The energy transition is going through a moment of redefinition. As we detail in our most recent Boston Consulting Group report, “after the Global Elections: The Next Energy Transition”, the results of the 2024 elections in the main economies of the world have marked a turn in the way in which governments address this transformation.
If until recently the center of the debate revolved almost exclusively around decarbonization, today they are added, more weight, two inescapable variables: Energy security and affordability.
This new approach does not imply an abandonment of climatic objectives. What is observed is a displacement towards more balanced strategies, which recognize the particularities of each country and the need to ensure available, reliable and economically viable energy for its populations, while promoting the use of national resources and economic development. The global energy reality is no longer thought of as a linear career towards the net zero, but as a network of diverse trajectories that must contemplate the resources, industrial capacities and priorities of each nation.
In that most pragmatic scenario, Argentina has a concrete opportunity to reposition itself. The advances in the production of unconventional hydrocarbons have allowed us to reach historical figures. During 2024, oil production exceeded 710,000 barrels per day, the highest level in more than two decades, and natural gas was consolidated as a key vector. But that growth has also evidenced the limits of the existing infrastructure.
Argentina has the resources, but still faces a gap in the logistics capacity to take them to where they are needed: both within the country and international markets. Investment in transport (pipelines, gas pipelines, distribution networks and export terminals) is today an essential condition to consolidate the potential. The project Vaca Muerta Oil Surwhich provides for the construction of a new pipeline from Vaca Muerta to the Atlantic coast and an export terminal, is an important step. So are the reversal of the northern gas pipeline and the advances in LNG, and in all with the participation of multiple actors. The country needs to continue strengthening the long -term vision in sectoral way to materialize the opportunity we have as a country.
In parallel, the future of refining in Argentina must take a priority place on the agenda. If the world goes to a flexible transition, where liquid fuels will continue to have a relevant role in the next two decades, then modernize our refineries and enhance their performance becomes a strategic objective. This will generate investment and ensure the country’s competitiveness in an increasingly demanding market.
To this is added a new uncertainty factor: The growing commercial tension between powers. The recent imposition of reciprocal tariffs on renewable technologies in the US is adding additional pressure on the energy transition. In the short term, this translates into higher costs for solar and wind projects, with deceleration risks in key markets such as the American. While some speculate that countries like China could redirect exports to other destinations, the global nature of energy supply chains warns about the possibility of a broader impact on investment dynamics and renewable deployment of renewables globally.
This scenario confirms that the energy transition cannot be addressed in isolation or standard solutions. For countries such as Argentina, it implies thinking systemically: investing in infrastructure that connects demands with demand, modernizing traditional sectors such as refining to sustain competitiveness, and anticipate the global impacts that can condition the evolution of renewable energies, identifying opportunities leverage in the vast natural resources of the country. The combination of planning, coordinated execution and long -term vision will be key to take advantage of the entire potential.
The BCG report raises a clear conclusion: The energy transition will not be uniform or immediate. It will be a complex process, marked by political, economic and technological balances. The countries that manage to adapt their energy strategy with pragmatism, industrial vision and public-private coordination will be those that win prominence. Argentina has the opportunity and also the responsibility of being one of them.
By Leonardo de Lella, managing director & partner of BCG
Source: Ambito
David William is a talented author who has made a name for himself in the world of writing. He is a professional author who writes on a wide range of topics, from general interest to opinion news. David is currently working as a writer at 24 hours worlds where he brings his unique perspective and in-depth research to his articles, making them both informative and engaging.
