In the middle of his usual rounds, a worker at a fruit farm near the town of Villa Manzano heard a rushing sound coming from one of the oilwells on the site. He hurried to the farmhouse and told his boss. Within hours, the farm was crowded with trucks from Argentina’s state oil company YPF, which found hydrocarbons had spread through water and soil on the farm.
Such a discovery, says Norma Ramírez, the farm’s owner, has rendered an entire batch of fruit unsuitable for export, costing them as much as 40% of the fruit’s value.
Her family has farmed the land in Río Negro province for 40 years, but now they are considering packing their bags and leaving. “We are grieving for our farm,” says Ramírez.
“We worry about losing our livelihood – and our health.”
Fruit farming has taken place in this area for a century. But in recent years agriculture has been overshadowed by a far more profitable industry: shale gas and oil extraction – a highly intensive and controversial form of fossil fuel production.
Ramírez’s farm sits atop a geological formation known as Vaca Muerta – meaning Dead Cow, the name the Mapuche Indigenous people gave the region originally.
It is one of the largest deposits of fossil gas in the world – and the area has long been touted by Argentina’s government as the country’s golden goose.
Throughout the 1970s, oilwells sprang up across the region. Even Ramírez says the oilwells on her family’s land have brought in more cash than growing fruit.
Vaca Muerta has been central to the government’s plan for emerging from its decades-long economic mire and achieving “energy sovereignty”.
Current production is about 250,000 barrels a day, and there are plans to expand this to 1m by the end of the decade; it’s all part of the wider plan to transform Argentina from a country that imports gas into one that can sell energy to the world.
Opening the national congress in March, President Alberto Fernández reiterated a pledge to make Argentina an energy exporter, and identified the Vaca Muerta field as a key part of the transition.
In the first half of last year, the government spent $6bn (£4.9bn) on energy imports, a significant drain on its dwindling foreign currency reserves.
Luciano Caratori, a former energy adviser to several government departments, said: “There was a lot of stress in the trade balance – it was a big, big issue. Economically, there were not many options.”
The government’s line is that gas from fracking has a role to play as a “transition fuel” in pursuit of net zero. In an interview this year with EconoJournal, the climate change secretary, Cecilia Nicolini, said investment in renewables was constrained and that strengthening national capacity would allow for further expansion.
“Gasification is a vehicle so that this transition can be accelerated, although it is not a long-term solution,” she added.
Some who sympathise with the government’s predicament point out that, before it was decided to allow fracking, Argentina’s oil and gas production had been in decline for some time, forcing the crisis-stricken country to pay for energy imports, despite its huge reserves of natural resources.
However, the International Energy Agency (IEA) has calculated that for the world economy to reach net zero by 2050, investment in hydrocarbons should cease. Other countries in the region, such as Costa Rica and Brazil, have hugely expanded their renewable energy capacity.
Argentina, though, is accelerating fracking in Vaca Muerta at an “unprecedented rate”. The IEA says Argentina’s energy matrix is dominated by gas and oil (contributing 55% and 33% respectively), with bioenergy and hydroelectricity contributing 8% between them.
Enrique Maurtua Konstantinidis, an independent environmental consultant, believes Vaca Muerta has become an escape route for politicians confronted by a chronic economic crisis.
“For Argentine politicians, Vaca Muerta is the golden goose and the one thing that would save our economy. I think that idea has been successfully passed into the minds of many people on the street,” says Konstantinidis.
Among environmentalists, there is a concern that this focus on Vaca Muerta is diverting attention, and potential investment, away from renewable energy and tackling the climate crisis, and instead funneling it into fracking, one of the dirtiest forms of fossil-fuel extraction.
Experts say the exploitation of hydrocarbons shows Argentina is lagging behind in the race for renewable energy. Konstantinidis believes the country should be investing in renewables now. “Thirty years from now is 2050 – and that’s the moment where we should be around zero emissions, according to international targets,” he says. “All our eggs are in this one basket – they should be diversified.”
Fernando Cabrera, of the Observatorio Petrolero Sur, which works for equitable energy production and use, is among the critics of expanding extraction from Vaca Muerta. “We believe that we need to think about an energy transition and that focusing all expectations on this reservoir prevents us from thinking about other sources or other policies,” he says.
Ten years after the government signed an agreement to start fracking, the social and environmental consequences have become visible. Norma Ramírez believes that increased activity was responsible for the oil spill affecting her land.
Her view is one of the hypotheses of Agustín González, a professor of agrarian sciences at the National University of Comahue, and Laura Forni, of the Stockholm Environment Institute, who are working together to analyse the impact of fracking in the area.
Forni says: “The expansion of fracking-based hydrocarbon development has accelerated at an unprecedented rate in Vaca Muerta, posing significant threats to local livelihoods and the environment.”
The expansion of fracking, which involves applying heavy pressure to rocks underground to release gas trapped there, has also been blamed for increased seismic activity in the area.
A report by the Environment and Natural Resources Foundation (FARN) suggests there have been 200 to 400 earthquakes in the region in the past eight years, occurring with particular frequency since 2018.
The area has changed significantly – and the vast profits from the Vaca Muerta field have not been distributed evenly. Nowhere is that more pronounced than in Añelo, a once-small town in Vaca Muerta that has become a destination for men looking for work in the area.
The influx of people has seen Añelo’s population grow from just over 10,000 people 10 years ago to 18,000 today. Although pay for oil workers is high – part of a phenomenon that Argentinians call “petrol prices” – the cost of goods and services in oil towns has also risen.
Ariel Slipak, of FARN, pointed out that the oil boom was making the lives of local people not employed in the energy industry harder as they also had to pay “petrol prices” but without the higher income. The influx of workers has also led to the growth of other social problems, including gambling, alcoholism and prostitution, he said.
In addition to creating environmental and social problems, critics say, Vaca Muerta has not brought the benefits to people promised by the authorities. Argentina’s rate of inflation is 124%, poverty is increasing but the government continues to hand out large subsidies to the energy industry.
Caratori says: “Vaca Muerta is being sold as the future. They are saying we can flood the world with our energy, but at the same time [the companies] are saying they need public investment to build a pipeline, [with] fixed prices in dollars. I can’t believe both statements.”
Slipak says: “Ten years ago, Vaca Muerta was a promise, and politicians today are saying it is the future. But Vaca Muerta was the future 10 years ago. If you go to Neuquén today, 37% of families live in poverty.”
Cabrera said that in the current inflation, more than half of children were living in poverty. “The focus on unconventional hydrocarbons has not generated wellbeing in the country,” he says.
