The hidden costs of fracking in Argentina

The greatest hidden cost of Vaca Muerta lies in the damage that the oil and gas extracted from this reserve cause to public health. Atmospheric pollution generated by the burning of fossil fuels leads to diseases that cause loss of working hours and a reduction in the life expectancy of the population. In addition, when oil and gas leaks occur, containment and environmental restoration measures are required, which are generally carried out by the State. Collectively, these damages will cost Argentina and the international society, in the worst case scenario, more than US$4.5 trillion.

Another US$ 942 billion in hidden costs correspond to the probable collection, in the next 30 years, of a carbon tax emitted by the burning of fuels extracted in Vaca Muerta.

“In the energy transition scenario that we are experiencing, the price of emissions must be part of the calculation of any energy undertaking, since these costs could considerably affect the return on investment during the next three decades. It is not excluded that the level of carbon price will rise much further in the coming decades.”, said Gerard Rijk, asset analyst at the consultancy Profundo and a coauthor of the study along with Barbara Kuepper.

Additionally, the researchers point out that the energy transition could cause a significant fall in the price of fossil fuels in the next 30 years, generating potential financial losses for high-cost fields such as Vaca Muerta. The lost investments, in the worst case, would reach the equivalent of US$ 120 billion.

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