Argentina’s Climate Agenda Compromised by Expanding Fracking Frontier

 

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Source: Ministry of Energy

Argentina’s commitment to the goals set forth by the Paris Agreement and its reputation as a regional climate leader stand to be compromised by the rapid expansion of shale oil and gas development in the nation’s interior.

Macri’s climate agenda

Argentine President Mauricio Macri has positioned Argentina as a leader in climate action since he assumed the presidency in December 2015.  Under this center-right president’s leadership, Argentina became one of the first countries to ratify the Paris Agreement, with unanimous backing from its congress.  A few months into office, Macri created an inter-ministerial National Cabinet on Climate Change to help “facilitate a coordinated policy response to climate change.”  Macri partnered with President Barack Obama to cut emissions from air flights and facilitate the development of renewable energy.  Argentina’s Ministry of Energy has launched a renewable energy bidding program, with the goal of 20 percent of the nation’s electricity from renewables by 2025.

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“Climate change is the most important challenge, the greatest of humanity and only by being aware of this will we be able to progress, without jeopardizing our future and that of the next generations,” said Macri, addressing the General Assembly of the United Nations.  “In Argentina, we are making an ambitious commitment – in terms of renewable energy – to develop our potential in sectors such as the generation of solar, wind and biomass.”

The reserves of Vaca Muerta

However, Argentina’s climate agenda is being undermined by the administration’s commitment to exploiting the nation’s massive shale oil and gas reserves.  Argentina, which already generates 60 percent of its electricity from fossil fuels, has one of the largest shale gas reserves in the world. The U.S. Energy Information Administration has identified nearly 802 million trillion cubic feet of shale gas reserves, second only to China.  Most of these reserves are located in the Vaca Muerta geologic formation in the country’s Neuquén Basin.

To extract oil and gas, Argentina has embraced hydraulic fracturing, or fracking.  This controversial technology involves injecting huge amounts of water, sand and chemicals at high pressure to free reserves trapped deep underground. Along with the United States and Canada, Argentina has emerged as a global leader in shale gas production and is regarded as the fracking capital of the region. Argentina, where oil production from fracking is expected to triple over the next five years, has drawn interest from international oil conglomerates such as Exxon Mobil Corp, Chevron Corp., Royal Dutch Shell PLC and BP.

“Argentina is among the countries with the greatest potential in the world. We want the best companies to come and partner with us,” Macri said in a lunch with oil executives in Houston.

Fracking and Argentina’s climate goals

Macri’s embrace of the fossil fuel industry and expansion of the fracking frontier could undercut its goals set forth in the nation’s Nationally Determined Contribution.

“It has a big impact in terms of the climate commitments,” said Enrique Maurtua Konstantinidis, Senior Climate Change Advisor for the Fundación Ambiente y Recursos Naturales (FARN), speaking to La Ruta del Clima. “The protections around Vaca Muerta and use of shale oil and gas is a big threat. … In this regard, we cannot invest in an industry that actually goes against the Paris Agreement.”

Jennifer Morgan, Executive Director of Greenpeace International, went even further in her criticism of Argentina’s use of fracking. In an op-ed for the Thomson Reuters Foundation, Morgan wrote:

“Macri’s economic reputation and climate legacy hinge on the country’s next move. Investing in Vaca Muerta – the world’s largest undeveloped non-conventional shale oil and gas reserve – would unleash a carbon bomb incompatible with the goals of the Paris Climate Agreement.”

Argentina, like many nations, is struggling to reach its modest targets under the Paris Agreement.  To honor its commitments, Argentina, which is already on track to become one of the most attractive markets in Latin America for renewable energy development, must move to limit shale oil and gas exploration.   

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López Obrador Sets Mexico on the Right Path with Plan to End Fracking

 

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Source: López Obrador Facebook Page

The promise of Mexico’s President-elect Andrés Manuel López Obrador to ban hydraulic fracturing, or fracking, marks a major win for environmental activists.

When asked at a July 31 press conference about the potential risks associated with the technology, Lopez Obrador made it clear his incoming administration will change course.  “We will no longer use that method to extract petroleum,” announced López Obrador, according to the Associated Press.

If Mexico does this, it will join nations such as FranceGermanyBulgaria,and Ireland that have banned this controversial technology.

Fracking is an extreme technology used to extract oil and gas from shale and other rock formations.  The process involves injecting huge amounts of water, sand and chemicals at high pressure to free reserves trapped deep underground.  While fracking has been around for decades, it exploded in the mid-2000s, when the technology was combined with horizontal drilling and other technologies.

Fracking has also been the subject of much criticism.  While some have promoted this technology as a favorable alternative to coal, others have rightly criticized it as a “bridge to nowhere.” They have argued that the technology has led to an increase in methane emissions, a much more potent greenhouse gas than carbon dioxide, and slowed the development of renewable technologies.  In a 2016 piece for The Nation, climate activist and co-founder of 350.org Bill McKibben wrote, “One of the nastiest side effects of the fracking boom, in fact, is that the expansion of natural gas has undercut the market for renewables, keeping us from putting up windmills and solar panels at the necessary pace.”

A host of other concerns are also raised by fracking.  A 2016 report by the Environmental Protection Agency concluded that fracking has the potential to contaminate drinking water supplies.  A recent study by the Concerned Health Professionals of New York and Physicians for Social Responsibility linked fracking to a higher risk of asthma, birth defects and cancer.  The technology has also been connected to increased seismic activity.

This process has revolutionized the oil and gas industry in the United States, where domestic oil and gas production has increased dramatically in recent years.  In 2012, the United States became the world’s top petroleum and gas producer, largely as a result of the nation’s fracking boom.

Fracking has expanded rapidly in Latin America. Argentina, with its Vaca Muerta rock formation holding one of the world’s largest shale gas reserves, is considered the fracking capital of the region.  Colombia has been in the exploratory stages of embracing this technology after the nation’s Ministry of Mines and Energy gave fracking the go-ahead in 2014.

But fracking has met with growing opposition in the region.  Earlier this month, activists and more than 30 legislators presented a bill to end fracking in Colombia.  Meanwhile, Uruguay instituted a four-year ban on the technology in 2017.

Mexico, with the shale-rich Burgos Basin on its northern border, has been coveted by private investors looking to exploit the nation’s reserves.  The nation opened itself up to fracking and foreign investment in recent years following the passage of a 2014 energy reform bill. In 2017, the country opened the Burgos Basin to private investment for natural gas exploitation.  Pemex, Mexico’s state-owned petroleum company, announced its intention to drill more than 27,000 wells in the shale-rich formations in the states of Coahuila, Chihuahua, Tamaulipas and Veracruz by 2045.

Although Lopez Obrador’s stance on fracking is encouraging, he has also spoken out in favor of ramping up oil and gas production in recent weeks, pledging to increase Mexico’s domestic oil production from 1.9 million barrels per day to 2.5 million.  Lopez Obrador has stated his administration will invest $9.4 billion in the state-owned energy sector and will oversee the construction of two new oil refineries.

Lopez Obrador offers an intriguing departure from Enrique Peña Nieto’s unpopular administration.  While his energy plan appears to be far from perfect, his decision to ban fracking should be considered a major step in the right direction.