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Protests against Chevron highlight Argentine energy woes

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

By Jonathan Gilbert, Correspondent
Buenos Aires

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

Lawmakers in Neuqu茅n province approved the $1.2 billion pact last week amid violent protests outside the provincial legislature, where police fired rubber bullets at around 5,000 anti-fracking demonstrators. Mapuche natives also blockaded a YPF plant, and one of the community鈥檚 leaders said Monday that 鈥淲e鈥檙e not ruling out further action.鈥

Opposition to developing the Vaca Muerta in southwest Argentina 鈥 one of the world鈥檚 largest nonconventional hydrocarbon deposits 鈥 reflects similar clashes across Argentina. Energy and mining projects, often foreign investment-led, are frequently resisted by environmental, social, and political movements here.

These battles arise 鈥渙ne after the other鈥 鈥 from protests against nuclear power to hydroelectric dams 鈥 because President Cristina Fern谩ndez de Kirchner鈥檚 government has never outlined its long-term strategy for the energy sector, says Juan Carlos Villalonga, president of Los Verdes, an environmental organization.


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

鈥淏ecause of its energy deficit, the government is desperate,鈥 Mr. Villalonga says. 鈥淪o it is moving hurriedly with a minimum of consensus, detonating conflicts."

Provinces in Argentina, not the federal state, own the oil and gas in their territories, which means Neuqu茅n鈥檚 politicians had to pass a law granting an extension of YPF鈥檚 permit to explore the Vaca Muerta. The first stage of the Chevron deal will see the two companies frack 115 wells to get to the shale 10,000 feet below. Fracking is controversial because it is thought to contaminate ground water and emit volatile gases.

Villalonga, a proponent of renewable energy, says fracking is not a strategy that makes sense for the government in the short term. 鈥淲ind power is cheaper and would produce quicker results." he says.

Despite Kirchner's leftist policies in terms of social welfare, and her demonization of neoliberalism, Villalonga and others 鈥 even former Kirchner allies 鈥 criticize her for her lack of "environmental conscience."

鈥淸Latin American] governments that are considered progressive have taken on a passive role as exporters of nature,鈥 Enrique Viale, a leading environmental lawyer here, told Perfil newspaper. 鈥淲e鈥檝e gone from the Washington Consensus to the commodities consensus.鈥

But some say it is impossible for Argentina to meet its energy needs with renewables alone. The country鈥檚 economy has expanded at an average rate of 7.2 percent a year from 2003 to 2012. As a result, 鈥淓nvironmentalists need a dose of reality," says听Bud Weinstein, an associate director at the Maguire Energy institute in Dallas.

鈥淚f your economy grows, there鈥檚 higher energy consumption,鈥 says Mr. Weinstein, in Buenos Aires for a conference on the Vaca Muerta. 鈥淩enewables on their own cannot do the trick. You need baseload power.鈥

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