Argentina energy doubts mount as Vaca Muerta stalls
Monday, January 4, 2021
Significance
On December 15, President Alberto Fernandez's government awarded supply contracts under the Gas.Ar plan, seeking to address short-term supply challenges and energy trade balance concerns. The government’s initial plan to prioritise development of the Vaca Muerta unconventional hydrocarbons reserves appears to have been shelved.
Impacts
- The shift in priority from renewable energy to hydrocarbons development may prove to be misguided.
- Vaca Muerta may be overtaken by the global focus on renewable energy and climate concerns.
- Shifting economic and trade policies and renewed tariff freezes risk deterring investment in the hydrocarbons sector.
- The cost of subsidies may prove unsustainable amid fiscal constraints and competing spending priorities.