmental analyst Jhon Arbelaez, the details of the deal have been withheld from the public. The Argentinean people are not only worried about a loss of sovereignty on the national level but also at the provincial level. Because Argentina law affords each province has ownership over the natural resources in its territory, YPF – Argentina’s largest energy company – approached Neuquen’s lawmakers with a law that would allow YPF to continue extracting natural gas in Vaca Muerta until the year 2048. Argentina-FeatureThe lawmakers agreed, but some of the local people are angry. Arbelaez went on to explain, however, that “industry has worked with the Argentine government to crush all dissent,” and the “people have been filled with misinformation on fracking.” The government and industry manage to do so because “most of the information [about fracking] is not avaliable to the public, and if it is, it’s in English,” which makes it inaccessible to many citizens. And meanwhile, the media promotes fracking using words like “energy revolution” and “energy independence.” Even where opposition does exist, “it is still very grassroots.” There are also health and safety concerns. According to Arbelaez, the current public health laws “exempt fracking from many regulations.”

The question now becomes: if not natural gas, then what?

Argentina_solarmapAccording to Tedsen, Argentina “has some of the best renewable resources, with huge wind potential in the south and great solar in the northwest.” Some provinces in the Patagonia region have introduced tax incentives to promote wind energy use, but it is questionable whether such incentives are large enough to allow Argentina to reach its target installed capacity of 1.2 GW by 2016. The solar potential of Argentina’s northwest region is so great that, in theory, it could act as the country’s sole energy source. However, Argentina does not appear to be in the process of creating any major utility scale solar plants. As is the case in many other countries, Argentina’s weak regulatory framework and insufficient international investment deter the increased use of renewable energy sources. Although the underutilization of solar energy in Argentina is apparent, the nature of solar technology makes it a relatively easy and affordable energy source for communities to employ.

Sources: Arbelaez, Jhon. Enviromental Analyst, San Francisco, CA, 10 June 2015
Gilbert, Jonathan. “In Argentina, Enormous Fracking Potential and Opposition to Match.”
GlobalPost. GlobalPost, 9 June 2014. Web. 1 June 2015.
Grotz, Enrique, and Pablo Decundo. “Renewable Energy Recap: Argentina.” Renewable Energy World. RenewableEnergyWorld.com, 2 Jan. 2012. Web. 1 June 2015.
Tedsen, Elizabeth. Ecologic Institute, Washington, D.C., 3 June 2015.

Photos courtesy of FracTracker.