Vaca Muerta Megaproject

Vaca Muerta Megaproject A fracking carbon bomb in Patagonia Enlace por la Justicia Energética y Socioambiental (EJES) [Socio-environmental and Energy Justice Alliance] is the collaboration of Argentine organizations Observatorio Petrolero Sur (Buenos Aires, Neuquén, and Río Negro provinces) and Taller Ecologista (Santa Fe province). Trough an interdisciplinary and federal approach, our work currently focuses on the megaproject Vaca Muerta. We take into account the policies involved, and the territories and population afected in the long term. Te strategic focus is on the economic, financial, energy and socio-environmental aspects. Our objective is to expose the overlooked impacts and find a fair path to energy and economic transition. Author: Diego di Risio Editing: Flavia Medici Proofreading: Nancy Piñeiro, Lynne Bolton Design, layout and illustrations: dosRíos [diseño & comunicación] Map design: Iconoclasistas Photos: Jorge Ariza, Martín Barzilai, Martín Carcione, Fabián Ceballos, Alexis Vichich, among others. Figures: Oil Change International 1. Fracking 2. Hydrocarbons December 2017, Argentina. pp. 20 Taller Ecologista Rosario and Observatorio Petrolero Sur in EJES (Enlace por la Justicia Energética y Socioambiental), Argentina. In cooperation with the Regional Ofce Cono Sur and the Department of Ecology and Sustainable Development of Heinrich-Böll-Stiftung e.V. CC-BY-SA – Attribution-ShareAlike Details of the license can be found on the following website: http://creativecommons.org/licenses/by-sa/4.0/legalcode YPF-Chevron Loma Campana concession, Patagonia, Argentina. Credit: Martín Barzilai The transnational megaproject is a key extractive frontier and a major carbon bomb that has a signifcant lock-in risk. In spite of its early stage of development by a complex network of corporations, it is already impacting on the rights of communities on various levels, both locally and across Latin America’s Southern Cone region. Stakes are high–both for the companies involved and for the governments supporting this project. 1. Gas well explosion from Pluspetrol at Plottier city, Neuquén province. Credit: La Mañana de Neuquén. | 2. Mobilization against YPF and Chevron deal repressed by police, Neuquén city. Credit: Diario Río Negro. | 3. Hydrocloric acid spill from a truck in Centenario city, Neuquén province. Credit: Matías Dabramo. | 4. Gas well explosion in Loma Campana concession. Credit: Diario Río Negro. | 5. Spill of 248 thousand liters of formation water in farmland, Allen city, Río Negro province. Credit: Martín Álvarez Mullally. he United States Energy Information Agency ranks Argen- T tina’s shale gas and shale oil resources in second and fourth place globally.1 Almost all of this potential is concentrated in the Neuquén basin in Northern Patagonia (provinces of Neuquén, Río Negro, Mendoza, and La Pampa). Dubbed “Vaca Muerta” (“Dead Cow”), it has been identified as the biggest shale play outside North America and makes Argentina the third country, after the United States, and Canada, to reach commercial development.2 Since 2011, as conventional volumes have decreased and do- mestic consumption has risen, the country has lost self-suf- ciency and been forced to import huge quantities of liquefied natural gas (LNG) and Bolivian gas. In this context, the government set the goal of drastically increasing hydrocarbons from unconventional sources. To complement the 2008 tight gas ini- tiatives -8,000 km² with a potential of 45 trillion cubic feet of gas3- in 2011, a shale campaign was announced. Te following year, the government nationalized YPF, and put it in charge of the initiative. Te company had been privatized in the ‘90s and became a symbol of the neoliberal reforms, which lead to a massive crisis and popular uprising in 2001, the year in which -5- Argentina sufered the worst socioeconomic crisis in its history. Te goal is ambitious. Tere are two shale formations (Vaca Muerta and Los Molles), which together stretch over 30,000 km². Total estimated resources amount to 19.9 billion barrels of oil and 583 trillion cubic feet of gas. Tey represent around 50 billion tons of CO2 that are currently locked in the ground, almost 1.5 times the annual global CO2 emissions from the energy sector. However, since there are very few exploitation projects, there is very little overall development (2 to 4%) with just over 1,500 fracking wells. Output from unconventional reservoirs has nevertheless had a significant impact: unconventional gas accounts for 23% and oil for 8% of the total extracted.4 Currently, the main target is gas, whereas in the past it was oil. Fracking: risky, dirty and banned Developing unconventional hydrocarbon reservoirs requires a combina- tion of technologies: hydraulic fracturing, horizontal drilling, and multi- well pads. This toolbox is usually referred to as ‘fracking’. Virtually the only country where it has been implemented on a large scale is the United States, which has fracked over 50 thousand wells since 2005, resulting in numerous controversies globally due to the impacts of this practice. Up-to-date scientific peer-reviewed literature has concluded that fracking has inherent impacts on public health, water, soil and air.5 Other local harms identified include increased seismic activity as well as damage to neighboring economic activities. Climate impact has also been flagged up as a key issue to consider. Because, although gas has been regarded as a bridge fuel, scientific research, such as the study by Robert Howarth of Cornell University, has shown that unconventional sources accelerate global warming due to methane leakages.6 Health threats related to infrastructure have also been re- searched. For example, silica sand extraction and transportation has been linked to silicosis.7 In addition, controversies have emerged over overestimated long-term output. The US-based Post-Carbon Institute -6- has regularly reported on the EIA’s overstatement of gas extraction.8 Poland, one of the countries with the biggest shale potential in Europe, finally gave up extraction eforts given the lack of productive results.9 Among the voices of numerous victims in the United States, these arguments have raised worldwide awareness about the costs and benefits of the technique. The population and decision makers have also been exposed to scientific evidence, like the Compendium of Sci- entific, Medical and Media Findings Demonstrating Risks and Harms of Fracking. The result of these actions has been a global wave of awareness and resistance to unconventional fossil fuel developments and expansion. Currently, three countries (France, Bulgaria, and Ireland), two States in the U.S. (New York, Maryland), and numerous munici- palities across Latin America (Mexico, Colombia, Brazil, and Uru- guay) have enacted moratoriums or banned the technique. As a strategy to reduce costs, the scale of operations in Vaca Fracking carbon bomb in Patagonia Muerta is growing rapidly. Having reached the size of a transnational megaproject, the current and proposed infrastructure is expanding throughout Latin America’s Southern Cone. Aside from extraction, its value chain encompasses more than ten waste dumps and oil landfills, three sand extraction mines, plus its cleaning facilities and associated logistics; national and international pipelines, LNG plants on the Atlantic and Pa- cific oceans, a 700 km train line for goods transportation, expansion of petrochemicals and refineries as well as new roads and highways, among other assets involved. Te result is an increasing web of nodes, in which the actors complement each other and compete among themselves in a complex network (see the image below on p. 8). Vaca Muerta is presented as a test case for the Global South, and especially for the Latin American region, where several governments are proposing new unconventional projects.10 In Mex- ico and Colombia it is often used as an example to promote the benefits of the unconventional fossil fuel paradigm and pave the way for industry-friendly reforms. For example, in 2015 Co- -7- lombian congressmen visited Neuquén at the invitation of their Argentine peers and YPF to “see the project for themselves”.11 Te group was discussing a joint statement with European rep- resentatives to encourage shale investment in both continents.12 Vaca Muerta megaproject Figure 1. Top Countries (outside of North America) by Potential Oil and Gas Production from Shale Plays Over the Next 20 Years (2018-2037) -8- Source: Oil Change International (using data from Rystad Energy UCube, December 2017)13 Extracting for exports and heavy industry Te Neuquén basin is an old extractive region, which supplies over half of the country’s gas. With revenues declining due to the exhaustion of conventional sources, Neuquén has been pushing strongly to reactivate its main economic activity. In national terms, gas accounts for half of Argentina’s energy matrix, with the rest being made up of oil (around 40%) and small outputs of hydro and nuclear power. Coal and renewables account for less than 3%. ‘Cleaning up’ the energy matrix by reducing oil dependence and increasing gas use is also mentioned among the government’s narratives. By reducing current imports first, the government’s long-term Fracking carbon bomb in Patagonia goal is to shift the region towards gas exportation through conti- nental pipelines and projected LNG facilities in Uruguay, Chile, and Argentina.14 According to government scenarios, with a steady investment trend, seasonal exports will be possible by 2025.15

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