Argentina Wants a Fracking Boom. The US Offers a Cautionary Tale
Argentina’s President Alberto Fernandez takes office in the midst of an economic crisis. Like his predecessor, he has made fracking a centerpiece of the country’s economic revival.
Argentina has some of the largest natural gas and oil reserves in the world and “possibly the most prospective outside of North America,” according to the U.S. Energy Information Administration. If some other country is going to successfully replicate the U.S. shale revolution, most experts put Argentina pretty high on that list. While the U.S. shale industry is showing its age, Argentina’s Vaca Muerta shale is in its early stages, with only 4 percent of the acreage developed thus far.
The country feels a sense of urgency. Declining conventional production from older oil and gas fields has meant that Argentina has become a net importer of fuels over the past decade. Meanwhile, Argentina’s economy has deteriorated badly due to a toxic cocktail of debt, austerity, inflation, and an unstable currency.
For these reasons — a growing energy deficit, a worsening economic situation, and large oil and gas reserves trapped underground — there is enormous political support for kick-starting an American-style fracking boom in Argentina.
It has taken on a level of political significance that outstrips its immediate economic potential. In Argentina, Vaca Muerta is treated as the country’s chance at salvation, with fracking seen as doing everything at once — creating jobs, reducing the debt burden, plugging the energy deficit and turning Argentina into a major player on the global oil and gas stage.
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