At a unique moment in the Argentine economy, questions aimed at measuring growth in power generation are essential. What view does the Government have of the energy transition? What role does Argentine gas play in this transition? Can our country become one of the main players internationally? Within the framework of the Energy meeting held by Ámbito Debate yesterday, we interviewed Flavia Royón, Secretary of Energy.
Journalist: Why is the energy transition important for Argentina? Who are in charge of carrying it out in the country?
Flavia Royón: The energy transition is an essential part of our agenda. Today it is something that is imposed worldwide and Argentina is committed to reducing emissions. Within this framework, the energy transition guidelines were published and we are preparing the energy transition plan for our country, in the Federal Energy Council, in a participatory debate. The energy transition is an opportunity for Argentina, because it has a lot to offer. First, because the Argentine energy matrix is relatively clean, compared to other developed countries. In Argentina, we practically do not have coal, but instead it has not been able to be replaced in the main economies of the world. Argentina has energy potential, when one looks in terms of power generation potential, it is difficult to find so much elsewhere: Argentina has the second unconventional gas reserves in the world; Vaca Muerta, which is fourth in shale oil; it has other basins, which are mature basins; has expectations with the offshore in the northern basin. In terms of hydrocarbons, it also has great potential. Regarding renewable energy, the country also has one of the best places in the world for solar power generation in the north of the country, wind power generation in the south, it has great potential in hydroelectric power that we are also committed to promoting. In terms of biofuels, it also has great potential. In nuclear energy, Argentina is a country recognized throughout the world in the development of technology. When you see this, you see that Argentina is much more than gas and has a lot to develop to be an energy provider in the world. In this context, we are going to continue betting on hydrocarbons, because the energy transition must be financed.
Q.: Within this scenario, what is the role of hydrocarbon companies? Are they going to be protagonists of this transition?
FR: Argentina defined that gas is the fuel of the energy transition, because it generates much less emissions than other types of fuels. And Argentina has the second gas reserves in the world. The role of gas is fundamental. It also deals with a concept of energy security: not only for Argentina, but also for the countries of the region. We are in a committed work of greater energy integration with the countries of the Southern Cone, and gas has a fundamental role, because clearly renewable energies are important, but the intermittency of renewable energies still has to be resolved, the restriction that Argentina has today in terms of high voltage transmission lines, that we are clearly working to solve this challenge. But gas is today for Argentina, especially the gas from Vaca Muerta, it is the fuel of the transition. And the one that will allow us to lead Argentina towards a much more competitive energy matrix. The results of the Gas Plan of December of last year made it possible to commit gas until 2028 for our country, at a value almost six times cheaper than gas imports. In addition to the development of an entire sector, jobs or industry, we have a competitive gas. Also the development of Vaca Muerta and the development of crude oil in Argentina is fundamental: because for the transition, and for each renewable energy project, you need financing. When facing a solar or wind farm project, you also have to look at the need for imported products that they require. And, seeing, for example, the situation of agriculture, which is going through the worst drought in the last 80 years, which has deprived the country of some US$20,000 million, Argentina needs to diversify its export matrix, its source of foreign currency generation, and there the energy sector already has a key role. This is already a reality. The growth curve is real and the energy sector is going to reverse its balance and is going to contribute with foreign currency and development.
Q.: What contribution can the energy sector make to the Argentine economic matrix?
FR: When discussing whether there is added value or not, one must refer to the data. Clearly in the energy sector, and also in the mining sector, there is an added value. Today each project in Vaca Muerta has a percentage of more than 70% of national component. There is a whole national industry behind it. The spillover, not only in labor, but also in the development of local suppliers, generates added value. Argentina has an important acquired and developed know-how in its industry. There is a company in Mar del Plata that is already making fracture equipment, for example. There is a national industry linked. Undoubtedly, the first beneficiary of the development of this industry are local suppliers. In addition, they are sectors where there is very little informality and that have salaries above average. In addition, it is an industry that helps to have a country development project with a federal perspective.
Q.: Regarding infrastructure, it is important to highlight the start-up of the trans-Andean oil pipeline that created the possibility of exporting oil to Chile. What reading do you make of this?
FR: It is a strategic project for Argentina. This pipeline has not been used for 17 years and since last Tuesday crude began to flow to Chile. Today the Argentine refineries are supplied, so all the production growth that there may be in crude oil will be destined for export. And the export of crude oil is key to turning around the energy balance, which last year was almost US$4.5 billion negative and by 2030 we expect it to be US$12 billion positive. In this increase in exports, in addition to the Néstor Kirchner gas pipeline, in terms of oil pipelines there is an investment of approximately US$1.1 billion in different projects: the trans-Andean one, we recently inaugurated the Sierras Blancas oil pipeline. There is strongly committed private investment.
Q.: Are there others in the portfolio?
FR: YPF is leading the Vaca Muerta Sur project and the expansions are in the portfolio. This speaks of the fact that it is not a promise, it is a reality. And this year is going to see a contribution. Argentina can produce much more energy than we can transport, to put it graphically, and infrastructure is essential. We did the last welding of the Néstor Kirchner Gas Pipeline, which is on time and will be ready by the last week of June. It must be recognized that it is a project that nobody believed could be done in less than 24 months, it will be completed in 10 months. The gas pipeline generated almost 50,000 jobs, 81% of which were national. It is a work that required the coordination of the national government, of the provincial governments, of the contractors. It is a project that will change the energy matrix of Argentina. And we are working so that this network of gas pipelines changes the matrix of electricity generation in the country, which will enable more development, more industry and also more exports.
Q.: One of Minister Sergio Massa’s projects is to create an adequate framework for companies that invest in the Argentine energy sector. What state is this project in?
FR: The LNG project will be sent by the minister in the coming days, as will the hydrogen project. These are two key projects for the energy sector. The framework of the projects, in general lines, seeks to provide fiscal stability for 30 years, because they are projects that require relevant and long-term investments; guarantee access to foreign currency, as well as tax benefits, because Argentina has to compete with other countries. Today Vaca Muerta is in productivity values at the level of the best players in the world. The goal is to be able to export Vaca Muerta gas as LNG, because clearly the energy transition changed the paradigm. Today we must take advantage of our resources, with a production with lower emissions.
Q.: What is the view of the Secretariat on the present and future projections of lithium?
FR: I was Secretary of Mining and Energy for the province of Salta, the province with the largest number of lithium projects in the portfolio. As for the critical minerals required for the energy transition, Argentina has lithium and copper projects to offer. Lithium projects today are a reality.
Source: Ambito
