Oil and Natural Gas Economy in Argentina: The case of Fracking (The Latin American Studies Book Series)

This book gathers four papers authored by Víctor Bravo and Nicolás Di Sbroiavacca, Oil and Natural Gas Engineers, specialized in Energy Economics. The main axis of the book is the application of the exploitation techniques of Oil and Natural Gas in Argentina, by the so-called “conventional” methods, in comparison with the so-called “Fracking”,(name massively used in the First World and particularly in the United States of America). Argentina has important Oil and Natural Gas resources in different regions of its wide geography. To develop these “non-conventional” techniques has generated endless controversies all over the world, mostly due to its estimated environmental impact and the need of significant requirement of large capitals for investment. Argentina is not out of this relevant controversy because in the mind of the maximum national authorities, fracking is one of the main factors that may contribute to generate monetary funds devoted to the payment of the immense foreign debt of this country. Other authors estimate that it is not possible to develop our country just on the basis of the massive exploitation and boundless export of natural resources. Consequently, fracking is undoubtedly a topic of National Energy Politics. In this scenario, a previous analysis of the National Energy Politics of the recent governments of Argentina, after the bloody military dictatorship of 1976-1983 and the return to democratic governments in December 1983. This analysis is done over the chapters “Analysis of the National Law No 27007 (known as the “Hydrocarbon Resources Law”) and the Oil and Natural Gas politics”, the “Oil and Natural Gas Politics of the period from 2003 to 2014” and “The Argentine Energy Politics during the 2014-2018 period”. Later on, the “Fracking” case is fully developed with two complementary analyses. One of them is basically centered on the technical and prospective scenarios for “fracking”: ”Shale Oil and Shale Gas in Argentina: Situation and Perspectives”. The other one, ”A technical opinion about Fracking”, contemplates the impacts resulting from the use of these techniques, especially those concerning the environment. Anyhow, each of the chapters are self-contained, thus permitting separate reading of any of them. Introduction to the Problems of Hydrocarbons in Argentina and the Case of Fracking Contents About the Authors 1 Analysis of the Hydrocarbon Law 27,007 and the Hydrocarbon Policy for the Period 2003 to 2014 1.1 Introduction 1.2 Why It is Needed a Prompt Elaboration of the So-Called Hydrocarbon Law 1.3 Some Legal Background and Other Circumstances Prior to the Full Privatization of the State-Owned YPF Company 1.3.1 From the “Origins” to the “Menemism” Period 1.3.2 The “Menemist” Period 1.4 The Privatization of YPF 1.5 The Period from 2003 to 2014 1.5.1 The Trust Funds 1.5.2 Export Duties 1.5.3 ENARSA 1.5.4 The Role of the Provinces 1.5.5 Total Energy Plans 1.5.6 The Oil Plus, Refining Plus and Gas Plus Programs 1.5.7 Hydrocarbon Sovereignty 1.5.8 Other Laws and Complementary to National Law 26,741 1.5.9 Regulation of the Liquefied Petroleum Gas (LPG) Market 1.6 The Hydrocarbon Law 27,007 1.6.1 Specific Analysis 1.6.2 General Analysis and Conclusions 1.7 Conclusions on the Hydrocarbon Policy for the Period 2003–2014 1.8 What Should Be Done Annex: Text of National Law 27,007 of 30 October 2014 Bibliography 2 Argentine Energy Policy During the Period 2014–2018 2.1 Why This Document 2.2 Summary 2.3 Comments 2.3.1 Energy Planning 2.3.2 Crude Oil and Its Derivatives 2.3.3 Natural Gas 2.3.4 The Vaca Muerta Oil Field 2.3.5 Liquid Petroleum Gas (LPG) 2.3.6 Compressed Natural Gas (CNG) 2.3.7 Electrical Energy 2.3.8 Nuclear Energy 2.3.9 Coal 2.3.10 Renewable Energies 2.3.11 Public–Private Partnerships (PPP) 2.3.12 Distributed Energy 2.3.13 The Rational and Efficient Use of Energy (UREE) 2.3.14 Energy Prices and Tariffs 2.3.15 The Grants 2.3.16 The Energy Matrix 2.3.17 Guidelines for a Different Energy Policy 2.4 Contents 2.5 Something, Very Brief, About “Ideology” 2.6 Energy Planning 2.6.1 Some Concepts 2.6.2 Does the Current Government Have an Energy Plan? 2.7 Hydrocarbons 2.7.1 Oil and Derivatives 2.7.2 Natural Gas 2.7.3 Vaca Muerta Oil Field 2.7.4 Liquid Petroleum Gas (LPG) 2.7.5 Compressed Natural Gas (CNG) 2.8 Electric Power 2.8.1 Some Facts 2.8.2 Some Comments 2.9 Mineral Coal 2.9.1 Some Facts 2.9.2 Some Comments 2.10 Nuclear Energy—Uranium 2.10.1 Some General Information 2.10.2 Some Problems 2.11 Renewable Sources 2.11.1 Some General Aspects 2.11.2 Some Data by Renewable Energy Source 2.11.3 The Plans 2.12 Rational and Efficient Use of Energy (UREE) 2.12.1 Background of the Previous Government 2.12.2 The Current Government 2.12.3 Comments 2.13 Energy Prices and Tariffs 2.13.1 Tariff Policies, Structures and Subsidies 2.13.2 Something About Natural Gas and Electricity Tariffs 2.13.3 Fuel Tax 2.13.4 Prices of Crude Oil and Its Derivatives 2.13.5 LPG Prices 2.13.6 Biofuel Prices 2.14 Energy Subsidies 2.14.1 Some Concepts Related to Grants 2.14.2 Subsidies in the Previous Government 2.14.3 The Current Government 2.15 The Energy Matrix 2.15.1 Some Data 2.15.2 Some Comments Bibliography 3 An Opinion About Fracking 3.1 Some Previous Elements to Better Understand the Topic 3.2 Conventional Exploitation of Hydrocarbons 3.3 The Fracking 3.4 Reserves of Resources? Of “Non-conventional” Hydrocarbons 3.5 Why Fracking in Argentina? 3.6 Main Environmental Impacts of Fracking 3.7 What About the Rest of the World? 3.8 Conclusions Annex: The YPF-Chevron Contract Bibliography 4 Shale Oil and Shale Gas in Argentina. State of Situation and Prospective 4.1 Introduction 4.2 About Resources and Reserves 4.2.1 Shale Gas 4.2.2 Shale Oil 4.3 About Production 4.4 About the Possible Scenarios of Offer and Demand 4.4.1 The Chevron Scenario 4.4.2 The Conservative Scenario 4.4.3 Self-sufficiency Scenario 4.5 Conclusions and a Possible Road Map 4.6 Present Situation Bibliography Final Summary