Big Oil hopes Argentina’s shale oil and gas boom can rival the United States’. Backed by US dollar diplomacy, the boom has come at the cost of climate change, ecological damage, and encroachment on indigenous land.
This is a rush transcript and may contain errors. It will be updated.
Greg Wolpert: It’s The Real News Network and I’m Greg Wolpert in Baltimore. The government of Argentina together with major transnational oil companies is working on a plan to double its production of oil and natural gas via hydraulic fracturing or fracking as it’s commonly known. The plan though has been running into trouble recently. This week on Wednesday, workers at a fracking sand production mine went on strike demanding a doubling of their wages. Also, the recently elected government of Alberta Fernandez introduced price freezes for fuel to help bring inflation under control, but this has affected investment in the fracking sector. Still, the project moves forward as the world’s second most important fracking effort after the United States. Argentina’s fracked oil and gas production raises series issues however, about the effect it will have on climate change and indigenous land just as it does in the United States. The Vaca Muerta Shale has attracted trans-national oil companies such as ExxonMobil, Francis, Total, Shell, and Chevron. Also, the Trump administration is supporting this project recently providing a $450 million loan via the US International Development Finance Corporation.
Joining me now to discuss Argentina’s fracking boom is Nick Cunningham. He’s a Portland, Oregon based independent reporter who recently returned from a week long reporting trip to Argentina. His investigation resulted in a series of articles, the third installment of which was written for The Real News Network and is titled Surviving the Onsite of Fracking in Argentina. Good to have you on Nick.
Nick Cunningham: Thanks for having me.
Greg Wolpert: So let’s start with some of the basic background information. Where is the Vaca Muerta Shale located in Argentina, and why has it emerged as a second most important commercially viable country in the world for fracking?
Nick Cunningham: Yeah, so the Vaca Muerta Shale formation, which is part of the Neuquén Basin, is located in sort of central Argentina, a little bit East of the Andes in a dry part of the country. It’s an arid step in northern Patagonia. And the reason it’s important is because the USEIA estimates that it has the second largest shale gas reserves in the world and the fourth largest shale oil reserves in the world. So after the United States, actually in terms of gas, it’s estimated to have more gas reserve than the United States. So the geologic potential is massive and the Argentine government wants to take advantage of that. And unlike some other countries, say China, which also has a lot of estimated shale reserves, the Argentine government is very actively courting multinational oil companies to come in and then to develop this. So it’s a little bit slow going, but in the last few years it’s sort of picked up momentum.
Greg Wolpert: Now, president Alberto Fernandez, who came to office in December specifically aimed to reverse many of the Neo liberal policies of his predecessor Mauricio Macri. Now, how does the Fernandez administration view this shale project and fracking as a policy matter?
Nick Cunningham: This is a good question, and in a lot of ways there’s continuity. Last year during the campaign, after Alberto Fernandez won in their version of a primary in August, and he was sort of the presumed president in waiting, there was big questions over what he was going to do with Vaca Muerta. And the industry was concerned that he was going to re intervene in the market which would sort of be bad for them. But he didn’t say much in the next few months. He made a couple of big statements about the state needed more control, but he didn’t say much. And as time went on and he won the presidency and he assumed office, it became clear that he very much wants this to happen. There’s going to be some nuance and some tweaking of the policy. But the Argentine government, now under Alberta Fernando still wants to develop fracking.
And so this is kind of interesting because in the English speaking press and English language press, it’s often framed as as the [inaudible 00:04:22] are sort of anti-market and Macri was very pro-market. But while there’s differences, and Alberto Fernandez wants a little bit more of a state role, they still promote extractive industries, and it’s just a little bit more of a state led approach. And so now he enters 2020 in the midst of an economic crisis and he’s positioning Vaca Muerta as a key part of the country’s economic revival.
Greg Wolpert: Now, your article for us focuses on the impact that fracking is having within indigenous communities in Argentina. Those include both the human rights impacts and also the potential impacts on drinking water as well as earthquakes. Tell us about that and also about who you talked to while you were there.
Nick Cunningham: Yeah, so the flagship oil field for Vaca Muerta and one of the most important oil fields at this point in South America is called Loma Campana. And it’s in the province of Neuquen, and it is a joint venture between YPF, which is the state-owned oil company, partially state-owned, and Chevron, the American oil giant. And so this Loma Campana field is located on ancestral lands for the Mapuche indigenous communities, particularly one community called Campo Maripe. They’ve lived there for decades, at least a century, but the state and the province dispute that fact saying that they don’t have land title. But obviously they were there before Neuquen was even a province.
Nevertheless, the Argentine states permitted this and approved it and YPF and Chevron proceeded and that required evicting Mapuche communities from this land. Now they still live, they’ve kind of been pushed to the side from this field and they live below the plateau, kind of in the industry shadow and there’s a lot of, a lot of negative outcomes from this.
I met with them and they said that they’ve had various health problems, respiratory problems, skin rashes, some cancers. There was one case of a kid, a child getting cancer. They had drinking water problems. They now have to buy water, which is a really hard, a big hardship for a community that doesn’t have a lot of money. Their animals have been sick, some are born with deformities and they can’t graze them as much anymore. And so moving in the industry shadow is very negative for them.
Now, a little bit further down the main highway, there’s another town called Sauzal Bonito. And this is a very small village and it’s sort of in the epicenter of a sudden wave of earthquakes. And I spoke with a geographer from the university there in Neuquen who said that there’s no precedent for earthquakes in this area. Since the onset of fracking, there has been a huge spike in earthquakes and particularly in the past year. And it’s not fracking per se that causes the earthquakes, it’s these disposal wells. When all this water comes out of the ground, they have to reinject that water back into the ground in deeper wells, and it’s these disposal wells that are thought to be causing some earthquakes.
And in this small town, some houses had some severe damage from earthquakes. I saw and took pictures of cracks in walls. And there’s one house that fell to the ground and I spoke with a woman who described living in fear because of this happenings. They wake up in the middle of their night and their children are crying and, and there are earthquakes rattling their houses. They’re old adobe houses, so she’s scared that they’re going to fall down, and one did. So the earthquakes is another problem in this area.
Greg Wolpert: Now, the second article in your series also highlighted the infrared camera shots that showed methane emissions in the Vaca Muerta Shale. What exactly are the risks that are associated with that and with climate change, especially considering that they’re ramping up drilling in this field? And what does the movement against this drilling in Argentina look like?
Nick Cunningham: The important context is that all the oil majors have sort of committed to the Paris Climate Agreement, at least extensively, I’m putting that in quotes, they’ve committed to the principles of the Paris Climate Agreement. Nevertheless, in the past two years, they spent at least $50 billion on new projects that are out of alignment with [inaudible 00:09:20] and that data comes from Carbon Tracker. And they have another trillion and a half dollars in the works on new oil and gas projects. So what does that mean? That means that they’re actively betting against or they’re assuming and betting against that the world would get serious about climate change. They’re very much invested in the world blowing past climate targets. Now, Argentina is one of these places that they are investing in. And Argentina, by all accounts is at the very early stages of this is fracking story.
The U S has been doing this for a decade and a half, and Argentina has been doing a lot of pilot projects and they’re only in the early stages of ramping up. So the oil majors involved in Argentina have no plans of slowing down. They plan to be there for decades and they plan to drill thousands of wells and essentially do what they did in the US. So this is a big climate problem because we already have… Some research suggests that all of the existing production is… We’ll use up the carbon budget and we essentially can’t be developing new frontiers for oil. And some of the activists that I spoke with referred to this as a carbon bomb. The amount of carbon that’s in the ground in Argentina. One study suggested that it’s equivalent to about 11% of the remaining carbon budget. And so the climate impacts are profound, but the story is not written yet. This is still early stages.
As far as the resistance to what’s going on there, it’s pretty weak to be honest. The national government, as I mentioned, is very much in support. The provincial government is very much in support. And Buenos Aires, which is very far from… They’re hundreds of miles away from where the joint is taking place. The press reports on Vaca Muerta in almost uniformly positive ways. And so there isn’t a big resistance in Buenos Aires where most of the population lives. So the resistance is really on the ground in Neuquen and Rio Negro provinces. It’s small, but it’s actually pretty interesting. Indigenous communities and [inaudible 00:11:47]communities work with environmentalists. They work with academics in the city of Neuquen, and there’s a lot of information sharing. I met a geographer who was in a town where all of those earthquakes were, explaining to the residents about the risks. So there is a small but a sort of a cross community movement to slow the industry’s advancement.
Greg Wolpert: Well, I certainly hope we can get your stories out, not only internationally, but also within Argentina, and maybe they can be translated so that people become more informed about this project. Because as you said, it seems like there’s very little information about this. But we’re going to leave it there for now and I encourage people to read your articles both in the DeSmogBlog and also on our website. I was speaking to Nick Cunningham, freelance journalist and author of the TRNN article, surviving the on start of fracking in Argentina. Thanks again, Nick for having joined us today.
Nick Cunningham: Thanks for having me.
Greg Wolpert: And thank you for joining The Real News Network.