BOOMTOWN CHALLENGES: THE CASE OF RINCÓN DE LOS SAUCES, NEUQUÉN

A Thesis submitted to the Faculty of the Graduate School of Arts and Sciences of Georgetown University in partial fulfillment of the requirements for the degree of Master of Arts in Development Management and Policy

By

Megan E. Cook, B.A.

Washington, D.C. April 17, 2020

Copyright 2020 by Megan E. Cook All Rights Reserved

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BOOMTOWN CHALLENGES: THE CASE OF RINCÓN DE LOS SAUCES, NEUQUÉN

Megan E. Cook, B.A.

Thesis Advisor: Eric Langenbacher, Ph.D.

ABSTRACT

Natural resource boomtowns are communities that experience rapid demographic growth due to their proximity to natural resource-based projects and that confront a well-established series of challenges that strain local government capacity. The thesis aims to better understand the challenges faced by planners and policymakers in responding to growth in natural resource boomtowns using a case study of Rincón de los Sauces in the Argentine province of Neuquén.

The town grew rapidly after a nearby major oil discovery in the late 1960s and is again anticipating a boom as Argentina looks to develop its vast unconventional oil and gas resources.

Through a review of a variety of primary and secondary sources, this thesis describes the challenges generated for planning and governance by rapid, natural-resource based growth in

Rincón de los Sauces and seeks to explain how policymakers have approached planning and management in this context. It finds that planners and policymakers have drawn on a variety of approaches to plan for growth including seeking to learn from the experiences of other towns, using a variety of sources to make projections, promoting flexibility and adaptability, encouraging community participation, promoting a central role for the local government and seeking outside support when necessary. Nevertheless, it finds that planners and policymakers have been constrained in their ability to effectively plan by rapid growth and external dependencies, limited institutional capacity, coordination challenges, inability to sufficiently control land use, and lack of prioritization of planning. Based on this analysis, the thesis concludes with several recommendations for improving planning outcomes in boomtowns.

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ACKNOWLEDGEMENTS

Many thanks to all who have supported me in this journey over the last several years: my advisor and professors, coworkers, friends, and especially, my family.

Megan

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TABLE OF CONTENTS

INTRODUCTION ...... 1 CHAPTER 1 - RESOURCE-BASED COMMUNITIES: SOCIAL DISRUPTION AND COMMUNITY DEVELOPMENT ...... 6 1.1 Defining Resource-Based Communities ...... 6 1.2 The Boomtown Impact Model: Costs and Benefits of Rapid Growth ...... 7 1.3 Community Development and Planning Approaches in Resource-Based Communities...... 12 1.4 Historical Approaches to Planning in Resource-Based Communities ...... 15 1.4.1 Additive Planning ...... 16 1.4.2 Holistic Approach ...... 17 1.4.3 Comprehensive Stage ...... 18 1.4.4 Discussion ...... 25 1.5 Planning and Governance Challenges in Boomtowns ...... 25 1.5.1 External Dependencies ...... 27 1.5.2 Planning Process ...... 28 1.5.3 Implementation ...... 30 1.5.4 Balancing Long-Term and Short-Term Needs ...... 32 1.6 Discussion ...... 33 CHAPTER 2 - OBJECT OF STUDY ...... 36 2.1 Resource-Based Communities in Latin America ...... 36 2.2 Case Selection, Research Questions and Hypotheses ...... 37 2.3 Methodology ...... 41 CHAPTER 3 - CONTEXT AND RELEVANT PRECEDENTS...... 43 3.1 Historical and Geographical Context of Argentine Oil Towns ...... 43 3.1.1 Oil Exploration and Development as State Policy ...... 43 3.1.2 Oil and Gas in Patagonia ...... 47 3.1.3 Oil Activity in Neuquén Province ...... 50 3.2 Comodoro Rivadavia ...... 52 3.2.1 Overview ...... 52 3.2.2 Urban Development and Expansion ...... 53 3.2.3 Urban Planning ...... 58 3.2.4 Discussion ...... 66 3.3 Cutral Có-Plaza Huincul ...... 67

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3.3.1 Overview ...... 67 3.3.2 Urban Development and Expansion ...... 68 3.3.3 Urban Planning ...... 70 3.3.4 Discussion ...... 77 CHAPTER 4 - RINCÓN DE LOS SAUCES: A CASE STUDY ...... 79 4.1 Oil Activity in the Area ...... 79 4.2 Urban Growth ...... 83 4.3 Planning in Rincón de los Sauces ...... 87 4.3.1 Overview ...... 87 4.3.2 Bases for the Creation of the Urban Nucleus of Rincón De Los Sauces ...... 90 4.3.3 Urban Environmental Development Plan for the Locality of Rincón De Los Sauces ...... 94 4.3.4 Plan for the Territorial Organization of Rincón De Los Sauces ...... 101 4.4 Comments on Planning in Rincón de los Sauces...... 106 4.4.1 Approaches to Planning ...... 107 4.4.2 Effectiveness of Planning ...... 113 4.4.3 Challenges in Planning and Implementation ...... 117 CONCLUSION ...... 140 ANNEX - INTERVIEW QUESTIONS ...... 146 WORKS CITED ...... 149

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LIST OF FIGURES

Figure 1. The Problem Triangle ...... 9 Figure 2. Argentine Provinces and Oil Towns (selected) ...... 49 Figure 3. Comodoro Rivadavia in Historical Periods ...... 56 Figure 4. Comodoro Rivadavia, Historical Periods of Growth by Neighborhood (1901-2014) .. 58 Figure 5. Oil and Gas Production Areas, Neuquén Province, First Quarter 2018 ...... 81 Figure 6. Neuquén Province: Annual Oil and Gas Production (1960-2018) ...... 82 Figure 7. Urban Expansion of Rincón de los Sauces (1991-2001-2010) ...... 87 Figure 8. Rincón de los Sauces: Original City Layout Plan ...... 91

LIST OF TABLES

Table 1. Kitimat Plan: Basic Tenets ...... 21 Table 2. Mackenzie: Selected Founding Principles and Land Use Objectives ...... 23 Table 3. Tumbler Ridge: Founding Principles, Design Elements and Land Use Objectives ...... 24 Table 4. Challenges to Planning in Resource-Based Communities ...... 34 Table 5. Population Growth of Rincón de los Sauces ...... 85 Table 6. Rincón de los Sauces and Pehuenches Department: Evolution of Population ...... 86 Table 7. Rincón de los Sauces: Key Urban Development Plans ...... 90 Table 8. Rincón de los Sources: Objectives of the Unification of the Urban Nucleus (selected) 93 Table 9. Principle Strategies of the Urban Environmental Development Plan...... 97 Table 10. Urban Environmental Development Plan: Management Strategies and Recommended Actions (Selected) ...... 99 Table 11. Plan for the Territorial Organization of Rincón De Los Sauces: Problems and Recommended Actions (Selected and Adapted) ...... 105 Table 12. Strategies Followed by Planners in Rincón de los Sauces ...... 114 Table 13. Comparison of Selected Diagnoses/Recommendations of Urban Development Plans ...... 115

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INTRODUCTION

The relationship between natural resources, development and governance is a complicated one that has generated considerable academic interest. Much research has explored the relationship between natural resource abundance and indicators of development, economic growth and democracy at the national level, attempting to substantiate or refute the theory of a

“resource curse,” which suggests that countries with an abundance of natural resources tend to have a weaker performance in the mentioned areas. These studies typically make cross-country comparisons and have proposed various causal mechanisms to explain the alleged “curse”, including exchange-rate appreciation, deindustrialization, corruption and rent seeking.

Although much research has focused on the aggregate impact of natural resource wealth at the national level, the exploitation of natural resources is often concentrated in certain regions or areas of a country. Taking these dynamics into account, another body of work explores how the costs and benefits of extractive projects are distributed, both between regions and within the communities located closest to the resources. The literature shows that the social, environmental and economic costs and benefits of resource development accrue to different levels and groups

(Cust and Viale 2). For example, while much of the rent generated by natural resources—and therefore the economic benefits—is often transferred away from the producing area, the social and environmental consequences of production tend to be spatially concentrated near the project.

These dynamics have implications for governance; for example, residents’ expectations of an economic boom generated by the energy project may increase political pressures for job creation or for the redistribution of the wealth generated towards the producing region (Cust and Viale 4).

Overall, resource-based development has significant impacts on the communities located nearest to them. A subset of these communities, known as “boomtowns”, experience rapid

1 demographic and economic growth due to proximity to natural resource-based projects, particularly mining and oil. The potential for new economic opportunities attracts waves of migration to these towns, putting serious strains on existing infrastructure. Research into these communities has found that they tend to experience a series of similar challenges that undermine the capacity of policymakers to respond to rapid growth and changes. Rapid growth linked closely to dependence on a single industry and the arrival of new actors complicates long-term planning and governance and is often linked to the generation of social problems.

A model describing the relationship between this growth and the resulting social and governance challenges was developed based on the experience of boomtowns in the western

United States in the 1970s, when there was a proliferation of new energy projects. Since then, the geographic scope of research into boomtowns has expanded, and many researchers have sought to describe and quantify the social, economic and governability challenges faced by boomtowns elsewhere. They have found primarily negative social impacts (increased drug use, crime, violence) and mixed economic impacts. They also find many challenges generated for local governance by rapid growth combined with an influx of new actors, information asymmetries, the need for public-private collaboration and oil price volatility. The housing sector and land use have been found to pose particular challenges in many boomtowns as an influx of new individuals combined with a crowding-out effect generated by high demand and often higher salaries in the energy sector create critical housing shortages and the rapid increase in demand outstrips local government capacity to address it.

Nevertheless, researchers have also highlighted the potential for certain governance structures and urban planning arrangements to mitigate some of the challenges. In particular, in

Canada, researchers have studied how approaches to governance and planning in resource-based

2 communities have evolved in an effort to improve the quality of life in these communities, with mixed outcomes. This thesis looks at the impacts of resource development on community well- being at the local level and draws heavily on this approach.

Despite the importance of oil production in several regions of Argentina and a history of towns linked to oil production, there are few studies on boomtowns in the country, and little attention has been given to the implications of oil and gas development for the communities dependent on it or the challenges this has generated for local policymakers. The literature on resource-based communities has largely focused on towns in a handful of countries, including

Canada, the United States and Australia. Although Argentina falls outside of the top oil and gas producers worldwide at the national level, hydrocarbons production is a major economic driver in several of the countries’ provinces. Indeed, the expansion of the oil industry has been an important driver of growth in many Patagonian provinces, including Neuquén. Given the geographical concentration of much boomtown research, there is also little understanding of whether their dynamics may differ in other cultural or political contexts.

For these reasons, this thesis aims to interact with the boomtown and resource-based community planning literature through a focus on a previously underexplored case: Rincón de los Sauces, a rural town in Argentina’s Neuquén Province that has grown due to its location near some of Argentina’s most productive oil fields. The city was the fastest-growing in the province between 1991 and 2010, when the population grew more than 367 percent, an extraordinary growth rate that also put it among the quickest-growing nationwide. This thesis seeks to first explain the town’s growth dynamics, and second, explore how local policymakers have sought to respond to said growth. In particular, this thesis seeks to respond to the following questions: 1)

What governance and planning challenges has the rapid, natural-resource based growth of

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Rincón de los Sauces created for local policymakers?; and 2) How have they approached planning and management in the context of rapid population growth and urban expansion?

A better understanding of these dynamics is necessary in order to help inform future decision-making and ensure that local communities maximize the benefits of resource development, while minimizing negative impacts. The need to better understand the dynamics of boomtowns in the particular context of Argentina is all the more urgent given plans to develop the country’s vast unconventional oil and gas resources—estimated to be the fourth- and second- largest in the world, respectively1—and the projections for the growth of towns in the area anticipated to be affected by their development. One way to consider possible impacts on nearby communities is by examining past cases. This is particularly relevant in the case of Rincón de los

Sauces which, in addition to having experienced significant growth driven by traditional oil development, falls within the area expected to experience future population growth linked to shale development. Indeed, following a downturn in the local economy due to the exhaustion of conventional oil and gas resources around 2010, policymakers are now planning in anticipation of a forthcoming boom driven by the development of unconventional oil and gas resources.

This thesis proceeds as follows: Chapter 1 establishes the theoretical framework and provides an overview of the existing research on research-based communities, the social disruption theory and approaches to municipal planning, with definitions and examples. Chapter

2 describes the methodology used in the thesis and outlines the research questions and hypotheses. Chapter 3 situates Rincón de los Sauces in context, including through a brief history

1 In 2015, the U.S. Energy Information Administration estimated Argentina’s unproved technically recoverable shale gas reserves at 802 trillion cubic feet, the second largest such reserves in the world after China. It estimated the country’s technically recoverable tight oil resources at 27 billion barrels, the fourth largest such reserves in the world after China, Russia and the United States. A large portion of these technically recoverable reserves, 308 trillion cubic feet of gas and 16.2 billion barrels of oil, are found in the Vaca Muerta formation, located in the Neuquén Basin.

4 of oil development in Argentina, and consideration of two emblematic oil towns—Comodoro

Rivadavia in Chubut and Cutral Có-Plaza Huincul—that have served as precedents for the town’s planners. Chapter 4 then considers the case of Rincón de los Sauces in depth, providing an overview of the town’s growth, the role of planning in its development and the challenges faced by policymakers in the planning process. The thesis then concludes with lessons learned and recommendations for policymakers.

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CHAPTER 1 - RESOURCE-BASED COMMUNITIES: SOCIAL DISRUPTION AND COMMUNITY DEVELOPMENT

1.1 Defining Resource-Based Communities

Resource-based communities (RBCs, also referred to as resource-dependent communities or single-industry communities) are towns whose economy is largely dependent on a single industry, such as mining, oil and gas, fishing, or forestry, among others (Tsenkova and Youssef).

Some researchers have suggested quantitative metrics to classify resource-based communities.

These are usually based on figures that demonstrate employment concentration. For example,

Ryser and Halseth define a resource-based town as one where 30 percent or more of the local labor force is employed by a single company or resource-based sector (qtd. in Leung et al. 1), while Rex Lucas defines a single-industry town as one with less than 30,000 people where 75 percent of the workforce is involved in one industry (qtd. in White 228). However, these definitions are somewhat restrictive, and in general, researchers’ classification of a community as resource-based is largely reliant on a historical understanding of the importance of natural resource extraction and development in the town’s founding or development.2 The business model of producing companies and local government structures are important factors that affect the development and structure of RBCs, which range from work camps and company towns to fully-developed towns and satellite communities.

2 Dinius and Vergara note that the term “company town” has been used to refer to communities with divergent types of settlements and community structures, and that various definitions of the term have emphasized different community characteristics such as company ownership of property or rural isolation. The authors suggest using a definition focused on “the combination of a single dominant industry with extensive company control over the daily life of the town” to highlight the importance of company dominance in these communities but allow for historical fluidity and changing power relationships (Kindle Location 152-168). Likewise, this thesis uses “resource-based communities” in a general sense to describe communities with different organizational structures, locations and industrial bases that nevertheless share the commonality of a historical economic dependence on natural resource production.

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1.2 The Boomtown Impact Model: Costs and Benefits of Rapid Growth

Many resource-based communities are boomtowns, or towns that experience very rapid demographic and economic growth linked to the start of a project (often in the energy sector), followed by a period of decline as the resource is depleted or the initial construction phase ends.

This rapid growth generates a set of interrelated social impacts—such as inflated housing costs, insufficient urban infrastructure and services, transience and lack of a sense of community—that researchers have identified as common to many RBCs.

The classic model of a boomtown was developed on the basis of the experience of the western United States, which saw a flurry of development of coal, oil and gas projects in the

1970s due to higher energy prices and policies implemented in response to the 1973 oil embargo and oil crisis (Jacquet 4-6; Jacquet and Kay 4). The rapid growth of the energy sector generated a strong migratory pull for individuals seeking work, with much migration occurring to small, rural communities that experienced sudden, rapid population growth. Given the scale of the energy development and the large number of towns affected3, much research sought to understand the social and economic impacts of rapid population growth rates on these communities and the implications for municipal planning. Researchers found that growth often overwhelmed the capacity of local governments to provide services and generated changes in social relations that negatively impacted quality of life for long-term residents (Jacquet and Kay

5). For example, in a study of three western energy boomtowns (Center, North Dakota; Langdon,

North Dakota; and Rock Springs, Wyoming), Cortese and Jones found that municipal governments were strained to provide more services and assume new responsibilities, and also

3 In 1977, the United States government identified 131 towns in the west of the country that were subject to impacts of the development of energy projects (Rocky Mountain Energy Resource Development 36). At the same time, sociologists Cortese and Jones estimated that there were about 25 “boomtowns” with high population growth (4).

7 that population growth and an influx of new residents led to “underlying changes in the social structure and cultural systems” of the towns (15).

These studies led to the development of a model of boomtowns—the “Boomtown

Impacts Model” or “Social Disruption Model”—to describe the social and economic changes commonly experienced in these towns. In 1976, the sociologist John Gilmore published a seminal article that describes the fictional town of “Pistol Shot”, located in a rural area in the western United States. Gilmore’s article brought together earlier research on boomtowns and

“provided a conceptual framework to explain the challenges to community development posed by energy development in rural communities, and also an explanation for the reactions of residents who live there” (Jacquet and Kay 7).

Gilmore’s model describes a typical boomtown as a rural community where population growth generates a series of interconnected problems, which he termed the “problem triangle”

(536). This is a cycle in which the government’s capacity to provide services (health, education, housing, etc.) is exceeded by the influx of residents and the resulting increase in demand for services. The government’s inability to provide the demanded basic services degrades residents’ quality of life (“degraded quality of life”), and thus makes it more difficult to attract skilled workers to the town to provide the services required by the community (“declining industrial productivity”). Gilmore argues that degraded quality of life in turn contributes to underinvestment by the private sector in key areas such as housing and businesses as they are less willing to invest due to uncertainty (“growing gap in local service provision”).

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Degraded quality of life

Declining industrial Local services fall productivity short of needs

Figure 1. The Problem Triangle Source: Adapted from Gilmore, John S. 1976. “Boom Towns May Hinder Energy Resource Development.” Science, vol. 191, no. 4227, 13 Feb. 1976, p. 536.

In addition to creating a framework to describe the relationship between growth, investment and the provision of public goods in boomtowns, Gilmore also outlines a series of four phases that correspond to residents’ perceptions and attitudes as they anticipate, experience and adapt to these changes (536). The sequence of phases he describes is as follows:

1) Enthusiasm: Residents eagerly await the economic boom.

2) Uncertainty: The population increase linked to the start of the construction of a

project begins to generate uncertainty—especially among public officials—about

how the demand for public services will change.

3) Panic: Public officials recognize that there is a gap between the demand for

public services and the resources that they have to provide them. The local

community begins to feel the negative effects of growth, and this, often combined

with unmet expectations for economic benefits, begins to generate panic.

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4) Adaptation: Government officials and the public begin to better understand the

problems/challenges and how to address them. It is common for the local

government to turn to the state or national government for resources and technical

experience and to seek help from private extractive companies. This may generate

confusion about which actor is setting policy priorities and competition for

resources.

In short, the crux of the challenge described by the boomtown impacts model is that the structural changes provoked by rapid population growth increase the demands on local governments at the same time that they generate new challenges in meeting them. The provision of services lags, degrading the quality of life, while the local government attempts to balance the interests of a multiplicity of new stakeholders interested in participating in community decision- making. Additionally, the model supposes that a boomtown is rural, located far from a large city or metropolitan area, which limits the ability of the community to address the challenges it faces because it must depend on locally-available resources and cannot easily access consumer goods and services from nearby communities (Gilmore 535-6).

Gilmore’s model received criticism for a lack of empirical data and macro-level perspective and for not giving enough consideration to the differences between resource-based communities (Jacquet and Kay 2014). Some research has suggested that resource-dependence is not a single phenomenon and that not all communities are equally prone to social disruption. For example, in attempting to understand the potential impacts of a resource boom on Darwin,

Australia, Ennis et. al argue that a more diverse local economy initially may potentially mitigate some negative impacts (“Expecting a boomtown”). Other researchers have argued that the unique characteristics of both a commodity’s demand dynamics and the local community’s

10 location and demography may lead to varied experiences (Stedman et. al qtd in Lawrie et. al

142). Nevertheless, the insights the boomtown impacts model provides about the difficulties generated by resource-driven growth for communities have played an important role in research into cities located near natural resource projects. Indeed, the basic tenets of the model remain important to conceptualizing and analyzing the development patterns of many resource-based communities worldwide.

Studies about the impacts of rapid growth in boomtowns have expanded on the social disruption model, which posits that rapid growth generates problematic social changes.

Boomtown communities often face high rates of drug and alcohol abuse, prostitution, crime, violence and mental health issues, which are attributed to low quality of life in these communities (for discussion of alcohol use see Lantz and Halpern; on alcohol, masculinization and violence see Ennis and Finlayson; on crime, violence and prostitution see Ruddell, and

Petkova et al.). Basic services (health and education, for example) that do not keep pace with growth, along with masculinization of the local population, have been signaled as key factors that undermine quality of life in many boomtowns. A lack of adequate housing, in particular, is highlighted as a challenge that may contribute to out-migration of long-term residents and high population turnover.

Rapid in-migration and the higher-than-average remuneration of workers in the booming sector generates competition and puts upward pressure on the price of housing in many boomtowns. A scarcity of options can increase the price of housing, which may benefit residents that can sell or rent their property but creates difficulties for residents that do not own their home nor want to rent it (Jacquet 18). For example, in Darwin, Australia, the arrival of new residents has been found to exacerbate existing housing problems, generate significant uncertainty among

11 the population and contribute to increases in the homeless population and of individuals living in improvised housing (Ennis et al., “Expecting a boomtown”; Ennis et al., “Open for business”).

Likewise, in western Australia, Haslam McKenzie et al. find evidence of recurring housing shortages and affordability challenges in mining boomtowns. Increased housing prices have also been found to contribute to out-migration of residents, especially those who work in the services sector. In general, boom-induced changes in the housing market tend to further marginalize segments of the population that are already among the most vulnerable (Ennis et al., “Expecting a boomtown”).

These effects may be mirrored in other sectors as higher salaries in the booming sector generate broader inflationary effects in the local economy and undermine the purchasing power of individuals that do not work in that industry, especially long-term residents who may lack the required technical skills to get the jobs generated by natural resource projects. Housing shortages and these other quality of life issues are key drivers of high population turnover in boomtowns and RBCs more generally.

1.3 Community Development and Planning Approaches in Resource-Based Communities

The pattern of challenges described by the social disruption model raises difficult questions about how communities can best mitigate the negative impacts and maximize the benefits of resource-based development at the local level. One answer is that appropriate planning and governance structures may help address the particular challenges faced by boomtowns and resource-based communities. Even as Gilmore was developing the social disruption model, he suggested that a primary aim of governments should be to ensure “growth management,” which he describes as coordinating among groups and individuals to determine where growth should be located, how to share the benefits, and pay for the costs of growth as

12 well as how to determine who pays them (537-8). In other words, growth management as conceived by Gilmore involves coordinating between relevant stakeholders (different levels of government, industry and the public), with four main goals: 1) balancing basic and local service investment; 2) affecting resource use and conservation; 3) developing the labor force; and 4) retaining the population (538).

Gilmore’s conception of growth management is similar to community planning, which is a specific type of planning concerned with maintaining the quality of life in a given jurisdiction4

(Bleiker 145-6). Like other forms of planning, community planning is aimed at solving problems, either experienced or anticipated, and while it may take the form of concrete plans and occur in specific planning institutions, it may also occur more informally (Bleiker 145). As Van

Assche & Verschraegen note, “spatial planning [may be defined as] as the coordination of policies and practices affecting the organization of space”, which can happen in informal settings and may not involve a planner or plan (qtd. in Deacon et al. 4). Indeed, planners may be professional urban planners, architects or public officials, or other citizens. This broader definition of planning, which implies a sense of coordination and consensus among actors but is not only limited to formal planning institutions and plans, draws attention to the need to consider a variety of ways that stakeholders may go about attempting to influence the course of development of a community. This may be especially relevant amid the changes that occur in rapidly growing RBCs. Indeed, as Lawrie et al. note in a comparative study of several mining towns in Western Australia, “one of the emergent themes here is the extent to which new and evolving forms of governance might be shaping patterns of socio-economic well-being in these resource contexts” (141).

4 Community planning describes a type of planning concerned with maintaining the quality of life of a jurisdiction through tools such as land use planning and zoning, site design, urban planning and environmental planning.

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Planning—whether formal or informal—can both help mitigate the negative impacts of resource-based development, including instability and speculation generated by boom and bust cycles, and, more proactively, outline directions and forms of a town’s long-term development.

For example, governments can restrict resource development, shape the design of residential areas, determine service provision (or otherwise organize space), implement regulations to reduce land speculation and include considerations of environmental and social impacts of development in long-term planning (Deacon et al. 4). Indeed, appropriate planning may also help communities and local governments to harness a boom to generate positive effects and give impetus to developing infrastructure and services (Ennis et al., “Expecting a Boomtown” 35).

Research has shown that “long term, comprehensive planning and community involvement can prevent some of the more negative aspects of booming” and that extensive planning processes with significant community input result in better socio-economic outcomes than in places with little planning (Ennis et al., “Expecting a Boomtown” 35). For example, in a comparative study of the impact of gas pipeline projects on Valdez, Alaska, where the community had little time to prepare or plan for the impact of the project, and Inuvik in Canada’s Northwest Territories, where there was a long community review process, Asselin and Parkins highlight the “potential for foresight and planning to mitigate impacts in Inuvik” (496) and “lead to major differences in socioeconomic outcomes” (495). With the understanding that planning is a valuable tool in improving quality of life in resource-based communities and mitigating the negative impacts of resource-based development described in the social impacts literature, the following section will review several historical approaches to community planning and development in RBCs.

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1.4 Historical Approaches to Planning in Resource-Based Communities

Single-enterprise communities5, and resource-based communities, have been a feature of the North American landscape for more than a century. Given the historical importance of resource-based development in Canada (by the early 1900s, company towns were generating a large portion of the country’s wealth and were home to a significant percentage of its population), government officials, urban planners, and engineering and planning journals began publishing studies on life in company towns in the early 1910s (Dinius and Vergara Kindle

Locations 175-176). There is therefore a rich and well-developed literature on these communities in Canada.

RBCs have developed according to different models, some involving more and some involving less formal planning. The earliest mining towns in Canada and the western United

States developed organically—and often chaotically—with little forethought given to planning or designing the communities, either the physical layout or its socioeconomic impacts. However, approaches to governance and planning in these towns evolved throughout the 20th century driven by a desire to make these communities more attractive places to live and ensure their long-term viability. Bowles argues that the evolution of planning strategies in resource-based communities in Canada can be broken down into a sequence of three general stages (qtd. in

Halseth and Sullivan 134). These move from the initial stage in which the resource company played a predominant role in developing the town to later stages in which increasing attention is paid to land use and social and economic considerations and in which government actors take on increasing responsibilities for town management.

5 Single-enterprise communities is a broader term than RBCs that encompasses towns that are almost entirely dependent on a single economic activity though not necessarily natural resource extraction, such as military installations or specialized resorts (Porteous, Single-Enterprise Community).

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In recent years, especially since the 1980s, there has been a shift away from developing single-industry communities in rural areas, and companies have increasingly shifted to using mobile workforce practices and rotational workforce practices (Ryser et al. 617), or expanding regional hubs from where workers can commute (Lawrie et al.) in lieu of seeking to build new communities. However, the Canadian “new town” model of a rural community located a considerable distance from population hubs and created with the aim of supporting natural resource development most parallels the Argentine experience. As such below follows a brief discussion of the historical stages of planning and development in Canadian resource-based communities.

1.4.1 Additive Planning

The first stage of community development described by Bowles—known as additive planning—describes traditional company towns, where the “construction and operation of the company town was simply added to the routine duties of the mill or mine manager” (qtd. in

Halseth and Sullivan 134). In these towns, the company leading resource development assumed responsibility for providing housing and basic services (health care, educational and recreational facilities, water and sewage) for the workforce. In many cases, residential and commercial areas were entirely owned by the company and located directly adjacent to the project (From Company to 'Instant' Towns). These communities often developed out of necessity as companies exploiting natural resource wealth in isolated areas with high transportation costs were left to create an environment for workers in the absence of other established local actors (Porteous, The Single-

Enterprise Community).

This form of town organization was common in Canada through the 1920s, when residents and workers (in some cases unions) began to push back against companies’ dominating

16 roles in these communities (Bowles qtd. in Halseth and Sullivan 135). In many cases, company managers were either unprepared to deal with the additional responsibilities of managing a town, or prioritized operational profitability over building sustainable communities. Due to low quality of life, many residents viewed their stays as temporary, leading to high turnover. The company town became associated with “repression, often by means of the company store, excessive paternalism, high labour turnover, poor physical planning, induced economic, social and political immaturity, and a discontented populace” (Porteous, “Gold River” 317). Nevertheless, this pattern of town developments has been common in frontier areas across North America,

Australia, Russia and much of the developing world (Porteous, The Single-Enterprise

Community).

1.4.2 Holistic Approach

Driven by a desire to increase labor force retention, companies began to pay more attention to developing livable communities in the period between World Wars I and II, leading to the emergence of the “holistic approach” to RBC planning (Bowles qtd. in Halseth and

Sullivan 135). Guided by the goal of creating self-contained communities, companies began to put more emphasis on site planning (in some cases, they started to hire architects and engineers to design towns) and adopted basic land use principles, such as the separation of residential and industrial areas as part of the planning process (Dinius and Vergara Locations 91-95). For example, sleep camps of largely single males were largely replaced with housing areas that accommodated a more gender-balanced population. Residential areas were located further from worksites, reducing noise and pollution and creating a more attractive residential areas for workers and their families (Halseth and Sullivan 135).

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Companies that took on these responsibilities had several motivations; in some cases, they recognized that creating a more livable environment would help retain the workforce, and that space could be organized to improve the company’s efficiency (Deacon et al. 4). Overall, this transitional phase of community development was characterized by greater emphasis on community design with an understanding that this had benefits for both workers and the company (principally by reducing turnover and increasing worker retention and productivity).

Nevertheless, companies still faced a series of persistent problems in providing urban services and high turnover remained a challenge (Bradbury; Keough qtd. in Deacon et al. 4).

1.4.3 Comprehensive Stage

The increasing understanding of the benefits of community design on residents’ quality of life ultimately led to the emergence of the third stage identified by Bowles: the

“comprehensive stage” which “is grounded in efforts to incorporate a broader range of social and economic considerations into town development” (Halseth and Sullivan 135) and to make communities attractive places to live. Concerns about quality of life, social well-being and community health became more integrated into the design process with the aim of fostering a sense of permanence among residents in the community. Importantly, this stage marks a shift away from company predominance, and an increasing role was given to promoting the organization of local government (particularly in the provision of urban services) and citizen participation in the planning process.

This shift in understanding about the importance of quality of life considerations as well as the British Columbia provincial government’s recognition that companies were unable to create communities that met residents’ social and economic needs resulted in a profound change in how towns were founded along western Canada’s resource frontier in the 1950s and 1960s

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(Porteous, “Gold River” 318). In 1965, the British Columbia government enacted a law known as the “Instant Towns Act” that was intended to serve as a tool to promote the development of

RBCs. The law simplified procedures to create municipalities with the idea that this would foment the organization of local governments to make decisions about the communities’ development, reduce companies’ influence over these towns, and promote local participation and help generate a sense of permanence among residents.

“Instant towns” were characterized by three main features: 1) zoning—the planning of town layouts that separated industrial commercial and residential spaces; 2) primacy of local government in decision-making—the local government (not the provincial government nor the resource companies) was expected to be the primary decision-maker on issues such as land use and infrastructure development; and 3) local ownership—well-planned, self-governed communities were expected to promote local ownership of residential and commercial properties over time (From Company to 'Instant' Towns).

The idea that communities should be developed taking the needs of residents into account, and that the best way to do this was through the creation of local government and early community planning were profoundly influential. Although this ideal occasionally clashed with the reality of towns in which companies still exercised considerable influence over the community, these ideas formed the bedrock of community development. Nevertheless, planners continued to face the problem of community turnover, and research suggested that the way to address this was through improving quality of life (Gill, “Respecting Context” 117). With this goal in mind, over the following decades, planners and architects began integrating new and innovative concepts from urban planning into their work in resource-based communities (Gill,

“Respecting Context” 114). Below, several examples are examined to explore how

19 decisionmakers concretely incorporated these ideas into the planning of resource-based communities.

1.4.3.1 Case 1: Kitimat, British Columbia

Kitimat, British Columbia was an early example of a town planned according to the tenets of comprehensive design. In the early 1950s, Aluminum Company of Canada (Alcan) planned to establish what was then the world’s largest aluminum smelter and wanted to create an attractive town that would maintain a stable workforce (“The Town of Kitimat”). Alcan wanted to move away from the company town model where it owned most housing and commercial property and sought to promote economic diversity.

Alcan also recognized the value of planning in meeting its goals: "We are interested in building neither palaces nor monuments, but we are extremely anxious to avoid a shack town...Through proper planning we will try to avoid many needless mistakes and expenses of haphazard growth," J.B. White, Vice President and Director of Personnel at Alcan said of the company’s vision for Kitimat (“The Town of Kitimat”).

For that reason, Alcan hired urban planner Clarence Stein, the founding president of the

American Planning Association and a proponent of the Garden City Movement, along with town planners Mayer & Whittlesey to plan the townsite (Halseth and Sullivan 137, “The Town of

Kitimat”). Stein developed the townsite, which followed a “green space model”. The town plan was based on three tenets (see table 1). Spatially, the plan called for separation of land uses

(grouping residential/commercial areas and separating them from industrial zones) and the creation of self-contained neighborhoods that would include basic amenities such as convenience stores and gas stations, and green spaces (Halseth and Sullivan 136). These in turn, would be connected to a city center, where recreational, religious and businesses were to be concentrated.

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The plan also called for ensuring the consideration of other industries and economic sectors so as to generate diversity and mitigate the impacts of reliance on a single industry.

Table 1. Kitimat Plan: Basic Tenets ● Use site planning to separate land uses ● Use neighborhood design to create functional living areas ● Use economic principles to ensure local diversity Source: Halseth, Greg, and Lana Sullivan. "From Kitimat to Tumbler Ridge: A Crucial Lesson Not Learned in Resource-Town Planning." Western Geography, vol. 13/14, 2004, p. 138.

The overall goal of the plan was to ensure that Kitimat could become a stable industrial town that simultaneously met the needs of families and workers as well as provide a stable workforce. In Stein’s opening letter that accompanied the town plan, he noted that:

The purpose of Kitimat is the industrial success of the plant. That success will depend on the degree that workers are content, that they like living in Kitimat. Unless the town can attract and hold industrial workers, there will be continuous turnover and difficulty, interfering with dependable output. (qtd. in Halseth and Sullivan 138)

In that sense, the spatial layout of the plan was developed with young families in mind, and self- contained neighborhoods were to include playgrounds as well as sidewalks to separate vehicle and pedestrian spaces (Halseth and Sullivan 136). In tandem, the company implemented policies that sought to encourage permanent residency and promote the construction of permanent housing, and temporary housing was demolished as soon as possible (“The Town of Kitimat”).

Planners expressed optimism about the possibilities for their town design to lead to the desired outcomes and avoid the negative impacts of worker turnover. A letter from the town reeve prefacing the plan notes that if the initial plan is followed carefully into the future, there should never be a time when service provision was inadequate (Kitimat Townsite 1960 Report).

Although Kitimat’s founding predated the passage of the “Instant Towns Act”, in 1953,

Kitimat became the first townsite to be incorporated without residents, and it served as an example for later RBCs in Canada. The design principles it embodied were incorporated into

21 their development. Though the town was designed to be able to expand, it never exceeded a population of 15,000, falling short of estimates that its population would reach 50,000; however, it was able to expand its economic base to include other industries (Halseth and Sullivan 138).

1.4.3.2 Cases 2 & 3: Mackenzie and Tumbler Ridge, British Columbia

Founded more than a decade after Kitimat, Mackenzie and Tumbler Ridge are classic instant towns, which were created rapidly in response to new resource development opportunities. These communities were carefully designed by planners who sought to create vibrant, diverse communities (Robinson qtd. in Halseth and Sullivan 140).

Mackenzie

Mackenzie, British Columbia was founded in 1966 to serve as the site of a regional industrial forestry complex for the British Columbia Forest Products (BCFP) company. As in

Kitimat, a driving goal behind the design of Mackenzie was to build a community that would retain a skilled workforce, and the first community development plan states that the goal is to create an integrated community and avoid chaotic, uncontrolled development (Letters Patent,

District of Mackenzie qtd. in Halseth and Sullivan 147). The plan recognized that it would be necessary to allow a variety of land uses to meet resident’s social and economic needs. There was also an acknowledgement that not all needs could be accounted for initially, and that flexibility and community input would be needed to allow the municipality to respond to changing community needs over the years.

The townsite design shares basic design principles with Kitimat (see table 2). The industrial zone was located away from the town center, and residential areas were organized into neighborhood units, each with their own school, green spaces and playgrounds. An area was

22 designated for the commercial core, where the majority of retail, social, educational and government facilities were to be located.

Table 2. Mackenzie: Selected Founding Principles and Land Use Objectives Founding principles ● Create an integrated community with industrial processing plants and residential/service facilities ● Prevent haphazard development along new reservoir ● Incorporate a variety of land uses ● “Provide an ‘efficient, convenient, and pleasant community for the optimum economic and social benefit of its inhabitants’”

Land use objectives ● Maintain most areas as non-urban ● Separate industrial areas from the residential, service, and commercial areas ● Create an “attractive townsite which will be compact and oriented to a strong central core area containing retail and service commercial facilities, and recreational, social, and educational facilities serving the municipality as a whole” ● Recognize the need “for a degree of flexibility so that the social and economic needs of the community can be met ...” Source: Adapted from Halseth, Greg, and Lana Sullivan. "From Kitimat to Tumbler Ridge: A Crucial Lesson Not Learned in Resource-Town Planning." Western Geography, vol. 13/14, 2004, p. 147.

Tumbler Ridge

Tumbler Ridge, British Columbia was founded in the mid-1970s to house workers and their families as large-scale coal projects were beginning to be developed in the area. The experience of town closures that occurred in the 1970s in the Labrador-Quebec region was high in the government’s mind, and for that reason it sought to create a resilient and adaptable community (Halseth and Sullivan 144). Planning on the townsite began in 1976, and the municipality was incorporated in 1981.

The provincial government played an active role in coordinating the planning of the city with the aim of having the townsite ready before residents began moving in (Halseth and

Sullivan 144). In this sense, the British Columbia provincial government (through the Ministry of Municipal Affairs, BCMMA) sought to have “as soon as possible, a politically functioning, financially viable, well planned community with a high level of services” (Paget and Rabnett qtd.

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In Halseth and Sullivan 144). This largely took the shape of significant, early investment in city infrastructure with the province exceeding its usual role of financing transportation infrastructure to the region.

Table 3. Tumbler Ridge: Founding Principles, Design Elements and Land Use Objectives Founding principles ● Choice ● Integration ● Commitment ● Equity ● Challenge ● Fiscal Responsibility ● Self-reliance ● Environmental Sensitivity ● Participation ● Flexibility

Land use objectives ● Separation of industrial, commercial and residential land uses ● Residential neighborhoods focused on family, and designed around elementary schools, connected by greenways, parks, pedestrian access ● Central downtown Source: Adapted from Halseth, Greg, and Lana Sullivan. "From Kitimat to Tumbler Ridge: A Crucial Lesson Not Learned in Resource-Town Planning." Western Geography, vol. 13/14, 2004, p. 145-149.

The BBCMA worked with planning and design consultants with the aim to “create a socially cohesive, financially viable, self-governing community, conducive to attracting and retaining a stable workforce” (BBCMA qtd. in Gill, “Respecting Context” 118). As there were no existing residents to consult during the process, planners relied on research and prior experiences of other communities (Gill, “Respecting Context” 119). As shown in table 3, they chose a series of principles to guide their decisions (e.g. commitment, challenge, self-reliance, choice, and participation), and planners imagined a link between the principles, the physical design elements, and the social outcomes they were expected to produce (Gill, “Respecting

Context” 120). For example, the development of local government (“participation”) was expected to produce resident commitment, while neighborhood design would generate social attachment and a town center would create a sense of place. All of these were expected to encourage long-term residence in the town.

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1.4.4 Discussion

The changing approach to designing RBCs in western Canada reflected an evolution in thinking about how best to ensure the long-term viability of a town. Planning in RBCs did not occur in isolation and was influenced by broader changes in approaches to urban planning. By the 1970s, planning in RBCs incorporated the principles of environmental design research and socially responsive planning, which attempts to move beyond a narrow focus on service provision and account for the social and psychological impacts of physical design (Gill, “An

Evaluation” 180). This was reflected in the importance given to spatial organization as a key to improve quality of life and community development, particularly in the case of separation of land uses and goals to develop thriving city centers. Similarly, while the plan for each community included unique principles and goals related to its particular circumstances, they were broadly underlined by the belief that local government and resident participation would improve community management and outcomes and a recognition that flexibility and adaptability would be required of plans to be successful in the long-term. The evidence on the success of these planning methods in RBCs is mixed, but in 2006, the government of the province of British Columbia noted that while many instant towns had failed to diversify their economies as quickly as expected, they had all succeeded on the most important test: not one had become a ghost town even as the original local industries were shutting down (From Company to

'Instant' Towns).

1.5 Planning and Governance Challenges in Boomtowns

As discussed above, companies, planners, government officials and other decision- makers have attempted to address some of the most common challenges facing RBCs through planning, particularly at the local level. Inherent in these efforts is an assumption that local

25 governments are able to exercise sufficient control to influence the course of a town’s development both through planning and implementation of said plan. However, planners face significant challenges in planning in RBCs and are not always successful at meeting their initial goals. In a comparative study of Kitimat, Mackenzie and Tumbler Ridge, Halseth and Sullivan conclude that while planners were largely able to implement the spatial aspects of their plans

(separation of land use and contained neighborhood design), they generally failed at generating economic diversity (154). They argue that governments were constrained in meeting this goal by the realities of dependence on a single industry. Likewise, Gill finds that planners in Tumbler

Ridge struggled to ensure implementation of their ideas and that this led to a community where resident satisfaction did not differ considerably from other RBCs (“An Evaluation” 177). This suggests that planners in RBCs face a series of ongoing challenges that constrain their ability to affect the direction of community development.

In fact, Markussen changes the focus of the social disruption model from a description of social conditions in boomtowns to a pattern of challenges faced by local governments in these communities (1978 qtd. in Jacquet 8). Among the challenges they face, he mentions conflicts between new arrivals and long-term residents, insufficient control of land use, high rates of population growth, volatility in commodities prices, information asymmetries, and jurisdictional unevenness (development taking place in a different political jurisdiction from the one that bears the cost), all of which make it more difficult to generate projections and plans. Expanding on this, the following section examines well-identified challenges faced by local governments and planners in RBCs as they seek to promote community development and well-being.

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1.5.1 External Dependencies

The defining feature of resource-based communities is their dependence on external demand for a single product (Porteous, The Single-Enterprise Community). This means that local dynamics in resource-based communities are vulnerable to changes in global commodity markets and resulting impacts on production and employment (Tonts et al. 289). For that reason, urban planners in RBCs “must contend with the role of external forces in community development plans” (Keough 5). Estimating local population growth is key in long-term planning, but this growth is largely driven by external conditions in RBCs (Keough 2). Fluctuations in demand for and the prices of commodities not only impact population projections, but also employment stability and home ownership, which have implications for community development and the stability of commercial businesses and voluntary organizations (Halseth and Sullivan 151). More indirectly, “environmental and geopolitical issues like international pipeline development, connect with urban planning by creating uncertainty” (Keough 2). This uncertainty around the local impact of external conditions constrains the ability of governments to make the long-term forecasts necessary for planning.

This can also generate a dependence on resource companies, both because they provide the link between local impacts and external demand (and may have access to more accurate long- term forecasts) and because they have outsize influence in RBCs. This dominance can increase socioeconomic vulnerability (Tonts et al. 289) and is one of the issues that governments have attempted to address by promoting local governance and community participation, as in Tumbler

Ridge, where removing the control of resource companies in community decision-making was part of the rationale for establishing local government at such an early stage of the town’s

27 development (Gill, “An Evaluation” 189). However, while a government may formally operate independently, the amount of employment generated by one (or several) large companies means that in practice they continue exert a significant amount of control over the town (Gill, “An

Evaluation” 190). In fact, as Deacon et al. argues, “in many cases, one can still speak of a hybrid model, because of the direct and indirect influence of the main industry players on [the] local community” (4). Corporate behavior and preferences—particularly in relation to workers’ schedules and styles of housing provision—continue to play a relevant role in shaping community development and constraining the choices and information available to planners.

1.5.2 Planning Process

Policymakers in RBCs face unique difficulties in collecting the necessary information to make long-term plans. The external dependencies described are often linked to asymmetries between government officials and company representatives, who may have more informed projections for investment and employment growth. Limited information exchange between the government and companies can be problematic given the disproportionate influence that one or two large companies tend to have over the economy and development of RBCs.

Planners in RBCs face the challenge of generating accurate estimates for population growth and collecting reliable demographic data. In addition to uncertainty about future resource prices and growth, companies (particularly in oil and mining) may use workforce rotations such as fly-in, fly-out that make it difficult to estimate the population and are not accounted for in traditional prediction methodologies. In the town of Fort McMurray, Canada, for example, planners encountered difficulties estimating the “shadow population” of individuals who live on couches, motels, and campsites that spend at least half of the year in the town (Keough 11). This presented further challenges for municipal planners as the British Columbia provincial

28 government would not accept statistics with an estimation of this population, resulting in fewer funds allocated to the area (Keough 12). Similarly, in Darwin, Australia, Ennis et al. found that a lack of clear population forecasts made planning more difficult and resulted in insufficient housing (“Expecting a boomtown” 39). Accurately estimating the current population and projecting future growth are important for anticipating future service demands, selecting planning strategies and allocating funds for projects. Accurate population estimates may be especially relevant in the context of a rapidly growing RBC as the existence of a large shadow population may point to other issues such as high housing costs that require planners’ attention

(Keough 12). However, it is precisely because of the nature of these towns that accurately estimating their populations is more difficult.

Local governments in RBCs must also manage relationships with a wide variety of actors with a stake in community planning, including national and provincial governments; industry and other members of the business community; and the general public (both long-term residents and recent arrivals) (Gilmore 1976). The number of actors interested in managing population growth can generate problems for the design of public policies. In their review of four Australian boomtowns, Haslam McKenzie et al. find that one of the difficulties for planning in the towns is the “wide range of stakeholders that need to be involved in the process” (1). Although some communities reach agreements with industry for investment in infrastructure, education and housing, conflicts often arise between different levels of government and among the many stakeholders with diverse interests (Gilmore 1976). In Onslow, Australia, for example, Haslam

McKenzie finds that differences between the timeframes and governance structures of companies and the government undermined efforts to work jointly to promote community sustainability and well-being.

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Compounding the above challenges, urban planners and policymakers in RBCs may find they lack the resources necessary to effectively plan. Given that many RBCs begin as small, rural communities or are established where there was no existing settlement, planning departments may be understaffed or unprepared to address a town’s needs. Increases in financial resources at the local level may not be accompanied by a corresponding increase in planning capacity

(Vasquez). The government may not have staff with the technical skills required to effectively plan and may “not have enough planning and engineering staff in place to respond to the increased pressures, opportunities, and complexities of operations associated with construction phases,” (Australia Pacific LNG qtd. in Ryser et al. 618). Tracking and updating the information necessary to planning as well as developing and implementing agreements with other stakeholders, coordinating infrastructure deployment, and issuing and tracking development permits all require sufficient personnel, which may be limited in small RBCs (Ryser et al. 618).

1.5.3 Implementation

Government officials also face many challenges in implementing plans and community development strategies. Local planning departments may face the same high turnover rates that have long plagued the general population of RBCs, which may undermine continuity and effective long-term planning (Keough 10). For example, in the case of Tumbler Ridge, Gill notes that high turnover led to a loss of knowledge of the town’s initial plan:

Once the "planning by invitation" phase was over, planners had little control over what happened in the community. Conceptually the planning model was designed to encourage resident input and control over development, but this led to the loss of many of the planners' ideas during the transition stage to community development. No mechanism was built into the model to ensure continuity of ideas, which is especially important when the population is so transient. Thus, already by 1986, only five years after the community was started, many officials were unaware of the underlying principles and innovative ideas around which the town was built. (“An Evaluation” 202)

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Gill additionally hints at a related challenge for ensuring the continuity of long-term plans: that encouraging community engagement and participation may in fact undermine long-term planning as residents may move away from a plan’s original concepts and principles. This lack of continuity in community goals in turn undermines the ability to effectively implement plans.

Local governments in rapidly growing RBCs also face a series of complex challenges in sustainably financing public services and the programs demanded by residents. Resources to implement policies and infrastructure investment may require sustaining royalty revenues, which are dependent on uncertain and uncontrollable external factors. There are also issues of timing and jurisdiction that generate challenges. Rapid growth may outpace a corresponding increase in funds to the local government, precipitating difficult decisions about how to allocate scarce resources. This is especially true as a population boom often occurs before production takes off and generates additional resources for the local government. Other research has found that while communities may see short-term benefits from the growth of related industries and job creation, the increased cost of providing expanded services means that there is no net benefit for the city’s financial situation (Hugh and Ironside qtd. in Keough 17). Further, provincial and national governments, which in many cases control the majority of resources, may have incentives to concentrate their attention and investment more on populated areas rather than in rural boomtowns (Wenger 1978 qtd. in Jacquet 12). In summary, the complexity of providing increased services demanded by the community in many RBCs is complicated by the challenges of sustainably accessing sufficient funding.

City planners have particularly emphasized the challenges they face in meeting housing demand, particularly providing affordable housing, especially for service-sector workers with lower salaries than in the booming sector (see Ennis et al., “Open for Business”; Keough). While

31 companies may help ensure access to housing for workers, meeting the needs of other sectors of the population is often more difficult. This relates to a number of factors mentioned above.

Adequately meeting housing demand requires strong land use planning and zoning, and the expansion of public services. It also requires coordination among multiple actors, as the local government may offer tax incentives to spur private development or need to seek the release of land owned by another government jurisdiction (often state or provincial).

The geography of RBC communities may also create challenges in responding to rapid growth. The typically rural location of RBCs has been found to serve as a constraint on the construction industry and generate labor and material shortages which, when compounded with high transportation costs, can limit the pace of development (Jacquet 17). For example, planners in Fort McMurray highlighted that one difficulty they faced was the need to transport construction materials such as gravel from other regions and that the relative availability of these materials slows down housing construction when demand is high (Keough 18).

1.5.4 Balancing Long-Term and Short-Term Needs

Municipal governments in rapidly growing RBCs face the dual challenges of meeting residents’ immediate needs while also planning for long-term community development in the face of uncertain dynamics of changing supply and demand for services. This tradeoff can be summarized as the difficulty of ensuring infrastructure keeps up with population growth while also paying attention to quality of life issues, which may be easy to overlook amid a boom.

Gilmore warns of this challenge in his description of the “social disruption” thesis, noting that boomtowns are often growing so rapidly that planners and city officials concentrate on the infrastructure projects necessary to keep pace with population growth, and pay less attention developing recreational and leisure spaces, which may cause a decline in the quality of

32 life for residents. Planners in Fort McMurray, which saw annual average growth of 7 percent between 2000 and 2012, cited this as one of the primary challenges they faced in the city, noting that they struggled to balance addressing the city’s zero vacancy housing rate with developing long-term projects and projections for regional growth (Keough 17). This challenges planners, who must make difficult trade-offs.

1.6 Discussion

Local governments in regions where resource-based development is a common path have attempted to mitigate the issues identified by the social disruption model and influence the course of town development through planning. As described above, in Canada, they have used neighborhood design and socially responsive planning under the premise that changes in the social and physical environment can influence the behavior of residents. Although there is widespread recognition that careful and flexible planning, especially with community participation, can mitigate some of the impacts anticipated by the social disruption model, local governments, planners and communities face numerous challenges in reaching their goals. These begin in the planning process and last through implementation, and planners face a series of cross-cutting challenges, such as external dependence and balancing short-term and long-term needs, that are exacerbated in the context of resource dependence. Given the well-identified series of challenges that are commonly faced by planners in the context of a rapidly-growing

RBC, Keough echoes Markusson in proposing that the concept of a boomtown “should expand beyond a city’s economic condition or rate of change to include the challenges faced by urban planners and other constituencies as a result of the boom (or bust)” (21). This expanded definition would include qualitative measures related to issues the pattern of residential

33 development and “the possibility of achieving a balance between short-term and long-range planning” (Keough 21).

Table 4. Challenges to Planning in Resource-Based Communities RBC features RBC planning challenges

● Rapid population growth ● Information asymmetries ● Rural location ● Lack of clear community models ● Predominance of single industry (de facto ● Under-resourced local government and company dominance) planning departments ● Uncertain external demand dynamics for ● Stakeholder coordination commodity ● Balancing short- and long-term goals ● Increased demand for housing and services

There is evidence that local governments have responded to these challenges in myriad ways, including by seeking partnerships and support from industry, government and others. For example, in Fort McMurray, planners were able to better balance short- and long-term goals by seeking “long-term financial support, especially from the province and federal governments, and cooperation between entities [municipality, province, industry, and developers]” (Keough 19).

Studies of boomtowns in Canada in the decades after their initial founding found that resource companies had partnered with governments, community organizations and state agencies in order to provide infrastructure and services and address other socio-economic issues (Wilson qtd. in

Lawrie et al. 143). In other contexts, governments have increasingly asked that companies implement social impact management plans and impact benefit agreements (Ryser et al. 617).

Nevertheless, planning in RBCs remains difficult due to the lack of models that account for the distinctive dynamics of these communities (Gill, “An Evaluation 177). In Fort McMurray, for example, planners identified a lack of a “single contemporary model for this kind of growth” as their largest overarching problem (Keough 21). Instead, city planners combined methodologies from different models “to try to establish sound planning practices in Fort

McMurray” (Keough 21). In the case of Tumbler Ridge, Gill notes that planning efforts were

34 undermined by “the absence of more comprehensive models of resource community dynamics which clearly articulate the linkages between component principles” (Gill, “An Evaluation”

202).

There remains significant uncertainty about how many dynamics particular to RBCs may affect planning and community development. For example, there is limited research on how resource company housing and shift policies may affect community development, and how applicable research from other settings is in isolated resource-based communities (Gill, “An

Evaluation” 203). Likewise, Ryser et al. notes that there is not enough understanding about how structural underpinnings—“policies, regulations, collaboration, and information structures that provide nodes or spaces where stakeholders meet, negotiate, and mobilize the resources”— affect the ability to address challenges in resource-based communities.

Despite these challenges, planning is not a futile exercise, and numerous cases studies have shown communities adapting and creating innovative mechanisms to meet their needs. In this sense, an interesting suggestion is that “there is a need to develop a tool-kit of suggestions and ideas for other resource-based communities—especially in the developing world—to avoid the mistakes of the past” (Deacon and Lamanes 722).

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CHAPTER 2 - OBJECT OF STUDY

2.1 Resource-Based Communities in Latin America

Much of the research into boomtowns was carried out in North America in the 1970s and

1980s, and less scholarly attention has been paid to how these dynamics unfold in other locations. The concepts of the social disruption model and related research on resource dependence and socio-economic well-being have only recently begun to be applied to study the impact of mining and other natural-resource based projects in Australia and elsewhere (Lawrie et. al). This relatively limited geographic concentration of the literature is reflective of different research traditions, and not a lack of resource-based communities elsewhere in the world.

As in North America, a push to exploit mineral and oil wealth in remote areas has played a key role in the establishment of company towns in frontier areas across Latin America.

“Company towns played a similar role - if at different times - in the economic and social history of all parts of the Americas,” argue Dinius and Vergara (Kindle Location 128). In particular, the import substitution policies implemented by many Latin American governments during the mid-

20th century gave rise to large industrial, mining and oil complexes, where company towns were established (Dinius and Vergara, Kindle Location 123-127). For example, cities such as Volta

Redonda, Brazil and El Salvador, Chile grew hand-in-hand with steel and mining projects, respectively (Banco Interamericano de Desarrollo and Fundación YPF 17-18). As Porteous notes, “the extractive one-industry settlement is characteristic of frontier regions of difficult physical environment” (Single-Enterprise Community).

Nevertheless, in contrast to the sustained academic attention given to resource dependence and socio-economic well-being, and urban planning in RBCs in North America, little scholarly attention has been given to these topics in Latin America. This reflects a series of

36 factors including language barriers and different scholarly priorities (Dinius and Vergara, Kindle

Locations 170-171). In Latin America, the study of company and single-industry towns has historically taken a different focus from North American studies and has situated these communities in relation to broader political and economic research interests. Studies completed in the 1960s and 1970s viewed company towns through the lens of dependency theory, as a link between an undeveloped periphery and industrialized core, and also focused on issues such as industrialization, class conflict, social relations and labor mobilization (Dinius and Vergara.

Kindle Locations 200-204). Separately, Peter attributes the limited scholarly attention given to

Argentine oil cities to the fact a few oil-producing provinces are located in a non-oil country

(151).

The lack of studies on resource-based communities and boomtowns in Argentina is noteworthy given that natural resource development, especially oil, has been a driver of economic growth in many southern Argentine provinces. The Patagonian region has many cities whose image is intricately linked to their history as oil towns: Cutral Có-Plaza Huincul in

Neuquén Province, Comodoro Rivadavia in Chubut Province, and Las Heras in Santa Cruz

Province, for example. Academic and journalistic investigations into these cities have found that they have experienced problematic urban growth that has undermined quality of life and in many cases there is some evidence that they have high levels of alcohol use, violence, or suicide rates, which are characteristic of boomtowns (see: Bianchi; Guerrier; Reymundo Roberts; Bianchi;

Svampa).

2.2 Case Selection, Research Questions and Hypotheses

Despite the importance of oil production in several regions of Argentina and a history of towns linked to oil production, there are few studies on resource-based communities in the

37 country. The lack of research makes it difficult to know whether RBCs in the country have experienced the same growth dynamics and impacts as resource-based communities elsewhere, or how local communities have sought to respond to the challenges associated with rapid, resource-based growth.

The thesis aims to better understand the challenges faced by policymakers in natural resource boomtowns using a case study of Rincón de los Sauces in the Argentine province of

Neuquén. The town experienced rapid oil sector-driven growth after a major oil discovery in the late 1960s and for many years was the province’s fastest-growing municipality. This town has been selected for several reasons. For one, it embodies the key characteristics of traditional boomtowns: 1) it was formally founded to serve as a base for oil and gas activity; 2) it is located in a remote, rural area; 3) its economy is highly dependent on oil and gas activity; and 4) it has experienced rapid growth linked to said activity. Indeed, while many towns in Argentina grew quickly during the 1990s and early 2000s as Argentina’s oil industry opened to foreign investment and international prices began to rise in the 2000s, Rincón de los Sauces stands out as the fastest growing among them. This outlier status makes it useful as a case to study the dynamics of this growth and its impacts on urban development and policy making.

Several other factors make this case of interest. Rincón de los Sauces is situated within

Argentina’s Patagonia region, which is home to several other oil areas, including Cutral Có-

Plaza Huincul and Comodoro Rivadavia, which were founded in the early 1900s. As Rincón de los Sauces was not founded until the 1970s, its growth is somewhat more contemporary and occurred subsequent to the establishment and research into many RBCs in Argentina and elsewhere. This timing allows for consideration of if and how policymakers sought to incorporate existing knowledge from these towns into their approach as well as if they looked at

38 developing research elsewhere. It is also worth noting that the town’s location within the

Patagonia region and Neuquén Province is also relevant as the region has a unique political history within Argentina. The aforementioned towns are also located in this region meaning that knowledge could be more easily transferred to the case of Rincón de los Sauces, and vice versa, than if the town were located elsewhere.

Finally, after passing through a boom period that lasted roughly from the 1990s to early

2010s, the town experienced an economic decline as local oil and gas projects began to approach the end of their useful lives. However, expectations for the development of the nearby Vaca

Muerta shale formation, one of the world’s largest shale oil and gas fields, are once again generating a migratory pull to the town and forcing policymakers to begin planning to address lingering challenges and respond to anticipated growth.

The need to better understand the dynamics of boomtowns in the particular context of

Argentina is all the more urgent given plans to develop the vast unconventional shale oil and gas resources of Vaca Muerta. A better understanding of past Argentine RBC dynamics, including how these towns fit the general models and any unique characteristics they have, may contribute to improving future decision-making. This is especially relevant to Rincón de los Sauces as the town falls within the area expected to experience future population growth linked to shale development.

This thesis describes the challenges generated for planning and governance by rapid, natural-resource based growth in Rincón de los Sauces and seeks to explain how policymakers approached planning and management in the context of rapid urban expansion, including determining if decision-makers looked to other boomtowns for any best practices or lessons.

Overall, the research is guided by the following guiding questions:

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1) What governance and planning challenges has the rapid, natural resource-based growth

of Rincón de los Sauces created for local policymakers?

2) How have they approached planning and management in the context of rapid population

growth and urban expansion?

The factors identified in the literature on boomtowns in other contexts are anticipated to be largely relevant in this case. Thus, it is anticipated that the town’s rapid, natural resource-based growth has created the following challenges for local policymakers:

1) Coordination challenges, including with the national and provincial governments, oil

companies, and with longer-term and newer residents;

2) Significant uncertainty, generated by information asymmetries, particularly between

policymakers and companies (lack of population growth estimates and oil price

projections, for example);

3) Difficult tradeoffs between short- and long-term priorities; and

4) Limited and unstable resources (both financial and technical).

In addition, the strong federal system of governance in Argentina and the presence of strong unions are anticipated to present additional challenges to addressing urban growth as they are expected to create additional challenges to coordinating holistic policies.

In this context, it is anticipated that local policymakers will have sought to use the following strategies to address planning and management in the context of rapid population growth and urban expansion: 1) Seeking help from national and provincial government and agencies (including financial resources, and strategic planning and technical advice); 2) trying to partner with companies and unions; and 3) seeking to learn from the experience of other towns.

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2.3 Methodology

A single case study—Rincón de los Sauces—has been selected to allow for in depth- description of the historical processes of growth in the town and planning processes. One of the values of a case study approach is that it allows for the consideration of the phenomenon within its context using a variety of sources to allow “multiple facets of the phenomenon to be revealed and understood” (Baxter and Jack 544). This is especially relevant as one of the most salient features of a resource-based community such as Rincón de los Sauces is its susceptibility to changes in its context. The exploration of this case is undertaken using the following methodology.

First, an overview of the historical political and geographical context of Argentine oil towns is provided. This includes a summary of the development of Argentina’s oil industry and the role of state oil company YPF in the industry and in oil town development using a literature review. The literature on two previous oil boomtowns in Argentina is also briefly reviewed to provide context on previous experiences that policymakers would have been aware of.

Next, an overview of Rincón de los Sauces is provided, along with a detailed historical description of the dynamics of population growth and urban expansion experienced in the town.

This is done using a combination of sources, such as historical accounts, newspaper and journal articles and reports from government agencies and international organizations as well as data from the national and provincial statistics agencies.

This is followed by a review of the approaches that policymakers have taken to planning and governing in the town, as well as an analysis of the problems they have faced. This section largely draws on primary sources, particularly a review of three plans developed for the city during crucial junctures in its history: 1) at the time of its founding in 1971, 2) in 2001 in the

41 midst of the local boom, and 3) in 2019, in anticipation of a forthcoming boom. The analysis also draws on various newspaper articles, provincial and local government documents, a review of a database of municipal regulations that is available for the period from 1984-present and secondary sources. Additionally, in order to seek additional insight into the planning process, a semi-structured interview was conducted with a key informant who was selected based on their specialized knowledge as an urban planner with experience in Rincón de los Sauces, and willingness to participate.6

6 With consent, the interview was conducted in Spanish according to the interview guide (see Annex A). The interview was recorded and later transcribed and coded by theme. Informal conversations with other individuals with knowledge of Rincón de los Sauces have also informed the findings, although there was reticence to participate in on-the-record conversations, which I attribute to concern about damaging relationships with local stakeholders.

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CHAPTER 3 - CONTEXT AND RELEVANT PRECEDENTS

The following provides background on Argentina’s oil industry and oil towns in order to better situate the case of Rincón de los Sauces in its relevant context. It begins by providing an overview of historical factors that are relevant to understanding the case: a brief history of

Argentina’s oil industry and the role of the government in the industry’s growth with a focus on the state oil company and the Patagonian region. It then considers case studies of two of

Argentina's most prominent oil towns—Comodoro Rivadavia and Cutral Có-Plaza Huincul—and describes how their status as oil towns has influenced their patterns of urban growth and development. These two urban agglomerations were selected for their relevance as examples that preceded Rincón de los Sauces in the same region, and indeed are referenced in some of the town’s original planning documents as cases that early policymakers had considered as precedents.

3.1 Historical and Geographical Context of Argentine Oil Towns

3.1.1 Oil Exploration and Development as State Policy

Argentina has a long history of promoting the development of the oil industry. Efforts aimed at the exploration and production of hydrocarbons occurred across Argentina in the late

19th and early 20th centuries (Risuleo 2-3). The national government funded exploration missions nationwide in the early 1900s through the national Ministry of Agriculture's Division of Mines,

Geology and Hydrology (Favaro, “El Oro Negro”). These government-funded missions discovered oil in the territories of Chubut (1907) and Neuquén (1918), and also carried out exploration work in provinces such as Salta through agreements with local authorities (Favaro,

“El Oro Negro”). However, it was not until the period during and shortly after World War I,

43 when coal imports from England were interrupted, automobile use became more widespread and the increased use of oil led to a perception among leaders that it was a strategic resource, that

Argentina’s oil industry really began to expand (Risuleo 7). The normalization of international commercial and financial relations following the war also increased the availability of equipment and capital that permitted the industry’s growth (Risuleo 10).

For most of the 20th century, the Argentine government played a predominant role in the country’s oil and gas industry, both through state-owned companies and the regulation of private players. In 1910, the national government created the Dirección General de Explotación del

Petróleo de Comodoro Rivadavia (General Directorate of Oil Production of Comodoro

Rivadavia), the first state-owned oil company in Latin America, which was tasked with administering and planning for the development of the country’s hydrocarbons reserves (Torres and Borges). This was a forerunner of Yacimientos Petrolíferos Fiscales (YPF), the state oil company created by President Hipólito Yrigoyen in 1922 (Risuleo 12). The company's first president, General Enrique Mosconi, viewed the development of the country’s oil industry as essential to protecting the national interest (Favaro, “Territorio y Petróleo” 168). For this reason, he pushed for Argentina to become energy self-sufficient, and under his watch, the company expanded operations and consolidated itself as a leading player in Argentina’s oil and gas industry (Risuleo 14).

Private oil companies also operated in Argentina’s oil and gas industry throughout most of the 20th century, although with a generally smaller role than YPF that was constrained by varying regulatory restrictions. Given the absence of a specific regulatory framework for the sector, oil and gas was initially governed by the Mining Code of 1886, which established that the resources belong to the government (national or provincial depending on their location),

44 although it allowed for their development by private companies with concessions (Risuleo 2).

For example, shortly after the discovery of oil in the area near Comodoro Rivadavia, the national government issued a decree reserving a zone with a radius of five kilometers around the well for the government (Risuleo 5). Only the government could develop the resources located within this zone although private companies could seek permission to explore for oil in the area surrounding the reserve (Risuleo 5-6).

Over the following decades, policies towards private companies in the oil sector were inconsistent, and changes in government were often followed by abrupt changes in sectoral policy. Until the 1930s, private oil companies played an important role in the country’s oil production. The granting of new concessions to private companies was suspended in the 1930s

(although no expropriation occurred). Subsequently, the first presidency of Juan Domingo Perón

(1946-52) assigned strategic importance to oil and gas as inputs for industrial development, and the short-lived 1949 Constitution declared that hydrocarbons reserves were the “inalienable property” of the government (Giuliani 23-24). During his administration, in 1946, the government created a second state-run energy company, Gas del Estado, to commercialize and distribute natural gas, which held a monopoly on transportation and distribution of gas nationwide until its privatization in 1992 (Risuleo 22).

Although oil production increased between 1955 and 1960, Argentina was still highly dependent on oil imports. In 1958, President Arturo Frondizi (1958-1962) launched the so-called

“oil battle”—a push for Argentina to achieve self-sufficiency in oil production. In order to achieve this goal, his government reopened Argentina’s oil sector to private exploration and production, and YPF gave contracts to private companies, resulting in an uptick in private

45 production.7 The subsequent period from 1958 to 1963 is considered Argentina’s first “oil boom”. In 1960, imports had accounted for 60 percent of national oil consumption (Colangelo), but Frondizi’s reform quickly increased production at an annual rate of approximately 29%

(Cabral Marques 110). By 1962, Argentina was nearly self-sufficient, with YPF accounting for

54.8% of production (Cabral Marques 110).

Upon taking office, President Arturo Illia (1963-66) renegotiated or annulled many contracts with multinational companies (Giuliani 24). This was reversed just several years later when the dictatorship that came to power in 1966 approved the 1967 Hydrocarbons Law (Law

17,319), which allows private participation and remains one of the main legal frameworks for the sector (Giuliani 24). However, private companies would not play a major role again in the country's oil sector until 1976 (Colangelo), when the then-military government announced it would seek to promote private investment in the sector.

Despite the periods of greater openness, throughout most of the 20th century, the national government played a predominant role in Argentina’s oil sector though state companies with private participation limited to serving contractors or for specific purposes (Giuliani 200). This tension between the interest of maintaining national sovereignty over the resources and allowing private companies to develop hydrocarbons was a key characteristic of the period, as were tensions between the national government and provinces over the administration of the funds generated by oil production (Giuliani 22). The 1990s brought significant changes to Argentina’s oil industry on these two fronts: on the one hand, YPF was privatized, and, on the other, the

7 The contracts allowed during this period were production-sharing contracts, which sought to attract international capital and technological expertise, but did not give private company ownership rights over the resources (Cabral Marques 110; Risuleo 17).

46 balance of power in the dispute over national versus provincial control of oil resources shifted to the provinces.8

By the 1980s, YPF had serious financial troubles and was highly indebted: in 1981 its total debt exceeded $4.1 billion (Colangelo). This resulted from a combination of factors, largely outside of the company’s control, such as macroeconomic policy, political mismanagement and use of the company to take loans in U.S. dollars to finance the country’s fiscal deficit (Viña and

Ferrara). In 1989 then-President Carlos Menem began setting the bases for a privatization of the company that aimed at increasing the company’s efficiency through reorganization and eliminating non-strategic businesses (Colangelo). The privatization process was formalized in

1992 through Law 24,145 (Risuleo 18). Gas del Estado was also privatized in 1992 and broken into 11 companies with majority private stakes (Giuliani 40). The privatization was successful in professionalizing YPF and limiting political interference, and the company’s oil and gas production and exploratory activity increased in the 1990s (Giuliani 37). In 1999, YPF was acquired by Spain’s Repsol.9 This privatization would fundamentally reshape Argentina’s oil industry.

3.1.2 Oil and Gas in Patagonia

The national government’s most important oil discoveries occurred in the Patagonian region in the early 1900s. At the time, Patagonia was a sparsely populated region, over which the government had only recently established effective control following the “Conquest of the

Desert” military campaign led by Julio Argentino Roca in the 1870s. The region was

8 A 1994 Constitutional reform gave provinces full ownership of natural resources within their boundaries. However, the national government retains broad authority to dictate energy-sector policy. 9 In 2012, then President Cristina Fernández de Kirchner renationalized the company, which is now 51% controlled by the Argentine state and provincial governments.

47 incorporated into Argentina as national territories, administrative divisions under the control of the central government, with the aim of promoting the political and economic development of these territories so that they could ultimately become provinces.10 Both Chubut and Neuquén remained national territories until 1955.11 Two years later, in 1957, the provinces held constitutional assemblies to formally constitute their governments.

As YPF increased its role in oil exploration and production in Argentina, the company undertook all activities necessary to support its oil and gas production. In the context of this remote region this included founding and supplying towns near oil reserves (Risuleo 14). For this reason, the state energy company played a fundamental role in the founding of various towns throughout Patagonia, including Comodoro Rivadavia in Chubut Province; Las Heras, Cañadón

Seco, and Caleta Olivia in Santa Cruz Province; and Plaza Huincul in Neuquén Province (see figure 2).

10 The 1884 Law of National Territories (Law 1,532) differentiated territories from provinces and stated that these administrative divisions could create a legislature when they had 30,000 residents and become a province with a minimum of 60,000 (Cabral Marques 105). It allowed municipalities with at least 1,000 residents to elect a Municipal Council. 11 Law 1,532 was revoked in 1954, and in 1955, national Congress passed Law 14,408, which created the provinces of Formosa, Río Negro, Neuquén, Chubut and Santa Cruz, which until then had been national territories (Cabral Marques 109).

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Figure 2. Argentine Provinces and Oil Towns (selected)

Many of these towns began as encampments near oil fields and later became incorporated as municipalities, such as Plaza Huincul and Rincón de los Sauces, both in Neuquén. These towns were profoundly impacted by the energy policies implemented by the national government, and YPF by extension. For example, shortly after its founding in 1922, YPF instituted a policy to begin attracting workers from the north of the country to Comodoro

Rivadavia (Cronología Histórica de Comodoro Rivadavia). Similarly, the uptick in oil activity that occurred as a result of Frondizi’s “oil battle” prompted a wave of massive migration to

Comodoro Rivadavia (Usach and Freddo 228). Conversely, the annulation of private oil

49 contracts in the late 1960s and the privatization of YPF negatively impacted many oil towns, leading to increased unemployment and reduced well-being.

3.1.3 Oil Activity in Neuquén Province

There are 10 Argentine provinces (of a total of 23, plus the autonomous City of Buenos

Aires) where oil and gas are produced, but just half of these—the so-called “oil provinces”, which include Chubut and Neuquén—are responsible for the majority of the country’s oil and gas production. Argentina’s hydrocarbons production is concentrated in five major basins: San

Jorge, Neuquén, Cuyo, Northwest and the Austral basins (Giuliani 27). The large Neuquén basin extends under approximately 70% of the province of the same name, as well as to Río Negro, La

Pampa and southern Mendoza. It is one of Argentina’s most productive basins, particularly for natural gas, and in 2011, accounted for 43% of national oil production and 54% of national natural gas production, according to figures from the national Energy Secretariat (Giuliani 29).

Oil was first discovered in Neuquén Province in 1918 in Plaza Huincul, and hydrocarbons activity came to be a main driver of the provincial economy. The zone around

Plaza Huincul and neighboring Cutral Có was the hub of production in the Neuquén Basin for the following several decades (Subsecretaría de Planificación Territorial de la Inversión Pública de la Nación, “Tomo I” 26). The province’s early economy was characterized by the strong presence of the national government, which promoted an economic model based on ranching and oil production in Cutral Có and Plaza Huincul, although the territory remained relatively poor at the time of its provincialization in 1957 (Giuliani 138). Oil activity in the province really began to increase with the 1967 discovery of the Puesto Hernández field and the 1977 discovery of

Loma de la Lata (Giuliani 93). The commercial production of oil and gas then became one of the province’s main economic activities in the following decades, and by 1999, the extractives sector

50 had come to represent 69.8% of gross regional product (Giuliani). It remains a primary economic activity in Neuquén Province, although oil and gas activity has somewhat declined in relevance since peaking in the late 1990s and early 2000s (Giuliani 62). The above-mentioned privatization of YPF strongly impacted Neuquén, where private companies took on a leading role in oil production after receiving long-term concessions for oil fields. Between 1997 and 2011, YPF’s participation in oil and gas production slowly declined (Giuliani 76). By 2011, seven companies accounted for nearly 96% of oil production in the province, with three—Repsol-YPF SA

(35.6%), Chevron Argentina SRL (26.6%) and Petrobrás Energía SA (11.3%)—concentrating nearly 75% (Díaz, “Retorno” 4).

The development of oil and gas has not only been a major driver of economic activity in the province but also of population settlements (Díaz, “Retorno” 1-2). The period of oil development in Neuquén that lasted until 1989 coincided with the period “that was characterized by the presence of the state through YPF and Gas del Estado, companies responsible for implementing the policies designed by the state for the sector” 12 (Giuliani 93). As Giuliani notes,

“there were towns that were born and grew under the auspices of YPF, to which it provided hospitals, schools, grocery stores and even took responsibility for some urban aspects by asphalting streets or constructing canals to bring in water from remote places” (Giuliani 93). For example, this occurred in the Cutral Có-Plaza Huincul region. In the 1960s, YPF set up the first exploratory camps in the area near a small settlement called Rincón de los Sauces (Díaz

“Retorno”1).

12 This and all other translations from sources in Spanish are the author’s own.

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3.2 Comodoro Rivadavia

3.2.1 Overview

Comodoro Rivadavia in Chubut Province—nicknamed the “Capital Nacional del

Petróleo” (“National Oil Capital”)—is one of Argentina’s most emblematic oil towns. The city was founded in 190113 along the San Jorge Gulf on Argentina’s southern eastern Atlantic coast as a port for livestock production. However, the 1907 discovery of oil in the area—the first such discovery in Argentina—irreversibly changed the region’s productive profile and shaped the city’s posterior socio-economic and spatial development. For more than a century, the city’s growth has occurred in waves that paralleled increases in oil prices and activity, driving the city to its current position as one of the largest in southern Patagonia.

Comodoro Rivadavia is located at the epicenter of an oil and gas area centered around the

San Jorge Gulf. A few figures contextualize the historical and continuing relevance of the city as a hub of Argentine oil production: as of 2017, there were approximately 5,800 wells in the area that produced approximately 25% of the country’s oil, and the town is located just 70 kilometers from Cerro Dragon, the country’s most productive oil field (Reymundo Roberts). In 2017, approximately 25% of the city’s economically active population worked directly or indirectly in the oil industry (Reymundo Roberts). By the end of the last commodities supercycle, which lasted from approximately 2003 to 2013, oil accounted for 26% of Chubut province’s fiscal income, 3.4% of its GDP and between 40 and 60% of its exports (Peters 145).

Following the 1907 discovery of oil near Comodoro Rivadavia, oil companies began establishing themselves in the area. In 1910, the national government created a 5,000-hectare reserve where the General Directorate of Oil Exploitation of Comodoro Rivadavia began

13 The city was created by a national executive decree issued on February 23, 1901.

52 producing oil (Rock 208). Given the extension of the area reserved for the government, private oil companies initially operated in smaller fields in the surrounding area (Rock 208). By the late

1910s, private oil companies with consolidated operations in the area included Astra, which had received a 1,500-hectare concession 20 kilometers north of Comodoro Rivadavia for exploration in 1912, Compañía Ferrocarrilera de Petróleo (later Petroquímica Comodoro Rivadavia), and

Royal Dutch Shell (which later became Diadema) (Torres and Borges). By the early 1920s, the region had become the center of Argentina’s nascent oil industry (Peters 145) and was attracting both national and international migrants (Córdoba, “Comodoro Rivadavia”).

3.2.2 Urban Development and Expansion

As oil activity increased in the period from roughly 1918 to 1959, both state-owned YPF and private companies established camps to house operators and company employees.14 Oil camps were located close to extractive zones but far from the city center (Usach and Freddo 227) and for this reason developed as self-contained entities organized around their own internal logic determined by companies, which provided housing, public services, medical and educational facilities and other basic community infrastructure. Employment in an oil company offered benefits for workers beyond just employment, such as free or subsidized housing located close to the work site (Bachiller 122-3). In the earliest years, single male workers shared barracks, however high work-force turnover led companies to reconsider this model, and they began to establish family housing options with the aim of maintaining a stable workforce by the 1920s

(Bergen and McLane).

14 Oil camps established during this period by YPF include Cañadón Perdido (1928), Escalante (1931), Caleta Córdova (1933), Restinga Alí (1934), Manantiales Behr (1937), El Trébol (1938) and El Tordillo (1939) (Cabral Marques 107). Private companies also established camps during this period, such as Compañía Ferrocarrilera de Petróleo (1920) and Diadema Argentina (1922) (Cabral Marques 105).

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Company camps were essentially small towns with residential and commercial areas intended to satisfy, at a minimum, all of workers' basic needs. The social hierarchy of companies was reflected in the urban layout of these camps, which generally contained residential areas that were separated by workers’ marital and occupational status (Bergen and McLane). In addition to residential zones, many oil camps contained centers with commercial and leisure activities

(Bachiller et al. 73). Companies built and operated hospitals, police stations and post offices, as well as bakeries and restaurants that lowered costs for company employees and workers (Bergen and McLane). Torres argues that companies offered these amenities near worksites in order to

“obtain the greatest organizational efficiency at the lowest cost” but that they also had the effect of improving the standard of living in these communities (qtd. in Bergen and McLane). Since companies provided housing as well as basic services and amenities, company camps operated as largely self-sufficient entities (Bergen and McLane).

Geographically, these oil camps were concentrated in the northern part of the city, several kilometers outside of the original municipality of Comodoro Rivadavia. In 1917, for example,

60% of the population in the area lived in what would now be considered the northern zone of

Comodoro Rivadavia where oil camps were located (Cabral Marques 105). By the late 1920s, there was a marked difference between the camps and the municipality, which lacked the infrastructure and services that were provided by companies in the camps (Cabral Marques 105).

Over time as the city expanded former oil camps became incorporated into the municipality of

Comodoro Rivadavia as residential neighborhoods. These include the Astra neighborhood (ex-

Astra camp), Shell Oil’s Diadema Argentina/Kilometer 27 neighborhood, Petroquimica’s Barrio

Kilometro 8 neighborhood, and the extensive General Mosconi/Kilometer 3 neighborhood (ex-

YPF camp) (Usach and Freddo 227). The origin of many of the city’s northern neighborhoods as

54 oil camps is reflected by the fact that many retain the name of the founding company or the distance in kilometers they were located from the original town.

Comodoro Rivadavia’s spatial organization is a result of the above-described pattern of extractive industries’ development which combined with geological features to create a particular north-south geographic axis. The Cerro Chenque hill divides the north and south of the city. Immediate south of this hill is the city center where the commercial area and services such as hospitals and educational institutions are concentrated (Usach and Freddo 224). The growth of the northern zone was driven by the expansion of oil and gas and industrial camps, and this pattern of development left its imprint on the city’s spatial organization. Even as former oil camps were consolidated as official neighborhoods, they remained self-contained and disconnected from others, meaning growth was dispersed and fragmented (Bachiller 129, Usach and Freddo 226). Usach and Freddo argue that dispersion and fragmentation are the key characteristics of the city’s urban development, which they see as a result of the city’s historic link to the oil industry:

These patterns of dispersed growth are not new for the case of cities such as Comodoro Rivadavia in Argentine Patagonia, which have historically grown from the location and consolidation of workers around extensive areas of oil production at important distances from the central core. In effect, this city can be recognized for its dispersed urban territory, whose imprint has been marked by the historical path of extractive activity. (219)

Indeed, the north of the city is more spread out as neighborhoods are disconnected as a consequence of this pattern of development (see figure 3 for a visual representation of this phenomena). Integrating these neighborhoods fully into the urban structure has proven difficult; even today, neighborhoods in the northern zone lack connecting infrastructure, in contrast to the more compact city center and southern zone (Usach and Freddo 224).

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Figure 3. Comodoro Rivadavia in Historical Periods Maps from 1901-1930 (top) and 1964 (bottom). Shaded areas represent inhabited zones. Source: Bergen, Julia, and Kristin McLane. “Espacios.” Mosaico De Patagonia, Dickinson College and Universidad Nacional De La Patagonia San Juan Bosco, http://deila.dickinson.edu/patagonia/newsite/es/museo/espacios/index.htm.

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The growth of the southern part of the city was also driven by oil industry dynamics, although it followed a different pattern. The flipside of the organized, corporatist neighborhoods that characterized the development of the northern part of the city are the large-scale informal land occupations that have occurred in the southern zone (Bachiller et al. 75-76). Oil booms15 in the city have coincided with the periods of greatest urban growth (Bachiller 123). As inward migration increases, driving up land prices and making legal access to land difficult for many, land occupations and self-construction have served as mechanisms to allow residents to meet their housing needs (Bachiller 123). These self-constructed neighborhoods are characterized by precariousness of services and urban infrastructure.

Although informal occupations had previously occurred (Bachiller et al. 76), massive land occupations first became a notable public policy issue during the oil boom of the late 1950s and 1960s, when the uptick in oil activity prompted by Frondizi’s “oil battle” generated the first large-scale migration to Comodoro Rivadavia (Usach and Freddo 228). This period led to rapid population of the southern zone of the city (Usach and Freddo 228) as individuals unable to secure jobs with Shell or YPF settled in the periphery of the city (Bachiller et al. 74-75). The

1980s and 1990s also saw expansion of informal self-construction in the peripheral southern and western areas of the city (Bachiller et al. 75-76), a phenomenon that strengthened again during the oil boom of the early 2000s (see figure 4). This has contributed to an expansion of the urban area, which increased from 3440 hectares to 4461 hectares between 2001 and 2010 at the same

15 There is some discrepancy around the periods considered booms. However, researchers generally coincide in identifying the period from the late 1950s to early 1960s as the first major boom and the period from roughly 2003 to 2013 as the second.

57 time that the population increased from 135,632 to 175,916 (Bachiller 124). Expansion of informal neighborhoods has been characterized by growth into geographically precarious areas.

Figure 4. Comodoro Rivadavia, Historical Periods of Growth by Neighborhood (1901-2014) Red represents city center Source: Usach, Natalia, and Bianca Freddo. “Crecimiento De Una Ciudad Dispersa: Análisis y Reflexiones Del Caso De La Ciudad De Comodoro Rivadavia.” Informes Científicos Técnicos - UNPA, vol. 7, no. 1, 28 Apr. 2015, p. 227.

3.2.3 Urban Planning

The above-described growth pattern has led to a series of difficulties. In 1988, the city government began a program to diagnose and reorganize urban space in which it identified a series of problems, among them: extension of the municipal area, imbalances in territorial occupation, difficulties generating an integrated structure, impacts of dispersed residential areas, and lack of norms to regulate urban growth (Gioino qtd. in Cabral Marques 113). It also identified the lack of separation of land use between residential and industrial areas as a major

58 challenge and one that limits the growth of the city as much expansion occurs towards old industrial sites that are not apt for residential purposes. These challenges are the result of a lack of centralized and holistic urban planning to organize the city’s growth as the state has historically proven largely incapable of effectively developing and implementing urban planning policies in Comodoro Rivadavia.

Historically, one of the major impediments to better organizing the urban space of

Comodoro Rivadavia has been a lack of political authorities able to exercise effective control over the municipality. As part of a national territory during its foundation, Comodoro Rivadavia suffered from a combination of a distant national government, and a weak and unstable local government whose early years were characterized by a series of instances during which national and territorial governments intervened in local affairs.16 Both the national and municipal government were unable to exercise effective control over various zones in the area. For example, for the first several decades of the city’s history, land occupation was a bureaucratic process overseen by a national government office that was located thousands of kilometers away from Comodoro Rivadavia and lacked the capacity to effectively control the territory and implement laws, meaning that colonists were able to populate the territory largely unhindered

(Bachiller et al. 85-6). It was not until 1950 that the Dirección General de Tierras (General

Directorate of Land) established an office in the area and began formally adjudicating land to

16 By way of example: the national executive power created the city of Comodoro Rivadavia by executive decree on Feb. 23, 1901. The first local elections for city council were held in late 1911, and this council was dissolved in early 1912. The municipality was formally founded in 1912 and the presidency was given to Dr. Luis M. Gallino. In 1914, fresh local elections were held following a first period of intervention. Another intervention occurred in 1924, followed by elections in 1926 and a fresh intervention in 1927. In 1932, elections were called following several interventions. In 1937, another intervention occurred, which lasted until 1943, when another intervention occurred. In 1944, the military government of Comodoro Rivadavia was created, and in 1945 the limits of the zone were defined (Torres and Borges).

59 occupants. In absence of the state, as described above, the region’s early growth was largely driven by companies, which established camps based on commercial objectives.

For the first several decades of the city’s history, the municipality faced several constraints that diluted its territorial authority. In 1917, President Hipolito Yrigoyen issued a decree that separated the town of Comodoro Rivadavia, under the control of the city council, from the oil camps, under company control (Cabral Marques 105). Cabral Marques describes the city as a center “under the administration of a weak municipality in the legal framework of the

Ley de Territorios" while the camps were urban centers consolidated according to their own strategies of urban and territorial management (Cabral Marques 106). This differentiation was continued in a subsequent decree issued by the national government in 1932 that set the city’s limits, and again excluded company camps from the jurisdiction of the city government.

The process of incorporating these areas under municipal jurisdiction would take several decades and be fraught with tensions. In the 1940s, YPF urbanized new sectors for workers' housing, and the relationship between the companies and the city began changing as the city started to demand that YPF pay taxes and fees; the city government also began making efforts aimed at incorporating YPF’s Barrio General Mosconi into the city (Cabral Marques 108). In the

1950s, the municipality created a network of delegations under the jurisdiction of the municipality, including one representing the YPF camp. According to Cabral Marques, this implied a “superposition of levels and spheres of administration with a collision between the old urban model associated with the orbit of the state company and the new decision-making scheme articulated with the sphere of the municipality of Comodoro Rivadavia” and generated tensions about issues such as how to organize transit, offer commercial permits and provide public services (108).

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It was not until the 1970s that the municipality incorporated many of the northern areas into its jurisdiction (Marques 2008 qtd. in Usach and Freddo 226), a process described by researchers as “municipalización tardía” (“delayed municipalization”). In the late 1960s and early 1970s, companies began dismantling camps and selling homes to their occupants, and in

1972, a local ordinance formally incorporated the northern zone into the municipality (Cabral

Marques 111). Beginning in 1973, the city government began to measure lots and promote development plans with the support of the provincial government as well as work to integrate these areas with the rest of the city through provision of public transport and adjudication of old public service networks to private and public companies (Cabral Marques 111). By the early

1980s, the city had fully incorporated all the oil areas but there were "enormous technical, political and financial difficulties to manage public space and organize public services," which remains one of the structural problems of the city to present (Cabral Marques 112).

Another challenge that Comodoro Rivadavia has faced is rapid population growth, which has outpaced the city government’s ability to plan, and meant that much planning has been reactive, rather than proactive. During boom periods, the rapid pace of growth of the city made it difficult for the government to implement effective policies to address the needs of an increased population and “the many projects, plans, norms and ordinances that aimed at institutional planning, became obsolete and were overcome by reality” (Freddo 2013 qtd. in Bachiller et al.

90). As noted by Bachiller et al., “First came the people and then the urban planning (when there was any)” (86).

The difficulty in keeping pace with population growth became clear in the late 1950s and early 1960s, when the oil-sector policies of President Frondizi generated major economic and demographic expansion in Comodoro Rivadavia, which in turn generated a new set of challenges

61 for the municipal government. The accelerated growth created a housing deficit and gave impulse to expansion of the city to peripheral areas in the southeast that lacked sewage, running water, gas and electricity, and health coverage, and many of which were also environmentally and geographically unsustainable (expansion occurred onto oil zones, hillsides, flood zones, etc.)

(Cabral Marques 110). The first city council elected after Chubut became a province, in 1958, advanced a series of measures related to organizing the urban growth of the city, including dividing lots in the Industrial, Roca and Pueyrredón neighborhoods (“Un Poco de Historia”) and also implemented regulation aimed at avoiding informal occupation in other neighborhoods

(Jorge Newberry, San Martin, etc.) (Cabral Marques 110). Nevertheless, the municipal government found itself overwhelmed as it unsuccessfully attempted to regulate and provide services given this unplanned growth, and speculation increased prices in the real estate market for basic goods, compounding the challenges (Cabral Marques 110). These informal residential settlements in southeast would become a chronic challenge of the city.

A closer look at the municipality's efforts to control the adjudication of land around the time of the boom, which proved largely ineffective in the face of large-scale land occupations, is illustrative of both the reactiveness of urban policies and their often-short durations. In 1956, the national military government issued a decree-law that created a new system for adjudicating government-owned land (tierras fiscales) and selling lots, and the municipality of Comodoro

Rivadavia subsequently issued a complementary regulation that promoted the sale of tierras fiscales to individuals who met the stipulated conditions for their occupancy (Bachiller et al.

86).17 Although attempts were made to adjudicate land under this framework, it was quickly found to be an ineffective mechanism for responding to the increase of land occupation and

17 Applicants were assessed based on a point system that prioritized Argentines and long-term residents, among other factors.

62 claims generated by the population boom of the early 1960s. In 1962, the municipality removed restrictions to make it easier for individuals to formally receive land titles with the aim of slowing down informal occupations (Bachiller et al. 86). Over the following decades, local regulations changed several times to reflect various approaches to addressing the city’s growing informal settlements (Bachiller et al. 87-90). For example, in the early 1970s, the city changed the ordinance that had prohibited the occupation of lotes fiscales with the aim of making it easier for poor families to legally access land; this was reversed in the 1970s when the municipality passed a new ordinance prohibiting any occupations of tierras fiscales (Bachiller et al. 87). The frequent changes reflected both the inadequacy of the regulations in addressing the problem, as well as changes in government that brought new political visions to policies.

The lack of centralized government action created space for other actors, such as companies and unions, to assume a leading role in guiding the municipality’s development.

Indeed, in the absence of coherent government planning, Bachiller et al. note that any planning there was occurred by private companies, which had their own driving logic (73). They argue that housing-sector challenges have been caused by a lack of state planning and policies to preemptively address access to land and housing, as well as a lack of control over the private housing market (114-115). The limited historical regulation of public space has meant that development has been driven by construction companies and real estate companies with the aim of generating profit, not addressing the city’s housing deficit (Ruiz et al. 2013 qtd. in Bachiller et al. 115). Employment was historically the key factor in determining access to land and housing in the city, and labor status was closely associated with neighborhood. This was not only true in the oil industry, but more broadly, as many neighborhoods “were created in function of a corporatist criteria where being employed by some state institutions (police, health or education),

63 being affiliated with some unions (truckers, oil workers, etc.) or inscription in certain cooperatives were the key to accessing housing” (Bachiller et al. 76). Bachiller has noted that work or employment status remains the primary factor that determines access to housing, either through income or because most official housing plans of the city are targeted at certain unions

(123). For example, in 2017, 43% of housing constructed by the Instituto Provincial de la

Vivienda (Provincial Housing Institute, IPV) went to the oil and truckers’ unions. The difficulty many sectors face in legally accessing land and housing has contributed to the growth of informal settlements.

The municipality has struggled to implement coherent, long-term policies. Bachiller et al. argue that municipal policies have been erratic, in part due to electoral incentives that generate difficulties in generating long-term projects as well as a lack of coordination between different agencies and dependencies (123). Separately, Cabral Marques highlights that market dynamics and the pressure of growth during the first oil boom gave rise to a poorly systematized style of planning and that the government also lacked the technical capacity and political legitimacy to address issues (Cabral Marques 110). Even decades later, a 1988 urban diagnostic aimed at developing a plan to re-organize the territory noted that one of the main problems faced by the municipality was a lack of complete statistics (Cabral Marques 113). Indeed, the necessity of addressing problems inherited during periods of little planning has often driven the aims of later governments, which seek to expand services while also addressing new challenges.

In 1999, the municipality developed a strategic development plan (PECOR, for its initials in Spanish). Of the plan’s six axes, two focused on economic diversification and urban development, with calls for increased community participation, development of flexible norms to accompany urban dynamics, and promoting the integration of city, among others. The plan

64 included specific actions and projects for work committees to address the different actions.

Although progress was made on several fronts, the plan failed to be sustained in the long-term and promote integrated change as Argentina’s 2001 economic crisis and the increase of oil prices and subsequent reactivation of the local economy in 2003 “changed the rules of the game in the local economy” (Cabral Marques 115). During the subsequent boom period, from 2003 to 2010, urban growth was characterized by many of the same problems that the city had experienced during the boom of the late 50s and early 60s (Cabral Marques 116). Many projects and decisions made in this period deviated from the premises defined in the holistic plans made during the previous decade, and the city government began to struggle to sustainably support plans for public services, housing and transport that accounted for the demands generated by population growth (Cabral Marques 116). This accentuated the city’s structural challenges related to land use organization, including a housing crisis, residential segregation, expansion of informal settlements, lack of integrated management of public spaces and challenges in urban infrastructure (Cabral Marques 116).

The issues associated with the city’s largely unplanned growth came to a head in late

March 2017, when the city experienced a massive flood. A rainstorm that lasted from March 29 to April 8 destroyed 2,000 homes, damaged 5-7,000, forced thousands of evacuations and completely flooded some areas of the city (Marques Cabral 116-7). The critical importance of a lack of urban planning in exacerbating the social impact of the natural disaster is highlighted by several researchers, including Bachiller who notes that there were “tragic consequences linked to the lack of urban planning, characteristic of an oil city, which were revealed by a ‘natural disaster’ [emphasis of the author]” (121). Likewise, researcher José Paredes has highlighted that a lack of planning meant a loss of historical knowledge of the city’s territory, such as where

65 lagoons and natural drainways are, that contributed to the damage done by the heavy rainfall

(Córdoba, “José Paredes”).

Following the flood, the city government organized a “Jornada de Planeamiento

Urbano y Diversificación Productiva” (“Day of Urban Planning and Productive

Diversification”) (“Exitosa Participación”). Local, provincial and national governments, community representatives, city councils, unions and others participated in the event, which was aimed at developing an Urban Planning Code to create norms to organize the city’s urban expansion (to promote economic diversification and new patterns of construction) that would be debated by the city council. At the event, participants highlighted how the historically poor use of urban and suburban land had contributed to the natural disaster. For example, the city’s Urban Planning Director, Marcelo Martinelli, noted that the city “is among the most disorganized in the country”. Similarly, a representative from the Chubut College of Architects noted that there has been lack of coordination between the municipality, province and nation, and between the municipality and entities in charge of infrastructure to finish basic works and ensure services reach all residents. The representative highlighted the need for better planning to avoid urbanization in areas of geological risk and for long-term planning that extends beyond the mandate of one government or another.

3.2.4 Discussion

The case of Comodoro Rivadavia draws attention to the importance of planning.

Importantly, it signals the relevance of government planning as in its absence much of the city’s development has been driven by private-sector interests, which has exacerbated housing and urban challenges in the city. Meanwhile, unions have played an important role in securing

66 housing for their members, but this has come at the cost of providing housing to low-income sectors. As Bachiller notes, “All of the people interviewed, whether they were municipal officials or construction or real estate businesspeople, or residents of settlements, agreed on the diagnosis of a historical absence of the state in urban planning” (127). There is wide consensus that the city needs urban planning and policies that consider the diversity of the city and seek to integrate land uses and zoning, land access, productive activities and transportation connection between areas of the city into a unified framework (Usach and Freddo 240).

3.3 Cutral Có-Plaza Huincul

3.3.1 Overview

The establishment of the city of Plaza Huincul and neighboring Cutral Có occurred as the result of the first discovery of oil in what is now Neuquén Province in 1918. Although some settlement had occurred in the area following the Conquest of the Desert, Plaza Huincul remained a small outpost until the 1920s, when oil production in the area began on a larger scale.

Subsequent major oil and gas discoveries—the 1941 discovery of oil in the Challacó formation, which would become the heart of development of the Neuquén Basin, followed by the 1977 discovery of the Loma de Lata mega-gas block, which helped power the country's conversion to a gas-powered electric grid—converted the region into a center of oil and gas activity in

Neuquén Province (Aringoli). Oil and gas activity propelled the urban agglomeration to become the second largest in Neuquén and the 11th largest in Patagonia, according to the 2010 census.

The towns of Plaza Huincul and Cutral Có, which grew from separate origins to form a large urban expanse became so linked to the oil industry and YPF that the economic and social impacts of the privatization process of the early 1990s led to a widespread political uprising known as Las Puebladas (town revolts) for which the towns became widely known.

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3.3.2 Urban Development and Expansion

Following the 1918 oil discovery, the national government created a reserved area, an octagon with a five-kilometer radius (an area of 7,584 hectares) around “well number 1”, under the jurisdiction of the national government (Palacios 4). Administration of this hydrocarbons zone (known as the octógono fiscal) passed to YPF following its creation in 1922. As additional wells were drilled, the government’s oil production in the area increased: from 13 cubic meters

(m³) in 1918 to 5,700 m³ in 1922 and to 89,359 m³ in 1930 (YPF cited in Favaro, “Territorio y

Petróleo” 165-169). In the 1920s, private oil companies such Standard Oil and Astra began production in the area outside of the reserve (Favaro “El Oro Negro”; Halsey and Sherwell 82).

The municipal history of Plaza Huincul is closely linked to YPF. Plaza Huincul began as a YPF oil camp located within the boundaries of the octógono fiscal that was inhabited by oil workers and technicians (Díaz et al. 2). In the earliest days, activity in the region was slowed by lack of infrastructure and human and financial resources (Favaro, “Territorio y Petróleo” 164).

However, the growth of production and installation of related activities (such as refining) contributed to population growth18 and by 1924, the town was home to 600 residents, already a relatively significant population considering that 2,452 people lived in the territorial capital

Neuquén City at the time, according to the 1920 territorial census (Favaro, “El Oro Negro”).

Immigrants were attracted to the region by the oil industry and the competitive salaries offered by YPF (Favaro, “El Oro Negro”).

18 In 1923, the government’s annual oil production at Comodoro Rivadavia reached 372,000 cubic meters (approximately 2,344,000 barrels), compared to 7,300 cubic meters in Plaza Huincul (Halsey and Sherwell 82). For the period from 1922 to 1930, production at Plaza Huincul was approximately 5% of production from Comodoro Rivadavia (Favaro, “Territorio y Petróleo” 169). However, while most oil and gas from Comodoro Rivadavia was processed in a plant in La Plata, Buenos Aires Province, most of the production from Plaza Huincul was processed in a local plant, built in 1919 and expanded in 1930 (Favaro, “Territorio y Petróleo” 169).

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As oil activity increased fueling population growth, the inability to provide housing for all new arrivals in the oil camps contributed to the establishment of informal settlements, which were located near natural water sources within the octógono fiscal due to the aridity of the region

(Díaz et al. 2; Iuorno and Palacios). One such community was La Laguna Colorada (the Red

Lagoon), which was located several kilometers from YPF’s Camp No. 1 but within the octógono fiscal and housed workers from YPF, Standard Oil, Sol and Astra (Iuorno and Palacios). Though illegal, the camp’s existence was de facto permitted due to the inability of the companies to house all the workers in the formal camps (Iuorno and Palacios). The poor conditions in these informal settlements is highlighted in a 1933 report from an inspector in the Dirección General de Tierras (General Directorate of Lands), which notes that the settlements were overcrowded, lacked water and electricity services, and were littered with waste (Iuorno and Palacios). In the early 1930s, YPF began taking a harsher line towards these illegal settlements and evicted settlers, who were forced to relocate outside of the octógono fiscal (Palacios and Paris 321).

Many of these settlers relocated around a well drilled by Wenceslao Navarrete, where they built precarious homes that lacked connections to public services including light, water and gas

(Iuorno and Palacios). This area was first known as Barrio Peligroso (Dangerous Neighborhood) and later as Cutral Có (Díaz et al. 2).

In this sense, Cutral Có began as an informal settlement that served as home to both oil workers who did not have company housing as well as to migrants attracted by the promise of working in or providing services to the industry (Palacios 3; Palacios and Paris 321-322). The population lived in precarious conditions in homes made of adobe with cardboard roofs, and the settlement lacked basic services. Homemade wells provided water, there was no electricity, children were bused to school in Plaza Huincul and the only medical services were provided by a

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YPF doctor who visited occasionally (Palacios and Paris 321). One of the results of this situation was the appearance of diseases such as typhoid, which was viewed as a threat to YPF’s employees and staff (Favaro, “Territorio y Petróleo '' 170). As a result, in 1933, the director of the Plaza Huincul hospital, Dr. Víctor Ezio Zanni, worked with officials from Plaza Huincul and

YPF’s head of studies and projects (also a surveyor) to organize a formal town in the settlement

(Iuorno and Palacios; Palacios and Paris 321-322). The territorial government did not play a role in this stage of Cutral Có’s development, although the territorial governor did approve of the organizational initiative and attended its inauguration in October 1933 (Palacios and Paris 322).

3.3.3 Urban Planning

One of the key differences in the urban development of the cities is the role played by the state and YPF. YPF played a central role in the history of Plaza Huincul and, to a lesser degree, in the development of Cutral Có. While the towns would ultimately come to form a single urban expansion, this difference had implications in the early decades of the cities’ urban development.

Plaza Huincul was founded on national government land on September 13, 1918. The town was divided into northern and southern zones, a layout it retained until the privatization of

YPF in the 1990s (Favaro, “El Oro Negro”). The northern zone included the central camp (now the neighborhood known as Barrio Central), where the company’s administrative offices, workshops, and employee and worker housing were located (Favaro, “Territorio y Petróleo”

170). The south was home to the hospital, public offices, and shops and businesses that received permits from YPF (Favaro, “Territorio y Petróleo” 170). The national government constructed school buildings, mail and telegraph offices, and a police station, all of which had running water, gas heating and electricity (Favaro, “Territorio y Petróleo” 170).

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The town remained under the jurisdiction of YPF until 1965, when the company ceded the area within the reserve corresponding to the town to the provincial government, and in 1967, the municipality of Plaza Huincul was formally created. For almost 50 years, then, the town was overseen by YPF, which assumed responsibilities far beyond simply providing jobs for workers and took an active role in providing the physical infrastructure of town as well as meeting workers’ other needs. As Díaz et al. note, “YPF had a policy of contention and social control towards its workers, and by extension, to the whole town, because it was the main source of work” and the company provided employment stability, good salaries, family subsidies, bonuses, a pension, health coverage and access to housing (3).

Beyond its labor and social policies, the company provided basic services for free and also took responsibility for the urbanization process, paving streets, constructing canals and water infrastructure, and planting trees (Díaz et al. 3). The company additionally operated the public hospital and organized social activities, such as a cinema, neighborhood football clubs and more (Díaz et al. 3). This meant the local community was strongly dependent on oil activity, and the company’s policies and salaries meant that much of the local population built strong purchasing power beginning from the 1960s onward as oil prices rose and the local economy strengthened (Díaz et al. 3). In 1966, Governor Felipe Sapag named a Junta Vecinal

(neighborhood council) to govern the city until the municipality was formally created on January

20, 1967 (García 52). In his speech, Sapag noted that the town had “demanded liberation from dependence on YPF”, but the company would nevertheless remain a key player in the town until its privatization (García 52).

While the development of Plaza Huincul was guided primarily by YPF, Cutral Có’s origin as a self-organized, informal settlement resulted in a different path of urbanization that

71 was driven more by local initiative and less by company policy. Indeed, part of the town’s rapid growth owed to the fact that new building works were prohibited by YPF in Plaza Huincul until it became a municipality (García 55). The population of Cutral Có grew quickly and by 1935 it had 2,500 residents, making it the second-largest city in the national territory of Neuquén

(Palacios and Paris 323). Nevertheless, the town continued to lack a formal name as well as many basic services (Palacios and Paris 323), such as electricity, gas and water services that were provided by YPF in Plaza Huincul (Díaz et al. 3). These shortages would persist for decades, and Cutral Có did not have electricity until 1943 (Colantuono 16 qtd. in García 54).

Further, it was not until 1965 that blocks began to be paved, and in 1968, running water was only available for four hours per day (Colantuono16 qtd. in García 54). Ultimately, the national government (through YPF) as well as the territorial government would provide urban services to the town (Díaz et al. 3), but the process was more fraught than in Plaza Huincul for several reasons, including a lack of clear political authority or organization responsible for guiding the town’s development.

This early period of Cutral Có’s history was characterized by lack of clarity in the organization of the local government structures. The town was constituted without material support from the territorial government along with a lack of active participation from YPF

(Palacios and Paris 322). As a result, confronted with a series of urgent social problems, residents quickly organized two neighborhood commissions to begin addressing issues, including constructing a school in the locality for which they sought help from the territorial government

(Palacios and Paris 322). By the end of 1935, they succeeded in pushing for the town to be formally named as well as for the establishment of the first local authority within a legal framework that had taxation power to raise funds to address infrastructure deficiencies (Palacios

72 and Paris 322). In 1933, the national government (the controlling authority of then-Neuquén

Territory) established the first legal authority in the town: a “comisión de fomento” or

“promotion commission” (Palacios 6), a type of formal urban agglomeration with less political and administrative authority than higher-level agglomerations, such as municipalities. During this period, which lasted until 1950, the local government sought to meet demands for public services in the context of continuous population growth, and water, light, mail and education services were constant sources of demands made to the provincial government (Palacios and

Paris 324).

Despite its rapid growth, the town remained a relatively small settlement by national standards. This, combined with weaknesses in the legal framework for national territories and a lack of channels for residents to formally channel their demands to authorities, meant that local organizations continued to take a leading role in pushing for the installation of urban services

(Palacios and Paris 331).

In the 1940s, movement began toward organizing a municipality in place of a comisión de fomento. This municipality was created by a decree issued in 1945, which was subsequently suspended in 1946 (Palacios and Paris 325). It was not until 1950 that a local municipal government began to function with authorities appointed by the territorial authorities, and not until 1952 that the first elected municipal government took office (Palacios and Paris 325). Once the municipality was in charge of local government, it had to respond to various demands from the local population for public services. When the municipal council was formed in 1952, one of their initial focuses was on ensuring that basic services were provided to the community, as residents were continuing to demand electricity, water, and education, and the town’s population now exceeded 10,000 (Palacios). Along with organizing the public administration, the council

73 began regulating issues such as water use, and the conditions of rental properties (Palacios and

Paris 325). As they did not receive funds from the territorial government, they organized a committee to list contributors and determine tax rates. City spending was largely directed at infrastructure works: installing running water, light, gas, and pavement (Palacios and Paris 328).

The local government also sought outside help, including from the territorial government.

Many demands were also focused on YPF, which was associated with urban development.

Residents believed that the national government, through YPF, should be responsible for resolving the town’s problematic lack of public services given the town’s contribution to national economic growth (Palacios and Paris 329). In the early years of the town, local community leaders wrote several pamphlets in which they called on YPF to provide services to the town, saying it was the company’s responsibility to do so:

In justice, it corresponds to no other than Yacimientos Petrolíferos Fiscales to solve the problems that affect the population of Cutral Có, because from it [the company] receives the enormous human energy that it needs and employs for the normal development of its activities. (Díaz et al. 4)

They additionally highlighted that YPF workers that didn’t live in a company area lacked housing and basic services and that the company was not fulfilling its commitment to providing housing to all employees (Palacios and Paris 329). With this logic, the council argued that YPF should contribute to resolve the town’s issues: “The Honorable Municipal Council of Cutral Có sustains the concept that Yacimientos Petrolíferos Fiscales is the authority called to solve the serious problems of water, light and school that the population demands” (Palacios).

This approach of seeking help from other entities had mixed success. It proved successful in several instances, such as in 1954, when YPF committed to providing running water for the town (Palacios and Paris 330). In other instances, the local government intervened in front of the provincial organism charged with providing electricity on behalf of the municipality (Palacios).

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The arrangements with external actors were often complicated: for example, the organization of the city’s water system in the 50s and 60s included participation from YPF, the province and the municipality, which all took responsibility for different parts of the process (Díaz, “El Retorno”

3). However, efforts to seek external help to address residents’ demands for services to improve quality of life did not always receive positive responses, in part due to the minimal electoral and economic significance of the Neuquén territory to the national government (Palacios and Paris

330).

Nevertheless, the national government played a fundamental role in the urban, economic and social development of both Plaza Huincul and Cutral Có. Indeed, despite the differences,

Díaz et al. argue that both “Plaza Huincul and Cutral Có arise in full force from the welfare state; that is to say, from a state conceived as an economic agent and with an active and fundamental role in the achievement of social development” (15). This meant that the state (primarily the national government in the early period) invested in urban, educational, health and recreational infrastructure that contributed to improving the quality of life in these towns. As Auyero notes,

“both cities grew at the rate (and became highly dependent on) of the benefits provided by the extraction of oil and the activities of state oil company YPF” (Auyero 195). This dependency would provoke crisis in the 1990s as the state oil company retreated from its role as a guarantor of welfare and took a more strictly profit-focused approach (Auyero 195-6).

By the 1990s, oil and gas activity had established itself as the dominant productive activity in the region. For this reason, the process of privatizing state enterprises in the 1990s, which included YPF and Gas del Estado, was traumatic for the urban area. Nationwide, the

52,000 employees and contractors that YPF had in 1990 were reduced to 23,400 in 1991 and

13,500 in 1992 (Díaz et al. 6). In Plaza Huincul and Cutral Có, this included 4,246 layoffs, and

75 only around 400 people maintained their jobs with the company (Díaz et al. 6). Although severance packages were offered, stemming disruption in the short term, the lack of local development meant that these were quickly exhausted (Díaz et al. 6). In 1996, unemployment in the two cities reached 35.7% (Giuliani 95), and by 2000 the unemployment rate hit 47% (Díaz et al. 6). As Shever notes, “The isolated oil towns in the north and south of the country bore the brunt of this ‘downsizing’” (91).

This economic and social upheaval prompted massive protests in the cities. From June

20-26, 1996, thousands of town residents (the general consensus is approximately 20,000 residents) blocked national, provincial and local routes to the city, the first pueblada (town uprising) that occurred in Cutral Có and Plaza Huincul (Auyero 188). As privatization had occurred several years earlier, the direct cause was not the privatization but a resulting demand for employment in the private sphere; indeed the proximate trigger for the pueblada was the announcement of the cancellation of a contract for a planned fertilizer plant that had offered the promise of private-sector jobs (Shever 91). Residents called for “genuine sources of employment” (Auyero 188) and “demanded the installation of an industry, trying to escape the sad fate of ghost town” (Díaz et al. 8). Indeed, Shever argues that the demands of the protestors were not against privatization but to be included in the private sector (92). Newspaper headlines from the time capture the uncertainty and anxiety of the local population about the town’s future:

“An uncertain future awaits Cutral Có and Plaza Huincul”, “Alarming unemployment in oil zone” and “The fight to not be another ghost town”19 (Auyero 196).

19 Residents would not have had to look far afield to find antecedents of this phenomenon as there are several ghost towns in the vicinity of Plaza Huincul and Cutral Có that are former oil camps, such as Challacó, which is located about 25 km from Plaza Huincul (“Los Cinco Pueblos Fantasmas En Neuquén”). The town had a train stop and served as home to some railway workers. YPF established a small camp there and installed public services after discovering oil in 1941. However, following the privatization of the railways and YPF in the 1990s, the companies stopped operating there and the town was abandoned (Hevia).

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Beyond just employment, protestors were expressing discontent with the changing relationship between the oil industry and the town. Protests focused on Torre Uno, an oil-rig that became a monument commemorating the discovery of oil in the area, highlighted oil’s value in

“political sovereignty and economic nationalism” and not only as a natural resource and generator of economic rent (Shever 92). Protestors also expressed that they were trying to recoup the “YPF family” and YPF’s social mission, which had provided a sense of community and guaranteed a certain level of well-being (Shever 92). The relocation of YPF headquarters to

Neuquén City was also a blow to the towns, which saw their status “as towns that fueled the nation” as being undermined (Shever 91).

Protestors involved in the pueblada rejected local political leadership’s possible role as interlocutor, accusing them of lack of honesty and transparency, and called on the governor to address their demands (Auyero 188). After nearly a week of protest, on June 26, 1996, Governor

Felipe Sapag gave in to demands and signed an agreement with a committee of piqueteros (as the protestors were known) (Auyero 188), which included addressing hunger and utilities shortfalls in the short term as well as offering workfare plans and employment creation through public works projects in the longer term (Shever 95). However, beginning in April the following year, protesters resumed action saying their demands had not been met, and protesters calling for increased employment subsidies trapped provincial and local government officials in municipal buildings (Auyero 191).

3.3.4 Discussion

The parallel histories of Plaza Huincul and Cutral Có draw attention to several issues.

The foundation of Cutral Có highlights, as in Comodoro Rivadavia, the inability of oil camps to fully accommodate all new arrivals in formal housing and urbanized areas. Population growth

77 resulted in the formation of settlements that lacked basic services. Indeed, the town’s original name—Barrio Peligroso—suggests the precariousness of the settlement, in which urban development occurred reactively, and without preemptive planning. Given the town’s remote location and the fact that a distant national government with few incentives to allocate resources to the town was the main political authority, there were few formal channels through which residents could channel urban demands. Instead, they had to organize to demand that authorities address their demands, which were channeled at various national and provincial organisms. The situation changed somewhat when Neuquén became a province as it was an important locality in the province and began to receive more attention. On the other hand, urban development in Plaza

Huincul was almost entirely linked to YPF, which invested in urban infrastructure, but failed to promote holistic policies that promoted general well-being as oil resources in the area became exhausted. The Plaza Huincul-Cutral Có metropolitan area failed to diversify its economy, a challenge for resource-based communities, which contributed to widespread unemployment and social malaise in the late 1990s, serving as a warning case for other oil towns about the risks of oil and gas dependence.

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CHAPTER 4 - RINCÓN DE LOS SAUCES: A CASE STUDY

Rincón de los Sauces—the largest city in the department of Pehuenches20—is located some 230 kilometers from the capital city of Neuquén Province along the banks of the Río

Colorado (Colorado River), which divides the province of Neuquén from Mendoza. Since the late 1960s, Rincón de los Sauces has been inexorably linked to the oil industry. Indeed, the municipality became a major national hub of oil and gas production, leading the national

Congress to declare the town the “Capital Nacional de la Energía” (“National Energy Capital”) in 2001.21 Oil activity generated incentives for migration to the town and has fueled rapid population growth. As a result, the municipality was among the fastest-growing nationwide in the late 1990s and early 2000s. This rapid population growth has created challenges for local planners and policymakers who have sought to ensure that public services keep pace with demand, and that the city’s growth does not occur in a way that undermines quality of life.

4.1 Oil Activity in the Area

The contours of contemporary Rincón de los Sauces began to take shape as the frontier of oil exploration in Neuquén pushed northward toward the Río Colorado from its epicenter around

Cutral Có-Plaza Huincul beginning in the 1950s (Aringoli). In the early 1960s, YPF established a camp near Rincón de los Sauces as it undertook drilling activities aimed at locating new hydrocarbons resources. In 1967, YPF made an important oil discovery at the Puesto Hernández field, which became one of Argentina’s most productive fields. Several other major discoveries

20 Departments in Argentina are the second-order territorial division after provinces. Their function varies by province. In Neuquén, departments are not electoral districts nor do they have any administrative or executive authority. Local authority is exercised by municipal governments, which have significant authority and autonomy over local affairs. 21 National Law 25,482.

79 occurred in the area over the subsequent decades. For example, the Chihuido de la Sierra Negra bloc, discovered in 1978, became an important production field for YPF (Aringoli). Additionally, in 1991, private oil company Petrolera Argentina San Jorge discovered the El Trapial field, which became one of the most productive areas in the province (Carnese). The company moved quickly to develop the reserves and by 1994, the field was producing 50,000 barrels per day

(Blann and Laville). In 1999, Chevron acquired San Jorge and El Trapial and undertook an investment plan that converted it into one of Argentina’s most productive fields (Navazo “Hay

Buenos Motivos”). Additional oil and gas fields in the region include Las Lomitas, Zonas

Alejadas, Aguada Chivato, Desfiladero Bayo, Paso Barda, and others located across the Río

Colorado in the south of Mendoza Province (see figure 5).

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Figure 5. Oil and Gas Production Areas, Neuquén Province, First Quarter 2018 Green: oil production areas; Red: gas production areas; Purple: oil towns; Light gray lines: oil concessions; Darker gray lines: departments. Source: Boletín Estadístico número 193. Dirección Provincial de Estadística y Censos de la Provincia del Neuquén.

Oil and gas production in Neuquén peaked in 1998 and 2004, respectively (see figure 6).

During this period, much of this activity was centered around Rincón de los Sauces, which made the region one of the most important in terms of energy production at both the provincial and national level. By 2000, oil and gas fields in the area accounted for 80% of provincial

81 production, and 26% of national production (Pérez and Vives 168), explaining why it was designated the “national capital of energy”.

30.000

25.000

20.000

15.000

10.000

5.000

0

Oil Production (thousands of cubic meters) Gas Production (millions of cubic meters)

Figure 6. Neuquén Province: Annual Oil and Gas Production (1960-2018) Source: Author’s own elaboration, based on data from Neuquén Provincial Directorate of Statistics and Census.

However, by the early 2010s, oil and gas production in the area began to fall as production at mature fields began to decline. Production at El Trapial peaked at 10,500 cubic meters of oil per day in 2002 but fell to around 1,000 cubic meters per day in 2018 (Carnese). In

2015, El Trapial lost its status as the province’s most productive field, falling to the sixth largest oil producing field in the province by 2019 (Navazo “El Trapial”). Given declining production at

El Trapial, in 2014, Chevron announced a personnel reduction plan that included early retirements and negotiated layoffs. Production at Puesto Hernández also dropped significantly, and by 2015, all the fields operated within the municipal boundaries of Rincón de los Sauces

82 produced only around 20,000 cubic meters per day of oil, and the drilling of new wells had been largely halted (Tapia Palomo 118).

Waning production resulted in an uptick in layoffs, and prompted concerns about the town’s future, both among residents and policymakers. However, this was short lived. In late

2017, YPF drilled its first unconventional well in the area, and in early 2018, Chevron announced that it would drill for shale resources in El Trapial. This generated expectations that a new boom period would be forthcoming. “I don’t like to count my chickens before they hatch, but we can suppose there will be an improvement for our city from 2018 onward,” said then-

Mayor Marcelo Rucci (“Rincón De Los Sauces: El Pueblo Petrolero”).

4.2 Urban Growth

The earliest settlers in the Rincón de los Sauces area, many from Chile, appeared in the late 1800s and engaged in small-time agricultural and livestock activity. By the early 1900s, the settlement was home to around 100 residents. However, in late 1914, a natural dam ruptured, generating a large flood that affected much of the Río Colorado Valley, killing an estimated 200 individuals and destroying homes and farms (Hernández 89). The early settlement of Rincón de los Sauces, located several kilometers downstream from the current town, was one of the areas impacted (Hernández 91), and following the flood, the town remained a sleepy outpost that was home to few goat and sheep farmers for several decades. However, the rise of oil activity in the area drove quick expansion of both the town’s population, and the urban area. As one local historian put it, “Its dizzying growth, driven by oil and oil workers, has written a brief, short and rapid history of birth and development of a town that until yesterday was just a handful of breeders, and is currently a thriving city that never rests” (Tapia Palomo 117).

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YPF and the oil industry played an important role in the early history of the town.

Following the discovery of oil at Puesto Hernández in the late 1960s, due to the remote nature of the location, the state oil company set up a permanent camp that included a medical post, grocery store, dining hall, plaza, the town’s first school and an airport (Tapia Palomo 118-121). YPF transported workers by plane from Plaza Huincul and Cutral Có due to poor roadway connectivity (Desarrollo Pecuario y Comercial 36). Thus, despite its growth, the town remained relatively isolated for many years.

In 1970, efforts began to level plots to make a formal town, and Rincón de los Sauces was founded shortly thereafter (Palomo 78). The provincial executive declared the foundation of the city on December 9, 1971.22 The provincial authority subsequently created the local comisión de fomento (promotion commission), fixed the municipal boundaries23 and designated the authorities of the local promotion commission.24 The ceremonial start of Rincón de los

Sauces occurred on December 21, 1971, when Neuquén Governor Felipe Sapag visited the town along with several other provincial officials and laid the town’s foundational stone, just 1,500 meters away from the YPF camp (Tapia Palomo 117).

Oil activity generated a bustling local economy and attracted migration to the city. The town’s association with the oil industry and employment opportunities in the social imagination has historically generated a migratory pull (Tapia Palomo 118). Additionally, by the early 1990s, several factors promoted a transfer of population from Plaza Huincul-Cutral Có to Neuquén City and Rincón de los Sauces and other regional centers, including the impact of YPF’s privatization on those cities’ economies as well as the shifting of the oil frontier toward the north of the

22 Provincial Decree No. 2439 23 Provincial Decree No. 2440 and Expedient 2100-24879-1971 24 Decree No. 2442 and Expedient 2208-22328-1971

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Neuquén basin (Pérez and Vives 168). More recently, growth has been facilitated by the construction and pavement of a new route that improved connectivity to the provincial capital

(Desarrollo Pecuario y Comercial 36).

Since its foundation in the early 1970s, the town has grown rapidly, including in the period from 1990 onward (see table 5). As discussed above, this paralleled one of the most dynamic periods of oil and gas production in Neuquén’s history. From 1991 to 2010, Neuquén’s population growth outpaced national growth. From 1991 to 2001, the province grew 21.9% compared to a national growth rate of 11.2%, and from 2001 to 2010, it grew 16.3% compared to the national rate of 10.4%, according to national census data.

Table 5. Population Growth of Rincón de los Sauces 1970 1980 1991 2001 2010

Population 427 1,606 3,982 10,129 19,398

Inter-period -- 276.11% 147.96% 154.37% 91.51% Growth (%) Source: Neuquén Provincial Directorate of Statistics and Census, based on data from the National Census conducted by Indec.

Within Neuquén, the cities that experienced the most growth in the province during that period were linked to the oil industry—Rincón de los Sauces, Buta Ranquil (also in Pehuenches department) and Añelo—which all saw triple-digit growth rates—or to tourism. Overall, the capital’s metropolitan area and the “new” oil areas in the province’s northeast saw population growth rates that exceeded the provincial average, while growth was much lower in older oil areas, such as Cutral Có-Plaza Huincul (Subsecretaría de Planificación Territorial, "Informe

Final - Tomo 1" 17). However, even within a context of rapid growth, Rincón de los Sauces stands out. Between 1991 and 2001, its population grew 147.96%, and from 2001 to 2010, it

85 grew 91.51%. As the town has grown, it has concentrated an ever-larger percentage of the population of the Pehuenches department (see table 6).

Table 6. Rincón de los Sauces and Pehuenches Department: Evolution of Population 1970 1980 1991 2001 2010

Rincón de los 427 1,606 3,982 10,129 19,398 Sauces

Pehuenches 2,614 3,872 6,538 13,765 24,087 Department

% of 16.3 41.5 60.9 73.6 80.5 Department’s Population Source: Dirección Provincial de Estadística y Censos de la Provincia del Neuquén, based on data from the National Census conducted by Indec.

The city’s rapid demographic has had significant impacts on the urban area. As will be explored in greater detail below, the “consequences produced by this phenomenon have completely changed the physiognomy and characteristics of the city” (Tapia Palomo 119). From

1991 to 2010, the urban area grew 548%, from 50 to 323 hectares (see figure 7), outpacing population growth during that same period (Subsecretaría de Planificación Territorial, "Informe

Final - Tomo 1" 169). This has implied expansion of the urban area without increased population density.

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Figure 7. Urban Expansion of Rincón de los Sauces (1991-2001-2010) Source: Subsecretaría de Planificación Territorial de la Inversión Pública de la Nación. Estudios Estratégicos Para El Desarrollo Territorial De La Región Vaca Muerta Segunda Etapa. Informe Final - Tomo 1. 2015, p. 170.

4.3 Planning in Rincón de los Sauces

4.3.1 Overview

Urban planning and development is a responsibility that is largely delegated to municipalities in Neuquén Province. The provincial Constitution25 “recognizes the broadest powers for municipalities, in such a way that they are the ones who exercise the largest number of autonomous government functions in each jurisdiction”. In this sense, they are empowered to determine their own legal organization and have broad freedom to exercise economic, electoral

25 Neuquén reformed its provincial Constitution in 2006, however the aspects related to municipal authority remained largely unchanged.

87 and administrative functions. This includes responsibility for guiding urban growth, including establishing building codes and regulating construction, constructing and maintaining roads, organizing the transit system, and providing local public services. They are also empowered to levy taxes and invest their own resources as well as administer municipal property.

Rincón de los Sauces' Organic Charter, approved by the provincial legislature in 1999, includes several sections that are relevant to urban planning. Among them are Article 72, which gives the city council the power “to dictate ordinances of organic and holistic urban planning and development of the city” with the aim of promoting integration into the province and local social, cultural and economic traits. Additionally, Article 135 states that the local government should promote rational and sustainable land use, guarantee community participation in planning, and protect areas that are apt for agricultural and forest production, and ensure there is no construction that could affect these zones. Separately, Article 137 tasks the municipality with carrying out environmental and sustainable development planning according to guidelines laid out in Article 138, which include harmonizing territorial space to consolidate investments, protecting the environment and promoting productive enterprises. Overall, the Organic Charter assigns the municipality responsibility for urban development and lays out general guidelines related to land use and sustainable development.26

While municipal governments are the primary authority charged with planning and guiding urban development, the Neuquén provincial government has also traditionally played an important role in planning and providing support for local governments.27 A central organism in

26 However, it should be noted the Organic Charter does not contain specific considerations about land regulation and management, planning or real estate speculation (Subsecretaría de Planificación Territorial, "Informe Final - Tomo 1” 73). 27 Article 77 of the provincial Constitution notes that “the action of the government, as regards economic promotion and the realization of public works, will respond to comprehensive planning that takes into consideration the interdependence between local, regional and national factors”.

88 this respect is the Consejo de Planificación y Acción para el Desarrollo (Council for

Development Planning and Action, COPADE), which was created in the 1958 Neuquén

Constitution and made operative in 1964. Article 78 of the provincial Constitution states that planning will be led and updated by COPADE; it additionally mandates that all public provincial and municipal authorities as well as private entities cooperate with COPADE. The organism was founded as Neuquén went from being a national territory to becoming a province based on the understanding that the development and implementation of strategic plans would be essential to the province’s development. In coordination with local authorities, COPADE supports the design of urban development strategies and plans. It is worth noting, however, that the province does not have minimum guidelines in matters of urban organization (such as a provincial building code), and this remains exclusively under municipal jurisdiction (Garay “Tomo I”, 204).

Over the years, COPADE has supported the elaboration of many strategic plans related to the development of Rincón de los Sauces. In doing so, it has often worked in conjunction with the Consejo Federal de Inversiones (CFI), a federal organism created by the Argentine provinces in 1959. The CFI’s mission to promote integral development of the country, which it works towards by providing financial assistance and technical cooperation, including for the development of studies, projects, plans and programs in participating provinces.

The following section reviews three plans that were supported by COPADE and/or the

CFI, briefly describing their context, diagnoses, guiding principles and recommendations. While

COPADE and other national, provincial, and local inter-jurisdictional authorities have prepared numerous other studies, especially related to environmental and economic diversification, in both

Rincón de los Sauces and surrounding region, these three are the most directly relevant to both the town and its urban development.

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Table 7. Rincón de los Sauces: Key Urban Development Plans ● 1971 - Bases Para La Creación Del Núcleo Urbano De Rincón De Los Sauces (Bases for the Creation of the Urban Nucleus of Rincón De Los Sauces) - Supported by COPADE. ● 2001 - Plan De Desarrollo Urbano Ambiental De La Localidad De Rincón De Los Sauces, Provincia Del Neuquén (Urban Environmental Development Plan for the Locality of Rincón De Los Sauces, Neuquén Province) - Supported by the CFI. ● 2019 - Plan De Ordenamiento Territorial De Rincón De Los Sauces (Plan for the Territorial Organization of Rincón De Los Sauces) - Supported by COPADE and the CFI.

4.3.2 Bases for the Creation of the Urban Nucleus of Rincón De Los Sauces

In 1971, the provincial executive declared the foundation of Rincón de los Sauces as a comisión de fomento28. The government founded the town following a series of studies, and provincial authorities took a guiding role in outlining the town. Provincial authorities from the

Dirección de Catastro (Cadastre Directorate) outlined the town’s plan (see figure 8), which was largely based on the “damero espanol” (checkerboard) layout with some with “neoclassical diagonals” and whimsical elements (Albanesi 49).

28 This is a permanent settlement with between 250 and 500 residents, which according to the provincial legal framework, has less autonomy than higher-level municipalities, but nevertheless have significant power to regulate and undertake tasks related to urban development. First-municipalities can be formed when there are 5,000 residents. These can issue their own Organic Charters. Rincón de los Sauces was formally recognized as a first-order municipality by Law 2,095, approved by the provincial legislature in 1995.

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Figure 8. Rincón de los Sauces: Original City Layout Plan Source: Palomo, Salvador. Historia De Rincón De Los Sauces (Provincia De Neuquén). Dirección Nacional Del Libro, Secretaría De Cultura De La Nación, 1989, p. 76.

As part of the preparations, in June 1971, COPADE published a plan known as the

“Bases for the Creation of the Urban Nucleus of Rincón de los Sauces” in which it provides an initial analysis of the situation of the town and its prospects for development. The document provides an outline of the premises that should guide decision-makers, noting that the town owes its origin to the discovery of oil. The overall objective that should guide decision-makers, according to the document, is to create a community that meets workers’ needs and is not just

“the physical expression of a workshop and temporary and nomadic residence, characteristic of some industrial centers” (Consejo de Planificación y Acción para el Desarrollo 4). In this respect, it argues that policies and programs should consider residents' aesthetic, social and other needs in

91 the planning process order to promote long-term residency, and it lays out a series of objectives that decision-makers should seek to achieve (see table 8).

The document highlights the importance of planning and lays out a proposed scheme for guiding the city’s growth. The introduction notes the remote location of the town in an arid region and states that “the correct planning and distribution of future infrastructure as well as the road networks, the long-range ones and their relationship with the internal system of the urban layout, will always be decisive for its organic development” (Consejo de Planificación y Acción para el Desarrollo 2). It calls for interdisciplinary teams to develop the urban center of the town and for ensuring that there are green spaces to separate industrial and residential neighborhoods.

The document’s proposed scheme also calls for ensuring that development of the city is coordinated by government entities and does not allow for distinct zones to arise under the sole control of oil companies:

The unification of efforts in the tasks of planning and execution does not imply that neither YPF nor other state or private companies do not construct their own zones...but rather that the plans to form new development guidelines must be coordinated by agencies and entities and ultimately framed within the common master and regulatory plans… (Consejo de Planificación y Acción para el Desarrollo 5)

It notes that this is necessary in order to make efficient use of resources and to meet anticipated increased demand for services.

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Table 8. Rincón de los Sources: Objectives of the Unification of the Urban Nucleus (selected) Economic ● Organize growth within a long-term regulatory plan that defends the city from inorganic or problematic growth ● Achieve economies of scale in infrastructure and services (drinking water, sewage, electricity, pavement, etc.) ● Optimize use of the urban area, avoiding unutilized spaces between urban nuclei, reducing them with spaces dedicated to transit, and centers for civic, commercial and recreational activities ● Protect the population from the harmful effects of industry (noises, smells, gases, accidents, heavy traffic, etc.) Social ● Avoid segregation of the population, whether by type of job or occupation, income or other indicators of social class ● Avoid future social conflict, which is often caused by segregation of social classes ● Create a single community/socio-cultural unit makes peoples’ lives more enjoyable Political ● Promote integration of YPF agencies into the province of Neuquén, which will be difficult if they have separate urban centers Source: Author’s own elaboration, based on Consejo de Planificación y Acción para el Desarrollo (COPADE). Bases Para La Creación Del Núcleo Urbano De Rincón De Los Sauces. 1971.

The provincial government says it plans to take a leading role in promoting the town’s development, a stance which is clearly influenced by previous experiences in other oil towns, both in Neuquén and elsewhere. The document compares Rincón de los Sauces with Plaza

Huincul and Comodoro Rivadavia, noting that they share the commonality that their “principal reason” for existence is oil (2). It notes “the Province cannot remain unconnected to the formation of a population center, which, as it has already experienced in other cases, may constitute in the near future, when labor requirements in the oil sector decline, a problem for its maintenance or eradication" (3). Concretely, it notes that the town did not have any infrastructure or services that are provided by the province, and that the province will need to complement the works undertaken by YPF in the future.

In addition to conveying a clear sense that the province must assume a leading role in the town’s development, the previous quote also shows an early awareness of the need to diversify

93 the productive base to ensure the town’s economy is not overly dependent on oil. In this regard, it highlights the potential for agriculture in the region given it is located along a river and mentions that the province has already designed a plan to undertake irrigation works to promote the development of agriculture in the region.

4.3.3 Urban Environmental Development Plan for the Locality of Rincón De Los Sauces

In 2001, the CFI supported the development of a Plan de Desarrollo Urbano Ambiental de la Localidad de Rincón de los Sauces (Urban Environmental Development Plan for the

Locality of Rincón De Los Sauces), which was sought by the municipality of Rincón de los

Sauces along with the provincial government as part of the latter’s efforts to produce development strategies for special areas. The plan was produced due to “the need for technical assistance raised by the municipality” as a result of the “urgent” necessity for a policy of urban environmental organization to structure the town’s layout, including distinguishing between land uses and guiding its expansion (4). This need resulted from the “disordered expansion of the urban area” driven by hydrocarbons activity and demographic growth (4).

The report, prepared by a series of consultants based on a review of city norms, statistical information and a series of workshops, aims to “achieve adequate planning that proposes orderly growth with the goal of optimizing resources, rationalizing essential services” (5). Divided into several sections, it first reviews the town’s situation, and then analyzes challenges and opportunities. Finally, it concludes with strategies to guide the town’s growth as well as recommendations for future actions to organize the territory and, based on a prediction of the town’s evolution, proposes the creation of differentiated urban and suburban areas with defined land uses.

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The plan’s diagnosis finds serious challenges and problems linked to the town’s model of development, including environmental degradation, uncontrolled urban expansion, infrastructure deficits and an undiversified economy. Indeed, it notes that “Rincón de los Sauces constitutes a locality with characteristics comparable to a major oil enclave, lacking planning, with severe environmental problems that translate into openly deteriorated and/or contaminated areas” (52).

Ultimately, it characterizes the town as in a situation of “urban environmental emergency” (82).

On the economic front, the diagnostic finds that the town’s economic structure is dependent on the oil sector and lacks diversification. The secondary sector (industry, manufacturing) is relatively small, while the services sector, particularly for the oil industry, is larger, generating imbalances. Although it recognizes that there have been efforts to promote diversification into agriculture, it finds that these have been largely unsuccessful due to the need to create irrigation infrastructure, the occupation of productive space by the oil sector, an absence of relevant policies and the inability of the less dynamic and profitable agricultural sector to compete for physical, economic and human resources with the oil sector. However, it nevertheless highlights the potential to develop more agriculture and mining and promote tourism in the area through appropriate policies.

In terms of urban expansion, it finds that much of the city’s growth has occurred in a disorganized and uncontrolled manner which has generated a series of challenges and infrastructural deficiencies. These include:

● Lack of contiguous land that promotes a reasonable cost of providing infrastructure and

services, and inefficient services infrastructure;

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● Construction and settlements in zones at risk for flooding and occupation of potentially

productive zones (an estimated 18.9% of irrigable land that is apt for agricultural use has

been settled by humans);

● Lack of green and recreational spaces;

● Inappropriate management of waste and visual contamination;

● Transit circulation problems;

● Insufficient primary and secondary education institutions; and

● Spatial reproduction of social inequalities and lack of integration (e.g. marginal

neighborhoods and planned oil company neighborhoods are not well integrated and have

varying levels of services).

Overall, then, the diagnosis finds a series of serious urban challenges that undermine quality of life.

The diagnosis additionally finds that Rincón de los Sauces is poorly integrated with the rest of the microregion and the province, which limits development opportunities. As most roads are low-quality or unpaved, the local airport remains key for connectivity, and many oil companies operate private flights to transport workers and materials. Given the lack of economic diversity, the town is strongly dependent on goods and services from elsewhere, which are more expensive because they must be transported from supply centers such as Neuquén City.

Within its diagnostic, the report also highlights some of the institutional constraints the town has faced that affect its capacity to effectively address these issues. These include budgetary limitations due to low tax collection (structural lack of paying municipal taxes and services), lack of municipal legislation that creates corrective measures or impose fines, and lack

96 of control and monitoring both at the municipal and provincial level. It additionally highlights that there are unresolved jurisdictional conflicts between the province and municipality.

Table 9. Principle Strategies of the Urban Environmental Development Plan 1. Make the urban development of Rincón de los Sauces more environmentally sustainable by organizing the growth of the urban area ● Create clear guidelines for land use zoning based on the identification of homogenous areas, and guide their growth through various instruments; generate a territorial organization plan that outlines parameters for land use and that strengthens the proposed zoning.

2. Improve the environment of the settled population to generate conditions for residents’ long- term stability ● Establish mitigation measures for environmental impacts and norms to improve construction in certain zones; generate a plan to improve housing conditions, and develop basic social infrastructure that is aimed at improving existing homes and generating new units.

3. Make development more environmentally sustainable by taking advantage of the opportunities afforded by the Río Colorado ● The general territorial organization plan will include a special project related to the development of the coastal sector.

4. Assure the socioeconomic sustainability of the locality ● Elaborate plans and projects to promote tourism based on local paleontological resources; promote the agricultural sector (reconversion of the existing rural sector and development of the contiguous area, take advantage of existing irrigation canal)

5. Assure the economic and financial sustainability of projects that are proposed in order to allow the public sector to recoup its investment ● This requires tools that establish guidelines for the sale or concession of land, which require a colonization plan, relocating settled populations, and the establishment of specific environmental norms. Source: Author’s own elaboration, based on Albanesi, Adolfo L. Plan De Desarrollo Urbano Ambiental De La Localidad De Rincón De Los Sauces, Provincia Del Neuquén. Consejo Federal De Inversiones, 2001, pp. 151-153

Based on its diagnostic, the plan proposes general strategies aimed at assuring the municipality’s sustainability based on the assumption that it will continue to experience significant oil-sector linked growth (see table 9). The diagnostic concludes with general directives that guide its land use zoning proposal. These include maximize the development of the city center, consolidate and densify existing neighborhoods, implement programs to consolidate and integrate marginal neighborhoods, create a municipal landbank, promote

97 connectivity in the microregion, and make expansion more orderly. Based on the diagnostic, the final Urban Environmental Development Plan includes a series of strategic management objectives and proposed actions aimed at generating sustainable development and improving quality of life (see table 10). It classifies environmental and urban challenges into a series of thematic areas which are paired with recommended actions. It also includes an extensive zoning proposal to create rural/agricultural, industrial/service areas and residential areas. To implement the program, it proposes the creation of a special municipal unit located under the Public Works and Services Secretariat that would include representation from the mayor’s office and city council and be monitored by the provincial government during a transition period.

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Table 10. Urban Environmental Development Plan: Management Strategies and Recommended Actions (Selected)

Diagnostic(s) Strategic Management Goal Actions(s)

Socioeconomic ● Limitations of the natural environment (soil, climate) Assure the locality’s ● Diversify socio-economic structure structure ● Monoproductive economy, characterized by the sustainability, recommending ● Implement alternative productive projects development of oil and related activities different projects of ● Productive reconversion of existing rural sector ● Absence of regional promotion strategies and policies productive development. ● Develop a project to relocate the settled population ● Lack of economic diversification ● Project to join lots with the aim of generating economically ● Explosive and cyclical population growth dependent on the sustainable developments predominant economic activity ● Develop a colonization plan ● Marginalized populations and labor instability ● Implement a policy to regularize land titles ● Lack of primary productive policies at the municipal level

Urban ● Spontaneous and disordered expansion of the urban Make the town’s urban ● Implement the Urban Environmental Development Plan disfunction footprint development more with an adequate legal framework, adopting the zoning ● Illegal settlements in urban areas and adjoining rural areas environmentally sustainable policy that identifies homogeneous areas and directs their ● Settlements in risk zones (e.g. flood-prone areas) by orienting and organizing its expansion ● Deterioration in quality of life and high costs of growth. ● Programs and subprograms of urban improvement for urbanization special areas (e.g. coastal zone)

99 ● Inefficient urban mobility system ● Design a legal framework to sustain the norms of urban

● Urbanization on productive areas environmental organization ● Lack of definition of planning and territorial organization ● Develop a building code policies ● Lack of municipal autonomy in land ownership

Network ● Growth of the urban area without consideration for the Optimize the efficiency of ● Develop plans and projects related to infrastructure for infrastructure viability of providing essential services to expansion areas infrastructure to improve services, sanitation and urban pavement ● Lack of information about general infrastructure quality of life. ● Address the inadequacy of water and sewage systems and ● Inadequate sewage and running water systems, and lack of expand them expansion to meet population demands ● Failure to expand power grid

Roadways and ● Lack of hierarchical roadway system and infrastructure to Optimize use of thoroughfares ● Develop a roadway plan for the town connectivity develop one through hierarchization. ● Improve accessibility of neighborhoods ● Dangerous provincial route cuts through city ● Implement Roadway Integration Plan developed by the ● Lack of measures to prevent accidents, and failure to Achieve better regional Provincial Roadway Directorate implement adequate controls and sanctions integration through ● Improve interregional connectivity ● Lack of municipal authority to resolve issues on provincial strengthening existing and company land within town boundaries network.

Table 10 (cont.)

Diagnostic(s) Strategic Management Goal ● Actions(s)

Housing ● Unsatisfied demand for housing Improve the environment of ● Implement a medium- to long-term holistic housing plan ● Precariousness of housing materials the settled population and ● Consolidate current residential areas, densifying areas generate conditions for long- through high-rise construction, and occupying vacant areas term residential sustainability ● Promote residential areas that have basic services through environmental ● Improve housing through recuperation and remodeling mitigation measures and ● Generate new planned settlements to address deficit specific norms. ● Forecast new areas for urbanization in line with identified needs ● Create social lots ● Implement a municipal land bank

Urban solid ● Inadequate management of urban waste Formulate and implement a ● Define method for solid waste treatment waste ● Poor application of existing norms holistic municipal policy of ● Develop specific norms ● Negative environmental impact and visual contamination solid waste management while ● Implement monitoring and control measures protecting the environment. ● Strengthen inter-jurisdictional and inter-institutional relations to improve mitigation and control

100 Education sector ● Lack of holistic education policy for city and region Implement holistic education ● Implement plan for development of educational building ● Inadequate infrastructure for demand plan that considers current infrastructure

● Lack of specific trainings to promote youth labor insertion infrastructure and curriculum ● Develop educational curriculum that favors labor insertion demands. ● Create programs in agriculture and tourism

Health ● Unsatisfied demand for health services Implement a holistic public ● Elaborate health plan that includes improving hospital and sector ● Lack of hospital that can handle higher-complexity cases, health policy, increasing the necessary building upgrades operating room, specialists, etc. complexity level of local ● Increase supply of doctors and aides ● Poor state of ambulances due to poor roads hospital and developing new ● Promote health centers in neighborhoods ● Lack of policy that addresses connectivity issues in infrastructure and ● Improve connectivity through pavement of provincial directing patients to other health facilities neighborhood health centers. routes

Identity, ● Problems inherent to municipal management Generate channels for citizen ● Create a municipal “Urban Environmental Management belonging, ● Limited participation of some sectors of the community participation among different Unit” participation and ● Lack of identity, belonging, roots and environmental sectors and social actors. ● Create unit of “environmental guards” management awareness ● Create neighborhood centers ● Organize participatory workshops

Source: Author’s own elaboration, based on Albanesi, Adolfo L. Plan De Desarrollo Urbano Ambiental De La Localidad De Rincón De Los Sauces, Provincia Del Neuquén. Consejo Federal De Inversiones, 2001, pp. 162-170.

4.3.4 Plan for the Territorial Organization of Rincón De Los Sauces

In April 2019, a series of consultants presented a “Plan de Ordenamiento Territorial for

Rincón de los Sauces”, a comprehensive diagnostic and series of recommended actions for the local government aimed at addressing the municipality’s various challenges. The technical assistance was requested by the municipality, and the interdisciplinary team of consultants was contracted by COPADE and CFI. The plan was developed in the context of the expectations for development of Argentina’s unconventional oil and gas reserves in Vaca Muerta. Projections suggest that the town could experience another boom period and double or triple its population and extension over the next 20 years. The final product, which resulted from nine months of work, including a review of local documents and statistics, previous local and provincial plans, engagement with local officials and community members, and a DELPHI survey of key actors, is comprised of three reports: 1) a diagnostic; 2) a forward-looking proposal of courses of action and an analysis of the opportunities, risks and costs of each; and 3) a Code of Organization and

Urban-Territorial Development (CODUT, for its Spanish acronym), a draft ordinance aimed at updating the city’s urban development norms and regulating land use and occupation.

The plan’s authors conceive of territorial organization as an integral system of norms, directives and actions of planning and implementation in which both the public and private sector must interact to improve territorial management. In the introduction, the project’s coordinator clearly lays out the aim of the technical assistance that is being provided:

To generate a Plan of Development and Territorial Organization (PDOT), a municipal tool of management that permits identification of the problems of a locality and proposes solutions, locating them within the framework of a strategy that will be implemented over time. Among the purposes signaled in the bases are: organizing land uses, reducing the risk of disasters, regularizing informal settlements, improving connectivity and the quality of green spaces, identifying environmentally appropriate sites to guide future urban expansion and proposing

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tools, among others an urban code, which can guide these growth trends. (Garay et al., “Tomo I” 3)

The project’s authors also express the ambition to improve on the environment of a typical oil town, noting that they aim to ensure that recent arrivals have access to “correctly urbanized land in a friendlier environmental context than is traditional in oil zones” in order to promote long- term residency (Garay et al., “Tomo I” 3). In order to develop the plan, the report begins with a diagnostic of the current situation along the following dimensions: economic, urban structure, infrastructure, environmental, social, and institutional. The report finds some advances, but many lingering challenges across these areas.

First, the town remains highly dependent on oil activity. The other activities that contribute to its economy are either linked to oil and gas activity or are relatively limited, despite efforts to promote agriculture and tourism. Additionally, the town remains dependent on goods and services transported from elsewhere, and the lack of consolidated commercial center in the town means that many purchases are made in Neuquén City. The diagnostic also finds that the current regional roadway system makes the town an endpoint along routes, which limits possibilities for its integration into regional transportation circuits and thus economic development. On the positive side, however, the plan does mention that the provincial government has recently created a tourism circuit aimed at taking advantage of the region's paleontological resources and that irrigation infrastructure is underutilized and other nearby towns have developed more agriculture

Additionally, the town continues to experience several problematic urban processes, many linked to the oil industry and uncontrolled growth. The town has a city center where the original layout was planned, but expansion has occurred across the original industrial park and outwards in a largely self-guided way. Residential growth has expanded onto areas apt for

102 farming and prone to flooding, and also shows a tendency towards dispersion instead of densification. For example, from 2001 to 2010, the vast majority of growth–54%–occurred in new areas compared to just 18% percent on partially urbanized land and 28% percent on more urbanized, dense areas (Garay et al., “Tomo I” 90). Further, a major challenge that affects both low-income and middle-income segments of the population is a housing deficit of 26% percent, which is 6 points above the provincial reference point and intermediate compared to reference municipalities29 (Garay et al., “Tomo I” 144).

In terms of infrastructure, the plan’s diagnostic shows mixed results. On the one hand, it finds that public service provision in the town is adequate, particularly in water and gas, with coverage exceeding the general level of the province and that of reference towns (Garay et al.,

“Tomo I” 145). However, given this data was from the 2010 census, it notes that if demand for land and housing were not accompanied by an extension of network, coverage has likely fallen.

Overall it notes that the provision of infrastructure, particularly for sewage and water, has historically lagged population growth, and that current plans to increase their service area are not well linked to an understanding of possible areas for urban expansion (Garay et al., “Tomo I” 9).

Concern about public service provision is widespread among the population. In the DELPHI survey, key informants identified education, health, the provision of water, sewage, gas, and electricity, citizen security, and environmental protection as the most important and urgent matters to be addressed in the town (Garay et al., “Tomo II” 45). The management of urban waste and urban hygiene were also signaled as priority areas by local residents (Garay et al.,

29 The report uses Añelo and Cutral Có, both oil towns, as reference municipalities. It also uses Neuquén City and San Patricio del Chañar as references. The latter is located approximately 50 kilometers from both the capital and Vaca Muerta and has historically been known for its fruit and wine production. Give its proximity to Vaca Muerta, it was among the towns in Neuquén that saw the largest percentage increase in population from 2001 to 2010, along with Añelo and Rincón de los Sauces, according to the Neuquén Provincial Directorate of Statistics and Census.

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“Tomo I” 74). Most of these challenges are the result of this lag between urban growth and urban consolidation (e.g. adequate provision of infrastructure and services, and maintenance of the city and environment).

The diagnostic additionally finds significant challenges related to land management.

Local officials have made many attempts to implement systems to allocate and promote the development of land, including mechanisms to regularize land ownership, periodically updating price tables with differentiation by land use and location, and implementing a special account for infrastructure projects (Garay et al., “Tomo I” 106). Nevertheless, the study finds that these mechanisms have faced serious limitations, including exhaustion of space suitable to continue growth around the original urban area and inability of central infrastructure to support expansion of services (Garay et al., “Tomo I” 106). More structurally, it also finds that the government’s income from land and infrastructure investment are below market value, without clearly defined subsidy policies, which implies intense decapitalization of the municipality’s main asset: land ownership (Garay et al., “Tomo I” 106). The diagnostic additionally finds that public housing projects face challenges including lack of economic sustainability and difficulties coordinating all of the works necessary to urbanize the neighborhoods.

Based on the diagnostic, the authors identify several key lessons for policymakers. These include the need for urban policies that can accompany the city during a new period of growth and guide its expansion, the need to promote economic diversification and the growth of the services sector, and the necessity of regularizing land ownership and ensuring access to well- equipped land. These lessons are reflected in the strategies outlined in table 11, each of which is paired with a series of specific programs. The report describes each program in terms of its objectives, actors involved, costs, potential risks and positive impacts, and how to monitor

104 results. Overall, the aim of the proposals included in the PDOT are to guide Rincón de los

Sauce’s growth and ensure that the offer of land and housing precedes demand to avoid negative impacts of uncontrolled growth (Garay et al., “Tomo II” 266). It also notes that given that urban development will accompany the production of oil and gas, it is reasonable to expect a new cycle of stabilization, decline and abandonment, which will generate new social and environmental liabilities.

Table 11. Plan for the Territorial Organization of Rincón De Los Sauces: Problems and Recommended Actions (Selected and Adapted) Diagnostic(s) Strategy Actions(s)

Economic ● Exhaustion of one ● Accompany a new cycle of ● Create new industrial park development productive cycle and the growth and prosperity start of a new one with different characteristics

● Limitations of a ● Diversify economic activities and ● Develop tourism development model based develop greater levels of ● Promote rural productive activity on a single product that complexity in the tertiary sector ● Bank of productive, commercial and presents sustainability services initiatives challenges

Environmental ● Misalignment between the ● Correct misalignment between the ● Prevention of floods sustainability settlement and its settlement and its environment ● Strengthening and expansion of water and environment sanitation networks ● Treatment of gullies ● Integral management of urban solid waste ● Remediation of the old municipal landfill ● Integral management of environmental risks

Inclusion and ● Rapid expansion of the ● Contain demographic expansion ● Urban development social equity population and growth and guide the city’s growth ● Roadway infrastructure

● Difficulties for the ● Improve the quality of the ● Urban forestation and municipal nursery population in accessing environmental, urban and cultural ● Conditioning of the waterfront of the Río housing, land and an urban settings for residents’ daily lives Colorado environment to develop daily life

Institutional ● Restrictions on the ● Strengthen the link between the ● Future residents strengthening development of daily life in municipality and local society, ● Employment a context marked by increasing engagement with civil ● Access to housing vulnerability and uprooting society organizations ● Development of businesses ● Health ● Education

● Weakness of policies ● Promote the modernization of ● Institutional development related to land municipal management by ● Develop Executing Unit with responsibility management, assistance introducing reforms that provide for new urbanization and the needs of it with the necessary instruments ● Update urban regulations disadvantaged sectors to meet the challenges of growth Source: Author’s own elaboration, based on Garay, Alfredo, et al. Plan De Ordenamiento Territorial De Rincón De Los Sauces. Informe Final - Código de Ordenamiento y Desarrollo Urbano-Territorial (CODUT) de Rincón de los Sauces - Tomo II. Consejo Federal de Inversiones, 2019, p. 192-5.

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At this point, it is worth highlighting several other relevant aspects of the plan. The plan presents a model of growth based on densification of existing central areas, combined with organized and programmed expansion onto a series of large parcels of land known as chacras.

The plan envisions the municipality providing wholesale infrastructure and services to the parcels, which would then be developed by “small-scale urbanizers”, such as cooperatives, unions, public housing institutions or private developers that would take responsibility for installing residential infrastructure and developing neighborhoods. The plan seeks to “recover the experience of the region”, which involves transforming land into irrigated units, and suggests that chacras be opened on irrigated land that would support trees to improve the visual landscape and prevent winds (Garay et al., “Tomo II” 176). This model of development is intimately linked to one of the other key recommendations: encouraging the municipal government to see land ownership as an important asset that it can use to generate the resources necessary to financing the ambitious plans presented if correctly managed. The authors argue that correct management will allow the municipality to not only avoid the type speculation seen in the nearby oil town of

Añelo, but also to capture the cost of urbanization in contrast to a historical model in which land has been given away at little cost. The PDOT also emphasizes defining a management model, which involves determining the process to guide the involvement and sequencing of different institutions involved in the urbanization process (Garay et al., “Tomo II”, 176).

4.4 Comments on Planning in Rincón de los Sauces.

Policymakers in Rincón de los Sauces face a difficult challenge in responding to the town’s rapid growth, and over the years, planners and policymakers have prepared numerous plans aimed at guiding its development. The following section outlines how planners in Rincón

106 de los Sauces have approached planning, the challenges faced, and why planning has not always been effective.

4.4.1 Approaches to Planning

Policymakers have always highlighted the need for planning to guide and anticipate the town’s growth and as a tool to promote quality of life and social inclusion. Plans have generally been technically sound and aligned with the best practices of the time. Although it is not clear that there was specific familiarity with this literature, the 1971 plan largely reflects best practices of then-contemporary Canadian RBCs in terms of calls for development to be led by the government but coordinated with industry, calling for the separation of land use and the creation of green spaces as well as promoting economic diversity, all with the aim of making the community more economically and socially sustainable and inclusive. For example, the founding principles and land use objectives of Mackenzie, British Columbia (see table 2 above) included creating an integrated community, preventing haphazard development, separating land uses, and developing an efficient and pleasant community to provide social and economic benefits to its inhabitants. These parallel many of the principles espoused in the 1971 COPADE document, such as avoiding problematic growth, avoiding population segregation, creating a socio-cultural unit that makes peoples’ lives more enjoyable, and promoting basic land use separation.

Other plans have also shown alignment with good practices. For example, the authors of the 2019 plan note that the 2001 plan was “correct in its formulation, having an accurate diagnosis and making adequate proposals” (Garay et al., “Tomo II” 344). The plans show clear development in the sophistication and specificity of both the diagnoses and the recommendations. This is evidenced in the increasing length of the documents: from a 10-page document of general principles in 1971, to just over 200 pages in 2001, to an approximately

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1000-page, 3-part report that includes very specific recommendations, reflecting the ongoing incorporation of new diagnostic and planning tools. For example, the 2019 PDOT presents the creation of a local public company aimed at guiding urban development and capturing the value provided by government investments in urban infrastructure as a possible course of action.

Planners and policymakers in Rincón de los Sauces have looked to different example communities that have served as reference points. In particular, two other oil towns in

Patagonia—Comodoro Rivadavia and Cutral Có—have served as references for planners since the 1970s. As described in Chapter 3, both have experienced problematic growth. In the former this has been reflected in chaotic urbanization, widespread land occupation and precarious informal settlements. Likewise, Cutral Có originated as a precarious settlement due to migrants’ inability to access housing in formal oil camps or on urbanized land. Cutral Có has also served as a warning of the danger generated by dependence on a single commodity that has forced planners to consider what comes after oil. These examples have contributed to planners’ focus on better controlling land use and urban expansion, and concern for promotion of economic diversification. The influence of these examples is evidenced in the 1971 plan’s focus on ensuring organized growth that avoids problematic expansion and avoiding unutilized space between the urban nuclei of the town and oil camp as well as its desire to ensure coordination with YPF.

More contemporarily, the town of Añelo has also been incorporated into the repertoire of references for planners. Añelo, which is located just over 100 kilometers from Rincón de los

Sauces and sits midway along one of the routes that connects that town to the provincial capital, is at the epicenter of unconventional oil and gas development in Argentina.30 As a result, the

30 It is the town located nearest to the Loma la Lata and Loma Campana concessions where YPF (renationalized in 2012) operates a joint venture with Chevron. Following a 2011 U.S. Energy Information Administration report that

108 previously a small agricultural community, has become a boomtown that grew from approximately 2,800 inhabitants in 2010 to 8,610 in 2015 (Delgado 110). By 2020, the town was expected to have more than 17,000 residents (Gorgal). This rapid growth has generated socioeconomic problems including insecurity and feelings of displacement as well as increased prices of consumer goods and real estate speculation (Delgado 118-21). Rapid population growth has also stressed municipal infrastructure, which lags behind demand, and generated new challenges for the municipal government (Delgado 123). The town’s growth has also created a problematic housing deficit and urban expansion has occurred with low population density

(Banco Interamericano de Desarrollo, and Fundación YPF 64-8). As noted by Barrera, “The shale boom also overwhelmed an understaffed and underfunded municipal government”.

Contemporary planners have sought to understand the urban impacts that shale development will bring to Rincón de los Sauces through extrapolating from Añelo, the first town to experience boomtown effects from Argentina’s shale development. Given there are differences between the business model and economic impacts of conventional and shale resources, in the development of the 2019 plan, planners sought to anticipate the impact of shale development on Rincón de los Sauces by extrapolating from the experience of Añelo. As noted in the plan, “That city can be considered a bank of experiences of urban phenomena, some of which are expected to move as a trend to Rincón de los Sauces” (Garay et al., “Tomo 2” 117).

For example, they looked to the town to understand housing types, employment generated, and how service companies established themselves, finding that unconventional development implies less workers directly employed by oil companies and more service sector jobs, which means

stated that Argentina had some of the world’s largest shale oil and gas reserves, largely located in Neuquén, in 2013 the two companies signed an agreement to develop the area with plans to invest $15 billion and drill 1,500 wells to generate projected production of 50,000 barrels of oil and 3 million cubic meters of gas per day (Delgado 107-8).

109 lower purchasing power. All these factors translate into implications for future housing demand.

The image of Añelo is present more generally in the community, and as one planner noted, “the social actors of Rincón de los Sauces don’t want what happened in Añelo to happen to them.

They pass through there all the time and see it. That is, they want the economic flow it generates but not the disorder” (Buenos Aires-based urban planner with experience in Rincón de los

Sauces).

Planners have also looked beyond boomtowns for other precedents or examples that may offer relevant lessons or mechanisms for the town. Contemporary planners, for example, have incorporated innovative management tools such as suggesting policymakers consider establishing a municipal trust or public company to guide the urbanization of lots, which was inspired by experiences in other Argentine cities. Additionally, the approach of programming growth onto the most appropriate land recommended in the 2019 PDOT was inspired by one of the participant’s previous experiences on a project in a neighborhood of Corrientes City (Buenos

Aires-based urban planner with experience in Rincón de los Sauces). Further, as mentioned above, they also looked to learn from the experience of other cities in the region.

Planners in Rincón de los Sauces are planning within a highly uncertain context dependent on external factors. This is evident in the uncertainty they build into their models as well as their dependence on extrapolating anticipated trends based on past data or relevant examples. For example, the 2019 plan elaborates four scenarios for population growth based on data from different sources and varying assumptions about population growth. The assumptions of the different source materials vary, with some relying more on statistical models of past and projected growth or local census data, while others include more considerations of oil sector dynamics. Uncertainty is inherent as shown by the fact that estimates of population by 2040

110 range from just over 45,000 to approximately 170,000 (though the authors note that the upper bounds is highly unlikely as it supposes a significant acceleration of current growth rates, and that growth will likely hover around the intermediate projection). Further assumptions, such as about family structure, must then be applied to anticipate other impacts of growth, such as demand for housing, education and health services.

Planners draw on information from various sources to make these projections. For example, they have reviewed other plans for the city and regional plans that include Rincón de los Sauces; both the 2001 and 2019 plans refer to prior plans in their text, including regional economic development plans and the local rain and storm drainage master plan. They have also used census data and projections from other studies such as those produced by COPADE or the national government (Buenos Aires-based urban planner with experience in Rincón de los

Sauces). Additionally, they have looked at the investment plans of YPF, the main company investing in Argentina’s shale development, and then used other studies about labor demand generated by drilling wells to anticipate the local economic impact of the company’s plans

(Buenos Aires-based urban planner with experience in Rincón de los Sauce). In this sense, planners seek various sources of information from which they attempt to extrapolate information that can serve as inputs to make the most accurate projections possible under the circumstances.

Given the uncertain context, planners have sought to make plans adaptable to ensure they are responsive to changing community needs and increase their chances of success. For example, the 2001 Urban Environmental Development Plan urges the local government to move from a model of “situational management” to one of “strategic management” that involves promoting participation and creating norms that are flexible and can be revised on a periodic basis

(Albanesi 207). Indeed, much emphasis is put on noting that the plan de ordenamiento is not

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“closed and rigid” but should provide general guidelines that create “flexible rules of the game for territorial action, to be agreed on as state policy that orients different territorial decisions”

(Albanesi 158). This is because cities’ growth is dynamic, and norms and guidelines should be flexible enough to adapt (Albaniei 173). Likewise, the authors of the 2019 PDOT note that it creates scenarios, but that these are just reference points, and policymakers will have to adapt their actions depending on the scenario that unfolds:

It is important to signal that the plan should be considered a reference that will experience adjustments in function of the signals that are given by reality. For this reason, the work of monitoring is so important, which will allow for the verification of the projections of population growth (and the other indicators identified for monitoring) and thus the possibility of continuing with the implementation of the selected scenario or the necessity of introducing corrections that are oriented towards an alternative scenario. (Garay et al. “Tomo II” 177).

To this end, they propose a series of indicators, such as supermarket purchases, new informal occupations and others, that can be used to track population growth and inform changes to the plan (Garay et al., “Tomo II” 151). Similarly, the authors include an entire section related to revision in their proposed municipal ordinance. Section 1.6.1 of the document notes that while the technique of strategic planning involved the work of experts that engaged with local authorities, technical officials and community members, “territorial organization should be conceived as an uninterrupted process in which a set of guidelines and regulatory provisions guide the decisions and actions of the public sector and direct those of the private sector towards the achievement of predetermined objectives, which can be adjusted according to unforeseen changes that affect the reality on which one acts” (Garay et al., “Tomo III” 18). The section includes subsections with procedures to guide changes proposed by different actors to ensure they are aimed at the public good and not individual interests, and mandates an obligatory

112 evaluation every five years of the dynamic of urban growth to determine if the norm should be updated.

Planners have sought to encourage and create mechanisms for community participation to assure both the relevance of plans and the local support necessary to successfully implementing them. The 2001 Urban Environmental Development Plan recommends that the government promote a “strategy of participative and consensual content” in which different social groups agree on future paths” (Albanesi 80). Similarly, the 2019 plan encourages the government to generate participation mechanisms to engage local civil society and to divulge the plan.

However, while plans have encouraged community participation and cooperation with other actors, they have sought to emphasize that the municipal government should be the main guiding force organizing the town’s development. In that sense, as mentioned above, the 1971 bases set forward that overall plans and guidelines should always be developed by public organisms. The 2001 Urban Environmental Development Plan also states that a management objective should be to give a predominant role to the municipality, which requires measures and assistance to ensure municipal autonomy (Albanesi 80). In that sense, one of its final recommendations is the creation of a Unidad de Gestión Urbano-Ambiental (a unit of urban- environmental management, UGUA), located under the public works secretariat, to oversee implementation of the plan (191). Likewise, the 2019 plan also envisions the municipal government as the guiding force behind the town’s development and makes several recommendations to strengthen its capacity.

4.4.2 Effectiveness of Planning

As described above, planners in Rincón de los Sauces have demonstrated that they have followed a series of strategies to plan in the context of rapid and uncertain population growth

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(see table 12). Despite this, the objectives laid out within plans have not always been met.

Indeed, despite the numerous plans developed for Rincón de los Sauces, the town shows signs of urban growth challenges typical to oil boomtowns such as infrastructure gaps, resident transience, housing deficits, and uncontrolled expansion of the urban area, all of which generate lower quality of life for local residents.

Table 12. Strategies Followed by Planners in Rincón de los Sauces ● Look at model communities and best practices, in boomtowns and elsewhere ● Use a variety of sources of information and plans to generate projections ● Make plans flexible and adaptable to account for uncertainty ● Promote community participation in planning processes ● Highlight central role of municipal government ● Draw on outside support, both technical and financial

Meeting the guiding principles outlined in the 1971 bases documents seems to have been difficult, particularly in terms of land use and housing issues. Measured against its original goals, the results are mixed, as the town has experienced growth that has generated lags in service provision and lower quality of life. The diagnostic of the 2001 plan is strikingly similarly in its diagnostic to the 2019 plan, especially in areas related to the challenges of urban expansion, environmental degradation, transportation and lack of economic diversification. Indeed, there is overlap among the diagnoses and recommendations of the three plans (see table 13), suggesting that many of their recommendations were either ineffective, or failed to be implemented.

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Table 13. Comparison of Selected Diagnoses/Recommendations of Urban Development Plans Diagnostic Objectives/Recommendations

N/A ● Organize growth and avoid inorganic or problematic growth ● Achieve economies of scale in infrastructure and Objectives of the services Unification of the ● Optimize the use of the urban area Urban Nucleus ● Promote economic diversification, particularly into (1971) agriculture ● Avoid segregation of the population ● Create a socio-cultural unit that makes peoples’ lives more enjoyable

● Spontaneous and disordered ● Join lots with the aim of generating economically expansion of the urban footprint sustainable developments ● Deterioration in quality of life ● Consolidate current residential areas, densifying and high costs of urbanization areas through high-rise construction, and occupying ● Explosive and cyclical vacant areas population growth dependent on ● Implement a policy to regularize land titles Urban the predominant economic ● Implement the Urban Environmental Development Environmental activity Plan with an adequate legal framework, adopting Development ● Lack of economic diversification the zoning policy Plan for the and dependence on oil and gas ● Design a legal framework to sustain the norms of Locality of activity urban environmental organization Rincón De Los ● Lack of definition of planning ● Develop a Building Code Sauces, Neuquén and territorial organization ● Develop plans and projects related to infrastructure Province (2001) policies for services, sanitation and urban pavement ● Lack of municipal autonomy in ● Improve inter-regional connectivity land ownership ● Diversify socio-economic structure and implement alternative productive projects ● Create a municipal “Urban Environmental Management Unit”

● Rapid growth and expansion of ● Contain demographic expansion and guide the the population city’s growth ● Difficulties for the population in ● Improve the quality of the environmental, urban and accessing housing, land and an cultural settings for residents’ daily lives urban environment to develop ● Diversify economic activities and develop greater daily life levels of complexity in the tertiary sector ● Restrictions on the development ● Strengthen the link between the municipality and Plan for the of daily life in a context marked the local society, increasing engagement with civil Territorial by vulnerability and uprooting social organization Organization of ● Limitations of a development ● Promote the modernization of municipal Rincón De Los model based on a single product management by introducing reforms that provide it Sauces (2019) that presents sustainability with the necessary instruments to meet the challenges challenges of growth ● Weakness of policies related to land management, assistance and the needs of disadvantaged sectors

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A good part of the discrepancy between the goals laid out in the plans for Rincón de los

Sauces and the ongoing challenges faced by the city can be attributed to failure or inability to fully implement the recommendations laid out in the plans. The mixed results of the implementation of the plans is illustrated by several points: while the city government implemented the zoning proposal suggested in the 2001 plan, it failed to act on recommendations to implement a building code, the first of which was not passed in the municipality until 201231.

Nor did it act on several other suggestions, such as creating a municipal land bank, which again appears as a 2019 recommendation.

Planners seem to anticipate that implementation will be a challenge. The 2001 plan outlines three possible future scenarios, ranging from unsustainable growth to sustainable development, depending on the municipality’s ability to implement strong urbanization and economic diversification policies as well as coordinate with other levels of government; it recognizes that the most likely scenario is the intermediate one of partial application (Albanesi

176). Separately, for each program proposed, the 2019 PDOT dedicates space to describing all of the conditions and requirements that will need to be met to implement each, as well as the risks.

Failure to implement technically-sound plans has been identified by planners as a shortcoming of municipal planning in Argentina. As one planner noted, “There are many plans. Not enough, but there are many. Most are in a library” (Buenos Aires-based urban planner with experience in

Rincón de los Sauces). With this in mind, the following section reviews challenges that have limited the effectiveness of the plans and policies that have been developed.32

31 Ordnance 1385/12 32 It is still early to fully evaluate the implementation of the 2019 PDOT plan. However, some initial observations can be made.

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4.4.3 Challenges in Planning and Implementation

4.4.3.1 Rapid Growth, External Dependencies and Uncertainty

Despite their best efforts and well-developed plans, policymakers in Rincón de los

Sauces have struggled in part simply because the town’s rate of growth means it is very difficult to adequately address. The annual growth rate of Rincón de los Sauces between 1991 and 2010 was about 9%, exceeding the 5-6% annual rate where it is estimated that the population’s demands begin to exceed the capacity of the local government to meet them (Jacquet 10-11). As

Tapia Palomo notes of the town, “municipal action with respect to programming or urban outlining and the provision of distinct services always arrives later than is ideal” (119). This has been clear in the case of the housing sector, where the local government has struggled to offer solutions and keep up with demand. Although the government had begun to prepare and give lots to residents, in 2007 in response to large lines at the government offices, “the government assured that it is not in conditions to meet the housing demand” (“Alto deficit habitacional”).

Similarly, the 2019 PDOT notes that difficulties in meeting the demands of a population that continues to grow at a rate greater than 7% contributes to some informal settlement on areas that are not apt for settlement (Garay et al., “Tomo I” 107). Rapid population growth is a cross- cutting issue that underlies and interacts with many of the other challenges faced by the town’s policymakers and planners that are discussed below, particularly insufficient control of land use.

Further, policymakers in Rincón de Los Sauces remain constrained by its external dependencies. Rincón de los Sauce’s economy remains highly dependent on the oil industry and services (many of which are related to the oil industry), with the two accounting for 77% of local employment in 2017 (Garay et al. “Tomo I” 149). In this sense, local economic activity, employment and growth rates are largely dependent on factors outside of the local government’s

117 control, such as international oil prices, national and provincial energy sector policies, and changes in business practices. This leaves the town vulnerable to changes in international oil prices, national energy sector policies and business practices.

One challenge for policymakers is the resulting uncertainty with regards to future population growth and services demands. For example, the 2019 PDOT was generated in the context of anticipated growth at Argentina’s Vaca Muerta shale formation. However, the 2019 presidential elections, macroeconomic challenges and policy uncertainty have called the outlook for its development into question: between July 2019 and January 2020, unconventional rigs in

Vaca Muerta fell 37% (Garrison and Lammertyn). The impacts of this slowdown are already being felt in Añelo, where construction projects have stalled as shale development stagnates

(Garrison and Lammertyn). As noted above, planners have attempted to account for this by building uncertainty into their plans. However, changes in the external environment necessitate adaptation of plans on the part of local officials, which requires institutional capacity to monitor and respond to changes that, as discussed below, may not always be present. It is also worth noting that a downturn in economic activity may force the government to adjust priorities away from implementing strategic plans, as occurred in the case of Comodoro Rivadavia described above, and towards other issues. For example, in 1999, amid a drop in oil prices, the local government of Rincón de los Sauces issued an ordinance (Ordinance 529/99) authorizing the contracting of a local cooperative to generate work, noting that a change in external circumstances “oblige it to design public administrative policies that generate employment.”

Although a minor example, it shows that a change in external circumstances may force policymakers to redirect their attention to immediate urgencies.

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A final consideration is that the town’s economic structure and remote location mean that it must externally seek goods and services not available locally, which increases the cost of goods and services. This may have a particularly acute impact in the ability to meet housing demand. In 2017, for example, a local representative from the construction chamber estimated that it may cost up to 20 percent more to build a home in Rincón de los Sauces than in Neuquén

City due to its distant location and the need to transport supplies from elsewhere as well as the general higher cost of goods and services generated by the oil industry (“Construir en tierras del petróleo”).

4.4.3.2 Limited institutional capacity of municipal government

A cross-cutting challenge faced by the town has been shortcomings in institutional capacity that undermine both planning and implementation. As noted above, the town’s Organic

Charter, which formally constituted its structure and responsibilities, was approved in 1999 and included responsibilities related to urban planning. However, effectively exercising these responsibilities requires a host of conditions that are not always met, including technical and financial capacity of the local government and ability to coordinate with other key stakeholders.

Among the factors that undermine local government autonomy are insufficient resources, both skilled technical staff and in terms of materials (such as computer equipment and working space). This is both a historic and lingering challenge. Although efforts have been made to improve institutional capacity, there emain variations across government departments. This is not uncommon in rural boomtowns, where there is often a lack of skilled professions across areas and where high turnover has been cited as a challenge.

Several examples illustrate the shortages of technical staff in Rincón de los Sauces. The town first established a statistics office, staffed by one individual, in 2007. Until the start of the

119 first term of former Mayor Marcelo Rucci in 2011, the Technical Office of the Secretariat of

Planning of Works and Public Services only had one works master and an architect; since then, this has been increased to include five civil engineers, two architects, a works master, electromechanical technicians and an administrative secretary (Garay et al., “Tomo I” 232).

Skilled staff in all these areas is crucial to effectively undertaking urban planning activities, particularly monitoring and evaluating in order to respond to changes.

More broadly, there is a general shortage of skilled professionals such as doctors in the town, which means the government must take additional measures such as offering housing to attract them. Given the limitations of the local labor pool, as the government has increased its commitments and expanded its sphere of action, it has invited skilled professionals from elsewhere to join the administration, including in areas related to planning and urban development. For example, until recently, the town also lacked a surveyor, a fundamental role in land policy, and the government offered housing in order to attract one (Buenos Aires-based urban planner with experience in Rincón de los Sauces).

Nevertheless, a lack of skilled technical staff in some areas continues to represent a challenge. For example, the lack of a skilled economist poses a possible hindrance to ambitions to diversify the local economy through agriculture (Buenos Aires-based urban planner with experience in Rincón de los Sauces). Additionally, the 2019 report finds that while the

Subsecretariat of Planning and Urbanism is headed by qualified personnel, there is insufficient technical personnel to allow it to meet all of its responsibilities (Garay et al., “Tomo I” 233).

Additionally, the finance and economy areas lack personnel and programs that focus on capturing the value of urban development, and instead are more focused on traditional sources of income (Garay et al., “Tomo I” 234).

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The potential for insufficient qualified human resources to undermine the planning and implementation process is worrisome. The plans discussed above, particularly the 2019 PDOT, call for the use of more sophisticated tools of public administration, which undoubtedly require skilled public administrators. For example, one planner noted that generating policies that move from a traditional focus on generating new units to addressing the town’s qualitative housing deficit would require “a more sophisticated instrumentation with professionals who program and execute it well” (Buenos Aires-based urban planner with experience in Rincón de los Sauces). In this sense, plans not only require changes to the regulatory framework, but also imply increased responsibility for local government departments, which have to increase their capacity to enforce new regulations and plans. In interviews with key local community members, the authors of the

2019 PDOT found that only 47% of respondents believe the municipality has enough skilled human resources to implement the plan (Garay et al., “Tomo I” 260-1).

Planning and implementation have been further complicated by a municipal structure in which responsibilities for urban planning and its implementation are diffuse and not well- articulated. In 2000, Pérez and Vives argued that efforts to expand the local government’s functions in terms of promoting economic development were undermined by legal-normative fragility given that the town lacked an organic charger that legally defined the roles of different municipal offices (175). While subsequent norms have defined the roles of different government offices, in many cases, the responsibility for planning, implementation and oversight have been divided among municipal offices in such a way as to undermine coherency and efficiency in their efforts. For example, the office charged with regulating private construction works does not have oversight or enforcement capacity. This is instead vested in another secretariat that focuses more on commercial and transit inspections, does not coordinate with the regulatory agency and lacks

121 personnel specialized in the application of urbanistic norms (Garay et al., “Tomo I” 233). For this reason, the 2019 PDOT calls for the implementation of a “municipal strengthening program” to increase institutional capacity and that includes encouraging ongoing efforts to strengthen the skills of public employees and reorganizing the functional structure of the administration to avoid dispersion of responsibilities for planning and management (Garay et al., “Tomo II” 345-

63). However, it is important to note that plans that imply significant reorganization or new responsibilities for the government may generate push back from municipal officials or civil society or generate conflicts over jurisdiction (Garay et al., “Tomo II” 347).

Another institutional weakness that has undermined capacity for planning and implementation is limited financial resources.33 The 2019 PDOT notes that one of the reasons that the government has been unable to address the town’s growth in the past is “weakness of finances to respond to the increasing demands of the population” (Garay et al, “Tomo II” 345).

The municipal budget is largely dependent on provincial transfers, with only a small percentage of funds being raised locally. By way of example, the municipality’s grade of autonomy (as measured by the percentage of income it raises on its own divided by total spending) has wavered between approximately 20% and 40%: 25.3% in 1996, 23.3% in 2002, 41.1% in 2010, and 37.1% in 2017, according to information compiled by the provincial Directorate of Statistics

33 Revenue sharing in Argentina occurs through a complex system known as co-participation. The majority of public tax collection and public spending occur at the national level. In 2013, the national government accounted for approximately 80% of tax collection and 58% of total public spending (Acosta 24). That same year, provinces accounted for 16% of income and 33% of spending and municipalities for 4% of income and 9% of spending (Acosta 24). Much of the revenue collected nationally is redistributed to provinces. National Law 23,548 of 1988 and subsequent modifications define the process by which specified taxes collected by the national government are apportioned among the provinces according to predetermined coefficients. This system, known as co-participation, and other automatic transfers account for the largest percentage of funding allocated to provinces by the national government; additional discretionary funds are allocated through different programs run by national ministries and agencies. Argentine provinces can levy taxes and also collect royalty revenues, given they have ownership over natural resources located within their borders. Compared to other provinces, Neuquén’s budget is more dependent on royalties and less on national co-participation (Besfamille et al. 10).

122 and Census. As Colantuono notes in an evaluation of decentralization and self management in

Patagonian oil towns, “low municipal budgets and lack of financial autonomy create links of dependence with other levels of the government, provincial and national, a situation that limits municipal actions in the areas within their responsibility” (142).

Although the figures above show an upward trend, the municipality still remains highly dependent on funds transferred from the province. Provincial funding that goes directly to municipal budgets is allocated through a system known as co-participation34. Allocation is not done in such a way as to account for the resources necessary to address rapid population growth: although the allocation formula considers population and is intended to be updated every three years, in practice, the population figure used to calculate distribution has not been updated since

1995 (“Rincón de los Sauces demostrará”). This has resulted in a mismatch between the resources the town receives and its current population; in 2012, Noya and Gerez found that

Rincón de los Sauces was the municipality most negatively affected by the failure to update the distribution coefficient (154).

34Article 150 of Neuquén’s provincial Constitution states that the provincial government will agree on a method to share revenue with municipalities based on the principles of “equity, solidarity and efficiency”. Historically, there have been several changes to this system; they have tended to increase the resources given to municipalities (Noya and Gerez 149). Until 1993, royalties were not included in the funds shared with provinces (Noya and Gerez 150). Since 1995, Neuquén Province redistributes a percentage of its income to municipalities in Neuquén according to the provincial law of co-participation (Law 2,148). The province shares 15% of the total of the following sources of income with the municipalities: national co-participation funds, royalties (which are set at up to 12% on oil and gas) and income from provincial taxes (real estate, gross income and stamp taxes). This 15% is allocated to municipalities based on the following criteria: percentage of total provincial population (60%), in proportion to the inverse relationship between cost of salaries per resident (15%), percentage of population excluding the capital city (10%), in relation to municipal income (10%) and equally among all municipalities (5%). In a study on the impact of oil rents on subnational development, González and Lodola find that Neuquén’s fiscal regime allocates a comparatively high share of oil and gas rents to local governments compared to other provinces (562). They argue that rent sharing regimes promote provincial development when they redistribute rent to both producing and nonproducing localities (567) as occurs in Neuquén. One relevant causal mechanism that contributes to this, they argue using a case study of Añelo, is that the resulting increase in financial autonomy of local governments increases social pressure for more public goods (567).

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Given the town’s accelerated growth, the local government has repeatedly sought to organize censuses to update the local population count and advocate for increased resources. For example, in 1994, through Ordinance 329/94 the city council approved an agreement with the provincial Directorate of Statistics and Census to carry out a census given “that it is of extreme necessity to have the data of a census that at the same time is applicable to the relationship of co- participation and royalties for the municipality.” In 2012, a local city councilor stated that the government was working to convince the provincial government to address its concerns: “Rincón has been left far behind. We are very badly co-participated. Every month, we are knocking on the doors of the Minister of Economy who meets us with good will, but there are no responses.

The deputies should sit down and give what corresponds to each locality” (Noya and Gerez 149).

The co-participation coefficient was not changed, and in 2018, the municipality again sought an agreement with the provincial statistics and census agency to undertake a new census aimed at getting better information with which to plan and improve co-participation distribution (“Rincón organiza un censo”). Local officials have also expressed concern that censuses carried out are quickly outdated and do not generate accurate population counts due to the work schedules of oil workers who may not be home when officials visit (Noya and Gerez 150).

Historically, the municipality has struggled to effectively raise local income. In 2001, it was noted that less than 20% of contributors were paying their municipal taxes and fees35, which was generating economic difficulties for the government (Albanesi142). Previously, in the late

1990s, the local government issued a series of ordinances aimed at increasing local income and

35 In addition to income from their share of provincial co-participation, municipal budgets in Neuquén are financed by funds raised locally (generally through fees for services and hygiene and safety inspections). Article 66 of Provincial Law 53 delineates what constitutes municipal resources and taxes/fees that they are allowed to enact. These include a real estate tax, fees for public lighting and cleaning, sale and lease of municipal property, licenses for commercial businesses, motor vehicle registration, measuring and subdivision of lots, contributions of companies with municipal concessions, and accepting donations made to the city council or executive power.

124 highlighting the low percentage of tax collection it received.36 In recent years, the government has made efforts to increase income, particularly through seeking to increase contributions made by oil companies (Noya and Gerez 149-50). In 2012, one official noted that the local government was working to ensure that companies operating locally contributed to the municipal coffers:

The problem is that the oil service companies have their administrations in Neuquén or in Buenos Aires. The old state-run YPF, on the other hand, had a norm that required that the administration of the service companies could not be further than 5 or 6 km from the base. That does not happen now, so they pay taxes in Neuquén and not here in Rincón. Obligating them to pay taxes in Rincón is a policy of this administration (2011-2015). The executive's policy is that everyone commits to Rincón. Companies are paying commercial licenses and compensation for services [servicios retributivos]. With license plates it is a struggle, since as companies buy by leasing, they license cars in Buenos Aires. But they use our streets, our routes. It is very unfair. (Noya and Gerez 149)

These efforts to increase taxation as well as informal political agreements to get oil companies to pay license plate fees in the town have contributed to strengthening the municipal budget, which is “relatively good for the region,” according to one planner (Buenos Aires-based urban planner with experience in Rincón de los Sauces).

Nevertheless, the municipality lacks the necessary resources to meet all demands placed upon it, and insufficient financing is one of the major risks that occurs throughout the analyses of the various proposed courses of actions in the 2019 PDOT as fully implementing the plan would be costly. Indeed, when the plan was presented to the mayor and members of his team in March

2019, their first concern was about the “possibility of financing such an ambitious proposal”

(Garay et al., “Tomo I” 5). The plan proposes several sources of funding, most importantly by changing the town’s approach toward managing public lands, but also through other mechanisms such as seeking provincial support, promoting private-sector investment and reaching corporate

36 For example, Ordinance 402/96, which authorizes the city executive to open a concourse to estimate how much it would cost to contract service to deliver bills for services and contributions with the aim of increasing tax collection.

125 social responsibility agreements with oil companies; however, being able to fully take advantage of these potential sources of financing requires overcoming some of the other challenges described in this section, including effectively coordinating among diverse stakeholders.

4.4.3.3 Coordination Challenges

From the start, the local government of Rincón de Sauces has had to coordinate with various actors—other governments (local, provincial and national), oil companies, and unions, among others —in order to design and implement policies. Indeed, proposals made in the 1971,

2001 and 2019 plans all call for involvement from a multiplicity of actors, including various organisms of the provincial government, other municipalities, oil companies, local associations and business chambers, the private sector and, occasionally, national actors. However, challenges in effectively coordinating with all of these actors generate impediments to fully realizing the goals of plans. Indeed, one of the reasons that 2019 PDOT authors argue the government has been unable to fully address the demands generated by the town’s growth is “incoordination of the different levels of the state involved in the process” (Garay et al., “Tomo II” 344).

The provincial government is a particularly important actor as urban planning and management lie at the intersection of provincial and municipal jurisdiction; although municipal governments have jurisdiction over urban issues within their boundaries, provincial governments play an important role in the provision of much urban infrastructure. This includes providing investments in education, health, roadways and other public services infrastructure, and housing plans. Many public services are provided directly or contracted by the municipal government, including the sewage system, electricity, water systems and waste disposal systems

(Subsecretaría de Planificación Territorial, "Informe Final - Tomo 1" 28). However, the provincial government often plays a supporting role in many of these areas. For example,

126 although water service is a municipal responsibility, the provincial government, through a public company, is responsible for the general planning of the system, and control and follow up of actions to ensure they are complied with, and also offers support with repairs and maintenance to local governments (Subsecretaría de Planificación Territorial, "Informe Final - Tomo 1" 28).

Additionally, there are several areas in which the municipal government can act in only a limited manner. For example, the area of economic diversification is one in which the local government can take certain actions and implement certain policies (the creation of an industrial park, for example). However, it remains constrained by both dependence on the oil industry and inability to implement larger-scale policies, such as regional or provincial development plans, which require coordination with other municipalities and provincial governments.

The provincial government has played an important role in Rincón de Sauces, particularly through offering technical support and financing. Given its origins as a comisión de fomento, as noted above, the provincial government indicated that it saw its role in the town as ensuring its development and the provision of infrastructure. At the start, the provincial government provided the town with a school, magistrate’s court, and police office, among other infrastructure (Palomo 79). The municipality also signed numerous agreements with provincial organisms for investment in urban infrastructure, such as one in signed with provincial roadways organism Vialidad Provincial in 1972 to improve local roads (Palomo 80). Over the years, the municipality has closely worked with the provincial government in areas including housing projects, infrastructure and irrigation, and frequently drawn on technical support from the province (including for a census and to develop several of the plans discussed above). Indeed, the 2019 plan notes the importance of the provincial government’s support moving forward given the large investments that will be required to implement the PDOT, such as in health,

127 education, infrastructure and housing, and the need for COPADE to provide technical assistance for implementation (Garay et al., “Tomo 1” 262).

Alignment between the local government, which comes from the dominant provincial party, the Movimiento Popular Neuquino (Neuquén People's Movement, MPN)37, may have served to facilitate cooperation. Since the first mayor took office in 1984, the MPN has alternated the mayorship with the Partido Justicalista (Justicialist Party, PJ) , with the former having been elected seven times and the latter three times. The party alignment between the provincial government and local government that has been in place 2011, when the MPN retook the mayorship from the PJ, has facilitated coordination (Buenos Aires-based urban planner with experience in Rincón de los Sauces). This is likely incredibly important in seeking funds that are allocated on a programmatic basis, outside of the co-participation mechanism. The municipality remains governed by the MPN, and the survey that 2019 planners did with 32 key informants found that most (72%) believe that the provincial government will commit support for the plan’s implementation (Garay et al., “Tomo I” 262).

However, the relationship between the provincial and local governments has not always been smooth, and complex jurisdictional overlaps generate challenges to implementing plans.

From 1983-87, there were tensions between the provincial and municipal government about economic assistance, according to the municipal records (Palomo 83). Additionally, the 2001 plan notes that the province and municipality have unresolved conflicts over their areas of influence and calls on the municipality to assert more autonomy and exercise its management

(Albanesi 101). The issue of land titles, in particular, is one area where complicated processes and jurisdictional overlap have generated concrete challenges. The provincial government has

37 The MPN has governed the province uninterruptedly since Argentina’s return to democracy in 1983, and has won all democratic provincial elections since 1962.

128 technically transferred the ownership of all public lands within municipal boundaries to the local government in line with the provincial Constitution. However, in practical terms a large part of this land remains formally titled to the province as changing the registration is an administrative process that is undertaken on a case-by-case basis (Garay et al., “Tomo II” 107). Although the municipality can adjudicate or sell land that remains formally titled to the provincial government38, this is followed by a long administrative process. This generates a challenge in regularizing land ownership of individuals, who have in turn found that they are unable to access some credit lines due to lacking the formal title (Garay et al., ”Tomo I” 94). Additionally, the province has adjudicated some land that is titled in its name, circumventing municipal control

(Garay et al., “Tomo II” 107).

Further, the provincial government has not provided sufficient support to meet all of the town’s needs, and there are clear areas where lack of provincial action undermines local plans.

The 2001 plan noted that “the absence of territorial and environmental policies at the provincial level” has resulted in “unintegrated regional space” and “deficient roadway infrastructure” (79).

Concretely, while the 2001 plan called for provincial Route 6 to be paved to improve connectivity, this depends on investment from the province and failed to occur; it appears again as a recommendation in the 2019 plan. Additionally, attempts to promote tourism have been constrained by lack of connectivity, and until recently, lack of inclusion on broader tourism circuits within the province, which was not a provincial priority. Extending paved roadways to better link Rincón de los Sauces in regional tourist circuits would also require invesment from the provincial government of Río Negro, for which the paved road would have little impact

(Garay et al., “Tomo II” 50). It therefore has few incentives to undertake such an initiative.

38 Provincial Decree 40/03

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There are several constraints on the likelihood of the province providing all of the assistance necessary to implementing plans. For one, the province has limited resources, and there is competition among the different municipalities for them. This has contributed to the lag in financing infrastructure networks in the town (Garay et al., “Tomo II” 178). The fact that the

Confluencia department, where Neuquén’s capital city is located, concentrated almost 68 percent of population, according to the 2010 census, may remove incentives for policymakers to invest more resources in the region. Despite its rapid growth, Pehuenches, while the fourth-largest department, only accounted for approximately 4.5% of the province’s population. As Sili and

Espasa note of the cities of the Río Colorado region, “All the localities are located in a space historically considered historically marginal for their respective provincial governments, and also for the national government, since this vast space has historically been conceived as a border space and, later, as a place of forced passage towards Patagonia” (181). In this sense, the local government may face challenges in assuring that its priorities are adopted by the provincial government.

In addition to articulating with the provincial government to implement policies and plans, the local government must engage with other actors, notably YPF and other oil companies as well as the oil workers’ union. As mentioned above, planners have sought to promote the central role of the local government in coordinating with these actors and guiding their actions.

However, this multiplicity of actors with interests in the town raises questions about who is actually driving policy decisions.39 The absence of a strong state leaves open room for private

39 In the case of Añelo, Barrera describes the concept of “stakeholder parachuting” in which entities with different interests pursue their own objectives with no coordination. Barrera notes that while actors may bring resources for urban development, the absence of effective institutional mechanisms to channel stakeholder claims has allowed for oil companies and the national government to influence “an understaffed and underfunded local mayor” and has resulted in “long-term choices made with short-term criteria and through one-off agreements.”

130 interests to guide development, which may produce results that do not improve overall community well-being. This is evidenced in the experience of Comodoro Rivadavia, and there are some signs to suggest this has happened to a lesser degree in Rincón de los Sauces.

Historically, the government has collaborated with YPF, and there was a sense among local residents that the company contributed to the town’s development. As a local historian notes, “this state company, additionally, always contributed to the enhancement of the town; cooperating in various ways with the Comision de Fomento” (Palomo 81). In its earliest days, for example, the town reached an agreement with YPF “given the importance it had in the settlement of the population” to lay infrastructure for the provision of water and light (Palomo 79).

However, Díaz et. al argue that Rincón de los Sauces’ growth was more linked to private action than to YPF due to the historical moment during which the town was growing, which coincided

“with the privatization and deregulation of the oil market” (1). Oil companies such as YPF,

Petrobras and Chevron have supported some government initiatives through donations40 and one- off agreements41. It is not clear, however, the extent to which their actions were coordinated to align with the municipal government’s larger priorities.

The regional oil union (the Sindicato de Petroleros Privados de Neuquén, Río Negro y La

Pampa) has played an important role in the formulation of policies in the town. It is a powerful actor that wields significant power in the local economy, and local government (Garay et al.,

“Tomo I” 154). Indeed, former Mayor Marcelo Rucci (2011-2019) is also a high-ranking leader within the union. On the positive side, this has facilitated informal deals with oil companies to increase payment of local taxes and support local services providers (Buenos Aires-based urban

40 For example, YPF donated toys to the municipality (Ordinance 93/1986) and Petrobras donated materials for the local library (Ordinance 920/2004) and computer equipment (Ordinance 948/2005). 41 In 2017, the town inaugurated a new aqueduct that was supported by Chevron and aimed to increase coverage of running water in the town (Gonzalez).

131 planner with experience in Rincón de los Sauces). Maintaining a fluid dialogue may also help ensure the government is up to date and responsive to the sector’s needs. However, there are concerns that their influence may tilt policies towards generating sectorial benefits to the detriment of the formation of more holistic territorial policies or policies that consider the needs of other, less well-off sectors, particularly given the lack of “other territorially-based organizations that can serve to represent and advocate on behalf of community demands” (Garay et al., “Tomo I” 274). This may partially explain why the community leaders surveyed as part of the 2019 plan development process cited unions as the group that would be least supportive of implementation of the plan (Garay et al., “Tomo I” 261).

4.4.3.4 Insufficient Control of Land Use

As in other boomtowns, one area that has proved persistently problematic in Rincón de los Sauces is managing land use, which is linked to the patterns of urban expansion that the town has experienced. This has been exacerbated by high population growth and lack of institutional capacity to address the issue, and the city government has struggled to address the demands for land of a rapidly growing population. This has contributed to informal settlements and unorganized expansion of the urban area. As one diagnostic notes:

The phenomenon of continuous and exponential population growth...generates continuous demand in the city for new urban land and new housing. This pressure originates a need for the municipality to expand its urban shell and its provision of infrastructure in a very short time to address said population increase. Given the budgetary and management difficulties of the municipality in responding to this situation, there are spontaneous processes of irregular land occupation, led by both low-income sectors as well as by middle- and high-income sectors (Subsecretaría de Planificación Territorial de la Inversión Pública de la Nación, “Tomo I” 172).

Land use regulations have lagged behind this process of expansion. Uncontrolled expansion makes it more difficult to provide public services and means that resources

132 must be allocated to retroactively addressing problematic settlement patterns and formally transferring ownership to residents. A large percentage of residents in the urban area lack formal land titles, even those on formal lots (Subsecretaría de Planificación

Territorial de la Inversión Pública de la Nación, “Tomo I” 171-2), limiting their ability to exercise ownership rights. Additionally, insufficient control of land use exacerbates distortions in the local market that make it more difficult for some sectors of the population to find housing. High oil sector salaries contribute to speculation in the real estate market, which increases land, housing and rent prices to the detriment of workers in other sectors (Subsecretaría de Planificación Territorial de la Inversión Pública de la

Nación, “Tomo I” 173).

The town’s land regulation policy has been largely reactive, responding to this process, rather than guiding it. “They have an area of land policy, but it is very oriented towards regularizing what was already occupied and not preventing it”, according to one planner (Buenos Aires-based urban planner with experience in Rincón de los Sauces).

This reactive approach is reflected in the numerous changes made to the relevant ordinances. By way of example, in 1992 alone, the city council made numerous changes to land ordinances as the city council has sought to respond to the town’s rapid growth.

The text of one representative ordinance, Ordinance 203/92, which increased the value of square meters of land, notes that the land values the town had been using until that point were dictated by the Provincial Directorate of Land and Colonization and do “not conform to the reality of our town.” The justification of the ordinance states that the update is necessary due to the “outsized demand for existing land, caused by the large number of people who daily reach this town of Rincón de los Sauces looking to settle”

133 and because the government “lacks sufficient and efficient means” to address the requests given the costs involved in preparing land. In another representative example (Ordinance

350/94), the city council adjusted its zoning scheme to permit residential, commercial and other uses in an area that had previously been reserved for agricultural uses but was settled by residents. In 2012, the municipality approved a new framework for allocating public lands (Ordinance 1373) with the aim to “create a clear and concrete regime to regulate irregularities with the lots that we live with a daily basis” (“Alertan sobre la venta de terrenos adjudicados por la comuna”). These examples are just a few of many that show the local government adjusting land ordinances in response to developments reactively.

Insufficient control of land use is related to several of the cross-cutting issues previously discussed in this section, including a lack of technical capacity in the municipality and coordination challenges. From 1984 through 2019, 18.5%, or 413, of the 2234 ordinances passed by the city council were related to land use, urban organization or housing (Garay et al., “Tomo

1” 226). Between 1984 and 1995, the government of the then second-order municipality created the general norms that outline the organization of the municipality. However, most of these regulations were of “very low technical-legal quality” (Garay et al., “Tomo 1” 226).

Additionally, more than half of the 413 ordinances were related to regularizing the administration of land given the lengthy process of transferring ownership from the province to the municipality, and then to private entities (Garay et al., “Tomo 1” 226).

Further, these norms have been subject to significant modifications and arbitrary exemptions that have undermined their coherence. Many of them are related to individual cases

(approval of individual survey plans, adjudication to individuals, or reservation of lots for

134 specific purposes) instead of taking a holistic approach (Garay et al., “Tomo 1” 228). The practice of granting exceptions has opened the council to pressures from private developers to allow high-rise developments on a case-by-case basis through ordinances, undermining technical or holistic urban criteria in the decision-making process (Garay et al., “Tomo II” 55).

Additionally, despite the numerous partial modifications made, the land use norms have not been restructured in nearly 15 years, which Garay et al. attribute to “failure to apply the principle of flexible planning that is expressed through scheduled, periodic revision of the Codes” (“Tomo

II” 382). This potentially compromises efforts to ensure that the local government is guiding municipal development in a comprehensive and centralized way and ensure that land is being used in patterns that best promote local well-being.

4.4.3.5 Political Will

Planners are aware that the success of their plans depends both on the ability and willingness of decision-makers to implement them and assume any ensuing costs. Indeed, strong political will to move away from the town’s existing model of production was cited as a strength in the 2001 model. Overall, planners have expressed that they feel their work is valued by the actors they engage with and believe they value planning. However, this does not necessarily translate to action for a series of reasons, including the complexity of plans, lack of alignment between technical and political officials, limited political will and turnover of involved officials.

Moving a plan from paper to the operative stage involves designating responsible authorities and empowering them to act. In the case of the 2019 plan, the authors note that they proposed 29 programs, but that local authorities must designate and empower authorities to oversee them, with management from the mayor’s office. They additionally note that local authorities must take responsibility for adjusting their proposal and generating consensus around

135 it in the community (Garay et al., “Tomo I” 6). This implies a need for political will at the highest levels and also from a multiplicity of actors, any of whom could scuttle implementation of various parts of the plan. Relatedly, Garay et al. note in the development of their plan that one reason many plans have not been applied in the past “is the difficulty in organizing the first steps of its implementation” (“Tomo II” 392). They recommend that the head of planning begin by generating consensus among actors and coordinating with relevant sectors to begin implementation.

There is a clear sense that political will is a key factor in determining the implementation of plans. As one planner, who also has experience in municipal management, noted after outlining the town’s challenges (housing deficit, and partial services deficit, poor waste treatment policies), addressing “these things would be within the reach of the municipality if it had planning as a priority in its agenda” (Buenos Aires-based urban planner with experience in

Rincón de los Sauces). Indeed, in analyzing the risks of the proposal to create a new unit to be tasked with guiding urbanization, the authors note that “The greatest risk is that doubts about the viability of the project, or reticence to incorporate the cost of putting it into action, don’t find any actor interested in assuming this risk. The leadership of the municipal authority or the delegate responsible for the implementation of the project play a fundamental role in this point” (Garay et al., “Tomo II” 372). It is clear that lack of political will has undermined the full implementation of plans.

Planners have highlighted the need for strong articulation between political and technical objectives in order to increase the likelihood of implementation. While a plan may be technically sound, it must be linked to an overarching vision that does not conflict with political considerations or it will not work (Buenos Aires-based urban planner with experience in Rincón

136 de los Sauces). One planner noted that despite enjoying strong collaboration with municipal authorities during the planning process, it was still not clear to him if there was a “strong interest in planning the future” and questioned “how much emphasis they had or how much interest or how much effort they will put into the reformulation of public policies or the hierarchization of public policies” (Buenos Aires-based urban planner with experience in Rincón de los Sauces).

He noted, for example, the mayor never spoke with the team during the development of the plan in which he was involved.

Lack of clear understanding of the issues and possibilities of plans may in part explain the lack of prioritization placed on them. When the planners involved in the development of the

2019 PDOT asked informants to rank a top five out of 18 issues that are most urgent to address in the plan, their top choices (health, education, security, environmental protection, and provision of water, gas, sewage and electricity services) were not the main issues addressed by such plans and were more tangentially related (Garay et al., “Tomo I” 257). Instead, the key issues addressed by PDOTs, such as urban expansion and land policies, appeared as lower ranked concerns. This perhaps suggests a lack of appreciation for the relevance of these issues, or the role and purpose of the plan.

Political will requires that a high-level local decision maker is determined to take on a certain course of action. Overall, planners have sought to engage local authorities in the development of their plans to ensure their relevance. However, planners raised concern that the method of “drop in consulting” whereby plans are financed and developed by external actors such as COPADE and the CFI may not generate sufficient local buy-in. As one planner noted, the government on Rincón de los Sauces showed willingness to participate, but local governments do not tend to say no to plans as there is financing involved (Buenos Aires-based

137 urban planner with experience in Rincón de los Sauces). There is also a general sense that there needs to be more support for implementing and follow up after plans are developed. When asked about contact following the presentation of the plan, one planner noted, “there is little of that unfortunately...there are many reflections about this: why does urban planning in Argentina not produce results? And one of the reasons that I can say is that the model of consultants that go to a locality, study it and leave a product, as it is occurring, is not the best” (Buenos Aires-based urban planner with experience in Rincón de los Sauces). The planner highlighted the example of

Añelo, saying that many organizations had made plans but that they were not appropriated by the local government.

Separately, electoral cycles generate few incentives for prioritizing long-term planning, and the turnover in administrations and personnel wrought by elections may undermine the continuity of plans as officials involved in their development or implementation are replaced by new authorities. In 2019, elections (provincial, local and national) took place nearly all year in

Neuquén, and the 2019 PDOT was presented just as the electoral cycle was beginning. As one planner noted:

So then, it was a year in which politics did not pay us attention. We have the product, but we didn’t have an opportunity to present it and for them to assume the commitment of implementing it institutionally as a voted ordinance. They didn’t do it. It was not to deny it, but it’s like that (Buenos Aires-based urban planner with experience in Rincón de los Sauces).

Additionally, given that the plan was presented during an electoral period, there were changes in several key posts, including the mayor. Although COPADE officials had previously expressed their concern about ensuring the continuity of the plan and providing assistance during the initial stages of implementation (Garay et al, “Tomo I” 5), the project coordinator at COPADE left to

138 seek office. These changes have raised questions about the continuity of the measure and how coordination and implementation of the plan will continue in the future.

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CONCLUSION

This thesis has examined the impact of oil and gas development on the town of Rincón de los Sauces in Argentina’s Neuquén Province, an oil boomtown that experienced rapid growth from its foundation through the early 2000s, and again finds itself on the cusp of an anticipated boom. It has sought to describe the challenges that the rapid, natural-resource based growth of

Rincón de los Sauces has created for policymakers particularly in terms of planning and governance and explain how they have approached planning and management in this context of rapid and uncertain growth.

The situation of Rincón de los Sauces parallels the experience of many boomtowns in terms of the social, urban and quality of life challenges it has faced. As oil and gas production in the surrounding region increased, the town grew rapidly and also became a pole for migrants attracted by the possibility of employment. Urban expansion has taken on several problematic dynamics. For one, much growth has occurred in such a way as to promote low population density, increasing the difficulty and cost of providing basic services infrastructure, which has lagged behind demand. Additionally, settlement has occurred on lands that are either environmentally precarious or were initially reserved for other uses (primarily agricultural), potentially compromising economic diversification efforts. Other challenges faced include shortages of educational and health infrastructure, ineffective waste management, environmental contamination, high population turnover and lack of community bonds, and importantly, a significant housing deficit. Additionally, the economic dependency on the oil industry has generated a crowd-out effect of other economic activities, and during downturns has generated anxieties among the local population about the town’s future.

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The town of Rincón de los Sauces was formally constituted alongside an YPF oil camp as provincial government officials recognized early on the need to create a viable community that could meet the social and economic needs of the anticipated population. Planning has played a relevant role in the town’s history. Organisms such as COPADE and CFI have backed the design of plans aimed at organizing the town’s growth and promoting quality of life at several key moments in the town’s history: its foundation in 1971, amidst a boom generated by conventional oil and gas development in 2001, and again in 2019, as the city prepares for an anticipated uptick in unconventional oil and gas development in the region. An assessment of these plans and their implementation allows for several reflections on how policymakers and planners have approached planning and management in the town, and the challenges they have faced.

From the start, planners have recognized the unique challenges that the town would face given the context of its foundation: as a remote, oil work camp in an arid region, where oil activity was expected to quickly grow, but could not be expected to be unlimited. There is significant difficulty inherent in planning when many key factors that determine a town’s anticipated economic and demographic growth—oil prices, and national and provincial energy policies, for example—are outside of the local government’s control. In this uncertain context, planners in Rincón de los Sauces have taken several approaches in seeking to develop relevant plans for the town including: 1) trying to learn from the experiences of other towns and best practices; 2) drawing on a variety of sources of information to make projections; 3) seeking to build flexibility and adaptability into plans; 4) encouraging community participation and local buy-in; 5) aiming to strengthen the local government’s role in guiding urban development; and 6) seeking outside support when necessary.

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Despite some challenges, planners have overall been able to develop plans that are technically sound and relevant for the town’s situation. However, these plans have not always had the intended impact due to a series of challenges and limitations, many of which affect both the development and implementation of said plans. Among the limitations faced by planners and policymakers in the town are: 1) rapid growth and external dependencies, which generate existential uncertainties and require local government capacity to adapt; 2) limited institutional capacity, both technical and financial, which limit the municipality’s ability to effectively assume all of its responsibilities; 3) challenges coordinating among relevant stakeholders to ensure efforts are being aimed at common goals; 4) inability to sufficiently control land use, which raises the posterior costs of urbanization and generates potential conflicts; and 5) lack of political will or decision-making that prioritizes planning.

Many of these factors are mutually interconnected. For example, limited institutional capacity and coordination challenges have contributed to insufficient control of land use in the town. Meanwhile, external dependencies are exacerbated by coordination challenges. These factors are also engaged in ongoing interplay with the approaches built into municipal plans.

Successfully building adaptability into plans requires institutional capacity to monitor developments and respond accordingly. Separately, promoting a strong role for the local government requires institutional capacity and leadership to coordinate among stakeholders.

Balancing these different challenges may require making tradeoffs: seeking outside assistance may compromise local political will to prioritize planning or undermine the local government’s role in guiding urban development, while also providing much-needed technical or financial support to complement limited local capacity.

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The challenges to effectively planning in a boomtown context in Rincón de los Sauces largely parallel those seen elsewhere. It is clear that there are a recurring series of challenges faced by policymakers in boomtowns, particularly in regard to coordination with multiple stakeholders and different levels of government, insufficient control of land use, information asymmetries and uncertainty, and limited local capacity. In Rincón de los Sauces, these challenges have resulted in outcomes, that while far from disastrous, are not ideal and serve as limitations on quality of life (particularly the town’s ongoing housing deficit). Despite challenges, planning is hardly fruitless or ineffective. It is likely the town would face more serious challenges and infrastructure gaps in the absence of plans. Nevertheless, based on this case study, several recommendations can be made for how to improve planning outcomes in natural resource boomtowns, many of which are focused on improving the institutional context in which boomtown planning occurs:

1) Focus efforts on building local capacity: Municipalities, especially those confronting

rapid growth and increasing services demands, have a large number of responsibilities

that they struggle to uphold due to limited technical capacity. Historical experience

shows that in the absence of a strong central role for the local government, other

actors such as the private sector or individual settlers may guide urban expansion in

boomtowns with problematic results. In this sense, it is important that efforts be made

to build local authorities’ capacity to guide development in the long-term. To this

effect, national and provincial governments could consider offering long-term support

for promoting the relocation of skilled individuals to boomtowns or create a special

task force of planners charged with supporting local governments. Building capacity

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is particularly important to ensure that policymakers can monitor and respond to

changes in growth rates and patterns.

2) Promote mechanisms to ensure financial support from the provincial government:

Support from the provincial government is indispensable for boomtowns in

Argentina’s federal context, especially in areas such as promoting economic

diversification and investing in infrastructure. However, given their small size and

remote nature, there may be few incentives to offer them the necessary support; this

will be especially true if mechanisms for allocating support are unresponsive to quick

changes in population. In this sense, it is important that governments implement

mechanisms to allow for timely responses to rapid changes in community needs due

to population growth, and perhaps consider implementing special funds to be directed

to towns or regions projected to experience rapid growth to help them anticipate

future demands.

3) Ensure continuity of technical assistance: Outside technical assistance provided to

municipalities is a valuable tool that can help address shortcomings in local capacity.

However, too often assistance in planning is divorced from support in the

implementation stage. Efforts should be made to link support in planning to a

subsequent commitment to implement the plan on the part of local governments, and

outside organisms should make every effort to provide ongoing support during the

implementation phase.

4) Improve formal coordination mechanisms to facilitate long-term agreements between

stakeholders: Policymaking in boomtowns is often guided by short-term agreements

with stakeholders. Consideration should be given to how these agreements can be

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channeled through more institutional forums to promote alignment with long-term

goals. For example, mechanisms could be established to ensure that any CSR

program agreed to with an oil company is clearly linked to the town’s strategic

objectives. Additionally, while a certain amount of reactiveness is likely inevitable in

the uncertain context of a boomtown, it is particularly important to focus on

governance structures that promote land use planning and timely release of urbanized

land to anticipate demand. Further, it is important to promote efforts to generate civil

society participation in planning and governance to balance sectoral interests.

5) Aim to minimize political barriers to implementation of plans: Technically sound

plans may fail to be implemented due to political barriers. Efforts should be made to

ensure that plans are easily accessible to a less technical audience and linked to a

clear, overarching objective. Consideration should also be given to how electoral

timing may impact implementation, and how to build review mechanisms into plans

that facilitate inter-temporal implementation.

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ANNEX - INTERVIEW QUESTIONS

Interview Questions (to be adapted depending on interviewee’s role)

General Background/Perceptions

● Could you describe your background and experience as it relates to planning/governance in Rincón de Los Sauces? ● How long have you lived/worked in the town? What changes have you seen? ● How would you describe the growth of the town? ● What role does the oil industry play in the city? What impact do you think it has on the town? How does this compare to other industries?

Planning and Management ● What are the main issues that the city government has to address? ● What issues do you think are most concern to local residents? ● What kind of projects or policies are/were you involved in? ● What challenges do/did you/the government face in developing and implementing these plans/projects? ● How do you think the town’s growth impacted planning, both in the short term and more long term? ● Could you tell me about a project/initiative/program/achievement that you are particularly proud of? ○ What was the result? Did you face any challenges? If so, how did you approach them, and what was the result? ● Did you collaborate with any other actors in the development of policies and plans? (e.g. other departments in the mayor’s office, city council, NGOS, neighborhood groups, academics, organizations, unions, oil companies, other governments, etc.) Which were most important, and why? ● What role did oil companies/unions/provincial government play? ● How would you evaluate the interaction between different actors? ● What spaces were there for coordination between different actors (formal/informal)? ● What was the role of the city council? Were there any ordinances that you see as particularly helpful, or as problematic? ● Was there any information, resources or skills that you felt would have helped improve planning?

Boomtown Examples ● Are you familiar with other towns or cities that have had similar experiences to Rincón de los Sauces? ○ If yes, which? What makes them similar? ○ If no, why? What makes Rincón de los Sauces different from other cities? ● Did you look to any examples or other towns or areas to provide guidance or lessons in developing policies/programs? ○ If no, why not?

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○ If yes, which, and what did you learn? ● Are you familiar with the concept of a boomtown?

Preguntas de Entrevista (Para adaptar según el entrevistado)

Preguntas Generales

● ¿Podría describir sus antecedentes y experiencia en lo que respecta a la planificación/la gobernanza en Rincón de Los Sauces? ● ¿Hace cuanto que vive/trabaja en la ciudad? ¿Cuáles cambios ha visto? ● ¿Cómo describiría el crecimiento del pueblo? ● ¿Qué papel juega la industria petrolera en la ciudad? ¿Qué impacto piensa que tiene en el pueblo? ¿Cómo eso se compara con otras industrias?

Planificación y Gestión ● ¿Cuáles son los principales problemas que el gobierno de la ciudad tiene que abordar? ● ¿Qué temas cree que le importan a la ciudadanía local? ● ¿En qué tipo de proyectos o políticas está/estaba usted involucrado? ● ¿Qué desafíos tuvieron que enfrentar el gobierno/usted al planificar e implementar estos planes/proyectos? ● ¿Cómo cree que el crecimiento de la ciudad afecta/afectó la planificación, tanto a corto como a largo plazo? ● ¿Podría contarme sobre un proyecto/iniciativa/programa/logro de que se siente particularmente orgulloso? ○ ¿Cuál fue el resultado? ¿Se enfrentó algún desafío? En caso de sí, ¿como respondió y cuál fue el resultado? ● ¿Usted colabora/colaboró con algún otro actor o actores en el diseño de políticas públicas y planes? (por ejemplo: otros departamentos municipales, el concejo deliberante, ONGs, académicos, organizaciones barriales y comunitarias, sindicatos, empresas petroleras, otros gobiernos, etc.) ○ ¿Cuáles son/fueron los actores más importantes y por qué? ● ¿Qué rol juegan/jugaron las empresas petroleras/los sindicatos/el gobierno provincial? ● ¿Cómo evaluaría la coordinación entre los diferentes actores? ● ¿Cómo se da la articulación con los otros actores? ¿Qué espacios (formales / informales) hay/había para la coordinación entre los diferentes actores? ● ¿Cuál es/fue el rol del concejo deliberante? ¿Hay/Hubo alguna ordenanza que considere particularmente útil o problemática? ● ¿Hay/Hubo alguna información, recursos o habilidades que creía que podrían haber ayudado a mejorar la planificación?

Ejemplos de Boomtowns ● ¿Está familiarizado con/Conoce a otros pueblos o ciudades que han tenido experiencias similares a Rincón de los Sauces? ○ En caso de sí, ¿cuáles? ¿En qué aspectos se parecen? ○ En caso de no, ¿por qué? ¿Qué diferencia Rincón de los Sauces de otras ciudades?

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● ¿Buscó/Miró ejemplos u otras ciudades para proporcionar orientación o lecciones en el desarrollo de políticas/programas? ○ En caso de sí, ¿cuáles? Y ¿qué aprendió de ellos? En caso de no, ¿por qué no? ● ¿Está familiarizado con/Conoce el concepto de un boomtown (ciudad en auge)?

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