The future is… fossil?

Last month, over 500 Argentinians participated in a public protest against the development of a brand new offshore oil exploration project. The project, developed in collaboration with Norwegian company Equinor, would be the first offshore exploration in Argentina. Environmentalists, alongside local fishermen and those in the tourism industry have come together to speak out  against this new exploration. They are arguing that the project will be hugely damaging for the Argentinian marine ecosystem and that there is a 100% chance of oil spills. While the President Alberto Fernández raised climate hopes by presenting a new NDC last December in the Climate Action Summit, his ministers have shown their commitment to fostering new fossil fuel developments, a trend that sadly is repeating itself worldwide.

According to the most recent national GHG report, the main emitter of greenhouse gases in Argentina is the energy sector. This is because our energy matrix is ​​strongly anchored to the use of fossil fuels including coal, oil and gas. But this information seems to have been conveniently forgotten by Argentina’s decision makers, who instead continue to push for new fossil fuel explorations, this time in our precious Argentinian Sea.

On October 1, 2018, the government of the now ex-president Mauricio Macri called an international public tender for hydrocarbon exploration permits in the Austral, Argentina North and Malvinas Oeste basins, belonging to the Argentine Continental Shelf. On 17th May 2019, the Ministry of Energy of the Nation granted 18 areas in concession for a total of $724m. The total of these 18 areas cover 201.104 km2, which represent about ⅕ of the Argentine Sea. 

One of these offshore oil exploitation blocks, the CAN 100, is right in front of the city of Mar del Plata. Equinor partnered with Shell and YPF for the drilling rights of this block, and when works begin this will be the first deep and ultra-deep water block in the Argentinian Sea. Norway has defined high environmental standards for this activity, this is why Equinor is looking for new places to develop it. If these standards were applied in our country, the exploration would not be allowed to be carried out.  Just another example of old neo-colonial and extractivist practices at play, nothing new. 

Amid the crisis in which we are living, advancing with projects like these are intensifying the problems which we are already facing. It seems to be completely illogical and counter-productive to propose public policies for decarbonisation, energy transition and carbon neutrality, when our government intends to continue promoting and financing fossil fuel projects from the state coffers. 

Let’s remember that the oceans capture about a third of the world’s carbon. Without the marine species that provide this essential ecosystem to thrive, the absorption capacity could be reduced by up to 50%. Authorising a project of this type goes against the international climate commitments assumed and recently renewed by the current administration. It was President Fernández who as recently as December of last year stated that Argentina would reach carbon neutrality in 2050 – an impossible goal to achieve if we continue to invest in these types of projects.

Let’s now talk about the supposed economic benefits that this activity would bring. First of all, this type of project famously does not generate a large amount of foreign currency for the host nation. Furthermore, according to estimates made by Rystad Energy, from 2026, the demand for oil is expected to drop considerably worldwide, meaning that by the time the project is up and running, its value will be greatly decreased. Even with this knowledge, the Government is continuing to raise investment in fossil fuels as an urgent issue of public policy, clubbing it into the framework of the post-pandemic “recovery”. This implies the government will be continuing to allocate money to subsidise an activity that, even for pro establishment economists, has no future. 

The carbon bubble is real, and if we continue betting on these industries we will have a financial crisis comparable to that of 2008 knocking on our door. Even the International Energy Agency itself, which was founded by oil companies, stated for the first time in its latest report that a route towards energy transition is financially necessary. We urgently need to redirect investments and subsidies towards this. While the world is moving towards renewable energies, a field in which Argentina has a lot of potential, the national government is instead considering enabling this project; a decision which at this point is like buying Blockbuster shares once everyone already has a Netflix account.

Worryingly, it is clear that this project isn’t the only one of its kind. There are more development programs anchored in the exploitation of hydrocarbons in Argentina, in the wider region and the world moreover. One example is the promotion and development of the coal plant Rio Turbio, in the South of Argentina. Another is in the Peruvian Amazon, where Oxfam’s report ‘the shadow of oil’ stated that from 2000 to 2019 there were more than 470 oil spills along the NorPeruano Pipeline in the Amazon. 

Moving away from Latin America, we can see that the fossil fuel lobby is taking hold in the rest of the world as well. Look at the UK, host of the upcoming COP26. Since the Paris Agreement in 2015, the UK Government has paid £3.2bn of public money to North Sea oil and gas companies. In recent years, companies like Shell and BP have actually been paid to pollute, because while paying next to nothing in tax they received millions in subsidies. 

‘Sustainable development’ is not a catch-all definition that applies to polluting projects that fossil fuel companies and governments want to carry out. It is a concept that proposes improving economic conditions without neglecting social and environmental impacts. Offshore exploitation in the Argentinian Sea does not make economic, social or environmental sense. Neither does any new fossil fuel exploration in the face of one of the biggest worldwide crises our societies have ever seen.

We are not ‘foolish’ or ‘extreme’ environmentalists, as some sectors like to label us when we raise these issues. We are simply saying that there is no place for fossil fuel industries in our future – and it’s beyond time our world leaders woke up to that.