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Entre Ríos: a new chapter of dispossession and contamination?

Entre Ríos: a new chapter of dispossession and contamination?


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By OPS

Even assuming that all exploratory activities will be carried out with the appropriate environmental care and controls, the record of looting and ecological crime that this industry has to its credit, sows severe doubts about the social and environmental viability of a possible hydrocarbon exploitation in Entre Ríos. With regard to groundwater, not only the Guaraní Aquifer is at risk, but also all other aquifers and even stream and river beds.


The first days of January 2010 surprised Entre Ríos with an important announcement: “In Entre Ríos it is very likely that there is oil and that is a powerful industry with tremendously important investment and development vectors. If we add industry and oil royalties to our specialized capacity to produce agri-food, Entre Ríos does not have a ceiling in its economy and in its human development, because precisely the challenge is for all of this to develop a virtuous circle that positively impacts people and in families, ”said Governor Sergio Urribarri [1]. However, such a display of techno-progressivism is unable to hide the motivations behind the project, as well as the enormous risks that it entails.

Current plan

The exploration agreement that Entre Ríos will sign on February 9 with the multinational Repsol-YPF, within the framework of the 2010/2014 Exploratory Development Program that the company launched in December, represents the completion of a project that began to be considered in October 2006. At that time, the Secretary of Energy from Entre Ríos, Carlos Molina, estimated that possibly in 2007 they would decide whether or not to carry out the studies aimed at determining the existence of oil [2]. Subsequently, in April 2009, Governor Sergio Urribarri officially announced “the implementation of a development plan for the hydrocarbon sector in the province […] I gave instructions so that through the Ministry of Energy and the Directorate of Mining, they intervene in the creation of the legal and regulatory framework that allows progress in the process of granting exploration permits and eventual concession for the exploitation of hydrocarbons within the framework of current regulations and placing special emphasis on caring for the environment ”[3].

The government of Entre Ríos, despite being boastful about the imminent signing of the first agreement of the Exploratory Development Program of the Spanish multinational, is at the tail end of a process of selection and offer of secondary areas for hydrocarbon exploration that covers numerous provinces from three years ago. Let's review [4]:

- Santa Cruz: offered fifteen blocks in November 2006, of which fourteen were awarded.

- Chubut: at the end of 2005 it offered and awarded a marginal exploitation lot and twelve exploration areas;

- Neuquén: pioneer in offering exploratory areas in public tenders, awarded between 2001 and 2004 nineteen blocks. In a second round started in 2006, it awarded fourteen more exploratory areas. A new round of tenders began at the end of 2009. In the framework of the Exploratory Plan launched by YPF, the Neuquén government informed that it will not cede the areas without granting, but that they will also be awarded by tender;

- Mendoza: in April 2007, it offered and awarded twelve blocks. Soon, the province will call for bids for another thirteen exploratory areas;

- Salta: since March 2006, it has offered and awarded sixteen exploration blocks. Soon, through the state company REMSA, it will directly bid or negotiate another twelve areas;

- La Pampa: since 2006 it has offered and awarded thirteen blocks, through the state company Pampetrol;

- Río Negro: since September 2006 it has offered twenty exploration blocks, of which nineteen were awarded;

- San Juan: since January 2006, it carried out two bidding rounds, offering eleven blocks and awarding three;

- La Rioja: in August 2006 it opened three blocks to tender, awarding two;

- Córdoba: in February 2007 it offered sixteen blocks, of which eight were awarded;

- San Luis: in July 2007 it offered and awarded three exploratory areas;

- Formosa: opened the first bidding round in June 2009, awarding an exploratory block;

- Chaco: to date pre-awarded (the ratification of the provincial Legislature is awaited) four exploratory areas;

- Corrientes: has selected ten exploratory areas to be tendered;

- Jujuy: will soon launch twelve blocks to tender;

- Santiago del Estero and Buenos Aires: are in the process prior to the call for tenders.

In effect, from the promulgation of Decree 546/03 and the sanction of the short law 26,197 / 06, both under the presidency of Néstor Kirchner, many provinces faced the control of their resources and launched an aggressive campaign to tender areas of exploration and exploitation [5], updating their internal legislation and granting tax exemptions to attract private capital, thus becoming the new interlocutors of the oil industry. Thus, motivated by the rise in the price of a barrel of crude oil and the fall in the country's reserve horizon, they saw oil as a new source of income in the face of growing fiscal deficits.

At the November meeting of the Federal Council for Fiscal Responsibility at the Palacio de Hacienda, “the provincial finance ministers made desperate demands for funds to the national administration. In several cases, they will appeal to co-participation advances or to the Financial Assistance Program (PAF) to pay salaries for this year ”[6]. Finally, twenty administrations closed 2009 with red numbers, and only four districts achieved a financial surplus. The situation, which had not occurred since the crisis of 2001/2002, reverses what was registered just three years ago, when precisely twenty provinces exhibited positive results [7].

In the particular case of Entre Ríos, as early as August it was among the districts with the greatest problems, with a deficit of $ 400 million [8]. On the other hand, by mid-year, together with La Rioja, it was the province that had least raised its own resources in terms of tax collection [9].

According to the Minister of Economy, Diego Valiero, Entre Ríos closed 2009 with a deficit of approximately $ 580 million [10]. When giving explanations, he stressed that “we cannot close the year in complete equilibrium because there has been a crisis situation in the world. Collection fell, we had fewer resources. All this has produced this extraordinary situation ”[11].

In turn, the province was particularly affected by droughts, which caused a drop in the production of the most relevant crops of close to 270%, equivalent to losses of $ 800 million. "By the beginning of 2009, when the production of coarse grains enters its final stage, [the water reserves] showed a state of absolute drought" [12].

Beyond the influence that this particular situation [13] could have had on public accounts, there is a movement that is general and pronounced: Entre Ríos does not escape the recurrent falls in the surplus that the provinces as a whole have been experiencing since the second 2004 quarter [14], and that this year ended with worrying deficits. As the economist Adriana Giuliani explained for the Neuquén case [15], in Entre Ríos the relative weight of current expenses has also been increasing; it is enough to take into account that between 2003 and 2009 the permanent staff of the state increased from 46,259 to 60,035 public employees, which represents a growth of almost 30% [16].

In the current scenario, and as Governor Urribarri himself tacitly acknowledges, the matter is reduced to adding oil royalties to compensate for the ailing provincial economy.

(Scarce) antecedents in the province

The only antecedent of effective exploration of hydrocarbons in the province dates back to the 1960s. According to a study by the Commission for the Exploration and Development of Hydrocarbons of the Argentine Institute of Petroleum and Gas (IAPG) [17], between 1933 and in 2007 38 exploratory wells were drilled in the Chacoparanaense Basin, of which only one took place in Entre Ríos [18]. The drilling was carried out in 1961 by YPF in El Pueblito -locality located 25 kilometers from Nogoyá- and despite its 2,088m depth, it did not yield satisfactory results.

Subsequently, the only serious attempt to resume exploratory work was carried out by the government of Jorge Pedro Busti at the end of the 1990s. On that occasion, the high cost of the work to be carried out –US $ 10 million– led to the investment being rejected. [19]

The Chacoparanaense Basin: between citrus, rice, wood and the Guaraní Aquifer System

"Good prospects" north of National Route 18

Despite the almost null antecedents in hydrocarbon matters, Florencio Aceñolaza -geologist and CONICET researcher- argued that “it is not remote that there is oil because Entre Ríos is in the middle of the road between two basins and it is almost logical that they repeat generation and storage conditions. The Chaco-Paranaense basin is linked in the Pampean plain with the Brazilian basin of Iratí, which has already proven the existence of mainly gas but also oil, and the Andean basin of the Salta border that has both. If in the province it is determined that there is this sedimentary thickness and the source rocks in which the process of liquefying oil or gas begins, there would be good prospects ”[20].

According to statements from Entre Ríos Secretary of Energy, Raúl Arroyo, the exploration areas agreed with Repsol-YPF are located north of National Route 18 -which cuts the province from east to west- in a region that includes the departments of Feliciano , Federation, La Paz, Federal, and part of those of Paraná, Villaguay, San Salvador, and Concordia. Despite the lack of official details, Aceñolaza said that “the area with the greatest prospects in the province is between the towns of Cerrito, Estacas, Los Conquistadores, Federal and the Gualeguay river basin, because the geophysical studies that have been carried out show that the basin deepens and has a greater thickness of sediments in the north-central region of Entre Ríos. On the contrary, to the south there is a package of very old granitic rocks that would be limiting the potential development of an oil basin ”[21].

From an economic point of view, the territory in question supports numerous primary and agro-industrial productive activities. Taking as reference the classification of the National Institute of Agricultural Technology (INTA), the region itself encompasses six Homogeneous Agroeconomic Zones (HAZ) [22]:

- Feliciano: the predominant economic activity is cattle and sheep farming, concentrating approximately 6% and 20% of stocks at the provincial level.


- Concordia: includes the departments of Concordia and Federación, covering 9% of the provincial surface. This ZAH concentrates 98% of the provincial citrus area and 43% of forest crops. Regarding livestock stocks, around 10% of the cattle and 19% of the sheep are found here. Regarding annual crops, soybeans stand out with 56% of the planted area, and rice with 19% of the planted area. It is the second most important area for rice production in the province.

- Federal: concentrates 9% of the provincial cattle ranch, and 21% of the sheep ranch. Among the crops with the highest participation in the agricultural area, soybeans, rice and wheat stand out.

- La Paz: both cattle and sheep heads reach 10% of the provincial total. Likewise, the presence of goats stands out, which represent 27% of the stocks in the province. Agriculture is expanding, covering 8% of the province's total agricultural area. In the area, 24% of the provincial flax is sown, as well as soybeans, sorghum, wheat and corn.

- Villaguay: includes the departments of Villaguay and San Salvador. Around 40% of the provincial rice area is concentrated in this ZAH, in addition to important soy and wheat productions. On the other hand, extensive cattle raising prevails, with cattle and sheep representing 12% and 13% of the provincial total.

- Paraná: in this case we do not take as a reference the ZAH delimited by INTA - which also includes the departments of Diamante and Victoria - but only the district of the same name. The cited information comes from the Third Situation Report of the Institute of Society and Economy (ISE) of the Autonomous University of Entre Ríos [23].

Paraná concentrates 13.58% of the area sown with wheat, 14.03% of that of corn, 17.99% of sorghum, 11.61% of soybeans, 10% of sunflower. The advance of agricultural activity has diminished the importance of livestock. However, it is included in the western dairy basin of the province, which has 75% of the dairy farms in Entre Ríos.

Taken as a whole, the export structure of Entre Ríos marks a strong preeminence of the primary sector [24], which in 2008 accounted for 56.1% of exports US $ FOB [25], (highlighting soybeans, corn, wheat, citrus), followed by the agroindustrial sector with 34.3% of exports US $ FOB (among which rice, dairy products and wood stand out). In order of importance, the main destinations for exports are Asia, Europe and MERCOSUR.

In short, the region that will be impacted by hydrocarbon exploration and exploitation, almost monopolizes citrus and rice production -which the province leads nationally in production and export volumes-, and those of wood and flax are very important. On the other hand, the north of Entre Ríos concentrates a large number of cattle, with a stock of around 1,500,000 copies [26].

Danger to aquifers

The Guaraní Aquifer System (SAG) is considered one of the largest underground water reservoirs in the world, comprising an area of ​​1,084,063 square kilometers, in subsoil sectors of Argentina, Brazil, Paraguay and Uruguay. 1,500 municipalities from the four countries stand in the SAG area, with a total population of around 23,500,000 inhabitants. Almost 40% of it is supplied with drinking water from the SAG, being used for human and industrial supply and for exploitation as hot springs [27]. Precisely, the entrerrianas localities of Paraná, La Paz, Federación, Concordia, Colón, Concepción del Uruguay and Gualeguaychú concentrate 10 thermal complexes.

Dr. Jorge Néstor Santa Cruz is Professor of Continental Hydrology in the Department of Geography of the UBA and former Technical Coordinator of the Guaraní Aquifer System Project. Asked by PAHO about the risks of eventual exploration and exploitation, he maintained that “it is an issue, as everywhere else, not only of oil exploitation itself, but of the environmental protection of natural resources. With regard to groundwater, not only the Guaraní Aquifer is at risk, but also all other aquifers and even stream and river beds. The province of Entre Ríos has an important aquifer called Ituzaingó (around 100 meters deep) that is exploited in some localities very intensively for rice irrigation, for example ”.

Environmental care

During the announcement of the agreement with YPF, Urribarri was in charge of remarking that "the oil industry had to adapt to new environmental standards throughout the world, so we eventually discard any type of problems in this regard and there are dozens of examples in the world where areas of primary production coexists perfectly with oil developments ”[28]. The president's statements, which are more in line with an expression of desire than reality, try to anticipate the criticism that could come from environmental groups [29], which in recent years gained prominence in the province in the heat of the conflict over the installation of the pastoralists in the Uruguayan city of Fray Bentos.

Regarding this issue, Santa Cruz commented to PAHO that “the key to the entire environmental issue is to have good control through the State and following clear guidelines and regulations. A recommended initial measure would be to institutionalize the ‘Tube Well Drilling Manual’ published by the former ‘Guaraní Aquifer System Project’ and in the hands of the national and provincial agencies involved in it. For the execution of exploration drilling, the same construction environmental care must be taken as for the exploitation drilling, especially in matters of isolation of the traversed land, [which must be done] with pipes in good condition and cemented from the outside, and with tests of watertightness carried out, all duly certified before the competent authority and with suitable technical inspections. Furthermore, the study wells carried out, and that are going to be abandoned, must be properly cemented […] The institutional issue is fundamental: even if we have codes and regulations, if they are not applied well and controlled accordingly, the problem will not be solved. thematic of avoiding environmental pollution ”.

Referring to Entre Ríos in particular, Santa Cruz indicated that “it would be convenient for them to find the necessary means to contract an economically independent inspection of the provincial treasury and to enforce and certify all environmental regulations in this regard. It would also be interesting to open the issue of control to a more participatory management of organized society ”.

Although it is true that the only antecedent of effective exploration dates back to 1961, and it was carried out with technology that is now totally obsolete, it should not be forgotten that exploration activities in a basin with little prospecting such as the Chacoparanaense will require huge investments. In fact, Sebastián Esquenazi, executive vice president of YPF, said that “Entre Ríos has potential, [but] this does not mean that we will find oil from one day to the next […] we believe that [exploration] will take two years and can begin drilling in the third year ”[30].

Even assuming that all exploratory activities are carried out with the appropriate environmental care and controls, the record of looting and ecological crime that this industry has to its credit, sows severe doubts about the social and environmental viability of a possible hydrocarbon exploitation in Entre Ríos.

Cost outsourcing

In an interesting article, James O'Connor - professor at the University of California and editor of the journal Capitalism, nature, socialism - questions the possibilities of putting into practice a sustainable capitalism from a social and ecological point of view, based on two fundamental contradictions:

- In the first place, it explains "that the attempt of individual capitals to defend or reestablish their profits by increasing labor productivity, increasing the speed of production processes, decreasing wages or resorting to other usual ways of obtaining greater production with less number of workers […] ends up producing […] a reduction in the final demand for consumer goods ”[31]. This capital-labor contradiction is expressed in the increasingly accelerated production of goods, and greater difficulties in accessing them by broad sections of the population, giving rise to what the author calls a “demand crisis”.

- Secondly, "if the costs of labor, natural resources, infrastructure and space increase significantly, capital faces the possibility of a 'second contradiction', an economic crisis arising from the cost side" [32].

This phenomenon has two variants. In the first place, it can be caused by exploitation strategies that degrade the social and material conditions of production. A typical and well-known example in Argentina is the wear of soils due to their inappropriate and intensive use.

Second, when demands from workers and social movements condition exploitation to certain labor or environmental standards, a “cost increase” is also being forced for capital.

This means that to maintain a sustainable rate of profit, the capitals that wish to invest in a certain branch of industry must find optimal production conditions: workforce, resources, infrastructure and physical space must be in quantities and costs that ensure profitability to capital. Otherwise, “constraints or shortages originating from the supply side pose especially difficult problems for companies and policymakers in capitalism when the economy is weak, or when it faces a crisis of demand or renewed competition for part of other countries. Stagnation or falling profitability forces individual capitals to try to reduce the return time of capital, that is, to accelerate production and reduce the time necessary to sell their products ”[33]. At the same time, outsourcing or cost reduction has extremely harmful effects on the socio-environmental environment in which the exploitation is carried out.

In our case, the 60% drop in Repsol-YPF's operating profits [34] (which led to a strong internal dispute among shareholders over the reduction of dividends [35]) and the usual greed for profits that such a situation entails , the high exploration and exploitation costs imposed by the region, and the urgent need for resources experienced by the local administration, raise severe doubts regarding a sustainable exploitation of hydrocarbon resources, if such a thing existed. The environmental care and controls that Santa Cruz well points out, would make the project unviable from an economic point of view. On the other hand, outsourcing these costs would seriously endanger the environment and local productions. In Entre Ríos -as in many other regions- it will be impossible to combine business economic interest with socio-environmental sustainability.

The agreement that Urribarri will celebrate with Repsol-YPF on February 9 is symptomatic of a process that has been going on for more than three years at the national level. It is the complete demonstration of the advance of a hydrocarbon frontier that, not content within the walls, in areas of proven tradition, expands over regions where other productive vocations take place. However, this should not be taken as a fatality. Everything will depend, to a large extent, on the organizational, mobilization and pressure capacities of those potentially affected.

PAHO - Southern Petroleum Observatory - http://opsur.wordpress.com. February 2010

Notes

[1] "The province will sign the first oil exploration agreement with YPF" [online]. Public Info. General Directorate of Public Information of Entre Ríos, January 6, 2010.
http://www.entrerios.gov.ar/noticias/nota.php?id=21746

[2] Ibid.

[3] Ibid.

[4] Information taken from: Chebli, Gualter A. “The exploratory problem. Protagonism of the provinces in the management of hydrocarbons: implications and expectations ”[online]. Phoenix Oil & Gas S.A. August 2009
http://www.iae.org.ar/conferences/ARGEN2CHEBLI.ppt

[5] See: OPS. “(Un) protected areas, the advance of the extractive frontier” [online]. Panorama, October 21, 2009. http://opsur.wordpress.com/2009/10/21/areas-desprotegidas-el-avance-de-la-frontera-extractivista/ and Pérez Roig, Diego. “Criminalization and extractive industries: hydrocarbons in Patagonia” [online]. Panorama, November 25, 2009.
http://opsur.wordpress.com/2009/11/25/criminalizacion-e-industrias-extractivas-hidrocarburos-en-la-patagonia/

[6] "The provinces prepare bonds to cover deficits" [online]. El Cronista, November 18, 2009.
http://www.cronista.com/notas/211618-las-provincias-alistan-bonos-cubrir-deficit

[7] Galak, Oliver. "Twenty provinces will close 2009 with their accounts in the red" [online]. La Nación, December 28, 2009.
http://www.lanacion.com.ar/nota.asp?nota_id=1216124

[8] Capriata, Laura. "The deficit of the provinces already affects the payment of salaries" [online]. La Nación, August 9, 2009.
http://www.lanacion.com.ar/nota.asp?nota_id=1160449

[9] Navarro, Roberto. "Numbers in red" [online]. Page 12. Cash Supplement, August 16, 2009.
http://www.pagina12.com.ar/diario/suplementos/cash/17-3989-2009-08-16.html

[10] "Entre Ríos closes 2009 with a deficit of 580 million pesos, according to Valiero" [online]. El Once, December 29, 2009.
http://www.elonce.com/secciones/politicas/nota.php?id=159887

[11] Ibid.

[12] VVAA. "Third Situation Report" [online]. Institute of Society and Economy, Autonomous University of Entre Ríos. December 2009.
http://uader.edu.ar/index.php?view=article&catid=225(…)

[13] In fact, for 2010, improvements are expected in the prices of the main crops, and a more encouraging outlook regarding the availability of water reserves.

[14] "International Seminar on Fiscal Responsibility and Reforms in Federal Countries" [online]. Economy & Regions, March 2007.
http://www.cippec.org/files/documents/Otras%20Publicaciones/Frigerio2.ppt

[15] "Neuquén's economy is in a very precarious situation" [online]. OPS interview with Adriana Giuliani, January 13, 2010.
http://opsur.wordpress.com/2010/01/13/%(…)

[16] "Entre Ríos is heading towards infeasibility" [online]. La Voz, January 18, 2010.
http://www.lavoz901.com.ar/despachos.asp?cod_des=95432&ID_Seccion=2

[17] Chebli, Gualter A. “Onshore basins not yet productive” [online]. Commission for the exploration and development of hydrocarbons. Argentine Institute of Oil and Gas. December 2007.
http://www.iapg.org.ar/sectores/eventos/eventos/listados/PPT/On/Cuencasnoproductivas.ppt

[18] The remaining wells took place in Santiago del Estero (13), Santa Fe (10), Chaco (6), Córdoba (4), Formosa (2), Salta (1) and Buenos Aires (1). Ibid.

[19] "Scientific expectations of finding oil in Entre Ríos" [online]. El Diario de Paraná, January 10, 2010.
http://www.eldiario.com.ar/buscar.asp?id=mtc&cod=185416&pr

[20] Ibid.

[21] Ibid.

[22] “Homogeneous Agroeconomic Zones. Entre Ríos ”[online]. Socio-economic studies of the sustainability of production systems and natural resources, Nº6, INTA. November 2008.
http://www.inta.gov.ar/parana/info/documentos/economia/(…)

[23] VVAA. Op. Cit.

[24] Ibid.

[25] Free On Board: merchandise placed on board by the shipper, free of all customs expenses, insurance, freight, etc.

[26] Rearte, Daniel [coordinator]. "Territorial distribution of cattle farming". INTA, November 2007.

[27] Santa Cruz, Néstor Jorge. “Guaraní Aquifer System. Hydrogeological knowledge for its sustainable use ”[online]. Science Today Magazine, Volume 19, No. 112, August-September 2009.
http://www.cienciahoy.org.ar/hoy112/sistema.htm

[28] "The province will sign the first oil exploration agreement with YPF" [online]. cit.

[29] The Popular Environmental Assembly of Colón wondered. “Where in the world is there an oil exploitation that does not have serious environmental problems and in arid, almost desert places where it is less likely that oily pollution is spread, unlike our place crossed on all sides by water courses?

“Unless they want our rivers and streams to start showing spots on the surface everywhere. And not to mention the consequences for the Guaraní Aquifer that underlies us and that surely has a much greater future value as a gigantic reservoir of fresh water (but think how much 1 liter of bottled fresh water is currently worth and compare it with 1 liter of refined fuel) ”.

Meanwhile, the leader of the M'Biguá organization, Jorge Daneri, told the AIM agency that there is "concern" since "all oil drilling, according to countless antecedents in the country, has produced a variety of environmental impacts. and very large social ”

"With all the history and evolution that exists in the control and mitigation systems, we are going to try to monitor the entire process so that it is done in the most serious way possible," he announced.

"Hope and fear for the search for oil in Entre Ríos". RENA News Agency, January 15, 2010

[30] "YPF announced that in March oil exploration will begin in Entre Ríos" [online]. General Directorate of Public Information of Entre Ríos, January 7, 2010.
http://www.entrerios.gov.ar/noticias/nota.php?id=21755

[31] O'Connor, James. "Is Sustainable Capitalism Possible?" In Alimonda, Héctor [compiler] Political Ecology. Nature, society and utopia. Buenos Aires, Clacso: 2002

[32] Ibid.

[33] Ibid.

[34] “Anticipan caída de 60% en ganancias de Repsol-YPF” [en línea]. Cronista Comercial, 25 de noviembre de 2009.
http://www.cronista.com/notas/210921-anticipan-caida-60por-ciento-ganancias-repsol-ypf

[35] Algañaraz, Juan Carlos. “Dura pelea entre accionistas en el corazón de Repsol” [en línea]. Clarín.com, 17 de noviembre de 2009.
http://www.clarin.com/diario/2009/11/17/elpais/p-02042383.htm


Video: Pablo Lapegna. The Political Economy of GMOs in Argentina (July 2022).


Comments:

  1. Azarious

    What interesting message

  2. Armstrang

    What words ... super, great thought

  3. Shakasa

    You have hit the mark. In it something is also to me your idea is pleasant. I suggest to take out for the general discussion.

  4. Ame

    Now I cannot take part in the discussion - there is no free time. I will be free - I will definitely express my opinion.



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