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Protests against Chevron highlight Argentine energy woes

Argentina is a net energy importer, but plans to tap vast oil deposits with the help of foreign investment could spark more environmental protests.

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Police disperse demonstrators outside the provincial legislature where an agreement between Argentina's state oil company YPF and Chevron is expected to be approved, in the Patagonian city of Neuquen August 28, 2013. Police fired tear gas and rubber bullets at the crowd who protested against the recent billion-dollar deal between YPF and Chevron, in which the US oil giant was granted exceptions to foreign exchange, export and tax rules to develop Argentina's vast shale oil resources.

Yamil Regules/Reuters

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Activists in southern Argentina are threatening to intensify protests against a deal struck between state-run energy firm YPF and international oil giant Chevron.

Lawmakers in Neuquén province approved the $1.2 billion pact last week amid violent protests outside the provincial legislature, where police fired rubber bullets at around 5,000 anti-fracking demonstrators. Mapuche natives also blockaded a YPF plant, and one of the community’s leaders said Monday that “We’re not ruling out further action.”

Opposition to developing the Vaca Muerta in southwest Argentina – one of the world’s largest nonconventional hydrocarbon deposits – reflects similar clashes across Argentina. Energy and mining projects, often foreign investment-led, are frequently resisted by environmental, social, and political movements here.
 
These battles arise “one after the other” – from protests against nuclear power to hydroelectric dams – because President Cristina Fernández de Kirchner’s government has never outlined its long-term strategy for the energy sector, says Juan Carlos Villalonga, president of Los Verdes, an environmental organization.

 
Argentina is a net importer of energy. To reverse that, the government says it needs to develop the Vaca Muerta with $37 billion of foreign cash over the next five years.

“Because of its energy deficit, the government is desperate,” Mr. Villalonga says. “So it is moving hurriedly with a minimum of consensus, detonating conflicts."
 
Provinces in Argentina, not the federal state, own the oil and gas in their territories, which means Neuquén’s politicians had to pass a law granting an extension of YPF’s permit to explore the Vaca Muerta. The first stage of the Chevron deal will see the two companies frack 115 wells to get to the shale 10,000 feet below. Fracking is controversial because it is thought to contaminate ground water and emit volatile gases.

Villalonga, a proponent of renewable energy, says fracking is not a strategy that makes sense for the government in the short term. “Wind power is cheaper and would produce quicker results." he says.
 
Despite Kirchner's leftist policies in terms of social welfare, and her demonization of neoliberalism, Villalonga and others – even former Kirchner allies – criticize her for her lack of "environmental conscience."
 
“[Latin American] governments that are considered progressive have taken on a passive role as exporters of nature,” Enrique Viale, a leading environmental lawyer here, told Perfil newspaper. “We’ve gone from the Washington Consensus to the commodities consensus.”
 
But some say it is impossible for Argentina to meet its energy needs with renewables alone. The country’s economy has expanded at an average rate of 7.2 percent a year from 2003 to 2012. As a result, “Environmentalists need a dose of reality," says Bud Weinstein, an associate director at the Maguire Energy institute in Dallas.

“If your economy grows, there’s higher energy consumption,” says Mr. Weinstein, in Buenos Aires for a conference on the Vaca Muerta. “Renewables on their own cannot do the trick. You need baseload power.”

And with YPF pushing for further foreign investment, including a possible deal with Chinese state-owned firm CNOOC, Guido Galafassi, a human ecology professor at the University of Quilmes, says the Neuquén protests will not be the last over Argentina’s shale oil and gas.


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