Fracking Expands in Latin America

Above Photo: Schlumberger employees work during an oil fracking process in Vaca Muerta in the Patagonian province of Neuquen, Argentina, September 20, 2013. (Anibal Adrian Greco / The New York Times)

Threatening to Contaminate World’s Third-Largest Aquifer

Hydraulic fracturing, or fracking – a method whereby hydrocarbons trapped within rocks are extracted – is expanding rapidly in Latin America. Fracking emits benzene, toluene, ethylbenzene and xylene, which are considered by the World Health Organization to be carcinogenic and responsible for blood disorders and other immunological effects. Despite these adverse health effects, however, reserves have already been mapped out in Bolivia, Colombia, Venezuela, Paraguay, Uruguay, Chile, Argentina, Brazil and Mexico.

In Mexico, recently passed energy reform legislation promotes fracking as a means of extracting shale gas – and with the reform, the government has opened the oil industry up to the private sector. More than 1,000 wells using the technique are currently in operation in at least 11 of Mexico’s 32 states. These fracking efforts are largely being carried out by North American companies such as Halliburton, Schlumberger and Baker Hughes, among others.

“I didn’t know anything about oil, but after our water started to get contaminated, we found out that more than 240 wells in our region were using that thing they call fracking,” Mariana Rodríguez, from the community of Papantla, Veracruz, told Truthout. “Now all our water sources have become contaminated.”

According to Francisco Cravioto, a researcher from the Alianza Mexicana Contra el Fracking (Mexican Alliance Against Fracking) and a member of the Research and Analysis Centre of the Mexican civil organization FUNDAR, most of the communities facing contamination have very little knowledge about fracking. “The scale of the effects only becomes clear when they begin to experience them directly, as in the case of the northern region of Veracruz in Mexico, where at least 240 fracking wells are already in operation,” Cravioto said.

Argentina, meanwhile, is considered the Latin American fracking capital because of the wells in the Neuquén Basin, a vast oil-producing region that covers the Neuquén Province and is home to the Vaca Muerta rock formation. This year in Argentina, fracking was used to drill into more than 1,000 shale gas reserves of compact sand and tight oil in slate or shale. According to International Energy Agency figures published in 2015, only the United States, Canada, and more recently Argentina and China produce large volumes of shale gas; the latter two countries are spearheading the development of shale extraction.

Polluted Waterways

Fracking takes a heavy toll on the environment wherever it is used. It produces large volumes of toxic and radioactive waste and dangerous air pollutants, and destabilizes the climate and local communities.

One of the greatest current fracking threats in South America is located in the Entre Ríos region of Argentina and the neighboring area of Uruguay in the Paraná Chaco, where the extraction of shale oil and shale gas is planned. According to Roberto Orchandio, an engineer and former oil industry employee in the United States and Argentina, contaminated water poses a serious danger. “In this region, the Guaraní Aquifer can be found, which is the third-largest in the world and holds 20 percent of South America’s water, spanning an area that includes southern Brazil and part of Paraguay, Argentina and Uruguay,” Orchandio told Truthout. “So, we are concerned that if they have to drill into the aquifer, it will be contaminated and therefore destroyed. We have to weigh up if this is worthwhile.”

“Contaminated water is a huge problem. In some places it will be a disaster, like in the north of Mexico where there isn’t any water and wasting it is illogical, because they are places where people won’t be able to live,” Orchandio said. “Every new well has a water leak rate of at least 6 percent, caused by a combination of poorly constructed foundations, pipeline accidents and corrosion.”

According to Argentina’s Observatorio Petrolero Sur, an organization that advocates for sustainable energy consumption and production, less than half of the water used is recovered. This contaminated residual water is placed in water tanks, where exposure to the open air causes the chemical compounds to evaporate. The contaminated water is sometimes reinjected into other wells.

Observatorio Petrolero Sur has documented that within the first days or weeks of fracking in a region, a significant quantity of the water used in fracking returns to the surface, after being injected into rocks under great pressure and causing fracturing. Orchandio points out that large volumes of methane are also released. “Between 0.6 and 3.2 percent of an unconventional well’s total production – be that one barrel or millions of barrels – is emitted as methane gas during the extraction process, along with the flowback fluid (the water mixed with the chemicals),” he told Truthout. “Methane has a greenhouse gas effect that is 25 times more potent than that of carbon dioxide.”

Cravioto describes the exploitation of the land for fracking as “territorial dispossession,” noting its disproportionate impact on Latin America’s Indigenous population. “In Mexico, Indigenous peoples and campesinos [peasant farmers] have been hardest hit,” he said. “Their ancestral lands are being destroyed, those lands where their history, traditions and knowledge are stored. Entire ecosystems, and superficial and subterranean aquifers are being destroyed.”

Orchandio expressed fear that Latin America may follow in the footsteps of the United States, where fracking has rapidly spread, impacting human and environmental health. In the US, lawmakers have often worked to accommodate the plans of corporations – even in the face of considerable resistance by their constituents.

“I’m terrified by the thought that they might be able to do the same thing in Argentina that they did in Texas, where they banned fracking and then some time later banned the banning of fracking,” Orchandio said. “No one will be able to live in places where they decide to extract these hydrocarbons because everything they leave behind is dead, and the same is true for Mexico or Brazil.”

Energy Independence

According to Orchandio, fracking was previously eschewed in Argentina due to its high costs and the environmental impacts. “Since the US made incursions into unconventional wells, in the year 2010 alone, there were a total of 2.5 million fracking wells across the world. Its irruption began in the US and centered on three states: Pennsylvania, Texas and in particular North Dakota, which is its greatest exponent and has become the American Saudi Arabia,” he said.

Extracting unconventional oil is much more costly than extracting conventional crude oil, said economist Javier Martinez, and the recent fall in oil prices caused by increased supply is making it less profitable. “The allocation of titles – future oil purchase papers – is creating a speculative bubble that is going to burst,” he told Truthout.

Orchandio, who is part of an Argentinian group that produced the book 20 Myths and Truths About Fracking, said that unconventional hydrocarbons only offer a temporary “fix” for waning fossil fuel supplies. He believes that wells have a life span of approximately six years, and that in the first year of operation up to 70 percent of their capacity can be extracted. “The productivity of these wells is too low. To maintain a production quota, you have to drill wells like crazy,” he said. “To name one example, in North Dakota, they have to drill 1,500 wells per year. It’s an abomination. In the US, all of the richest areas, the large pockets of hydrocarbons known as sweet spots, have already been found and fracked, and there aren’t any more left.”

Orchandio added that hydrocarbon reserves are rapidly dwindling on a global scale as well. “The reserves shrink by between 4 percent and 5 percent per year, so that means they fall by approximately 12 percent in three years; this 12 percent or 13 percent of global production is the equivalent to what Saudi Arabia produces,” he said. “This tells us that every three years we have to put a new Saudi Arabia into production, but there isn’t another one. They are advancing rapidly to exploit more unconventional wells in other countries. A collapse of the technology matrix is approaching, and it is a national security issue for the US.”

Espionage and the Opening of New Hydrocarbon Wells

Numerous exposés in recent years have suggested that US-orchestrated espionage and actions taken in the name of “national security” have supported the spread of fracking across the globe. The documents leaked by the former National Security Agency (NSA) contractor Edward Snowden in 2013, for example, confirmed that the NSA spied on the internal communications of Pemex in Mexico and Petrobras in Brazil, as well as other state-owned energy giants, seemingly with the aim of gaining leverage over their decision-making.

“With regards to the NSA espionage, it does not seem to be a simple operation to steal industrial secrets,” said Dr. John Saxe-Fernández, author of the book Energy in Mexico: The Situation and the Alternatives. “It is espionage in order to identify the weak links in the chain of command, in order to know where to penetrate, who to negotiate with, who to promote, who to remove from the economic and political process.”

Meanwhile, this year the investigative news site DeSmogBlog revealed that former Secretary of State Hillary Clinton helped the Mexican government to weave a web of pretense in order to open up the energy sector – primarily involving conventional oil and gas, which are currently being extracted through fracking – to large multinational companies with the energy reform that was consolidated in 2014. According to the report, the Mexican government acquiesced to the demands of ExxonMobil, Chevron, BP, the American Petroleum Institute and independent oil producers in the United States, among others, agreeing to let these energy firms capture the first nonconventional hydrocarbon wells that are currently being put up for tender in Mexico. Before the aforementioned energy reform, the sector was in state hands, with no possibility of opening it up to the private sector.

“The energy reform opened the door for national and multinational private companies,” Cravioto said.

In Argentina, meanwhile, the country’s leading oil-and-gas-producing company, YPF, has signed a secret agreement with Chevron to explore and exploit unconventional resources in the Vaca Muerta formation, with Chevron setting the rules. Some time later the executive branch gave its approval to this agreement through “Decree 929/13,” which stirred debate and opposition among citizens due to the fact that YPF was recently nationalized and therefore its status as a public body means that it cannot hold secret negotiations.

After the agreement was signed in 2013, Argentinian Sen. Rubén Giustiniani asked to be given access to the complete text in order to divulge it to the public, Giustiniani claims. However, the Argentinian authorities turned down his request. Giustiniani was challenging the supposed existence of “secret clauses in the contract,” including a hypothetical “commitment that forces the country to hand over an area that is the third-richest in unconventional oil and gas, for more than 35 years,” and a “clause that ensures the payment of bonuses in perpetuity, even if Chevron pulls out of the deal.”

“The multinational companies that want to invest in Argentina seek guarantees for the price of extraction, and changes to legislation that are required to guarantee their investments,” Orchandio said. “We don’t know what direction the unconventional oil industry is heading in Argentina. Investors claim that they will come to Argentina only if the economic conditions improve; basically, they want us to pay them to take away the oil.” On November 10, 2015, three years after Giustiniani’s denunciation, Argentina’s Supreme Court ordered that the clauses of the YPF-Chevron deal be made public.

Growing Resistance to Fracking in Latin America

In Mexico, Brazil and Argentina, opposition to fracking is growing.

In Brazil, in response to the tendering of blocks for the exploration and exploitation of shale over an area of 168,348 square kilometers, organizations, researchers and activists who belong to the No Fracking Brazil Coalition (Coesus) are keeping up constant protests and actions. In October 2015, in Paraná, Bahia, Minas Gerais, Mato Grosso, Acre and the Federal District, there were protests outside the offices of the fossil fuel companies that will participate in the Brazilian government’s tendering of new blocks for fracking. The Brazilian protesters were joined by demonstrators in 28 countries, including Portugal, England and Spain, who demonstrated outside Brazilian embassies and consulates.

In Mexico, the Mexican Alliance Against Fracking has carried out a range of activities under the campaign banner of “Say no to fracking in Mexico!” One such activity was the production of a recent educational video, which included the participation of internationally renowned artists and provided information about what fracking entails. The alliance has been joined by Indigenous communities and campesinos who have protested and blocked roads in order to demand respect from the government for their ancestral lands.

In Argentina, several organizations have joined forces with the Movimiento Artístico-Cultural Contra el Fracking (Cultural and Artistic Movement Against Fracking) to publish a statement in which they appeal to “the precautionary principle” when it comes to fracking, stating, “Given the impacts it has on human health and the environment, our country must halt all ventures of this type, through a moratorium, i.e. through a suspension.”

The protests have continued to grow as more residents come to agree with Cravioto’s assessment that the spread of fracking is a “war against humanity.”

“We have to stop thinking that the market must solve our problems,” Cravioto said. “We have to turn around and see those campesinos and Indigenous people who have shown us that another way of life exists, a way of life that is not about competition and destroying the environment in order to produce goods.”