Argentina: the dead cow and the disappearance of gas – 18/05/2021 – Latinoamérica21

The pandemic caused the collapse of the health system, although public health has long lost interest in society. The media echoed the doctors’ strike in Neuquén, but highlighted the costs that this type of measure generates in the production of Vaca Morta (VM). Omar Gutiérrez, governor of the above-mentioned Argentine province, underlines the “purely political” nature of the strike.

VM presents itself as a unique opportunity for the development of the country: pure greed. Gas is presented as a transition vector. Unlike petroleum, its use does not lead to an increase in the volume of carbon emissions. But few talk about the environmental costs generated by the activity, which, sooner or later, end up being borne by society. Or the health effects imposed by fracking, linked to the use of chemicals or the improper handling of residues. It does not matter whether a “sacrificial zone” is imposed, the activity generates profits for the majority. This would be the logic accepted by all, both neoliberal and neo-extractives.

But the favorable winds that once favored take-off are changing direction. Any hope of rescuing gas exports may eventually evaporate in the air. Unfortunately, methane does not dissolve as easily. A United Nations report to be published in the coming days highlights the harmful effects of the release of this type of gas into the Earth’s atmosphere.

Unlike carbon dioxide that remains for hundreds of years, methane lasts a short time (about a decade), but it is much more dangerous. According to the Intergovernmental Panel on Climate Change (IPCC), the effect of methane on global warming is 86 times stronger than that generated by CO2 (methane is therefore called carbon in steroids!). For this reason, and to quickly reduce global warming, more and more experts are suggesting abandoning gas projects.

The condemnation engendered by exploitation has repercussions beyond environmentalism. Investors are not interested in financing new projects and big companies are rushing to sell assets. A growing number of entrepreneurs fear that gas will become the new coal. The rush to start is linked to the fear of being exposed: your assets can depreciate long before you can write off your investments.

The state of California just announced a ban on hydraulic fracturing from 2024, and in order to reduce methane emissions, the Biden administration has decided to reverse Trump’s benevolent treatment of the industry. In short, restrictive measures are gaining ground, as reducing the level of methane emissions represents the fastest and most efficient way to achieve the target set in the Paris Agreement.

Consensus is growing for a “new green”, a tide that is now hitting both coasts of the North Atlantic. Meanwhile, Asia-Pacific continues to invest in renewable technologies, with the triad comprising China, Japan and South Korea leading global production and innovation. This explains the continued decline in the prices of renewable equipment, the increase in competitiveness that allows the industry to displace any non-renewable project.

Progress is not linear. If the oil industry is no longer ignoring the harmful effects generated by its production, it does not do much to reverse it: yesterday’s denial has become an impossibility, as the American scientist Michael Mann describes in his latest book The New Climate Wars. The same attitude is also observed among oil-producing countries in the region, such as Mexico and Argentina, which persist in their commitment to hydraulic fracturing.

All of this must force us to act for the common good and to rethink energy policy. However, the budget presented by the Argentine government proposes “to promote the development of conventional and unconventional deposits, as well as the exploration of hydrocarbons at sea. Infrastructure work will accompany this projection”. Make gas a “fundamental vector for successfully completing the energy transition, (…) without losing sight of the possibility of generating exportable balances”.

In addition to the original grants, at least $ 550 million in funds associated with the wealth tax would be added this year. These will benefit from the financing of programs and projects of exploration, development and production of oil and natural gas, in principle carried out by YPF. In this way, gas continues to be described as a carrier, more and more funds are allocated and the effects generated by the activity are masked.

From a public point of view, the reasons for the current situation must be reconsidered. In order to promote an activity which is clearly not economically viable, the Argentinian government maintains subsidies and launches a larger budget deficit.

Resources could be redirected towards demand, with soft credits for the renovation of housing (incentive to use double glazing for thermal insulation), or with changes in public transport (rationalization of the system, subsidies for the renovation of public transport for electric models).

All of this would lead to a reduction, albeit gradually, in the demand for gas. Neither can we think of solving, in the immediate future, the budget problem or the growing external deficit created by a subsidized price. But we have to think that the transformation is viable. Just see the conversion of the transport system in the metropolitan area of ​​Santiago de Chile. We could also analyze the experience started by Gustavo Petro in Bogotá with electric taxis, the shortcomings of which can be useful when designing the transition. More funds are not needed, what is needed is a political decision.

The news from the province of Neuquén is not only biased, but also shows the low value that we as a society place on the common good. As Governor Omar Gutiérrez said, the strike was political in nature. It certainly was. But the indecision generated around the law on biofuels is also political, as is the continuation of subsidies to VM or the de-financing of public health.

It is also a political decision to ignore or regard the harmful effects of this activity as inevitable. It is a cost imposed by development, even when it is clearly irrational. It’s a decision that prioritizes profits over a few short-term profits.

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