Protests in Argentina are intensifying after YPF, a state-controlled energy company, and international oil conglomerate Chevron came to terms on a $1.2 billion development deal. Over 5,000 anti-fracking activists took to the streets, blocking a YPF power plant and forcing authorities to fire rubber bullets into the crowd.
The protests are a manifestation of differing opinions on how Argentina should best develop the Vaca Meurta, one of the world’s largest deposits of nonconventional hydrocarbon. Citizens have fought against mining projects, backed by foreign private equity, in the past. But these fights arise “one after the other,” claims Juan Carlos Villalonga, president of the environmental organization Los Verdes. “From protests against nuclear power to hydroelectric dams. [And] because of its energy deficit, the government is desperate. So it is moving hurriedly with a minimum of consensus, detonating conflicts."
President Cristina Fernández de Kirchner has failed to outline a clear-cut, long-term plan for the nation’s energy infrastructure, and as a result, the population is struggling to trust the government. Now that Argentina needs an influx of $37 billion over the next five years in order to develop the Vaca Muerta, the question is: will their unhappy citizens pony up the cash? Or will the government be forced to seek foreign private equity?
Argentinian provinces, not the state, own the rights to oil and gas deposits on their land. Politicians actually had to pass legislation allowing YPF to explore the Vaca Muerta. The Chevron pact includes the opening 115 new fracking operations – without requiring provincial approval.
Fracking is the controversial new method of extracting natural gas from shale. Environmentalists are up in arms about the potential long-term effects of pumping thousands of gallons of undisclosed chemicals into the ground. Villalonga and even some of President Kirchner’s supporters have criticized her for her lack of "environmental conscience."
“[Latin American] governments that are considered progressive have taken on a passive role as exporters of nature,” says Enrique Viale, a prominent Argentinian lawyer who specializes in environmental law. “We’ve gone from the Washington Consensus to the commodities consensus.”
Argentina’s economy has been expanding at an average annual rate of 7.2% over the past decade. Now, how is the government going to meet the public’s increased energy demands?
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