Fracking: the US and the shale fever in Latin America

Fracking: the US and the shale fever in Latin America

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By Thomas Sparrow

In 2010, the State Department launched a Global Shale Gas Initiative (GSGI, now known as the Unconventional Gas Technical Engagement Program, Ugtep) focused on one of the most promising and controversial techniques of the recent times: hydraulic fracturing or fracking.

This is a bet through which Washington invites several countries in the world - including some from the region such as Brazil, Chile, Mexico and Colombia - to discuss the benefits and risks of this technique that, according to its proponents, is changing the energy market and, according to its detractors, is leaving a trail of environmental damage.

Hydraulic fracturing has been banned on American soil itself, in New York State, and is the subject of debate within and outside the North American nation.

US government sources assured that the objective is to share, with countries where there is a high exploration potential, the information that has allowed the United States to become the leading country in the use of this technique.

But other voices claim that Washington has a clear national interest in promoting the fracking in the region, for example to reduce the energy dependence that some Latin American countries have on Venezuela.

Robert F. Cekuta has deep knowledge of the initiative that seeks to link the United States with Latin America within the framework of the new energy landscape created by the fracking.

In his office in Washington, Cekuta, deputy assistant secretary of the State Department's Office of Energy Resources, insisted that the project does not seek to promote the technology but to foster a global conversation about it. For him, he said, that's a fundamental difference.

According to the official, the idea was to establish a system so that a country interested in resorting to unconventional gas can find a platform where the United States shares its information and experience. In turn, Washington seeks to understand how the issue is developing elsewhere.

  • According to forecasts by the United States Energy Information Administration (EIA), the country's natural gas production will increase by 44% between 2011 and 2040.
  • Most of this increase is due to projected growth in shale gas production, which will double between 2011 and 2040.
  • While these data are promising, the EIA says there are considerable uncertainties about the size and long-term productivity of this resource.
  • It also ensures that there are potential environmental concerns due to the amount of water needed for fracking, possible contamination of production areas, and wastewater.

Source: US Energy Information Administration.

On repeated occasions and through different means, BBC Mundo asked the State Department which Latin American countries have participated in the global initiative and what the concrete results have been, but it did not get more than a general response.

He also asked him how the promotion of information on a technique that is so controversial, banned in countries like France, is justified.

Cekuta argued that, ultimately, each country makes its own decisions and the United States has to respect them. In his opinion, the key is to have an educated discussion about what the fracking: from environmental risks to the geological conditions of each country, through the role of the private sector or the attention to local civil groups.

"Through the sensible application of this technology we have seen a great change in the United States, we have seen a great increase in our energy availability," he concluded.

"It is something that we have seen that can be developed and used safely."

"Reduce dependence on Venezuela"

Before Robert Cekuta's arrival, the person in charge of the GSGI project, as it was then called, was David Goldwyn, who was the coordinator for international energy affairs for the State Department.

In that position, he was not only in charge of creating the shale gas initiative, but also conducted strategic energy dialogues with countries such as Mexico and Brazil.

Unlike Robert Cekuta, Goldwyn is convinced that it's not just about fostering conversations.

"When you are in the United States government, in the State Department, if something is not serving the interests of the United States, then it should not be being done," he told BBC Mundo.

"We saw the development of local gas production in those countries, and to a certain extent of shale oil, as something that served our interests a lot."

What were these particular interests in Latin America?

In this Goldwyn did not beat around the bush. "It reduces the potential dependence of some of those countries on Venezuela, which has the largest gas reserves even though it cannot really develop them," he said.

"Venezuela has huge reserves but does not have the capacity to export liquefied natural gas, LNG. It was very demanding in terms of having its own technology and it scared off Shell and others. It supplies subsidized crude to its neighbors (Petrosur and Petrocaribe) for political reasons. added.

Another important element for Washington, according to Goldwyn, is that the variety of supplies in Latin America increases economic prosperity in the hemisphere and can improve energy security.

Long term strategy

However, other analysts believe there are more reasons behind the US interest in "providing information" on the fracking to Latin America.

Technically recoverable shale oil resources, in billion barrels

Russia …………… .75

USA …………… 48

China …………… .32

Argentina ……… ..27

Libya ……………… 26

Australia ………… 18

Venezuela ……… .13

Mexico ………… ..13

Source: EIA, June 2013 report, table 4

Rodolfo Guzmán, an expert in energy affairs at the consulting firm Arthur D Little, told BBC Mundo that the United States wants to diversify the energy supply in the world, which is currently concentrated in the Middle East, an unstable region.

With their vast experience in hydraulic fracturing, American companies have a leadership in this technology.

"Apart from the fact that US companies are going to benefit, which is true, there is also a long-term strategic interest in helping new energy-exporting regions develop," Guzmán said.

These arguments were not developed by Cekuta when BBC Mundo asked him what the United States gained from this project.

Regardless of whether it is about promoting a dialogue, as this official assured, or if the initiative also responds to other Washington interests, as Goldwyn suggested, one thing is unquestionable: the United States, the country that has developed the most fracking in the world, it has its eyes set on Latin America.

This work is part of the series "Click Fracking: myth and reality", by BBC Mundo, published throughout the week

Video: FRACK US: the dangers of gas fracking. (July 2022).


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