Shale oil poses risks, controversy for Argentina(1)

Loma Campana is Argentina's second largest oil field producer.

Unconventional oil and gas reserves in Vaca Muerta in southwest Argentina hold out the promise of energy self-sufficiency and development for the country. But the fracking technique used to extract this treasure from underground rocks could be used at a huge cost.

The landscape begins to change when you get about 100 km from Neuquén, the capital of the province of the same name, in southwest Argentina. In this area, dubbed “the Saudi Arabia of Patagonia”, fruit trees are in bloom and vineyards stretch out green towards the horizon, in the early southern hemisphere springtime.

But along the roads, where there is intense traffic of trucks hauling water, sand, chemicals and metallic structures, oil derricks and pump stations have begun to replace the neat rows of poplars which form windbreaks protecting crops in the southern region of Patagonia.

“Now there’s money, there’s work – we’re better off,” truck driver Jorge Maldonado said. On a daily basis he transports drill pipes to Loma Campana, the shale oil and gas field that has become the second-largest producer in Argentina in just three years.

It is located in Vaca Muerta, a geological formation in the Neuquén basin which is spread out over the provinces of Neuquén, Río Negro and Mendoza. Of the 30,000 sq km area, the state-run YPF oil company has been assigned 12,000 sq km in concession, including some 300 sq km operated together with U.S. oil giant Chevron.

Vaca Muerta has some of the world’s biggest reserves of shale oil and gas, found at depths of up to 3,000 meters.

A new well is drilled here every three days, and the demand for labor power, equipment, inputs, transportation and services is growing fast, changing life in the surrounding towns, the closest of which is Añelo, eight km away.

“Now I can provide better for my children, and pay for my wife’s studies,” said forklift operator Walter Troncoso.

According to YPF, Vaca Muerta increased Argentina’s oil reserves ten-fold and its gas reserves forty-fold, which means this country will become a net exporter of fossil fuels.

But tapping into unconventional shale oil and gas deposits requires the use of a technique known as hydraulic fracturing or “fracking” – which YPF prefers to refer to as “hydraulic stimulation”.

According to the company, the technique involves the high-pressure injection of a mix of water, sand and “a small quantity of additives” into the parent-rock formations at a depth of over 2,000 meters, in order to release the trapped oil and gas which flows up to the surface through pipes.

Víctor Bravo, an engineer, says in a study published by the Third Millennium Patagonia Foundation, that some 15 fractures are made in each well, with 20,000 cubic meters of water and some 400 tons of diluted chemicals.

The formula is a trade secret, but the estimate is that it involves “some 500 chemical substances, 17 of which are toxic to aquatic organisms, 38 of which have acute toxic effects, and eight of which are proven to be carcinogenic,” he writes. He adds that fracking fluids and the gas itself can contaminate aquifers.

Neuquén province lawmaker Raúl Dobrusin of the opposition Popular Union bloc said: “The effect of this contamination won’t be seen now, but in 15 or 20 years.”

In Loma Campana, Pablo Bizzotto, YPF’s regional manager of unconventional resources, played down these fears, saying the parent-rock formations are 3,000 meters below the surface while the groundwater is 200 to 300 meters down. “The water would have to leak thousands of meters up. It can’t do that,” he said.

Read Fracking, Page 2