Inter Press Service » Integration and Development Brazilian-style http://www.ipsnews.net Turning the World Downside Up Sat, 02 May 2015 21:05:13 +0000 en-US hourly 1 http://wordpress.org/?v=4.1.4 The Blue Amazon, Brazil’s New Natural Resources Frontierhttp://www.ipsnews.net/2015/05/the-blue-amazon-brazils-new-natural-resources-frontier/?utm_source=rss&utm_medium=rss&utm_campaign=the-blue-amazon-brazils-new-natural-resources-frontier http://www.ipsnews.net/2015/05/the-blue-amazon-brazils-new-natural-resources-frontier/#comments Sat, 02 May 2015 06:49:52 +0000 Fabiola Ortiz http://www.ipsnews.net/?p=140417 An oil tanker in Rio de Janeiro’s Guanabara Bay. Just 250 km from the coast lie the country’s presalt oil reserves, the wealth of the so-called Blue Amazon. Credit: Fabíola Ortiz/IPS

An oil tanker in Rio de Janeiro’s Guanabara Bay. Just 250 km from the coast lie the country’s presalt oil reserves, the wealth of the so-called Blue Amazon. Credit: Fabíola Ortiz/IPS

By Fabiola Ortiz
RIO DE JANEIRO, May 2 2015 (IPS)

The Atlantic ocean is Brazil’s last frontier to the east. But the full extent of its biodiversity is still unknown, and scientific research and conservation measures are lagging compared to the pace of exploitation of resources such as oil.

The Blue Amazon, as Brazil’s authorities have begun to call this marine area rich in both biodiversity and energy resources, is similar in extension to the country’s rainforest – nearly half the size of the national territory.

And 95 percent of the exports of Latin America’s giant leave from that coast, according to official figures.

Brazil’s continental shelf holds 90 and 77 percent of the country’s proven oil and gas reserves, respectively. But the big challenge is to protect the wealth of the Blue Amazon along 8,500 km of shoreline.

“We haven’t fully grasped just how immense that territory is,” Eurico de Lima Figueiredo, the director of the Strategic Studies Institute at the Fluminense Federal University, told Tierramérica. “To give you an idea, the Blue Amazon is comparable in size to India.”

“But we aren’t prepared to take care of it; it isn’t yet considered a political and economic priority for the country,” the political scientist said.

Figueiredo, who presided over the Brazilian Association of Defence Studies (ABED) from 2008 to 2010, said the Blue Amazon is a term referring to the territories covered by new treaties on international maritime law.

Brazil is one of the 10 countries in the world with the largest continental shelves, in an ocean like the Atlantic which conceals untold natural wealth that offers enormous economic, scientific and technological potential.

According to the United Nations Convention on the Law of the Sea, a country’s Exclusive Economic Zone (EEZ) comprises an area which extends to 200 nautical miles (370 kilometres) off the coast.

Official map of part of the Blue Amazon, off the east coast of Brazil, where conservation and research are lagging behind economic development, mainly by the oil industry. Credit: Government of Brazil

Official map of part of the Blue Amazon, off the east coast of Brazil, where conservation and research are lagging behind economic development, mainly by the oil industry. Credit: Government of Brazil

Brazil’s EEZ was originally 3.5 million sq km. But it later claimed another 963,000 sq km, which according to different national institutions – including scientific bodies – represents the natural extension of the continental shelf.

The U.N. Convention’s Commission on the Limits of the Continental Shelf (CLCS), made up of 148 countries, has so far sided with Brazil, adding 771,000 sq km to its EEZ. The decision on the rest is still pending.

Brazil’s demand, at least with respect to the expansion of the continental shelf granted so far, meets the requisites of the U.N. Convention and grants the country the power to exploit the resources in the expanded area and gives it the responsibility of managing it.

The recognition of Brazil’s claim, although only partial, has annoyed some neighbour countries, because of the huge economic benefits offered by the additional continental shelf it was granted.

Figueiredo said the challenge now is to monitor and protect the continental shelf. “We don’t have full sovereignty with regard to the maritime territory. Brazilian society is unaware of the important need to protect the Blue Amazon. There are enormous shortcomings, with respect to our needs.”

In 2005 a plan was approved to upgrade the navy with an estimated investment of 30 billion dollars until 2025. Defending a country is a complex task, said Figueiredo, because it involves a number of dimensions: military, economic, technical and scientific.

But scientific research in Brazil’s marine territory is currently far outpaced, he said, by the exploitation of resources such as the oil located 250 km off the coast and 7,000 metres below the ocean surface, beneath a thick layer of salt, sand and rocks.

Development of the so-called presalt reserves, discovered a decade ago, would make Brazil one of the 10 countries with the largest oil reserves in the world. And they already provide 27 percent of the more than three million barrels a day of oil and gas equivalent produced by this country.

“That region belongs to Brazil, the country has assumed commitments with the U.N. to monitor and study the living and non-living resources like oil, gas and minerals. If we don’t preserve it, we’ll lose this great treasure,” oceanographer David Zee, at the Rio de Janeiro State University, told Tierramérica.

In his opinion, Brazil is far from living up to the commitments assumed with the international community. “We have duties – we have to meet the U.N.’s scientific research requirements. We have to take greater care of our marine resources,” he said.

Apart from the oil and gas wealth, a large part of the EEZ borders the Mata Atlántica ecosystem, which extends along 17 of Brazil’s 26 states, 14 of which are along the coast.

The environmental organisation SOS Mata Atlántica explains that coastal and marine areas represent the ecological transition between land and marine ecosystems like mangroves, dunes, cliffs, bays, estuaries, coral reefs and beaches. The biological wealth of these ecosystems turns marine areas into enormous natural nurseries.

And the convergence of cold water from the South with warm water from the Northeast contributes to biological diversity and provides shelter for numerous species of flora and fauna.

But only 1.5 percent of Brazil’s maritime territory is under any form of legal protection, Mata Atlantica reports.

Thus, ensuring national sovereignty over jurisdictional waters is still an enormous political and military challenge. In March, some 15,000 naval troops and 250 Navy boats and aircraft took part in Operation Blue Amazon, the biggest of its kind carried out so far in Brazilian waters.

“This was an opportunity to train and guarantee the security of navigation, crack down on drug trafficking, and patrol the sea. The mission involved the entire territorial extension of Brazil,” Lieutenant Commander Thales da Silva Barroso Alves, commander of one of the three offshore patrol vessels that Brazil has to monitor the Blue Amazon, told IPS.

These vessels control the extensive coast in “areas of great economic interest, exploitation and accidents. Illegal fishing is also a recurrent issue,” he said.

The officer argued that the extraction of marine resources should be carried out in a “conscious, sustainable fashion,” with the aim of preserving biodiversity.

Figueiredo, the political scientist, concurs. “Our ability to defend the Blue Amazon depends on our capacity to develop technical-scientific means of protecting biodiversity in such an extensive area,” he said.

This story was originally published by Latin American newspapers that are part of the Tierramérica network.

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

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Cash-Strapped Latin American Countries Turn to China for Credithttp://www.ipsnews.net/2015/04/cash-strapped-latin-american-countries-turn-to-china-for-credit/?utm_source=rss&utm_medium=rss&utm_campaign=cash-strapped-latin-american-countries-turn-to-china-for-credit http://www.ipsnews.net/2015/04/cash-strapped-latin-american-countries-turn-to-china-for-credit/#comments Tue, 28 Apr 2015 01:06:31 +0000 Mario Osava http://www.ipsnews.net/?p=140358 Cidade de Kilamba is a new housing development built entirely by Chinese firms south of Luanda, the Angolan capital, to accommodate half a million people in five- to 13- storey apartment buildings with “smart” elevators, schools, shops and leisure facilities. Credit: Mario Osava/IPS

By Mario Osava
RIO DE JANEIRO, Apr 28 2015 (IPS)

Angolans are generally grateful for China’s participation in the reconstruction of their central African country, in spite of the fact that some of the roads and buildings built by Chinese firms are of poor quality, and mainly Chinese labourers have been hired rather than local workers.

To rebuild the infrastructure destroyed by the civil war, Angola needed finance which was denied to it by the West, whereas China supplied credit and engineering expertise without imposing impossible conditions on a country that only achieved peace 27 years after winning independence in 1975, Angolan leaders declare.

On the opposite side of the Atlantic ocean, several Latin American countries in financial difficulties have recently turned to China as a sort of lender of last resort. Argentina and Venezuela, for example, lacking access to international credits, obtained large loans from Chinese banks.

For China, it makes no sense to refuse loans to countries with strong agricultural production or that possess plenty of commodities, especially oil and gas. There is no need to be concerned about their solvency if their products guarantee their loans, whatever the reasons for their difficulties.

Brazil’s state oil giant Petrobras announced on Apr. 1 an injection of 3.5 billion dollars from China to relieve its finances, which have suffered from the corruption scandal that has rocked the economy, the government, large companies and several political parties in the country since 2014.

The loan from China Development Bank is helping Petrobras weather a storm that also includes gross management and planning mistakes which raised the cost of constructing two refineries, of the purchase of another plant in the U.S. city of Pasadena, Texas, and of other projects by tens of billions of dollars.

The crises faced by potential Petrobras suppliers provide opportunities for China, but are not seen as indispensable. China Development Bank previously loaned Petrobras 10 billion dollars in 2009, when the oil company appeared prosperous and had recently discovered vast reserves in the pre-salt layer off the Brazilian coast.

This loan will be repaid by a minimum of 10 years’ oil supply to China.

Unequal exchange

“China’s financial power tends to accentuate the trade imbalance,” when countries or whole regions export virtually only commodities to China, and import Chinese manufactured goods, said Luis Afonso Lima, president of the Sociedade Brasileira de Estudos de Empresas Transnacionais e da Globalizaçao Econômica (SOBEET – Brazilian Society for the Study of Transnational Corporations and Economic Globalisation).

Iron ore and soy account for 75 percent of Brazilian exports to China, he said, while imports from China are nearly all manufactured goods.

But China “is a new trading partner with a high degree of complementarity, and a win-win situation could be created if we knew how to make the most of the opportunity,” Lima said.

“Brazil must do its homework and define what it wants from China in the long term, and then negotiate, instead of merely reacting passively to Chinese demands,” he said.

In his view, now is the time to make changes to that unequal exchange, because China is facing “the prospect of reducing its exports and stimulating the dynamics of internal demand, whereas in Brazil it is the reverse: the domestic market is weakening and more exports are needed.”

But Lima recognises that Brazil’s economic and political difficulties do not favour the definition of long term strategies and goals in negotiations with an ascendant power like China.

Booming investment

China’s growing involvement in Latin America is also marked by growing investment. SOBEET identified 69 projects announced by Brazil since 2010, the vast majority in processing industries involving medium-sized amounts, that is, less than 100 million dollars.

Only three investments are over one billion dollars: in the first, the State Grid Corporation of China (SGCC) invested five billion dollars, mainly for the purchase of power transmission lines; the second is for extracting and exporting iron ore; and the third is for processing soy.

The list is not complete because of the difficulty of monitoring Chinese investments that are routed through other countries, such as European nations, and arrive at their productive destination without the nationality of origin being known, Lima complained.

China has been increasing its foreign direct investments since the turn of the 21st century, and they reached over 206.8 billion dollars in 2013, according to United Nations figures published by SOBEET.

Latin America has not been a priority destination for Chinese investments. The region has received only 4.1 percent of the total, according to the Economic Commission for Latin America and the Caribbean.

However this will change over the next 10 years. China will invest 250 billion dollars in the region over this period, President Xi Jinping announced in January in Beijing, at the first Ministerial Forum between China and the Community of Latin American and Caribbean States (CELAC).

Some projects are exceptional, like the interoceanic canal in Nicaragua which will compete with the Panama Canal and will cost an estimated 40 billion dollars, four times the GDP of Nicaragua.

A large part of the capital already invested is oil-related. State Chinese oil companies are already taking part in oil and gas extraction in Argentina, Brazil, Ecuador, Peru and Venezuela.

But the most spectacular growth in China-Latin America relations has occurred in trade, which increased 22-fold between 2000 and 2013, to reach 275 billion dollars in 2013. And it is set to double again by the end of this decade, Xi predicted.

The expansion in trade exacerbated the imbalance, but the terms of exchange improved with the boom in prices of Latin American commodities, which lasted at least until 2012.

Credit penetration

The amounts involved in Chinese loans to the region are lower than the trade figures, but also reflect the Asian giant’s expansion and its priority interests in oil, minerals and agricultural produce.

Between 2005 and 2014, borrowing from China by the region totalled 119 billion dollars, according to the databank of Inter-American Dialogue, a forum for political and business leaders of the Americas that includes former presidents of several countries.

Of this total, nearly half – 56.3 billion dollars – was loaned to Venezuela, which possesses the world’s largest oil reserves. Next in order of importance are Brazil and Argentina, which are big exporters of soy and received 22 billion and 19 billion dollars, respectively.

Mexico, the second largest Latin American economy, is in sixth place in terms of loans from Chinese state banks, with 2.4 billion dollars, less than one-quarter of the amount borrowed by Ecuador (10.8 billion dollars) and less even than the credit extended to The Bahamas (2.9 billion dollars).

Edited by Estrella Gutiérrez/Translated by Valerie Dee

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Planned Mega-Port in Brazil Threatens Rich Ecological Regionhttp://www.ipsnews.net/2015/04/planned-mega-port-in-brazil-threatens-rich-ecological-region/?utm_source=rss&utm_medium=rss&utm_campaign=planned-mega-port-in-brazil-threatens-rich-ecological-region http://www.ipsnews.net/2015/04/planned-mega-port-in-brazil-threatens-rich-ecological-region/#comments Fri, 24 Apr 2015 19:00:05 +0000 Fabiola Ortiz http://www.ipsnews.net/?p=140301 The town of Ilhéus in the Northeast Brazilian state of Bahia, part of whose coastline will be modified by the construction of the Porto Sul port complex, which environmentalists and local residents are protesting because of the serious ecological and social damage it will cause. Credit: Courtesy Instituto Nossa Ilhéus

The town of Ilhéus in the Northeast Brazilian state of Bahia, part of whose coastline will be modified by the construction of the Porto Sul port complex, which environmentalists and local residents are protesting because of the serious ecological and social damage it will cause. Credit: Courtesy Instituto Nossa Ilhéus

By Fabiola Ortiz
RIO DE JANEIRO, Apr 24 2015 (IPS)

Activists and local residents have brought legal action aimed at blocking the construction of a nearly 50 sq km port terminal in the Northeast Brazilian state of Bahia because of the huge environmental and social impacts it will have.

The biggest project of its kind in Brazil has given rise to several court battles. With a budget of 2.2 billion dollars, Porto Sul will be built in Aratiguá, on the outskirts of the city of Ilhéus, at the heart of the Cocoa Coast’s long stretches of heavenly beaches, where the locals have traditionally depended on tourism and the production of cocoa for a living.

The courts have ordered four precautionary measures against the project, while civil society movements say they will not stop fighting the projected mega-port with legal action and protests.

The Porto Sul port complex will be financed by the Brazilian government, through its growth acceleration programme, which focuses largely on the construction of infrastructure.

Construction of the deepwater port and the complex will employ 2,500 people at its peak. But the project is staunchly opposed by locals and by social organisations because of what activists have described as the “unprecedented” environmental impact it will have.

Critics of the project have dubbed it the “Belo Monte of Bahia” – a reference to the huge hydroelectric dam being built on the Xingú river in the northern Amazon jungle state of Pará, which will be the third-largest in the world in terms of generation capacity.

Environmentalists protest that the new port terminal and its logistical and industrial zone will hurt an ecological corridor that connects two natural protected areas.

These are the 93-sq-km Sierra de Conduru State Park, which boasts enormous biodiversity in flora and fauna, and the 4.4-sq-km Boa Esperança Municipal Park in the urban area of Ilhéus, which is a refuge for rare species and a freshwater sanctuary.

Construction of the port complex “shows a lack of respect for the region’s natural vocation, which is tourism and conservation. Since 2008 we have been fighting to show that the project is not viable,” activist Maria Mendonça, president of the Nossa Ilhéus Institute, dedicated to social monitoring of public policies, told IPS.

Ilhéus, a city of 180,000 people, has the longest coastline in the state, and is famous as the scenario for several novels by renowned Bahia writer Jorge Amado, such as “Gabriela, Clove and Cinnamon”.

Digital view of a small part of the future Porto Sul port complex in Aratiguá, in the Northeast Brazilian city of Ilhéus. Credit: Bahia state government

Digital view of a small part of the future Porto Sul port complex in Aratiguá, in the Northeast Brazilian city of Ilhéus. Credit: Bahia state government

The project’s environmental impact study, carried out in 2013, identified 36 potential environmental impacts, 42 percent of which could not be mitigated. Some of them will affect marine species that will be driven away by the construction work, including dolphins and whales. The project will also kill fauna living on the ocean floor.

Aratiguá, the epicentre of the Porto Sul port, “is an important fishing location in the region, where more than 10,000 people who depend on small-scale fishing along a 10-km stretch of the shoreline clean their catch,” Mendonça said.

An estimated 100 million tons of earth will be moved in this ecologically fragile region, where environmentalists are sounding the alarm while authorities and the company promise economic development and jobs, in a socioeconomically depressed area.

Bahia Mineração (Bamin) reported that until Porto Sul is operative, the Caetité mine will continue to produce a limited output of one million tons a year of iron ore.

According to Bamin, “the company will contribute to the social and economic development of Bahia and its population.” It says the Projeto Pedra de Ferro project will create 6,600 jobs and estimates the company’s total investment at three billion dollars in the mine and its terminal in the port complex.

Officials in the state of Bahia, which controls the Porto Sul project, reported that Brazil’s environmental authority held 10 public hearings to discuss the port complex, and said that 17 sq km of the complex will be dedicated to conservation.

A communiqué by the Bahia state government stated that all of the families to be affected by the works are included in a programme of expropriation and resettlement. Indemnification payments began in the first quarter of this year.

Social and environmental activist Ismail Abéde is one of 800 people living in the Vila Juerana coastal community, who will be displaced by the port complex project.

“The erosion will stretch 10 km to the north of the port, where we live, and the sea will penetrate up to 100 metres inland. It will be a catastrophe,” Abéde complained to IPS.

He pointed out that the complex was originally to form part of the Projeto Pedra de Ferro project.

That project, operated by Bahia Mineração (Bamin), a national company owned by Eurasian Natural Resources Corporation (ENRC) and Zamin Ferrous, is to extract an estimated 20 million tons of iron ore a year in Caetité, a city of 46,000 people in the interior of the state.

The iron ore will be transported on a new 400-km Caetité-Ilhéus railway, built mainly to carry the mineral to Bamin’s own shipping terminal in Porto Sul.

The mining project was granted an environmental permit in November 2012 and an operating license in June 2014.

Meanwhile, the Porto Sul complex received a building permit on Sep. 19, 2014, and construction is to begin within a year of that date at the latest. The complex is to be up and running by the end of 2019.

Porto Sul, the biggest port being built in Northeast Brazil and one of the largest logistical structures, will be the country’s third-largest port,l moving 60 million tons in its first 10 years of activity.

The main connection with the complex will be by rail. But an international airport is also to be built in its area of influence, as well as new roads and a gas pipeline.

The interconnected Projeto Pedra de Ferro requires a 1.5 billion dollar investment, and the mine’s productive potential is 398 million tons, which would mean a useful life of 20 years.

“The mine is not sustainable and the railway to carry the mineral to the port runs through protected areas and local communities,” Mendonça complained.

Activists argue that iron ore dust, a toxic pollutant, will be spread through the region while it is transported, affecting cocoa crops and the rivers crossed by the railroad.

Abedé also protested the way the company has informed the families that will be affected by either of the two projects. He said neither the company nor the authorities have offered consultation or dialogue.

“The state can expropriate property when it is for the collective good, not for a private international company,” he said.

The Eurasian Natural Resources Corporation (ENRC), a United Kingdom-based multinational, was delisted from the London Stock Exchange in November 2013, accused of fraud and corruption.

“We are preparing reports that we will present to public banks to keep them from financing the projects,” said Abedé, referring to one of the measures the activists plan to take to fight the project, along with court action.

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

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Plunging Oil Prices Won’t Kill Vaca Muertahttp://www.ipsnews.net/2015/04/plunging-oil-prices-wont-kill-vaca-muerta/?utm_source=rss&utm_medium=rss&utm_campaign=plunging-oil-prices-wont-kill-vaca-muerta http://www.ipsnews.net/2015/04/plunging-oil-prices-wont-kill-vaca-muerta/#comments Fri, 10 Apr 2015 07:42:31 +0000 Fabiana Frayssinet http://www.ipsnews.net/?p=140111 The Loma Campana camp where YPF and Chevron produce shale oil in the southwest Argentine province of Neuquén. So far, the plunging of oil prices has not modified the costely development of this unconventional fuel. Credit: Fabiana Frayssinet/IPS

The Loma Campana camp where YPF and Chevron produce shale oil in the southwest Argentine province of Neuquén. So far, the plunging of oil prices has not modified the costely development of this unconventional fuel. Credit: Fabiana Frayssinet/IPS

By Fabiana Frayssinet
BUENOS AIRES, Apr 10 2015 (IPS)

Despite the precipitous fall in global oil prices, Argentina has continued to follow its strategy of producing unconventional shale oil, although in the short term there could be problems attracting the foreign investment needed to exploit the Vaca Muerta shale deposit.

The uncertainty has come on the heels of the initial euphoria over the exploitation of shale oil and gas, of which Argentina has some of the world’s largest reserves.

Is the Vaca Muerta shale oil and gas field in intensive care, now that the price of a barrel of oil has plummeted from 110 dollars to under 50 in just seven months? That is the question repeated by financial and oil industry experts.

Argentina’s energy trade deficit climbed to almost seven billion dollars in 2014, partly due to the decline in the country’s conventional oil reserves.

Eliminating that deficit depends on the development of Vaca Muerta, a major shale oil and gas deposit in the Neuquén basin in southwest Argentina. At least 10 billion dollars a year in investment are needed over the next few years to tap into this source of energy.“Conventional oil production has peaked, so to meet the rise in demand it will be necessary to develop unconventional sources. And Argentina is one of the best-placed countries to do so.” -- Víctor Bronstein

“In the short term, it would be best to import, rather than exploit the shale resources,” Víctor Bronstein, the director of the Centre of Studies on Energy, Policy and Society, told IPS.

“But taking a more strategic view, investment in and development of these resources must be kept up, since oil prices are going to start climbing again in the near future and we have to have the capacity to produce our own resources when that happens,” he added.

That is how President Cristina Fernández saw things, he said, when she set a domestic price of 72 dollars a barrel – “40 percent above its international value” – among other production incentives that were adopted to shore up Vaca Muerta.

According to the state oil company Yacimientos Petrolíferos Fiscales (YPF), Vaca Muerta multiplied Argentina’s oil reserves by a factor of 10 and its gas reserves by a factor of 40, which will enable this country not only to be self-sufficient in energy but also to become a net exporter of oil and gas.

YPF has been assigned 12,000 of the 30,000 sq km of the shale oil and gas deposit in the province of Neuquén.

The company admits that to exploit the deposit, it will need to partner with transnational corporations capable of providing capital. It has already done so with the U.S.-based Chevron in the Loma Campana deposit, where it had projected a price of 80 dollars a barrel this year.

“Who is going to invest in unconventional oil and gas at the current prices?” the vice president of the Grupo Moreno, Gustavo Calleja, commented to IPS.

“We have to hold on to Vaca Muerta and continue studying its deposits in just a few pilot wells, to see how deep they are and what kind of drilling is necessary to keep down costs and curb the environmental impacts,” said Calleja, who was the government’s undersecretary of fuel in the 1980s.

YPF technicians working on one of the shale oil drilling rigs in the Loma Campana shale gas field in Vaca Muerta in southwest Argentina. Credit: Fabiana Frayssinet/IPS

YPF technicians working on one of the shale oil drilling rigs in the Loma Campana shale gas field in Vaca Muerta in southwest Argentina. Credit: Fabiana Frayssinet/IPS

Hydraulic fracturing or “fracking”, the technique used to extract shale oil and gas, involves the high-pressure injection of a mix of water, sand and chemical additives into the parent-rock formations at a depth of over 2,000 metres, in order to release the trapped oil and gas which flows up to the surface through pipes.

Besides being very costly, fracking poses environmental risks, as it requires huge volumes of water, pollutes aquifers, and can cause earthquakes.

The shale boom that began in the United States in 2008 was driven, among other factors, by high oil prices, which provided a profit margin.

“At the current prices only those who have cutting-edge technology can develop their shale reserves,” said Calleja.

The cost of producing a barrel of shale oil is based on variables such as extraction, exploration, investment amortization and the payment of taxes and royalties. In the United States, the cost is calculated at between 40 and 70 dollars.

That fact, explained Bronstein, led to an over 30 percent reduction in drilling activity since prices fell, “which will bring down production over the next few months.”

In Argentina, shale development is just starting, which means costs are high “due to a question of scale and problems of logistics and infrastructure,” said the expert.

In the United States, “developing a shale well, including fracking, costs around three million dollars,” while in Argentina “it costs more than twice that,” he said.

“The cost of extracting conventional oil in Argentina ranges between 20 and 30 dollars a barrel, while it costs around 90 dollars to extract a barrel of shale oil, although that will gradually go down as Vaca Muerta is developed,” he said.

Argentina does not yet produce shale gas on a commercial scale, as it still has large reserves of conventional gas. YPF’s shale oil production represents 10 percent of the company’s total output, and between three and four percent of the oil extracted by all operating companies in the country.

Canada and China produce unconventional oil on a commercial scale. But due to their geologic and operative characteristics, the United States and Argentina are seen as having the greatest potential in terms of future production of shale oil and gas.

YPF argues that with the gradual reduction in production costs, a rise in output, and higher domestic oil prices, Vaca Muerta is still profitable.

The industry is waiting for the collapse in prices to bring down the costs of international inputs and services, thus reducing the high domestic industrial costs.

YPF has also signed agreements for the joint exploitation of shale deposits with Malaysia’s Petronas and Dow Chemical of the United States, while other transnational corporations have announced their intention to invest in Vaca Muerta.

Bronstein believes the investments will continue to flow in because they were planned with an eye to “significant production in five years.”

“This means investors don’t take the current price of crude oil into account as much as the future price. And virtually all analysts agree that oil prices will rally within a few years,” he said.

“Conventional oil production has peaked, so to meet the rise in demand it will be necessary to develop unconventional sources. And Argentina is one of the best-placed countries to do so,” Bronstein added.

Cristian Folgar, who was undersecretary of fuels last decade, said “any snapshot of the market today would be distorted because the costs of different oil industry services have not yet settled.”

“YPF will continue to forge ahead and will not slow down investments that depend on its decision because the company currently channels its entire flow of investment into Argentina,” he told IPS.

In his view, international corporations will reduce their investments at a global level, which means “YPF is not at all likely to reach new joint venture agreements with other oil companies until the situation stabilises.”

But “those who have already started to invest are not going to back out,” he added.

“Argentina continues to pay for crude and gas at the same prices as before the start of this downward price trend,” Folgar said. “Since a change of government lies just ahead, new developments will probably wait for the next government to send signals indicating what its plans are in the energy sector.”

Calleja is worried that Saudi Arabia, the world’s leading oil exporter, and the country that according to experts is pulling the strings of the current price collapse in order to – among other goals – push shale out of the market, “may drive prices even further down.”

In the face of what he describes as a global “war of interests”, he believes it is a good time to start looking to energy sources other than fossil fuels.

Calleja argues in favour of hydroelectricity and nuclear energy, which currently represent just 14 percent of Argentina’s energy mix, but have “lower economic and environmental costs.”

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

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Opinion: Brazil at the Crossroadshttp://www.ipsnews.net/2015/04/opinion-brazil-at-the-crossroads/?utm_source=rss&utm_medium=rss&utm_campaign=opinion-brazil-at-the-crossroads http://www.ipsnews.net/2015/04/opinion-brazil-at-the-crossroads/#comments Wed, 01 Apr 2015 06:45:17 +0000 Fernando Cardim de Carvalho http://www.ipsnews.net/?p=139936

In this column, Fernando Cardim de Carvalho, economist and professor at the Federal University of Río de Janeiro, looks at the political and economic context within which newly re-elected President Dilma Rousseff is operating and argues that Brazil is living through a very dangerous period, with neither the government nor the parliamentary opposition led by leaders that the population trusts.

By Fernando Cardim de Carvalho
RIO DE JANEIRO, Apr 1 2015 (IPS)

Even moderately well-informed analysts knew that the Brazilian economy was in dire straits as President Dilma Rousseff initiated her second term in office in January.

Unlike her predecessor, Luiz Inácio Lula da Silva (2003-2011), Rousseff had not the same luck with the situation of the international economy. But also, unlike Lula, Rousseff showed herself a poor saleswoman for Brazilian goods and an even poorer manager of domestic economic policy.

Fernando Cardim de Carvalho

Fernando Cardim de Carvalho

There was a strong suspicion that economic policy, especially in the last two years of her first term, had been conducted in ad hoc ways and that serious adjustments would be needed to steer the economy back to working condition anyway. Still, the situation seemed to be even worse than most analysts feared.

More surprising, however, is to find out that Brazilian politics is also in dire straits. Caught off guard by the Petrobras corruption scandal, federal authorities, beginning with Rousseff herself, seemed to become paralysed by the rapid fall in public support, completely losing the power of initiative and creating a dangerous political vacuum in the country.

It is a vacuum rather than a political threat because the opposition seems to be as lost as the president. The political right, never very fond of democratic institutions any way, seemed to be more interested in making the president “bleed” – as stated by Senator (and former vice-presidential candidate) Aloysio Nunes Ferreira, of the Brazilian Social Democracy Party – than with fighting for political hegemony.

Economic problems were certainly fostered by the quality of economic policy-making in the second half of Rousseff’s first term. The realisation that tailwinds created by the Chinese demand for raw materials were no longer blowing led the government to implement a series of measures to stimulate the economy that turned out to be largely useless.

It was not “heterodoxy” that characterised the policy, it was uninformed wishful thinking. A plethora of measures were taken in isolation, without any apparent unifying strategy behind them, distributed mostly as “gifts” from the federal government (which later contributed to the public perception that corruption became a system of government). “Brazil is living through a very dangerous period right now. Neither the government, nor the parliamentary opposition are led by leaders the population trusts”

Plagued by semi-structural exchange rate problems, whereby Brazilian producers lose competitiveness in the face of imported goods in domestic markets and of other sellers in international markets, the federal administration tried to deal with them piecemeal, mostly through instruments like tax reductions or changes in tax rates.

Obsessed with car production, the government burned resources trying to stimulate production (only to meet increasing resistance of other countries to import them, most notably Argentina), again without any strategy thinking about how these newly-produced automobiles would be used in polluted and traffic-jammed Brazilian cities.

The federal government was not deficient only in terms of strategic thinking but also in terms of home caretaking: all available evidence points to the high probability that tax reductions and other similar measures were decided without any calculation of costs, lost fiscal revenues, and so on.

Anti-cyclical macroeconomic policy in late 2008 relied to a large extent on the expansion of consumption expenditures fuelled by increasing household indebtedness. The increase in non-performing loans and income stagnation made this option more and more unsustainable. Investment, in contrast, public and private, repeatedly frustrated expectations.

Unable to finance badly needed infrastructure investments, the government showed itself to be extraordinarily slow in devising appropriate strategies to attract private investors to implement them. Apparently lost in their own inability to define a way out of the mess, the government “muddled through” situations where more forceful definitions were required, as was the case of electric power.

The list of failures or of situations where the government showed inability to lead is long and well known. What was surprising to some extent was to find out that all evidence suggests that the government itself was unaware of what was going on.

Winning re-election by a narrow margin, President Rousseff, characteristically after a long period of hesitation, decided to take a 180-degree turn, asking a known orthodox and fiscal conservative economist to head an empowered Ministry of Finance, surprising even her supporters who seemed to be perplexed by the need to defend policies that they hotly denounced when presented by opposition politicians.

This picture would be difficult enough to manage without the Petrobras scandal. But Petrobras is not only the largest company in the country, it is practically a symbol of the nationality. Besides, energy was supposed to be Rousseff’s area of expertise and she was in fact responsible for the company’s policies for a while, as Minister of Mines and Power.

An increasingly loud murmur of a possible impeachment of the president led her to equivocal political decisions, beginning with the definition of her cabinet, widely considered to be particularly low quality, and alienating not only her major party in government, the Brazilian Democratic Movement Party, but even the majority of her own Workers’ Party.

The result of such initiatives was illustrated by the twin public demonstrations of Mar. 13 and 15.

On Mar. 13, nominal supporters of Rousseff marched through the streets of most of the largest cities in the country. Speaking to the press, most of the leaders of the march (Lula did not participate) declared conditional support for Rousseff – that is, conditional on the firing of the Minister of Finance and change of newly announced austerity policies.

On Mar. 15, an even larger crowd marched in the same cities declaring unconditional opposition to the president.

Brazil is living through a very dangerous period right now. Neither the government, nor the parliamentary opposition are led by leaders the population trusts. The president is slow and generally equivocal when making fateful decisions. The right-wing opposition seemed to be more interested in enjoying the possibility of enacting a “third” ballot to obtain at least a moral condemnation of the president.

This would be bad enough for a country that has just celebrated thirty years of civilian government. When the economy adds its own heavy problems to the political vacuum, it is impossible not to fear the future. (END/IPS COLUMNIST  SERVICE)

Edited by Phil Harris   

The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, IPS – Inter Press Service. 

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Nicaragua’s Future Canal a Threat to the Environmenthttp://www.ipsnews.net/2015/03/nicaraguas-future-canal-a-threat-to-the-environment/?utm_source=rss&utm_medium=rss&utm_campaign=nicaraguas-future-canal-a-threat-to-the-environment http://www.ipsnews.net/2015/03/nicaraguas-future-canal-a-threat-to-the-environment/#comments Tue, 31 Mar 2015 07:45:01 +0000 Jose Adan Silva http://www.ipsnews.net/?p=139956 Executives of the Chinese company HKDN and members of the Nicaraguan Grand Interoceanic Canal Commission, behind a large banner on Dec. 22, 2014, in the Pacific coastal town of Brito Rivas, during the ceremony marking the formal start of the gigantic project that will cut clean across the country. Credit: Mario Moncada/IPS

Executives of the Chinese company HKDN and members of the Nicaraguan Grand Interoceanic Canal Commission, behind a large banner on Dec. 22, 2014, in the Pacific coastal town of Brito Rivas, during the ceremony marking the formal start of the gigantic project that will cut clean across the country. Credit: Mario Moncada/IPS

By José Adán Silva
MANAGUA, Mar 31 2015 (IPS)

The new interoceanic canal being built in Nicaragua has brought good and bad news for the scientific community: new species and archeological sites have been found and knowledge of the local ecosystems has grown, but the project poses a huge threat to the environment.

Preliminary reports by the British consulting firm Environmental Resources Management (ERM) revealed the existence of previously unknown species in the area of the new canal that will link the Pacific and Atlantic oceans. The study was commissioned by Hong Kong Nicaragua Canal Development (HKND Group), the Chinese company building the canal.

Among other findings, the study, “Nicaragua’s Grand Canal”, presented Nov. 20 in Nicaragua by Alberto Vega, the consultancy’s representative in the country, found two new species of amphibians in the Punta Gorda river basin along Nicaragua’s southern Caribbean coast.

The two new kinds of frogs have not yet been fully studied, said Vega, who also reported 213 newly discovered archaeological sites, and provided an assessment of the state of the environment along the future canal route.

The aim of the study was to document the main biological communities along the route and in adjacent areas, and to indicate the species and habitats in need of specific conservation measures in order to identify opportunities to prevent, mitigate and/or compensate for the canal’s potential impacts.

The 278-km waterway, which includes a 105-km stretch across Lake Cocibolca, will be up to 520 metres wide and 30 metres deep. Work began in December 2014 and the canal is expected to be completed by late 2019, at a cost of over 50 billion dollars.

The environmental impact study will be ready in late April, Telémaco Talavera, the spokesman for the presidential Nicaraguan Grand Interoceanic Canal Commission, told Tierramérica.

“The studies are carried out with cutting-edge technology by an international firm that is a leader in this area, ERM, with a team of experts from around the world who were hired to provide an exhaustive report on the environmental impact and the mitigation measures,” he said.

Three farmers study the route for the interoceanic canal on a map of Nicaragua, which the Chinese firm HKND Group presented in the southern city of Rivas during one of the meetings that the consortium has organised around the country with people who will be affected by the mega-project. Credit: José Adán Silva/IPS

Three farmers study the route for the interoceanic canal on a map of Nicaragua, which the Chinese firm HKND Group presented in the southern city of Rivas during one of the meetings that the consortium has organised around the country with people who will be affected by the mega-project. Credit: José Adán Silva/IPS

Víctor Campos, assistant director of the Humboldt Centre, told Tierramérica that HKND’s preliminary documents reveal that the canal will cause serious damage to the environment and poses a particular threat to Lake Cocibolca.

The 8,624-sq-km lake is the second biggest source of freshwater in Latin America, after Venezuela’s Lake Maracaibo.

Campos pointed out that HKND itself has recognised that the route that was finally chosen for the canal will affect internationally protected nature reserves home to at least 40 endangered species of birds, mammals, reptiles and amphibians.

The route will impact part of the Cerro Silva Nature Reserve and the Indio Maiz biological reserve, both of which form part of the Mesoamerican Biological Corridor (CBM), where there are endangered species like scarlet and great green macaws, golden eagles, tapirs, jaguars, spider monkeys, anteaters and black lizards.

Along with the Bosawas and Wawashan reserves, Indio Maíz and Cerro Silva host 13 percent of the world’s biodiversity and approximately 90 percent of the country’s flora and fauna.

This tropical Central American country of 6.1 million people has Pacific and Caribbean coastlines and 130,000 sq km of lowlands, plains and lakes. There have been several previous attempts to use Lake Cocibolca to create a trade route between the two oceans.

The Cocibolca Group, made up of a dozen environmental organisations in Nicaragua, has warned of potential damage by excavation on indigenous land in the CBM, on the country’s southeast Caribbean coast.

One site that would be affected is Booby Cay, surrounded by coral reefs and recognised by Birdlife International as an important natural habitat of birds, sea turtles and fish.

Studies by the Cocibolca Group say that dredging with heavy machinery, the construction of ports, the removal of thousands of tons of sediment from the lake bottom, and the use of explosives to blast through rock would have an impact on the habitat of sea turtles that nest on Nicaragua’s southwest Pacific coast.

Map of Nicaragua with the six possible routes for the Grand Canal. The one that was selected was number four, marked in green. Credit: Courtesy of ERM

Map of Nicaragua with the six possible routes for the Grand Canal. The one that was selected was number four, marked in green. Credit: Courtesy of ERM

The selected route, the fourth of the six that were considered, will run into the Pacific at Brito, 130 km west of Managua. A deepwater port will be built where there is now a beach that serves as a nesting ground for sea turtles.

ERM’s Talavera rejects the “apocalyptic visions” of the environmental damage that could be caused by the new waterway. But he did acknowledge that there will be an impact, “which will be focalised and will serve to revert possible damage and the already confirmed damage caused by deforestation and pollution along the canal route.”

The route will run through nature reserves, areas included on the Ramsar Convention list of wetlands of international importance, United Nations Educational, Scientific and Cultural Organisation (UNESCO) biosphere reserves, and water basins.

According to Talavera, besides the national environmental authorities, HKND consulted institutions like the Ramsar Convention, UNESCO, the International Union for Conservation of Nature and Birdlife International, “with regard to the feasibility of mitigating and offsetting the possible impacts.”

The canal is opposed by environmental organisations and affected communities, some of which have filed a complaint with the Inter-american Commission on Human Rights (IACHR).

In an IACHR hearing on Mar. 16, Mónica López, an activist with the Cocibolca Group, complained that Nicaragua had granted HKND control over the lake and its surrounding areas, including 16 watersheds and 15 protected areas, where 25 percent of the country’s rainforest is concentrated.

López told Tierramérica that construction of the canal will also lead to “the forced displacement of more than 100,000 people.”

In addition, she criticised “the granting to the Chinese company of total control over natural resources that have nothing to do with the route but which according to the HKND will be of use to the project, without regard to the rights of Nicaraguans.”

The 2013 law for the construction of the Grand Interoceanic Canal stipulates that the state must guarantee the concessionaire “access to and navigation rights to rivers, lakes, oceans and other bodies of water within Nicaragua and its territorial waters, and the right to extend, expand, dredge, divert or reduce these bodies of water.”

The state also gives up the right to sue the investors in national or international courts for any damage caused to the environment during the study, construction and operation of the waterway.

In the IACHR hearing in Washington, representatives of the government, as well as Talavera, rejected the allegations of the environmentalists, which they blamed on “political interests” while arguing that the project is “environmentally friendly”.

They also repeated the main argument for the construction of the canal: that it will give a major boost to economic growth and will enable Nicaragua, where 42 percent of the population is poor, to leave behind its status as the second-poorest country in the hemisphere, after Haiti.

This story was originally published by Latin American newspapers that are part of the Tierramérica network.

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

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Renewable Energies in Latin America Weather Low Oil Priceshttp://www.ipsnews.net/2015/03/renewable-energies-in-latin-america-weather-low-oil-prices/?utm_source=rss&utm_medium=rss&utm_campaign=renewable-energies-in-latin-america-weather-low-oil-prices http://www.ipsnews.net/2015/03/renewable-energies-in-latin-america-weather-low-oil-prices/#comments Mon, 09 Mar 2015 17:34:03 +0000 Emilio Godoy http://www.ipsnews.net/?p=139557 One of Mexico’s 31 wind parks. By 2020, installed capacity for wind power in this country will be 15 gigawatts. Credit: Courtesy of Dforcesolar

One of Mexico’s 31 wind parks. By 2020, installed capacity for wind power in this country will be 15 gigawatts. Credit: Courtesy of Dforcesolar

By Emilio Godoy
MEXICO CITY, Mar 9 2015 (IPS)

Traditionally, falling oil prices have discouraged development of renewable energy sources, but clean energy is making steady progress in Latin America, according to regional experts.

Most Latin American countries have set medium and long-term targets for alternative energy supply and consumption and these projects are being maintained in spite of economic fluctuations and plummeting international crude oil prices.

According to Hugo Ventura, the head of the Energy and Natural Resources Unit of the Economic Commission for Latin America and the Caribbean (ECLAC), there are two factors that call into question the view that cheaper oil will act as a brake on the development of renewable energy sources.

“One of these factors is that countries are committed to increasing the contribution of renewables, in order to diversify their energy mix, decrease dependence on fossil fuels and reduce carbon dioxide emissions because of climate change. The other aspect is that players in the energy sector are taking the long-term view,” Ventura told IPS.

Studies provide evidence that renewable energy sources in the region are in robust health. The World Wind Energy Association (WWEA) said on Feb. 5 that preliminary figures for 2014 were “very bright,” in a report that confirmed that “wind power investment is still speeding up at an enormous pace.”“There is unstoppable inertia; many projects under construction will soon be operating , so growth is continuing. There are renewable energy tendering schemes in the pipeline that are not going to stop.” -- Hugo Ventura

“Especially the new markets in Latin America as well as in Africa are reflecting the importance which wind power is now playing in the electricity supply, as a cheap and reliable power source,” said Stefan Gsänger, the Secretary General of the WWEA, which is based in the German city of Bonn.

The collapse of fossil fuel prices is damaging the economies of producer countries in the region, such as Argentina, Bolivia, Brazil, Colombia, Ecuador, Mexico, Peru and Venezuela, where state oil companies are experiencing difficulties in planning and operations.

But it is benefiting net importers, like Central American countries and Chile, which are paying less for their oil. Consumers in both groups of countries may see the cost of their electricity bills fall.

In these circumstances, renewable energy sources are already cost-competitive with fossil fuels like natural gas, according to the report “Renewable power generation costs in 2014” by the International Renewable Energy Agency (IRENA) based in Abu Dhabi, with 139 states as members.

If the health and environmental costs of fossil fuel-fired power are taken into account, renewable sources are even more cost-competitive.

The IRENA study indicates that the average cost of electricity produced by solar plants has fallen to within the range of fossil fuel power generation . Electricity from solar plants installed in 2013 and 2014 cost 11 cents per kilowatt-hour in South America, 12 cents in North America and over 31 cents in Central America and the Caribbean.

Model of the first solar energy plant in Latin America, due to begin operating in the Atacama desert in northern Chile in 2017. Credit: Abengoa Chile

Model of the first solar energy plant in Latin America, due to begin operating in the Atacama desert in northern Chile in 2017. Credit: Abengoa Chile

The average cost of power generated by hydroelectric plants in South America was four cents per kWh.

Hydropower is the biggest renewable source in the region, but it is vulnerable to droughts, like the one currently affecting the south of Brazil. Brazil has 86,000 megawatts (86 gigawatts) of installed hydropower capacity, Mexico has more than 11,000 MW (11 GW), Argentina 10,000 (10 GW) and Colombia almost as much, according to IRENA’s figures.

“Countries will continue to pursue renewable energy sources. For example, wind power is much more economical than natural gas combined cycle plants or hydroelectric power,” Eduardo Rincón, a professor at Universidad Autónoma de la Ciudad de México (Autonomous University of Mexico City), told IPS.

Clean energy alternatives effectively contribute to lowering oil consumption and avoiding carbon dioxide emissions, which cause global warming. Moreover, they generate jobs and attract investment, he said.

Climatescope 2014’s report on “Mapping the global frontiers for clean energy investment” states that Brazil attracted as much as 96.3 billion dollars of investment between 2006 and 2013 for renewable energy development.

Renewables now represent 15 percent of Brazil’s total installed capacity of 126 gigawatts, according to the Climatescope document, which contains 55 country profiles compiled by the Multilateral Investment Fund of the Inter-American Development Bank, in partnership with public and private entities from several countries.

Mexico’s renewable energy sector attracted investments of 11.3 billion dollars in the period 2006-2013. The country has a total installed electricity capacity of 64 gigawatts, of which five percent is contributed by renewable sources.

Clean energy investment in Chile amounted to 7.1 billion dollars in the same period. Total installed power capacity is 17.8 gigawatts with renewable energies having an eight percent share. Peru’s renewables sector received 3.4 billion dollars in investments; the country’s total installed power capacity is 10 gigawatts.

Ventura, of ECLAC, predicted that oil prices will stabilise in 2016 at between 70 and 80 dollars a barrel, a moderate level compared to the average price in 2013 of over 100 dollars a barrel.

“At these prices, there is a viable niche for renewable power. Investors could find stability in the field of electricity,” he said. In his view, the region should aim for a diversified energy matrix, with wind, solar and geothermal power.

“There is unstoppable inertia; many projects under construction will soon be operating , so growth is continuing. There are renewable energy tendering schemes in the pipeline that are not going to stop,” Ventura said.

Argentina wants eight percent of total demand to be provided by renewable sources by 2016.

Chile’s goal is for 20 percent of its electricity to be provided by renewable sources by 2025.

Mexico has set targets of 23 percent of consumption to be supplied by clean energy sources by 2018, 25 percent by 2024 and 26 percent by 2027.
In Ventura’s view, these goals underpin regional plans to reduce polluting emissions by cutting fossil fuel consumption in spite of the current situation of low oil and gas prices.

Rincón, the university professor, said people’s awareness should be raised so that citizens exert pressure for legal changes to be made “in accordance with their demands, not with the interests of small, powerful groups.

“We need a transition towards low-cost energy systems, and renewable resources are heaven-sent: they are free,” he said.

In his view, “It’s a matter of getting the sums right. How much does a wind park or solar installation cost, over its planned service life, compared with continuing to build combined cycle plants?” he asked.

Mexico adopted an energy reform in August 2014 that opened up the entire sector to private local and international capital, including electricity generation from renewable sources.

The package of laws governing the reform includes one on geothermal energy, a resource that the authorities particularly wish to promote.

Edited by Estrella Gutiérrez/Translated by Valerie Dee

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Argentina Moves Towards Marriage of Convenience with Chinahttp://www.ipsnews.net/2015/02/argentina-moves-towards-marriage-of-convenience-with-china/?utm_source=rss&utm_medium=rss&utm_campaign=argentina-moves-towards-marriage-of-convenience-with-china http://www.ipsnews.net/2015/02/argentina-moves-towards-marriage-of-convenience-with-china/#comments Mon, 23 Feb 2015 22:33:52 +0000 Fabiana Frayssinet http://www.ipsnews.net/?p=139304 The entrance to Chinatown in Buenos Aires, where a sign promotes the renovation of Argentina’s railways, partly financed by Beijing. Credit: Fabiana Frayssinet/IPS

The entrance to Chinatown in Buenos Aires, where a sign promotes the renovation of Argentina’s railways, partly financed by Beijing. Credit: Fabiana Frayssinet/IPS

By Fabiana Frayssinet
BUENOS AIRES, Feb 23 2015 (IPS)

The government of Argentina is building a marriage of convenience with China, which some see as uneven and others see as an indispensable alliance for a new level of insertion in the global economy.

The process forms part of a radical change with respect to Argentina’s diplomacy, which years back involved ties with the United States described as “carnal relations.”

President Cristina Fernández called the new relationship with China an “integral strategic alliance,” after signing a package of 22 agreements with Chinese leader Xi Jinping in Beijing on Feb. 4.

The accords include areas like space technology, mining, energy, financing, livestock and cultural matters. They cover the construction of two nuclear and two hydropower plants, considered key to this country’s goal of energy self-sufficiency.

“Although they are important, the new agreements and others that were signed earlier are insufficient to gauge the dimension of the bilateral commitment,” said Jorge Castro, the director of the Strategic Planning Institute and an expert on China.

“For Argentina, the relationship with China has elements that are essential for insertion into the international system of the 21st century, along with other countries of the South, headed by Brazil,” he told IPS.

“These ties are between the new fulcrum of the global economy, China-Asia, and Argentina as a nation and as a regional unit,” he said.

Castro pointed out that Asia’s giant is currently South America’s leading trade partner, due to the volume of its purchases of raw materials, which implies a level of interdependence given that “China has placed the food security of its population in the hands of South American countries.”

In the case of Argentina, China is its second-largest trading partner, after neighbouring Brazil – displacing long-time partners like the United States and European countries.

In 2014, exports to China totalled five billion dollars while imports stood at 10.8 billion dollars – a bilateral record which represented 11.5 percent of this country’s trade balance, according to Argentina’s Chamber of Commerce.

Prior accords that cemented the alliance

Before Fernández’s visit to China, the two countries had already signed investment agreements in strategic sectors, such as the one between China’s Sinopec and Argentina’s YPF, two state-owned oil companies, for the exploitation of one of the Loma Campana deposits of unconventional oil and gas resources in Vaca Muerta in southern Argentina.

There was also an accord for China to provide some 2.5 billion dollars in financing for the reconstruction of the railway of the Belgrano Cargas y Logística company, which will transport Argentine and Brazilian agricultural products to Chilean ports on the Pacific ocean.

“The investment agreements with China are important to the extent that they facilitate the conditions to continue generating, for example, the infrastructure for development that Argentina needs, in a scenario” of a shortage of foreign currency, economist Fernanda Vallejos told IPS.

The Chinese space station under construction in the southern Argentine province of Neuquén, rejected by the political opposition of all stripes and social groups. Credit: Courtesy of DesarrolloyDefensa

The Chinese space station under construction in the southern Argentine province of Neuquén, rejected by the political opposition of all stripes and social groups. Credit: Courtesy of DesarrolloyDefensa

In July 2014, Argentina reached an 11 billion dollar currency swap agreement with China, to shore up this country’s weakened foreign reserves, of which it received one billion dollars in December.

The swap “has been a very powerful instrument,” which is added to measures by the government and the Central Bank to promote exchange stability and help slow down inflation, said Vallejos, a member of a group that advises the Ministry of the Economy and Public Finance.

Critical voices

Sectors of the business community are critical of the alliance with Beijing, such as the Argentine Industrial Union (UIA) or the Chamber of Exports, which sounded a warning about the asymmetrical nature of the relationship.

This country’s exports to China are only half of what it imports from the Asian giant, and they are basically raw materials or farm products. A full 75 percent is soy or by-products.

Imports, by contrast, are mainly machinery and electronics, computers, telephones, chemical products, motorcycles or parts for household appliances.

The UIA said the framework agreement on economic cooperation and investment, signed in July 2014 and pending final approval by the legislature, “contains clauses that pose an enormous risk to Argentina’s development.”

“Over the last decade, China’s strategy has pursued two central objectives: to consolidate its transnational companies in global value chains and to obtain commodities and inputs with little value-added, for its growing productive and employment needs,” the UIA said in a communiqué.

“In free trade agreements in this era of globalisation, the essential thing is not trade but investment,” said Castro, who questioned the concept of “asymmetry” and backed the agreement with China.

The China expert said the relationship should be analysed in a broader context. For example, by remembering that in the next 10 years, China’s foreign direct investment is estimated to climb to 1.1 trillion dollars.

“The question is how to manage to be part of China’s flow of investment in industry in the next 10 to 20 years,” Castro said.

The UIA agrees that it is important to be part of that current, but with allocations that would not harm local goods and services, which have no chance of receiving Chinese financing, the business chamber said.

The UIA and some trade unions also worry that Chinese labour power, which is included in several projects, will displace local workers.

“Don’t worry, we continue to defend Argentine workers and the business community’s participation,” said centre-left President Fernández, who urged those sectors to engage in technical discussions about the accords.

The new empire?

Some in Argentina see the China of the 21st century as the new England of the 19th century or the United States of the 20th century, in terms of economic and territorial hegemony and domination.

They also question the construction of a Chinese space tracking and control station in the southern Argentine province of Neuquén, which according to the government will monitor, control and gather data as part of China’s programme of missions to explore the moon and outer space.

Raúl Dobrusin, an opposition legislator from Neuquén, told IPS that the agreement, which grants China the use of 200 hectares for 50 years and is opposed by left-wing groups and social organisations, did not go through the Neuquén provincial legislature, which was not informed of the details of the accord.

So far there is no Chinese military presence in the construction project, said Dobrusin, but in his view, the space station poses “major geopolitical risks.”

“If there is a confrontation between powerful nations, we will be a place to be taken into account by the enemies of China…In short, we are getting into an area where the possibility of deciding whether or not to participate in conflicts is no longer a sovereign decision, they won’t ask us,” he warned.

“The alliance transcends economic matters and forms part of the search for independence, on both the economic and political fronts, which makes it possible to reach economic and social development goals, by breaking the yoke of neoliberalism and the empire-dependence logic,” said Vallejos.

China, in her view, “is far from the voracity of the Western powers…It is part of a new global order that is struggling to be born, where the role of emerging countries is no longer one of colonialism but of assuming the position of builders of our own destiny,” said the economist.

“That does not mean that China isn’t obtaining benefits from its ties with our nations, but that it is possible to build a win-win relationship for all of the parties involved,” she said.

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

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OPINION: Brazil Can Help Steer SDGs Towards Ambitious Targetshttp://www.ipsnews.net/2015/01/opinion-brazil-can-help-steer-sdgs-towards-ambitious-targets/?utm_source=rss&utm_medium=rss&utm_campaign=opinion-brazil-can-help-steer-sdgs-towards-ambitious-targets http://www.ipsnews.net/2015/01/opinion-brazil-can-help-steer-sdgs-towards-ambitious-targets/#comments Thu, 29 Jan 2015 08:45:16 +0000 Daniel Balaban http://www.ipsnews.net/?p=138883 Children having a daily lunch meal at a kindergarten in a poor community in Salvador, Bahia. Brazil's National School Feeding Programme is an example of one of the far-reaching programmes implemented in line with the Millennium Development Goals (MDGs). Credit: Carolina Montenegro/WFP

Children having a daily lunch meal at a kindergarten in a poor community in Salvador, Bahia. Brazil's National School Feeding Programme is an example of one of the far-reaching programmes implemented in line with the Millennium Development Goals (MDGs). Credit: Carolina Montenegro/WFP

By Daniel Balaban
BRASILIA, Jan 29 2015 (IPS)

With the current Millennium Development Goals (MDGs) expiring at the end of this year to be replaced by the Sustainable Development Goals (SDGs) which will set priorities for the next fifteen years, 2015 will be a crucial year for the future of global development.

As a country with an outstanding performance in reaching the MDGs, Brazil can play an important role in shaping and achieving the SDGs.

Extensive consultations with governments and civil society have been held in recent years, and consensus around many issues has been established and channelled into a series of documents that will now guide the final deliberations on the exact content of the SDGs. September 2015 has been set as deadline for their endorsement by U.N. member states.

Daniel Balaban, Director of WFP's Centre of Excellence against Hunger.   Credit: Carolina Montenegro/WFP

Daniel Balaban, Director of WFP’s Centre of Excellence against Hunger. Credit: Carolina Montenegro/WFP

A Working Group has identified 17 goals encompassing issues such as poverty, hunger, education, climate change and access to justice. While some of these topics were already covered by the MDG framework, there is a new set of goals with emphasis on the preservation of natural resources and more sustainable living conditions, meant to reverse contemporary trends of overuse of resources and destruction of ecosystems.

As governments quickly move to adopt the SDGs, they must capitalise on what has been achieved with the MDGs to secure new targets that will go beyond the lowest common denominator.

Brazil has a compelling track record in achieving the current MDGs, and it can use its experience to influence the final negotiations of the SDGs towards ambitious targets.

The country has already reached four of the eight targets – eradication of extreme poverty and hunger, achieving universal primary education, promoting gender equality and combating HIV – and it is likely to achieve the remaining targets by the end of the MDG deadline.“As governments quickly move to adopt the SDGs, they must capitalise on what has been achieved with the MDGs to secure new targets that will go beyond the lowest common denominator”

Through a set of innovative and coordinated policies, Brazil has tackled these different areas and demonstrated that it is possible to radically decrease poverty and hunger within a decade, giving special attention to the most vulnerable groups.

The National School Feeding Programme, for example, is one of the far-reaching programmes implemented so far. In 2009, the existing policy was upgraded to recognise school feeding as a right, whereby all students of public schools are entitled to adequate and healthy meals, prepared by nutritionists and in accordance with local traditions.

At least 30 percent of the food used to prepare these meals must be procured from local producers, with incentives to the purchase of organic produce.

The programme also devotes additional resources to schools with students of traditional populations, often exposed to food insecurity.

Another feature of the policy is the participation of civil society through local school feeding councils, which oversee the implementation of the programme, as well as financial reports produced by municipalities.

Altogether, the programme tackles a wide range of issues, combining action to combat hunger, ensure adequate nutrition (including of the most vulnerable groups), support local farmers and involve civil society, in line with principles of inclusion, equity and sustainability, which are also guiding principles of the future SDGs.

It is a good example of how the incorporation of innovative features to existing policies can result in more inclusion and sustainability while optimising resources.

As it occupies a more prominent role on the world stage, Brazil has been active in promoting such policies in multilateral fora, in addition to investing in South-South cooperation to assist countries to achieve similar advances.

The WFP Centre of Excellence against Hunger is the result of such engagement. In the past three years, the Centre been supporting over 30 countries to learn from the Brazilian experience in combating hunger and poverty.

Brazil is now in a position to showcase tangible initiatives during the SDGs negotiations to prove that through strong political commitment it is possible to build programmes with impact on a range of areas.

Such multi-sectorial action and articulation will be required if countries around the globe are determined to tackle humanity’s most urgent needs related to hunger, adequate living standards for excluded populations, and development, while reversing the trend of climate change and unsustainable use of natural resources.

The world is at a crossroads for ensuring sustainability. If the right choices are not made now, future generations will pay the price. However daunting the task may be, this is the moment to do it.

Edited by Phil Harris   

The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, IPS – Inter Press Service. 

* Daniel Balaban, an economist, is the Director of World Food Programme’s (WFP) Centre of Excellence against Hunger. He has also led the Brazilian national school feeding programme as President of the National Fund for Education Development (FNDE), which feeds 47 million children in school each year. In 2003, he served as the Special Advisor to the Secretary of the Council of Economic and Social Development under the Presidency of the Federative Republic of Brazil.

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Oil, An Invasive Water Species in the Carnival Capitalhttp://www.ipsnews.net/2015/01/oil-an-invasive-water-species-in-the-carnival-capital/?utm_source=rss&utm_medium=rss&utm_campaign=oil-an-invasive-water-species-in-the-carnival-capital http://www.ipsnews.net/2015/01/oil-an-invasive-water-species-in-the-carnival-capital/#comments Mon, 12 Jan 2015 18:39:50 +0000 Mario Osava http://www.ipsnews.net/?p=138601 Fishermen row their small boat out into Guanabara bay from a beach on Gobernador island. In the background can be seen an oil tanker and an island with oil silos belonging to Petrobras. Credit: Mario Osava/IPS

Fishermen row their small boat out into Guanabara bay from a beach on Gobernador island. In the background can be seen an oil tanker and an island with oil silos belonging to Petrobras. Credit: Mario Osava/IPS

By Mario Osava
RIO DE JANEIRO, Jan 12 2015 (IPS)

“We ran down to the beach and found a black tide, whose waves didn’t make the sound of water, but the slurp of a thick paste,” said Alexandre Anderson, describing the oil spill in Guanabara bay in the Brazilian state of Rio de Janeiro which turned him into an activist and leader among the local small-scale fishing community.

The January 2000 disaster marked a low point for environmental conditions in the bay, and drew global attention because of the impact of the sudden massive spill of 1.3 million litres of oil from a leaking underground pipeline.

The water in the bay is also polluted by untreated sewage from Greater Rio de Janeiro, which has a population of 12 million.“The oil industry is synonymous with the end: the end of fishing and the end of fish in Guanabara bay." -- Alexandre Anderson

Nevertheless, fish and fishing have survived, although the number of local fisherpersons has dropped around 60 percent since then, to 9,000 today, Anderson estimates.

The threat to their livelihood comes mainly from the shrinking of the space available for fishing, which covered 78 percent of the bay a few decades ago and currently is limited to just 12 percent, he said.

The activities of the oil industry’s plants, pipelines and tankers occupy 46 percent of the bay and that area is expanding, due to deepwater drilling in the Atlantic off the coast of Brazil, and the construction of a second refinery near the bay, set to begin operating in 2016.

“The oil industry is synonymous with the end: the end of fishing and the end of fish in Guanabara bay,” Anderson told IPS.

Besides narrowing the space available for fishing, the numerous pipelines that crisscross the bay change the environment. The oil is piped at high temperatures, to keep it liquid, while the natural gas is pumped cold, at dozens of degrees below zero.

Brazil’s state-run oil company, Petrobras, occupies islands in the bay with regasification plants of liquefied natural gas and stocks of oil and gas, supplied by oil and gas pipelines.

Marine life in the bay also suffers the effects of the sounds and vibrations caused by the pumping of tons of gas and oil at high pressure. “Imagine the impact of all of that on the seabed,” said Anderson.

The small-scale fishing community has fallen victim to the major economic transformation of the Rio de Janeiro metropolitan region. The economy of Rio, best known for its cultural activities, tourism and carnival, is now largely based on oil and the metalworking industry.

The oil deposits discovered in what is known as the “pre-salt” area, below a two-kilometre- thick salt layer under rock, sand and deep water some 300 km off the coast of Rio de Janeiro, have fuelled the recovery of shipyards that were practically inactive and have drawn large multinational engineering and oil services corporations to the area.

They also boosted the choice of Itaboraí, 60 km from Rio de Janeiro and near the northeast edge of Guanabara bay, for the construction of a petrochemical complex, COMPERJ, limited so far to a refinery with a capacity to handle 165,000 barrels a day.

On the other side of the bay, along whose banks the metropolitan region of 12 million people has grown up, Petrobras has been operating the Duque de Caxias refinery, which processes 242,000 barrels a day, since 1961.

“With the pre-salt deposits, Brazil will produce between 4.5 and 5.5 million barrels a day over the next 20 years, and will be able to export another two million, becoming a major oil exporter,” said Alexandre Szklo, a professor of energy planning at the Federal University of Rio de Janeiro.

The recent fall in international oil prices, of nearly 40 percent, does not modify that tendency, because in the current conditions in Brazil, “price swings only affect long-term expansion,” he said. “The oil industry is like an elephant – it takes it a while to start running and to brake.”

Brazil’s share of total global oil supplies might be small, only around five percent, but this country accounts for 60 percent of orders for drilling rigs and oil exploration and drilling systems, because almost all of its reserves are offshore, said Szklo.

It’s an opportunity to develop the naval industry and services for that sector, thus benefiting the economy of the state of Rio de Janeiro, off the coasts of which are the main pre-salt deposits, which also extend to other states to the north and south.

Brazil hopes to tap into this enormous source of wealth to improve its education and health systems over the coming decades. But some curses are inherent.

Because of its diversified production system, by contrast with Saudi Arabia, Russia and Venezuela, Brazil is protected from the main curse, which is sacrificing other sectors of the economy, especially processing industries, for an overvalued local currency and high dependency on oil exports, Szklo said.

But there is no denying that Rio de Janeiro suffers locally from Dutch Disease – an economic condition in which a nation’s economy becomes overly dependent on the export of natural resources.

“Oil production generates few jobs, but it provides work for highly-paid skilled workers who demand expensive services, driving up local costs, which debilitates other industrial sectors,” the professor explained.

On the outskirts of Campos, 280 km northeast of Rio de Janeiro, where large amounts of oil (not pre-salt) have been extracted in deep waters over the past three decades, the phenomenon helped destroy the local sugar industry and drove the cost of living up to the level of wealthy cities.

Rio de Janeiro is experiencing the same phenomenon, which has made it one of the most expensive cities in the world. The cost of housing in middle-class neighbourhoods has tripled in the last five years.

This explains the royalties charged by municipal and state governments in oil-producing areas, as a way to prepare for the future economic transition, after the oil reserves have been exhausted.

But it is the social and environmental curses whose repercussions are felt first and which generate the most resistance.

“The choice of location for the installation of COMPERJ was a bad one, between protected natural areas and a national park, threatening rivers that are still in good shape, and the last preserved area in Guanabara bay,” said biologist Breno Herrera.

He led a movement supported by local inhabitants, scientists and prosecutors which blocked the plans of Petrobras – the owner of COMPERJ – to turn the Guaxindiba river into a waterway for transporting heavy equipment to the petrochemical complex.

“The dredging could stir up heavy metals lying on the riverbed and pollute fish and people,” said Herrera.

The refinery will cause acid rain which could destroy forests and green areas in the mountains, towards which the wind blows, carrying pollutants produced by the processing of oil, said Herrera, the former head of a protected natural area jeopardised by the oil industry.

The Duque de Caxias refinery, “one of the worst sources of pollution in Guanabara bay, also pollutes the air in nearby neighbourhoods, causing respiratory diseases, allergies and red, itchy eyes,” said Sebastião Raulino, an activist with the Forum of People Affected by the Oil and Petrochemical Industry (FAPP).

Edited by Verónica Firme/Translated by Stephanie Wildes

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Shale Oil Threatens the High Prices Enjoyed by OPEChttp://www.ipsnews.net/2014/11/shale-oil-threatens-the-high-prices-enjoyed-by-opec/?utm_source=rss&utm_medium=rss&utm_campaign=shale-oil-threatens-the-high-prices-enjoyed-by-opec http://www.ipsnews.net/2014/11/shale-oil-threatens-the-high-prices-enjoyed-by-opec/#comments Wed, 26 Nov 2014 21:10:05 +0000 Humberto Marquez http://www.ipsnews.net/?p=137983 Ranking of recoverable shale oil and gas reserves, which have revolutionised the global map of fossil fuels. Credit: ProfesionalMovil

Ranking of recoverable shale oil and gas reserves, which have revolutionised the global map of fossil fuels. Credit: ProfesionalMovil

By Humberto Márquez
CARACAS, Nov 26 2014 (IPS)

Shale fever and the political chess among major oil producers and consumers have put OPEC in one of the most difficult junctures in its 54 years of history.

“OPEC was spoiled for several years by high prices of around 100 dollars a barrel,” Elie Habalián, a former Venezuelan OPEC (Organisation of the Petroleum Exporting Countries) governor, told IPS. “If it had had the foresight to keep prices down to around 70 dollars a barrel, shale oil would not have begun to pose such stiff competition.”

The 12-member group – made up of Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela – may agree to cut output, which would entail sacrificing markets, during its Nov. 27 ministerial meeting in Vienna – the 166th held since the organisation was founded in September 1960.

Oil prices, which climbed after 2003 to over 140 dollars a barrel in 2008, plunged as a result of the global financial crisis that broke out that year, but recovered this decade and have remained at around 100 dollars a barrel.

In the meantime, the production of unconventional oil and gas began to expand in the United States. Shale, a common type of sedimentary rock made up largely of compacted silt and clay, is an unconventional source of natural gas and oil, which is trapped in shale formations and recovered by hydraulic fracturing or “fracking”.

“Fracking” involves pumping water, chemicals and sand at high pressure into the well, a technique that opens and extends fractures in the shale rock to release the natural gas and oil on a massive scale.

With the technology and capital available in the 20th century, these unconventional resources were not recoverable.

Habalián pointed out that after the 1973 Arab oil embargo, “the West and Japan adopted a strategy to achieve a stable market under their control rather than under that of the exporting countries.”

That strategy has run into surprises. For example, 40 years ago no one foresaw that China, along with India and other emerging powers, would become a fast-growing economy with a voracious appetite for fossil fuels, which gave a boost to producers of oil and gas.

“But with the high prices, while the exporters financed geopolitical campaigns, like the conflicts in the Middle East or the influence of Venezuela in Latin America under the presidency of Hugo Chávez (1999-2013), the big corporations were investing in technology and new areas of business,” said Habalián.

The shale boom “has merely accelerated the results of that permanent strategy by the West. Shale oil is here to stay, the price will drop as the technology advances, and that will bring down the prices of, and set a cap on, OPEC’s oil,” the expert said.

Map of proven global reserves of conventional oil, where new actors have also reduced OPEC’s grip. Credit: Fastcompany.com

Map of proven global reserves of conventional oil, where new actors have also reduced OPEC’s grip. Credit: Fastcompany.com

Fracking is a costly procedure that requires high crude prices to make it profitable. It is also criticised for its environmental effects, as it involves consumption of enormous amounts of water and the creation of cracks in the rocks deep below the surface, with consequences that have yet to be determined.

Shale oil is already a major actor in the global energy market, with daily output of 3.5 million barrels, mainly in the United States, which recently overtook Saudi Arabia and Russia to become the world’s largest oil producer, with more than nine million barrels a day.

For decades Saudi Arabia was the biggest producer and the de facto leader of OPEC, because to its production of nearly 10 million barrels a day is added a spare production capacity of two million barrels which has enabled it to increase or reduce output in periods of market scarcity or abundance.

The market, of some 91 million barrels consumed daily, of which OPEC contributes one-third, is showing signs of being oversupplied because of the rising offer of shale oil, Europe’s fragile economic recovery, and the slowdown of emerging economies, from China to Brazil.

Crude oil is about 30 percent cheaper than one year ago. The European benchmark North Sea Brent stands at 80 dollars a barrel, compared to 110 dollars a barrel at the close of 2013. The U.S. benchmark West Texas Intermediate is trading at 75 dollars a barrel, and Venezuela’s dense cocktail at less than 70 dollars a barrel, down from a high of more than 100 dollars a barrel.

Saudi Arabia “appears determined to respond aggressively in defence of its market share, even if that means lower prices for a few years,” Kenneth Ramírez, a professor of geopolitics and oil at the Central University of Venezuela, told IPS.

The Saudis are thus apparently facing off with Iran, their rival in the Islamic world – and which, like Venezuela, Russia or Nigeria, needs the biggest possible influx of revenue in the short term – and would discourage, with flows of low-cost conventional oil, the development of its big future rival: shale oil.

In addition, according to analyses like those of Habalián and Ramírez, low prices and a market with a greater supply of crude would “punish” nations like Syria or its big supporter, Russia, which is clashing with the West over the conflict centred in Ukraine.

In the immediate future, OPEC could opt for the Saudi proposal of maintaining the status quo and letting oil prices slide to 70 dollars a barrel or lower, with the aim of slowing down the development of shale oil while waiting for a recovery of Europe or China and other emerging economies.

Venezuela has tried to push another option, with an intense tour by Foreign Minister Rafael Ramírez to the capitals of oil producing countries, from Mexico City to Moscow through Tehran, but conspicuously avoiding Riyadh. The idea is to cut production to shore up prices, betting that the capacity to extract shale oil will decline in a few years.

One component that contributes to a move in that direction, said Habalián, is the pressure from environmentalists, especially in the United States and Canada, who oppose the extraction of shale oil and gas because of its impact on water sources, the injection of chemicals and the fracturing of rock deep underground.

A third option, said Ramírez, would be to ratify OPEC’s production ceiling of 30 million barrels a day, which would remove a small portion of the partners’ current excess supply “and although it would have a small impact on prices, it would send a signal that the organisation is not on the ropes.”

But in the medium to long term, Habalián observed, a new energy architecture in line with the market stability sought by the West continues to be bolstered, in the face of an OPEC strained by political and budgetary urgencies.

Editedo by Estrella Gutiérrez/Translated by Stephanie Wildes

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Shale Oil Fuels Indigenous Conflict in Argentinahttp://www.ipsnews.net/2014/11/shale-oil-fuels-indigenous-conflict-in-argentina/?utm_source=rss&utm_medium=rss&utm_campaign=shale-oil-fuels-indigenous-conflict-in-argentina http://www.ipsnews.net/2014/11/shale-oil-fuels-indigenous-conflict-in-argentina/#comments Tue, 18 Nov 2014 16:57:06 +0000 Fabiana Frayssinet http://www.ipsnews.net/?p=137811 Jorge Nahuel, a spokesman for the Mapuche Confederation of Neuquén, in Argentina’s southern Patagonia region, complains that local indigenous communities were not consulted about the production of unconventional oil in their ancestral territories. Credit: Fabiana Frayssinet/IPS

Jorge Nahuel, a spokesman for the Mapuche Confederation of Neuquén, in Argentina’s southern Patagonia region, complains that local indigenous communities were not consulted about the production of unconventional oil in their ancestral territories. Credit: Fabiana Frayssinet/IPS

By Fabiana Frayssinet
CAMPO MARIPE, Argentina, Nov 18 2014 (IPS)

The boom in unconventional fossil fuels has revived indigenous conflicts in southwest Argentina. Twenty-two Mapuche communities who live on top of Vaca Muerta, the geological formation where the reserves are located, complain that they were not consulted about the use of their ancestral lands, both “above and below ground.”

Albino Campo, ”logko” or chief of the Campo Maripe Mapuche community, is critical of the term “superficiary” – one to whom a right of surface occupation is granted – which was used in the oil contracts to describe the people living on the land, with whom the oil companies are negotiating.

“We are the owners of the surface, and of what is above and below as well. That is the ‘mapu’ (earth). It’s not hollow below ground; there is another people below,” he told IPS.

Nor is it hollow for the oil companies, although the two conceptions are very different.

Three thousand metres below Campo Maripe lies one of the world’s biggest reserves of shale gas and oil.

The land that the community used for grazing is now part of the Loma Campana oilfield, operated by the state-run YPF oil company in partnership with U.S. oil giant Chevron.

“More or less 160 wells have been drilled here,” Campo said. “When they reach 500 wells, we won’t have any land for our animals. They stole what is ours.”“The company should respect our constitutionally recognised right to participate in the management of natural resources. Those rights have been completely violated by the oil company’s arrival.” – Mapuche leader Jorge Nahuel

Because of the urgent need to boost production, YPF started a year ago to make roads and drill wells in the Campo Campana oilfield in the southern Patagonian province of Neuquén.

The Mapuche chief and his sister Mabel Campo showed IPS what their lands had turned into, with the intense noise and dust from the trucks continuously going back and forth to and from the oilfield.

They carry machinery, drill pipes and the products used in hydraulic fracturing or fracking, a highly criticised technique in which water, sand and chemicals are injected into the rock at high pressure to fracture the shale and release natural gas and oil trapped in the underground rocks.

“They say fracking and everything aboveground doesn’t pollute…maybe it’ll be a while but we’ll start seeing cancer, skin cancer, because of all the pollution, and we’ll also die of thirst because there won’t be any water to drink,” said Mabel Campo.

YPF argues that it negotiated with the provincial government to open up the oilfield, because it is the government that holds title to the land.

However, “we try to have the best possible relations with any superficiary or pseudo superficiary or occupant, in the areas where we work, Mapuches or not,” YPF-Neuquén’s manager of institutional relations, Federico Calífano, told IPS.

The families of Campo Maripe have not obtained title to their land yet, but they did score one major victory.

After protests that included chaining themselves to oil derricks, they got the provincial government to recognise them legally as a community in October.

“Registration as a legal entity leaves behind the official stance of denying the Mapuche indigenous identity, and now the consultation process will have to be carried out for any activity that affects the territory,” Micaela Gomiz, with the Observatory of Human Rights of the Indigenous Peoples of Patagonia (ODHPI), stated in a communiqué released by that organisation.

According to ODHIP, as of 2013 there were 347 Mapuche people charged with “usurpation” and trespassing on land, including 80 lawsuits filed in Neuquén and 60 cases in the neighbouring province of Río Negro.

In the case of Vaca Muerta, Jorge Nahuel, spokesman for the Mapuche Confederation of Neuquén, told IPS that the local indigenous communities were not consulted, as required by International Labour Organisation (ILO) Convention 169 concerning Indigenous and Tribal Peoples, which Argentina ratified 25 years ago.

Convention 169 requires prior consultation of local indigenous communities before any project is authorised on their land.

“What the state should do before granting concessions to land is to reach an agreement with the community over whether or not it is willing to accept such an enormous change of lifestyle,” he said.

Furthermore, said Nahuel, “the company should respect our constitutionally recognised right to participate in the management of natural resources. Those rights have been completely violated by the oil company’s arrival.”

The Mapuche leader said similar violations are committed in the soy and mining industries. “Indigenous people are seen as just another element of nature and as such they are trampled on,” he complained.

In this South American country of 42 million, nearly one million people identified themselves as indigenous in the last census, carried out in 2010. Most of them belong to the Mapuche and Colla communities, and live in Neuquén and two other provinces.

Nahuel noted that of nearly 70 Neuquén indigenous communities, only 10 percent hold legal title to their land.

“The logic followed by the state is that the weaker the documentation of land tenure, the greater the legal security enjoyed by the company,” he said. “It’s a perverse logic because what they basically believe is that by keeping us without land titles for decades, it will be easier for the companies to invade our territory.”

Some have cast doubt on the real interests of the Mapuche.

Luis Sapag, a lawmaker of the Neuquén Popular Movement, triggered the controversy last year when he remarked that “some of them have been doing good business…YPF didn’t go to the Mapuches’ land to set up shop….some Mapuches went to put their houses where YPF was operating, to get this movement started.”

“Until Loma Campana was developed, there were never any demands or complaints from a Mapuche community,” said YPF Neuquén’s manager of unconventional resources, Pablo Bizzotto, during a visit by IPS and correspondents from other international news outlets to the oilfield in the southwestern province of Neuquén.

Nahuel compared that reasoning to “the arguments used by the state when it invaded Mapuche territory, saying this was a desert, we got here, and then indigenous people showed up making demands and claims.

“They’re using the same logic here – first they raze a territory, and then they say: ‘But what is it that you’re demanding? We hadn’t even seen you people before’,” he said.

Nahuel said the production of shale gas and oil, an industry in which Argentina is becoming a global leader, poses “a much greater threat” than the production of conventional fossil fuels, which he said “already left pollution way down in the soil, and among all of the Mapuche families in the area.”

“It is an industry that has a major environmental and social – and even worse for us, cultural – impact, because it breaks down community life and destroys the collective relationship that we have with this territory, and has turned us into ‘superficiaries’ for the industry,” Nahuel said.

He added that as the drilling moves ahead, the conflicts will increase.

He said the country’s new law on fossil fuels, in effect since Oct. 31, will aggravate the problems because “it serves the corporations by ensuring them the right to produce for 50 years.”

The logko, Campo, said: “When YPF pulls out there will be no future left for the Mapuche people. What they are leaving us here is only pollution and death.”

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

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More Economic Equality Brings Greater Political Polarisation in Brazilhttp://www.ipsnews.net/2014/11/more-economic-equality-brings-greater-political-polarisation-in-brazil/?utm_source=rss&utm_medium=rss&utm_campaign=more-economic-equality-brings-greater-political-polarisation-in-brazil http://www.ipsnews.net/2014/11/more-economic-equality-brings-greater-political-polarisation-in-brazil/#comments Sat, 08 Nov 2014 05:54:33 +0000 Mario Osava http://www.ipsnews.net/?p=137654 The Sauce port industrial complex in the state of Pernambuco in northeast Brazil, where some 200 companies from different sectors will operate. Credit: Mario Osava/IPS

The Sauce port industrial complex in the state of Pernambuco in northeast Brazil, where some 200 companies from different sectors will operate. Credit: Mario Osava/IPS

By Mario Osava
RIO DE JANEIRO, Nov 8 2014 (IPS)

“If I had to choose today I would stay back home, I wouldn’t come to look for work here,” said Josefa Gomes, who 30 years ago moved from Serra Redonda, a small town in Brazil’s semiarid northeast, to the city of Rio de Janeiro, 2,400 km away.

She reached that conclusion as a result of the changes she has seen in her hometown, population 7,000, during visits to her family in recent years. “Everything has changed, now people have electricity, there’s work in the flour mills, shoe factories, or farming cooperatives,” she told IPS.

Besides, thanks to paved roads and buses that pass frequently, it only takes 40 minutes to reach Campina Grande, a city of around 400,000, from her town. “It used to take over an hour,” she said.

The economy of the northeast, Brazil’s poorest region, has been growing since the past decade at a pace much higher than the national average, which has been nearly stagnant since 2012, due to the slowdown in the traditional motor of the economy: the south.The northeast is enjoying strong economic growth that has reduced the gap with the most developed part of the country, the south and southeast. The progress made and the expectations of further advances strengthened regional support for Rousseff.

The southern state of São Paulo is in recession. Its industrial output accounted for over 31 percent of the national total in 2011, compared to 38 percent 10 years earlier, according to an Oct. 6 study by the National Industrial Confederation.

The 7.7 percentage points lost were distributed among other states, including the nine states of the northeast.

That trend has been exacerbated since last year by an industrial crisis whose epicentre is São Paulo. Brazil’s industrial production fell 2.9 percent in the first nine months of this year, compared to the same period in 2013.

The country’s industrial decentralisation, added to other factors, has reduced the economic inequality between Brazil’s regions, at the expense of the traditional industrial centres of this Latin American powerhouse of 200 million people.

The dichotomy in the economic geography fuelled the opposite behavior of voters in Brazil’s recent elections. President Dilma Rousseff was reelected with 71.7 percent of the vote in the northeast in the Oct. 27 runoff.

But her triumph was threatened by a broad opposition majority in São Paulo, where 64.3 percent of voters backed her rival, the pro-business Aécio Neves.

The electoral divide in Brazil tends to be attributed to the government’s social programmes, especially Bolsa Familia, which have pulled some 36 million Brazilians out of poverty during the governments of the left-wing Workers Party led by Luiz Inácio Lula da Silva since 2003 and Rousseff since 2011.

A rural settlement in the state of Pernambuco, in the northeast of Brazil, with tanks to collect and store rainwater and make it potable, which form part of the small community infrastructure projects that have mushroomed in the region. Credit: Mario Osava/IPS

A rural settlement in the state of Pernambuco, in the northeast of Brazil, with tanks to collect and store rainwater and make it potable, which form part of the small community infrastructure projects that have mushroomed in the region. Credit: Mario Osava/IPS

The northeast is enjoying strong economic growth that has reduced the gap with the most developed part of the country, the south and southeast. The progress made and the expectations of further advances strengthened regional support for Rousseff.

Bolsa Familia funnels some 440 million dollars a month to the northeast, where the monthly cash transfer is received by 6.5 million families – nearly half of the programme’s recipients nationwide.

But that is only one-sixth of what is received by the 8.8 million retirees and pensioners of the region, from the social security system, economist Cícero Péricles de Carvalho told IPS.

Moreover, of Brazil’s five geographic regions, the northeast generated the most formal sector jobs in the past few years. There are currently nearly nine million workers with contracts in the region – double the number at the start of the 21st century, he said.

“The number of formal sector jobs in the construction industry alone increased from 195,000 in 2003 to 650,000 today,” Carvalho said.

The greater number of formal sector jobs means better wages, which also rose thanks to the policy of increasing the minimum wage adopted by Lula and Rousseff, besides improved access to bank loans – all of which has driven up buying power and consumption.

“The additional income, also from scholarships and pensions, which doubled between 2003 and 2014, and the new jobs have fuelled demand tremendously, because the beneficiaries don’t save, they spend everything on consumption,” said Carvalho, a professor at the Federal University of Alagoas, a small state in the northeast.

The rise in consumption bolstered commerce, which has in turned driven the expansion of networks of supermarkets and new industries to meet the growing demand, like factories of construction materials, clothing and food.

Another reason for the expansion was the Growth Acceleration Programme, implemented since 2007 and consisting of a set of economic policies and investment and infrastructure projects ranging from small community endeavours to giant megaprojects like the diversion of the São Francisco river, which includes the construction of 700 km of channels and tunnels to carry water to 12 million people.

“That unexpected dynamic has generated economic development as well as social inclusion, with social gains that aren’t limited to income,” such as the increase in access to electricity through the programme “Light for all” or the expansion in health and education coverage, Carvalho said.

Nevertheless, living standards in the northeast are still far below the national average, and the difference has only been reduced slowly, also because the region’s economic growth has been concentrated in the coastal areas, he added.

Deindustrialisation

Brazil’s process of deindustrialisation has also affected the northeast, but to a lesser degree than in São Paulo and with better prospects for the future, another local economist, João Policarpo Lima of the Federal University of Pernambuco, told IPS.

There are large-scale projects that will accelerate industrial expansion when they come fully onstream, he said. They include a refinery, a petrochemical plant and the world’s biggest Fiat assembly plant, being built in the northeast state of Pernambuco, which has grown the most in the past few years.

Large companies have set up shop in two port-industrial complexes: Suape in Pernambuco, and Pecém in the neighbouring state of Ceará. Suape also attracted more than 100 companies, including a major shipyard and the biggest flour mill in Latin America, besides the refinery and petrochemical plant.

Meanwhile, in São Paulo the strong opposition vote and the vehement rejection of the Workers’ Party, Lula and Rousseff were connected to the economic losses.

In protests in the city of São Paulo before and after the elections, demonstrators chanted increasingly hate-filled slogans against the “nordestinos” for “selling” their vote in exchange for Bolsa Familia, which provides an average monthly stipend of 70 dollars.

The industrial setback was especially felt in the sugarcane industry, which produces sugar and ethanol and represents 80 percent of the agricultural economy of São Paulo, said businessman Maurilio Biagi Filho of Ribeirão Preto, a city known as the “sugarcane capital”.

“The sector is caught up in a serious crisis that has given rise to a sense of desperation and will take many years to overcome, even if measures are adopted to bring about a recovery,” he told IPS.

The business community and analysts blame the crisis on gasoline price controls implemented by Rousseff to curb inflation. Ethanol, the cost of which is rising, has been unable to compete with the subsidised fossil fuel prices.

The situation was aggravated with the drop in sugar prices since 2010 and this year’s drought, which led to water rationing in more than 130 towns and cities in the state of São Paulo.

Dozens of sugar mills went under or suspended production in the past few years, while many others accepted legal accords to avoid insolvency proceedings or were purchased by foreign corporations. An estimated 300,000 jobs were lost.

The magnitude of the crisis and the perception that it is largely due to the government “influenced voters (in São Paulo), especially in the interior,” Biagi concluded.

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

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“Yeil” – The New Energy Buzzword in Argentinahttp://www.ipsnews.net/2014/10/yeil-the-new-energy-buzzword-in-argentina/?utm_source=rss&utm_medium=rss&utm_campaign=yeil-the-new-energy-buzzword-in-argentina http://www.ipsnews.net/2014/10/yeil-the-new-energy-buzzword-in-argentina/#comments Mon, 27 Oct 2014 15:53:00 +0000 Fabiana Frayssinet http://www.ipsnews.net/?p=137400 Technicians discuss their work near two drill rigs at the Vaca Muerta oil field in Loma Campana, in southern Argentina. Credit: Fabiana Frayssinet/IPS

Technicians discuss their work near two drill rigs at the Vaca Muerta oil field in Loma Campana, in southern Argentina. Credit: Fabiana Frayssinet/IPS

By Fabiana Frayssinet
NEUQUÉN, Argentina, Oct 27 2014 (IPS)

In Argentina they call it “yeil”, the hispanicised version of “shale”. But while these unconventional gas and oil reserves are seen by many as offering a means to development and a route towards energy self-sufficiency, others believe the term should fall into disuse because the global trend is towards clean, renewable sources of energy.

Wearing an oil-soaked uniform, the drilling supervisor in the state oil company YPF, Claudio Rueda, feels like he is playing a part in an important story that is unfolding in southern Argentina.

“Availability of energy is key in our country,” he told IPS. “It’s an essential element in Argentina’s development and future, and we are part of that process.”

The first chapter of the story is being written in the Vaca Muerta shale oil and gas field in Loma Campana in the province of Neuquén, which forms part of Argentina’s southern Patagonia region, where rich unconventional reserves of gas and oil are hidden in rocky structures 2,500 to 3,000 metres below the surface.

According to YPF, reserves of 802 trillion cubic feet of reserves put Argentina second in the world in shale gas deposits, after China, with 1,115 trillion cubic feet.

And in shale oil reserves, Argentina is now in fourth place, with 27 billion barrels, after Russia, the United States and China.“Staking our bets on fracking means reinforcing the current energy mix based on fossil fuels, and as a result, it spells out a major setback in terms of alternative scenarios or the transition to clean, renewable energy sources.” -- Maristella Svampa

According to projections, Argentina’s conventional oil and gas reserves will run out in eight or 10 years and production is declining, so the government considers the development of Vaca Muerta, a 30,000-sq-km geological formation, strategic.

“Nearly 30 percent of the country’s energy is imported, in different ways – a huge drain on the country’s hard currency reserves,” Rubén Etcheverry, coauthor of the book “Yeil, las nuevas reservas” (Yeil, the new reserves) and former Neuquén provincial energy secretary, said in an interview with IPS.

“We have been in intensive therapy for the last five years, with respect to the trade balance and the energy balance,” he said in Neuquén, the provincial capital.

“We went from exporting nearly five billion dollars a year in fuel, 10 years ago, to spending 15 billion dollars on imports; in other words, the balance has shifted by 20 billion dollars a year – an enormous change for any economy of this size,” Etcheverry said.

Imports include electricity and liquefied gas, natural gas and other fuels.

Diego Pérez Santiesteban, president of Argentina’s Chamber of Importers, said that at the start of the year, energy purchases represented 15 percent of all imports, compared to just five percent a year earlier.

Since 2009, accumulated imported energy has surpassed the Central Bank’s foreign reserves of 28.4 billion dollars.

Etcheverry sees Vaca Muerta as key to turning that tendency around, because the reserves found deep under the surface would be “enough to make us self-sufficient, and would even allow us to export.”

According to the expert, Argentina could follow in the footsteps of the United States, which thanks to its shale deposits “could become the world’s leading producer of gas and oil in less than 10 years.”

Shale gas and oil are extracted by means of a process known as hydraulic fracturing or fracking, which involves pumping water, chemicals and sand at high pressure into the well, and opening and extending fractures deep under the surface in the shale rock to release the fossil fuels.

But there is a growing outcry around the world against the pollution caused by fracking in the water table and other environmental impacts in wide areas around the deposits.

And in Argentina many voices have also been raised against the energy mix that has been chosen.

“This is an environmental point of view that goes beyond Vaca Muerta. The option that they are trying to impose in Argentina, as a solution to the energy crisis…has no future prospects,” said ecologist Silvia Leanza of the Ecosur Foundation.

“We’re basing all of our economic expansion on one asset here – but how many years will it last?” she asked.

Fossil fuels make up nearly 90 percent of Argentina’s energy mix. The rest is based on nuclear and hydroelectric sources, and just one percent renewable.

The Intergovernmental Panel on Climate Change (IPCC) has concluded that the burning of fossil fuels to generate energy is the main cause of climate change.

“This situation, along with the greater availability of renewable sources, indicates the end of the era of dirty energy sources,” Mauro Fernández, head of Greenpeace Argentina’s energy campaign, said in a report.

This country’s dependence on fossil fuels has made carbon dioxide emissions per capita among the highest in the region: 4.4 tons in 2009, according to the World Bank.

Fernández said unconventional fossil fuels are not only risky because of fracking, but are also “a bad alternative from a climate and energy point of view.”

“Unconventional deposits look like a new frontier for doing more of the same, fueling the motor of climate change,” he complained.

Argentina has set a target for at least eight percent of the country’s electricity to come from renewable sources by 2016.

“Staking our bets on fracking means reinforcing the current energy mix based on fossil fuels, and as a result, it spells out a major setback in terms of alternative scenarios or the transition to clean, renewable energy sources,” said sociologist Maristella Svampa, an independent researcher with the National Scientific and Technical Research Council.

“In the last decade, fracking has certainly transformed the energy outlook in the United States, making it less dependent on imports. But it has also made it the place where the real impacts can be seen: pollution of groundwater, damage to the health of people and animals, earthquakes, greater emissions of methane gas, among others,” she said.

Carolina García with the Multisectoral Group against Hydraulic Fracturing said that because of its rich natural resources, Argentina has other alternatives that should be tapped before exploiting fossil fuels “to the last drop.”

“We finish extracting everything in the Neuquén basin and what do we have left?” she commented to IPS.

Etcheverry mentioned the possibility of using solar energy in the north, wind energy in Patagonia and along the Atlantic shoreline, geothermic energy in the Andes, and tidal and wave energy along the coast.

But the author said that for now the costs were “much higher” than those of fossil fuels, because of technological reasons, transportation aspects and energy intensity.

He also said oil and gas are still necessary as energy sources and raw materials for everyday products.

For that reason, Etcheverry said, the transition from the fossil fuels era “is not simple.” First it is necessary to improve energy savings and efficiency, in order to later shift to less polluting fossil fuels, he added.

“In the first stage it would be a question of moving from the most polluting fossil fuels like coal and oil towards others that are less polluting, like natural gas. And from there, creating incentives for everything that has to do with clean or renewable energies,” he said.

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

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Añelo, from Forgotten Town to Capital of Argentina’s Shale Fuel Boomhttp://www.ipsnews.net/2014/10/anelo-from-forgotten-town-to-capital-of-argentinas-shale-fuel-boom/?utm_source=rss&utm_medium=rss&utm_campaign=anelo-from-forgotten-town-to-capital-of-argentinas-shale-fuel-boom http://www.ipsnews.net/2014/10/anelo-from-forgotten-town-to-capital-of-argentinas-shale-fuel-boom/#comments Thu, 23 Oct 2014 16:01:56 +0000 Fabiana Frayssinet http://www.ipsnews.net/?p=137341 The main street of Añelo, a remote town in Argentina’s southern Patagonia region which is set to become the country’s shale oil capital. In 15 years the population will have climbed to 25,000, 10 times what it was just two years ago. Credit: Fabiana Frayssinet/IPS

The main street of Añelo, a remote town in Argentina’s southern Patagonia region which is set to become the country’s shale oil capital. In 15 years the population will have climbed to 25,000, 10 times what it was just two years ago. Credit: Fabiana Frayssinet/IPS

By Fabiana Frayssinet
AÑELO, Argentina, Oct 23 2014 (IPS)

This small town in southern Argentina is nearly a century old, but the unconventional fossil fuel boom is forcing it to basically start over, from scratch. The wave of outsiders drawn by the shale fuel fever has pushed the town to its limits, while the plan to turn it into a “sustainable city of the future” is still only on paper.

The motto of this small town in the province of Neuquén is upbeat and premonitory: “The future found its place.”

But for now the town’s roads, most of which are unpaved and throw up clouds of dust from the heavy traffic of trucks and luxury cars driven by oil company executives, contradict that slogan.

“Many eyes around the world are on Añelo, but unfortunately we don’t have a good showcase, to put us on display,” the director of the town’s health centre, Rubén Bautista, told IPS.

“We are living on top of black gold, they take riches out of our soil, but they leave practically nothing to the local population,” added the doctor who, along with three other colleagues, covers the health needs of a population that doubled, from 2,500 to 5,000, in just two years.According to conservative projections, Añelo will have a population of 25,000 in 15 years, including people directly employed by the oil industry, indirect workers, and their families, who have begun to pour into the new mecca for Argentina’s energy self-sufficiency plans.

Añelo, a bleak town on the banks of the Neuquén river surrounded by fruit trees, goats and vineyards, is the town closest to the Loma Campana shale oil field, which is being worked by Argentina’s state oil company YPF and the U.S.-based Chevron.

It is only eight km from the oil field, which is part of new riches that hold out the biggest promise for revenue to fuel the country’s development: Vaca Muerta, a 30,000-sq km geological reserve that is rich in shale oil and gas and has made this country the second in the world after the United States in production of unconventional fossil fuels.

But the black gold is not shining yet in Añelo – which means forgotten place in the Mapuche indigenous language – located some 100 km north of Neuquén, the provincial capital.

The health centre, which refers serious cases to hospitals in the provincial capital, has just two ambulances, while 117 companies from across the planet are setting up shop in and around the town.

According to conservative projections, Añelo will have a population of 25,000 in 15 years, including people directly employed by the oil industry, indirect workers, and their families, who have begun to pour into the new mecca for Argentina’s energy self-sufficiency plans.

“They are people who come to Añelo with the idea of finding a better future…thinking about what unconventional fossil fuels could mean in their lives,” YPF Neuquén’s communications manager, Federico Calífano, told IPS.

YPF alone has 720 employees in the area. The workers come from nearby towns as well as other provinces, and from abroad, brought in by international companies in the construction, chemistry, hotel, transportation and services industries.

The town’s only hotel is full, and camps spring up on any flat area, with containers turned into comfortable temporary lodgings for the workers. Rent for a small apartment is five times what people pay in the most expensive neighbourhoods in Buenos Aires.

“We are building a city from scratch,” Añelo Mayor Darío Díaz told IPS, although he pointed out that even before the shale boom the town was “a strategic waypoint.”

YPF has been exploiting unconventional fossil fuels in the region since the 1980s, but “when their work was done they would leave,” Díaz explained. “This is much more intensive; there will be a lot of work over the next 30 years.”

“The town has infrastructure for around 2,500 inhabitants. It is too small now given the new demand for basic services like water, electricity, roads, and dust emission,” the province’s environment secretary, Ricardo Esquivel, told IPS.

The sound of hammering and pounding is constant. Two workers, who make the 120-km commute back and forth every day from Cipolletti, in the neighbouring province of Río Negro, are working on a new sidewalk. “It’s spectacular.There’s a lot of work here for everyone. More people are needed. The problem is housing,” construction worker Esteban Aries told IPS.

The YPF Foundation carried out an “urban footprint” study which gave rise to the Añelo Local Development Plan. The plan has the support of the Inter-American Development Bank (IDB) and its Emerging Sustainable Cities Initiative.

Carried out together with the local and provincial governments, the plan outlines different growth scenarios with the aim of assessing the risks and vulnerabilities of the area.

It addresses, among other aspects, “what surface area the city should have, how the urban planning process should start, what the diagram should look like, what services are needed – what Añelo is going to need today and in two, three, or five years,” Calífano said.

YPF reported that the work had already begun, including an expansion of the sanitation system, construction of homes for doctors, and a vocational training centre, linked to the needs of the oil industry. Primary healthcare clinics were set up in two trailer trucks – although Dr. Bautista said that’s not enough.

The economic growth has brought heavy traffic. The government is planning a two-lane highway to Vaca Muerta, on the so-called “oil route”, to keep the trucks out of the town.

“The steadily growing number of accidents is overwhelming,” Bautista said. The average has increased from 10 traffic and work-related accidents a month two years ago to 17 today.

“You have to keep in mind that most of the activity has been going on for a year,” said Pablo Bizzotto, YPF’s regional manager of unconventional fuels in Loma Campana, where some 20 wells are drilled every month, which has driven production up from 3,000 to 21,000 barrels per day of oil.

“There are things that we will obviously work out together with the authorities, as we go. This is all very new,” he said.

Agricultural engineer Eduardo Tomada left everything behind in Buenos Aires and invested his savings to open up a restaurant in Añelo, which is now packed with workers.

His cook, local resident Norma Olate, said she was happy because she’s earning more. But she nostalgically remembers when her town was “practically a sand dune.”

Development has brought work, “but also bad things,” the 60-year-old Olate told IPS. “There have been armed robberies, which we didn’t see here before.”

Olate, who has young, single daughters, said she is also worried about “the invasion of men.”

“So many men!” she said, laughing. “I’m not interested anymore, but the girls…there are guys who come and deceive them, a lot of them end up pregnant….that’s bad for the town too.”

Provincial lawmaker Raúl Dobrusín of the opposition Popular Unity party denounced the rise in prostitution, drug trafficking and use, alcoholism and corruption.

“We say the only things modernised in Añelo were the casino and the brothel,” he said ironically.

Dobrusín complained about the government’s lack of “planning” and “control” over these and other problems, such as real estate speculation and prices that are now unaffordable for many people in the town.

Nevertheless, for Mayor Díaz the balance is positive. “We have to take advantage of this opportunity for Añelo to develop as a town and improve the living standards of our people. What worries me is whether we will make the necessary investments quickly enough,” he said.

The province is preparing a “strategic development plan” for Añelo, along with nearby “oil micro-cities”, which will include the construction of an industrial park, schools, hospitals, roads and housing, and increased security.

“We’re not going to build an oil camp in Añelo without a city,” the mayor summed up.

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

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Fracking Fractures Argentina’s Energy Developmenthttp://www.ipsnews.net/2014/10/fracking-fractures-argentinas-energy-development/?utm_source=rss&utm_medium=rss&utm_campaign=fracking-fractures-argentinas-energy-development http://www.ipsnews.net/2014/10/fracking-fractures-argentinas-energy-development/#comments Wed, 08 Oct 2014 22:19:22 +0000 Fabiana Frayssinet http://www.ipsnews.net/?p=137074 Pear trees in bloom on a farm in Allen, in the Argentine province of Río Negro, across from a “tight gas” deposit. Pear growers are worried about their future, now that the production of unconventional fossil fuels is expanding in the area. Credit: Fabiana Frayssinet/IPS

Pear trees in bloom on a farm in Allen, in the Argentine province of Río Negro, across from a “tight gas” deposit. Pear growers are worried about their future, now that the production of unconventional fossil fuels is expanding in the area. Credit: Fabiana Frayssinet/IPS

By Fabiana Frayssinet
AÑELO, Argentina, Oct 8 2014 (IPS)

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 told Tierramérica. 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.“That water is not left in the same condition as it was when it was removed from the rivers; the hydrologic cycle is changed. They are minimising a problem that requires a more in-depth analysis.” -- Carolina García

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 metres.

A new well is drilled here every three days, and the demand for labour 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 metres, in order to release the trapped oil and gas which flows up to the surface through pipes.

The extraction of unconventional fossil fuels at the YPF deposit in Loma Campana has already begun to irrevocably affect life in the surrounding areas. Credit: Fabiana Frayssinet/IPS

The extraction of unconventional fossil fuels at the YPF deposit in Loma Campana has already begun to irrevocably affect life in the surrounding areas. Credit: Fabiana Frayssinet/IPS

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 metres 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 told Tierrámerica: “The effect of this contamination won’t be seen now, but in 15 or 20 years.”

During Tierramérica’s visit to Loma Campana, Pablo Bizzotto, YPF’s regional manager of unconventional resources, played down these fears, saying the parent-rock formations are 3,000 metres below the surface while the groundwater is 200 to 300 metres down.

“The water would have to leak thousands of metres up. It can’t do that,” he said.

Besides, the “flowback water”, which is separated from the oil or gas, is reused in further “hydraulic stimulation” operations, while the rest is dumped into “perfectly isolated sink wells,” he argued. “The aquifers do not run any risk at all,” he said.

But Dobrusin asked “What will they do with the water once the well is full? No one mentions that.”

According to Bizzotto, the seismic intensity of the hydraulic stimulation does not compromise the aquifers either, because the fissures are produced deep down in the earth. Furthermore, he said, the wells are layered with several coatings of cement and steel.

“We want to draw investment, generate work, but while safeguarding nature at the same time,” Neuquén’s secretary of the environment, Ricardo Esquivel, told Tierramérica.

In his view, “there are many myths” surrounding fracking, such as the claim that so much water is needed that water levels in the rivers would go down.

Neuquén, he said, uses five percent of the water in its rivers for irrigation, human consumption and industry, while the rest flows to the sea. Even if 500 wells a year were drilled, only one percent more of the water would be used, he maintained.

But activist Carolina García with the Multisectorial contra el Fracking group told Tierrámerica: “That water is not left in the same condition as it was when it was removed from the rivers; the hydrologic cycle is changed. They are minimising a problem that requires a more in-depth analysis.”

She pointed out that fracking is questioned in the European Union and that in August Germany adopted an eight-year moratorium on fracking for shale gas while it studies the risks posed by the technique.

YPF argues that these concerns do not apply to Vaca Muerta because it is a relatively uninhabited area.

“The theory that this is a desert and can be sacrificed because no one’s here is false,” said Silvia Leanza with the Ecosur Foundation.

“There are people, the water runs, and there is air flowing here,” she commented to Tierramérica. “The emissions of gases and suspended dust particles can reach up to 200 km away.”

Nor does the “desert theory” ring true for Allen, a town of 25,000 people in the neighbouring province of Río Negro, which is suffering the effects of the extraction of another form of unconventional gas, tight gas sands, which refers to low permeability sandstone reservoirs that produce primarily dry natural gas.

In that fruit-growing area, 20 km from the provincial capital, the fruit harvest is shrinking as the number of gas wells grows, drilled by the U.S.-based oil company Apache, whose local operations in Argentina were acquired by YPF in March.

Apache leases farms to drill on, the Permanent Comahue Assembly for Water (APCA) complained.

“Going around the farms it’s easy to see how the wells are occupying what was fruit-growing land until just a few years ago. Allen is known as the ‘pear capital’, but now it is losing that status,” lamented Gabriela Sepúlveda, of APCA Allen-Neuquén.

A well exploded in March, shaking the nearby houses. It wasn’t the first time, and it’s not the only problem the locals have had, Rubén Ibáñez, who takes care of a greenhouse next to the well, told Tierramérica. “Since the wells were drilled, people started feeling dizzy and having sore throats, stomach aches, breathing problems, and nausea,” he said.

“They periodically drill wells, a process that lasts around a month, and then they do open-air flaring. I’m no expert, but I feel sick,” he said. “I wouldn’t drink this water even if I was dying of thirst….when I used it to water the plants in the greenhouse they would die.”

The provincial government says there are constant inspections of the gas and oil deposits.

“In 300 wells we did not find any environmental impact that had created a reason for sanctions,” environment secretary Esquivel said.

“We have a clear objective: for Loma Campana, as the first place that unconventional fossil fuels are being developed in Argentina, to be the model to imitate, not only in terms of cost, production and technique, but in environmental questions as well,” Bizzotto said.

“All technology has uncertain consequences,” Leanza said. “Why deny it? Let’s put it up for debate.”

This story was originally published by Latin American newspapers that are part of the Tierramérica network.

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

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Panama, a Country and a Canal with Development at Two Speedshttp://www.ipsnews.net/2014/10/panama-a-country-and-a-canal-with-development-at-two-speeds/?utm_source=rss&utm_medium=rss&utm_campaign=panama-a-country-and-a-canal-with-development-at-two-speeds http://www.ipsnews.net/2014/10/panama-a-country-and-a-canal-with-development-at-two-speeds/#comments Fri, 03 Oct 2014 22:29:11 +0000 Fabiola Ortiz http://www.ipsnews.net/?p=136997 Thanks to the expansion, the Panama Canal will be able to accommodate ships that carry up to 14,000 containers, instead of the current 5,000. Credit: Fabíola Ortiz/IPS

Thanks to the expansion, the Panama Canal will be able to accommodate ships that carry up to 14,000 containers, instead of the current 5,000. Credit: Fabíola Ortiz/IPS

By Fabiola Ortiz
PANAMA CITY, Oct 3 2014 (IPS)

With the expansion of the canal, Panama hopes to see its share of global maritime trade rise threefold. And many Panamanians hope the mega-engineering project will reduce social inequalities in a country where development is moving ahead at two different speeds.

The expansion is happening one hundred years after the inauguration of the canal that links the Pacific and Atlantic oceans. At the heart of the project is a third set of locks, larger than the current two, which will accommodate ships with a maximum length of 400 metres, a maximum width of 52 metres and a draught of 15 metres.

Currently the 12,000 ships going through the canal every year have a maximum length of 294 metres, a maximum width of 32 metres and a draught of 12 metres, which means the canal handles only about five percent of global seaborne trade.

The expansion of the canal - in numbers

Work on the expansion of the Panama Canal began in 2007 after the project was approved by 77 percent of voters in a referendum the year before. The initial completion date was this month - October 2014.

But the Grupo Unidos por el Canal SA, which is carrying out the expansion, suffered several delays because of labour strikes and the suspension of the construction work due to disputes over the cost of the project, which have now been worked out. The consortium is headed by the construction companies Sacyr from Spain and Impregilo from Italy, which each hold a 48 percent share.

The huge Post-Panamax ships, which will be able to pass through the canal after it has been expanded, will carry up to 14,000 containers, compared to the current maximum of 5,000 carried by Panamax vessels.

In addition, it will take only two and a half hours to go through the canal, instead of the current eight to ten, and the cost will be reduced by at least 12 percent.

Some 7,000 people are working on the canal expansion, 90 percent of whom are from Panama. The project has also generated around 35,000 indirect jobs, according to the Panama Canal Authority.

The construction work, which began in 2007 and is to be completed in December 2015, is 80 percent done, Ilya de Marotta, the engineer in charge of the expansion works in the Panama Canal Authority (ACP), the government agency responsible for the management of the canal, told IPS.

The aim of the expansion is to boost the canal’s share of global shipping traffic to 15 percent, Olmedo García, director of the University of Panama’s Canal Institute, explained in an interview with IPS.

The 5.2-billion-dollar project will mean the 79-km canal will be able to handle larger vessels capable of carrying nearly three times as many containers.

“The canal now contributes 1.1 billion dollars a year to the national budget. Gross revenues are 2.3 billion dollars, but operating the canal absorbs 1.2 billion,” the academic explained.

“As soon as we finish the expansion, we have to think of building a fourth set of locks, which would cost 12 billion dollars,” said García, because the canal “is and will be the country’s main economic and commercial activity.”

De Marotta said “the expansion was indispensable because the canal was reaching the maximum capacity of boats that could go through. The demand for bigger ships is a global tendency, for bulk carriers and liquefied natural gas carriers – a client we don’t have because they are bigger vessels.”

“This is a good business that we’ll be able to attract now,” she said. “The idea is to avoid falling behind in global trade; with the new locks a container ship could carry 12,000 to 14,000 containers,” the engineer said.

According to projections, the country’s canal revenue will have climbed to 2.5 billion dollars by 2019 and to six billion by 2025, García said.

“The big advantage is that we not only have the Panama Canal, but also the logistics centre; together they represent 40 percent of our GDP. We have the best logistics connectivity in Latin America, with ports on each ocean, railways and the free trade zone,” he said.

“We can create multimodal trade with the merchandise distribution ports,” he added.

The neglect of the historic centre of Colón near the Caribbean Sea entrance to the Panama Canal and next to the city’s Free Trade Zone reflects the contrast between the pace of economic growth and social development in this Central American country. Credit: Fabíola Ortiz/IPS

The neglect of the historic centre of Colón near the Caribbean Sea entrance to the Panama Canal and next to the city’s Free Trade Zone reflects the contrast between the pace of economic growth and social development in this Central American country. Credit: Fabíola Ortiz/IPS

Social development at another level

But Panama’s priorities must change in order for the promising economic prospects engendered by the expansion of the canal to translate into benefits for the poorest segments of the population.

Despite annual GDP growth of around seven percent, because of the high levels of inequality, 27.6 percent of the population is poor according to figures from Sept. 28, although García and other academic sources told IPS the poverty rate is actually nine percentage points higher.

In rural areas of this country of 3.8 million people poverty stands at 49.4 percent, compared to 12 percent in urban areas. Worst off are the country’s small indigenous minority, who suffer from a poverty rate of 70 to 90 percent.

And according to official figures from August, 38.6 percent of the economically active population is engaged in the informal sector of the economy.

Thousands of families lack piped water and services such as health care and transportation.

Alfredo Herazo, 29, lives in the capital but takes a bus every day to the city of Colón, where he works in a soldering workshop that he and his father set up. “I don’t like this life but I don’t have any other options,” he told IPS at the end of a long day of work, as he got ready for the 79-km commute back to Panama City.

Colón, the second largest city in Panama, is a port near the Caribbean Sea entrance to the canal and is surrounded by the area that was the Panama Canal Zone when it was under U.S. control.

The canal was fully handed over to Panama on Jan. 1, 2000, as stipulated by the “Torrijos- Carter” treaties signed by the two countries in 1977.

The 450-hectare Colón Free Trade Zone is the world’s second largest free trade area after Hong Kong, with 2,500 companies that import and re-export with a total annual business volume of 30 billion dollars – although business dipped in 2013 because of disputes with Colombia and Venezuela, its biggest clients.

The Colón Free Trade Zone receives 250,000 visitors a year from all over the world.

“Like any Panamanian, I would like to work on the canal or in the duty free zone, because of the salaries paid there. The canal is our pride and joy. If I get the chance, I would be a solderer there,” Herazo said.

The young man said “the problem with the canal, from the point of view of the ordinary citizen, is that we don’t see the profits, which aren’t distributed among the population.”

The neglect of the rundown historic buildings in Colón contrasts sharply with the modern free trade zone, illustrating the gap between the vibrant growth of the canal and the country’s financial and trade centres and the desperation of those included from the boom.

Cesar Santos, 32, has been living in Colón for seven years, making a living selling fruit and vegetables in the Municipal Market in the city centre. He sets up his stand early every morning across from the Municipal Park.

“With this I only have enough to live as a poor man. Life in Colón isn’t good,” he told IPS.

He lists the problems in the city, stressing the lack of sanitation and decent drainage systems. “When it rains, everything floods, the streets are impassable, the city is paralysed. After a downpour, everything is flooded,” he said.

Besides the lack of urban infrastructure, what bothers him the most is the living conditions of most of the people living in the city.

“People here are really poor,” he said. “People live in condemned houses. Besides all the assaults and thefts, this is a city that has been forgotten by the governments; good thing we have the free trade zone, otherwise there would be even worse poverty,” Santos said, while three customers nodded their heads in agreement.

García, in Panama City, said “The financial centres have to transfer part of their wealth. There is a serious social fracture. The canal can’t just be a channel for trade, communication and world peace. Panamanians need the social debts to be repaid, and part of the wealth should be transferred to the people.”

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

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Vaca Muerta, Argentina’s New Development Frontierhttp://www.ipsnews.net/2014/10/vaca-muerta-the-new-frontier-of-development-in-argentina/?utm_source=rss&utm_medium=rss&utm_campaign=vaca-muerta-the-new-frontier-of-development-in-argentina http://www.ipsnews.net/2014/10/vaca-muerta-the-new-frontier-of-development-in-argentina/#comments Wed, 01 Oct 2014 14:53:45 +0000 Fabiana Frayssinet http://www.ipsnews.net/?p=136949 A YPF driling derrick at the Vaca Muerta shale oil and gas field in Loma Campana in the Neuquén basin in southwest Argentina. Credit: Fabiana Frayssinet/IPS

A YPF driling derrick at the Vaca Muerta shale oil and gas field in Loma Campana in the Neuquén basin in southwest Argentina. Credit: Fabiana Frayssinet/IPS

By Fabiana Frayssinet
LOMA CAMPANA, Argentina , Oct 1 2014 (IPS)

Production here has skyrocketed so fast that for now the installations of the YPF oil company at the Loma Campana deposit in southwest Argentina are a jumble of interconnected shipping containers.

Argentina is staking its bets on unconventional oil and gas resources, and the race to achieve energy self-sufficiency and surplus fuel for export can’t wait for the comfort of a real office.

“The camp here is our temporary offices,” Pablo Bizzotto, regional manager of unconventional resources of the state-run YPF, told a group of foreign correspondents during a visit to this oilfield in the southwestern province of Neuquén. “I apologise. But this is what we were able to set up quickly when we began the operations.”

Since last year, Loma Campana, some 100 km from the city of Neuquén, has been the Argentine oil company’s operating base, where 15 to 20 wells are drilled every month in the Vaca Muerta shale oil and gas field in the Neuquén basin.

There are currently more than 300 wells producing unconventional gas and oil here and in other oil camps in this part of Argentina’s southern Patagonia region. Some 250 are operated by YPF and the rest by foreign oil companies.

The final installations, with offices and a control and remote operation room, will be ready by mid-2015. But work at the wells is moving ahead at a different pace.

From January 2013 to mid-2014, daily oil output climbed from 3,000 to 12,000 barrels per day, before jumping to 21,000 in September.

“Loma Campana is the only large-scale commercial development [of shale oil and gas] outside of the United States. The rest are just trials,” said Bizzotto, explaining the magnitude of the operations in Vaca Muerta, which contains shale oil and gas reserves at depths of up to 3,000 metres.

Unlike conventional oil and gas extracted from deposits where they have been trapped for millions of years, shale oil and gas are removed from deep parent-rock formations.

According to YPF, which has been assigned 12,000 sq km of the 30,000 sq km in Vaca Muerta, the recoverable potential is 802 trillion cubic feet of gas and 27 billion barrels of oil.

A worker walking near pipes used to extract shale oil and gas at YPF’s Loma Campana oilfield in the southwest Argentine province of Neuquén. The shipping containers used as temporary offices can be seen in the background. Credit: Fabiana Frayssinet/IPS

A worker walking near pipes used to extract shale oil and gas at YPF’s Loma Campana oilfield in the southwest Argentine province of Neuquén. The shipping containers used as temporary offices can be seen in the background. Credit: Fabiana Frayssinet/IPS

With that potential, the country now has 30 times more unconventional gas and nine times more unconventional oil than traditional reserves. Thanks to recoverable shale resources, Argentina now has the world’s second largest gas reserves, after China, and the fourth largest of oil, after Russia, the United States and China, according to YPF figures.

Bizzotto said that in terms of both quantity and quality, as measured by variables of organic matter, thickness and reservoir pressure, the reserves are comparable to the best wells in the Eagle Ford Shale in the U.S. state of Texas.

Rubén Etcheverry, former president of the Gas y Petróleo de Neuquén, a public company, said the reserves open up “a new possibility for development and self-sufficiency from here to five or ten years from now.”

This is encouraging for a country like Argentina, whose reserves and production had declined to the point where over 15 billion dollars in fuel had to be imported.

“The possibility of converting these resources into reserves means that Argentina could have gas and oil for more than 100 years,” Etcheverry, who is also a former Neuquén energy secretary, told IPS.

But the challenge is just that: turning the shale resources into actual reserves.

Since 2013, YPF has invested some two billion dollars in Vaca Muerta.
But because of the magnitude of the resources and the country’s difficulties in obtaining financing from abroad, Etcheverry said “new actors are needed” in order to achieve the required volumes of investment, which he estimates at 100 billion dollars over the next five or six years.

YPF, which was renationalised in 2012, when it was expropriated from Spain’s Repsol oil company that controlled it since 1999, is now looking for foreign partners – a strategy that some political and social sectors see as undermining national sovereignty.

In Loma Campana, YPF operates one portion with the U.S. oil giant Chevron and is developing another shale gas field with the U.S. Dow Chemical.

Other companies involved in the area are Petronas from Malaysia, France’s Total, the U.S.-based ExxonMobil, the British-Dutch Shell, and Germany’s Wintershall, while negotiations are underway with companies from other countries, including China and Russia.

According to provincial lawmaker Raúl Dobrusín of the opposition Unión Popular party of Neuquén, the oil companies are waiting for the Senate to approve a controversial new law on hydrocarbons.

The legislation would grant 35-year concessions, reduce the tariffs the companies pay for imports, and allow them to transfer 20 percent of the profits abroad, and if they do not do so they would be paid locally at international values and without tax withholding, Dobrusín said.

The development of unconventional fossil fuels has also run into criticism from environmentalists.

Hydraulic fracturing or “fracking” is the technique used for large-scale extraction of unonventional fossil fuels trapped in rocks, like shale gas. To release the natural gas and oil, huge volumes of water containing toxic chemicals are pumped underground at high pressure, fracturing the shale. The process generates large amounts of waste liquids containing dissolved chemicals and other pollutants that require treatment before disposal.

Environmentalists say fracking pollutes aquifers and releases more toxic gases than the extraction of conventional fossil fuels.

“There is no doubt that it causes pollution. Wells are abandoned without being cleaned up. Here in Plottier the water contains heavy metals and isn’t potable in most places, and we blame that on conventional production that has polluted the groundwater,” Darío Torchio, who has a business in Plottier, a city of 32,000 located 15 km from Neuquén, told IPS.

“Oil is a heavy inheritance for our descendants, which ruins everything, while the wealth goes to the companies,” said Torchio, a member of the Permanent Comahue Assembly for Water.

Silvia Leanza, with the environmental Ecosur Foundation, said Argentina is opting for a development model based on “neoextractivism”.

These plans, she told IPS, are “designed in the central countries as part of the neoliberal economic development and globalisation package, where we are suppliers of raw materials.”

“The focus is on the exploitation of a non-renewable resource, fossil fuels, which also has an economic impact, because that money could go towards clean energy sources that could also be developed in Patagonia,” Carolina García, an activist with the Multisectorial contra el Fracking group, told IPS.

“This is an alarm signal,” Etcheverry said. “The timeframe is very short. We had reserves for the next eight or 10 years.”

But the government of Cristina Fernández has no doubts about the model of development being followed.

“When unconventional gas and oil production in Vaca Muerta reaches 1,000 wells, the gross geographical product will tend to grow between 75 and 100 percent in the province of Neuquén. That will have a three to four percent impact on the country’s gross domestic product,” argued the head of the cabinet, Jorge Capitanich.

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

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Cuba’s Sugar Industry to Use Bagasse for Bioenergyhttp://www.ipsnews.net/2014/09/cubas-sugar-industry-to-use-bagasse-for-bienergy/?utm_source=rss&utm_medium=rss&utm_campaign=cubas-sugar-industry-to-use-bagasse-for-bienergy http://www.ipsnews.net/2014/09/cubas-sugar-industry-to-use-bagasse-for-bienergy/#comments Fri, 26 Sep 2014 15:08:45 +0000 Patricia Grogg http://www.ipsnews.net/?p=136902 The 5 de Septiembre sugar mill in the Cuban province of Cienfuegos. A subsidiary of the Brazilian construction giant Odebrecht is taking part in upgrading the plant, which will include construction of a bioenergy plant run on sugarcane bagasse. Credit: Jorge Luis Baños/IPS

The 5 de Septiembre sugar mill in the Cuban province of Cienfuegos. A subsidiary of the Brazilian construction giant Odebrecht is taking part in upgrading the plant, which will include construction of a bioenergy plant run on sugarcane bagasse. Credit: Jorge Luis Baños/IPS

By Patricia Grogg
HAVANA, Sep 26 2014 (IPS)

Cuba’s sugar industry hopes to become the main source of clean energy in the country as part of a programme to develop renewable sources aimed at reducing dependence on imported fossil fuels and protecting the environment.

The project forms part of the plans for upgrading and modernising sugar mills that have been opened up to foreign investment by Azcuba, the government business group that replaced the Sugar Ministry in 2011. Traditionally, sugar mills have generated electricity for their own consumption, using bagasse, the fibrous matter that remains after sugarcane stalks are crushed to extract their juice.

In a conversation with Tierramérica, Azcuba spokesman Liobel Pérez defended the production of energy using bagasse as a cheap, environmentally friendly alternative. “The CO2 [carbon dioxide] produced in the generation of electricity is the same amount that the sugar cane absorbs when it grows, which means there is an environmental balance.”

For now, the production of ethanol as a by-product of sugarcane is not being considered in Cuba, although some experts argue that the biofuel could reduce consumption of gasoline by farm machinery and transportation and thus limit atmospheric emissions.

“That is one of the issues being discussed and analysed by the government commission created to study the development of renewable energies,” said Manuel Díaz, director of the Cuban Institute of Research on Sugar Cane Derivatives. The official did not, however, rule out the possibility in the future.

“Even if it is not the definitive long-term solution to the consumption of automotive fuel, ethanol is an important factor and contributes to reducing fossil fuel use, and if it does not run counter to the use of land for food, it could be, it seems to me, an alternative that each country should analyse depending on its specific characteristics,” Díaz said.

A worker at the Jesús Rabí sugar mill in the Cuban province of Matanzas. The plant’s biomass will help increase electricity production from clean sources of energy in Cuba. Credit: Jorge Luis Baños/IPS

A worker at the Jesús Rabí sugar mill in the Cuban province of Matanzas. The plant’s biomass will help increase electricity production from clean sources of energy in Cuba. Credit: Jorge Luis Baños/IPS

The sugar industry currently accounts for 3.5 percent of electricity generation in this Caribbean island nation. A target of the plan to boost energy efficiency is for around 20 sugar mills to generate a surplus of 755 MW by 2030, to go into the national power grid.

That would raise the proportion of electricity produced by sugarcane biomass to 14 percent by 2030. The overall aim is for 24 percent of energy to come from renewable sources, including wind power (six percent), solar (three percent), and hydropower (one percent).

Currently, renewable energy sources only represent 4.6 percent of electricity generation; the rest comes from fossil fuels.

The gradual installation in the sugar mills of modern bioelectric plants needed to achieve that goal requires an estimated investment of 1.29 billion dollars, which Azcuba hopes to obtain from government loans or foreign investment.

“If we don’t find a loan we will get foreign investment,” said Jorge Lodos, business director for Zerus SA, a subsidiary of Azcuba. The executive told Tierramérica that the first two companies to enter into partnership with Cuba in the sector included the bioelectric plants in their plans, to boost energy efficiency.

The first of the plants that run on sugarcane biomass will begin to produce energy in 2016, Lodos said. It is to be built near the Ciro Redondo sugar mill in the province of Ciego de Ávila, 423 km from Havana, by Biopower, a joint venture established in 2012 by Cuba’s state-run Zerus and the British firm Havana Energy Ltd.

During the December to May harvest season, the plant will use sugarcane bagasse from the nearby sugar mill. The rest of the year it will use stored sugarcane waste and marabú (Dichrostachys cinérea), a woody shrub that has invaded vast areas of farmland in Cuba. The projected investment ranges between 45 and 55 million dollars.

Meanwhile, the Compañía de Obras e Infraestructura (COI), a subsidiary of Brazilian construction giant Odebrecht, reached an agreement with the Empresa Azucarera Cienfuegos, another Azcuba subsidiary, to jointly administer the 5 de Septiembre sugar mill in the province of Cienfuegos, 256 km from the capital, for 13 years.

In this case, the commitment is to bring the productive capacity of the sugar mill back up to 90,000 tons of sugar per harvest, or even higher.
Lodos said investment in the project would surpass 100 million dollars, and would also include the construction of a bioenergy plant.

These two sugar mills and the Jesús Rabí mill in the province of Matanzas, 98 km from Havana, will generate the first 140 MW of electricity in the medium term.

Havana Energy and COI opened the door to foreign capital in Cuba’s sugar industry, just as investment has already been welcomed in other sectors of this country’s centralised economy. “Foreign investment requires mutual trust,” Lodos said.

The socialist government of Raúl Castro estimates that the country needs between two and 2.5 billion dollars a year in foreign capital in order to grow and develop.

Of Cuba’s 56 sugar mills, six of which are now inactive, Azcuba has opened up 20 to foreign investment. The initial priorities are the eight built after the 1959 revolution.

Although ethanol production is not among the plans to be offered to foreign investors, many experts believe prospects for selling the fuel are good.

“It is not expected to be included in the programme,” Lodos said. “None of the minimum conditions required to introduce foreign investment are in place. It would not involve large amounts of capital or technology contribution, and it would not be for export or to replace imports. Today it isn’t on the business menu. But it might be tomorrow.”

Cuba produces alcohol in 11 distilleries, which are also to be upgraded, for pharmaceutical use and the industry that produces rum and other alcohol.

Cuba’s once-powerful sugar industry, which produced harvests of up to eight million tons, hit bottom in the 2009-2010 season when output plunged to 1.1 million tones – the lowest level in 105 years.

The industry currently represents around five percent of the country’s inflow of foreign exchange.

The hope is that the modernisation of factories, machinery, transport equipment and other resources will boost yields and bolster production, along with the increase in the planting of sugarcane. Last year 400,000 hectares were planted and production in the 2013-2014 harvest amounted to over 1.6 million tons.

This story was originally published by Latin American newspapers that are part of the Tierramérica network.

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

 

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A Flood of Energy Projects Clash with Mexican Communitieshttp://www.ipsnews.net/2014/09/a-flood-of-energy-projects-clash-with-mexican-communities/?utm_source=rss&utm_medium=rss&utm_campaign=a-flood-of-energy-projects-clash-with-mexican-communities http://www.ipsnews.net/2014/09/a-flood-of-energy-projects-clash-with-mexican-communities/#comments Mon, 15 Sep 2014 15:22:02 +0000 Emilio Godoy http://www.ipsnews.net/?p=136634 Trees on the bank of the Blanco river that have been felled to make way for a power plant. Hydroelectric projects are threatening biodiversity and the way of life of communities in the state of Veracruz, in southeast Mexico. Credit: Courtesy of Comité de Defensa Libre

Trees on the bank of the Blanco river that have been felled to make way for a power plant. Hydroelectric projects are threatening biodiversity and the way of life of communities in the state of Veracruz, in southeast Mexico. Credit: Courtesy of Comité de Defensa Libre

By Emilio Godoy
MEXICO CITY, Sep 15 2014 (IPS)

Since January, villagers and townspeople near the Los Pescados river in southeast Mexico have been blocking the construction of a dam, part of a multi-purpose project to supply potable water to Xalapa, the capital of the state of Veracruz.

“Our rights to a pollution-free life, to decide where and how we live, to information, to free, prior and informed consultation, are being infringed. We don’t want our territory to just be invaded like this any more,” Gabriela Maciel, an activist with the Pueblos Unidos de la Cuenca Antigua por Ríos Libres (PUCARL – Peoples of La Antigua Basin United For Free Rivers), told IPS.

PUCARL is made up of residents from 43 communities in 12 municipalities within the La Antigua river basin. Together with other organisations, it succeeded in achieving a suspension of work on the dam that was being built near Jalcomulco by Odebrecht, a Brazilian company, and the State of Veracruz Water Commission.

The dam has a planned capacity of 130 million cubic metres, a reservoir surface area of 4.13 square kilometres and a cost of over 400 million dollars. It is one of more than a hundred dams planned by federal and state governments, which are causing conflict with local communities.

Infrastructure building on a vast scale is under way in Mexico as part of the country’s energy reform. The definitive legal framework for this was enacted Aug. 11, opening up electricity generation and sales, as well as oil and gas extraction, refining, distribution and retailing, to participation by the domestic and foreign private sectors.

Nine new laws were created and another 12 were amended, implementing the historic constitutional reform that was promulgated Dec. 20.“Fossil fuels should not be given greater priority than a healthy environment. Zoning should be carried out, where possible, to indicate areas for exploitation and to establish constraints." -- Manuel Llano

The new energy framework is expected to attract dizzying sums in investments from national and international sources to Mexico, the second largest economy in Latin America, during the four-year period 2015-2018, according to official forecasts.

On Aug. 18 the Federal Electricity Commission (CFE) announced 16 investment projects worth 4.9 billion dollars. Of this total, 27 percent is for public projects and 73 percent is earmarked for the private sector.

In the framework of the 2014-2018 National Infrastructure Programme (PNI), the CFE is planning 138 projects for a total of 46 billion dollars, including hydroelectric, wind, solar and geothermal energy generation plants, transmission lines and power distribution networks.

“Environmental and social legislation has been undermined in order to attract investment. Laws guaranteeing peoples’ rights and land rights have been weakened. This heightens the risk of a flare-up of social and environmental conflicts. It is a backward step,” Mariana González, a researcher on transparency and accountability for Centro de Análisis Fundar, an analysis and research centre, told IPS.

State oil company Petróleos Mexicanos (PEMEX) is programmed to carry out 124 projects as part of the PNI, totalling over 253 billion dollars. They include gas pipelines, improvements to refineries, energy efficiency measures at oil installations and oil exploration and extraction projects, among others.

The majority of the planned investments are slated for the southeastern state of Campeche, where 43 billion dollars will be spent on the exploitation and maintenance of four offshore oilfields.

In second place is the adjacent state of Tabasco, with projects amounting to nearly 15 billion dollars for shallow water oilfields and for the construction and remodelling of oil installations.

In Veracruz, PEMEX is planning investments of 11 billion dollars in shallow water offshore reserves and building and modernising oil installations, while in the northeastern state of

Tamaulipas it will spend 6.67 billion dollars on deepwater facilities and infrastructure modernisation.
Hydrocarbons licensing rounds

On Aug. 13, the Energy ministry (SENER) determined Round Zero (R-0) allocations, assigning PEMEX the rights to 120 oilfields, equivalent to 71 percent of national oil production which is to remain under state control.

PEMEX was also awarded 73 percent of gas production in R-0.

PEMEX’s current daily production is 2.39 million barrels of crude and 6.5 billion cubic feet of gas.

For Round One (R-1) concessions, SENER called for tenders from private operators for 109 oil and gas exploration blocks and 60 production blocks.

The government estimates the investment required for these projects at 8.52 billion dollars between 2015 and 2018, for exploration and extraction in deep and shallow waters, land-based oilfields and unconventional fossil fuels like shale gas.

The National Hydrocarbons Commission (CNH), the industry regulator, is preparing the terms for the concessions. Contracts will be assigned between May and September 2015.

Manuel Llano, technical coordinator for Conservación Humana, an NGO, cross-referenced maps of the detailed areas involved in Round Zero and Round One with protected natural areas, indigenous peoples’ and community territories.

He told IPS that the total land area assigned in R-0 is nearly 48,000 square kilometres, distributed in 142 municipalities and 11 states. Most of the assigned area is in Veracruz, followed by Tabasco. R-1 allocations cover 11,000 square kilometres in 68 municipalities and eight states.

The lands affected by R-0 overlap with 1,899 out of the country’s 32,000 farming communities. R-1 areas affect another 671 community territories, representing 4,416 square kilometres of collectively owned land.

Thirteen indigenous peoples living in an area of 2,810 square kilometres are affected by the R-0 allocations. Among the affected groups are the Chontal, Totonac and Popoluca peoples. The R-1 areas involve five indigenous peoples, including the Huastec, Nahuatl and Totonac, and more than 3,200 square kilometres of land.

“It’s hard to say exactly which places will be worst affected. There could be a great deal of damage in a very small area. It depends on the particular situation in each case. I can make reasonable estimates about what might occur in a specific concession area, but not in all of them,” Llano said.

Llano carried out a similar exercise in 2013, when he produced the “Atlas de concesiones mineras, conservación y pueblos indígenas” (Atlas of mining concessions, conservation areas and indigenous peoples). For this he mapped mining concession areas and compared them with protected areas and indigenous territories.

The new Hydrocarbons Law leaves land owners no option but to reach agreement with PEMEX or the private licensed operators over the occupation of their land, or accept a judicial ruling if agreement cannot be reached.

“The institutions have not carried out their work correctly. We know how the government apparatus works to get what it wants. We will oppose the approval of concessions and they will not succeed. We will continue our struggle. We are not alone; other peoples have the same problems,” said Maciel, the PUCARL activist.

Since March, several social organisations have taken collective legal action against government agencies for authorising the dam on La Antigua river and its environmental consequences. Los Pescados river is a tributary of La Antigua.

Between 2009 and 2013, SEMARNAT, the Environment and Natural Resources ministry, gave the green light to 12 hydroelectric and mini-hydropower plants on rivers in Veracruz. Construction has not yet begun on these projects.

Llano intends to compare maps of oil and gas reserves with the concession areas and contracts that are granted, in order to locate the potential resources claimed by the government and identify whether they match the bids at auction.

“Fossil fuels should not be given greater priority than a healthy environment. Zoning should be carried out, where possible, to indicate areas for exploitation and to establish constraints,” he said.
Edited by Estrella Gutiérrez/Translated by Valerie Dee

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