Argentina pushes pipeline exports through protected Patagonian waters

San Matías Gulf, on the northern coast of Argentina’s Patagonia region, is one of the most biodiverse areas in the Argentine Sea. The Valdés Peninsula — a UNESCO World Heritage Site since 1999 and a biosphere reserve since 2014 — forms its southern border. It’s surrounded by Islote Lobos National Park, the Puerto Lobos and Bahía San Antonio protected natural areas, and Caleta de los Loros Multiple Use Reserve. But a planned oil port has many locals and environmentalists concerned for the future of this biodiverse marine region.

“We all need energy to live our lives, but the location chosen for these works could not be worse,” says Roxana Schteinbarg, coordinator of the conservation program at the Whale Conservation Institute (ICB). “The San Matías Gulf is too important for the health of our sea to be turned into a sacrifice zone.”

Authorities have chosen the village of Punta Colorado for the new oil port, the final destination for the 437-kilometer (272-mile) Vaca Muerta Sur (VMOS) oil pipeline. This enormous pipeline will carry crude oil extracted by fracking from the Neuquén Plateau, at the western edge of the country, to two buoys installed offshore to fill the tanks of cargo ships.

The government is also planning a second fossil fuel port in the gulf. North of the oil port, an extension of the San Martín gas pipeline will bring gas to the Hilli Episeyo, a floating liquefied natural gas ship that will process, store and transfer the gas for export.

“It is impossible to think that activities of this kind will not have a significant impact on the gulf’s ecosystem,” says Valeria Falabella, director of marine conservation with the Argentine office of the World Conservation Society (WCS).

A true natural paradise

San Matías Gulf is home to a stunning variety of marine wildlife, including southern right whales (Eubalaena australis), southern elephant seals (Mirounga leonina), killer whales (Orcinus orca), Magellanic penguins (Spheniscus magellanicus), South American sea lions (Otaria flavescens), sharks, rays, dolphins, sea- and shorebirds, seahorses, and many others.

In 1999, the legislature of Río Negro province, where the gulf is located, passed a law prohibiting all types of hydrocarbon projects in the gulf. However, in September 2022, driven by the Argentine economy’s need for foreign currency, the government amended the law.

“There was no prior consultation or information process for the population, nor was there a public hearing, which is what the laws and the Escazú Agreement [ratified by Argentina in 2020] establish,” says Hernán Pérez Orsi, an activist, researcher and coordinator with the Energy Group of the Forum for the Conservation of the Patagonian Sea.

Critics challenged the law on the basis of these shortcomings, but the Río Negro Supreme Court dismissed the lawsuit.

Despite this, many locals have continued to speak out against the twin fossil fuel ports.

“We are few, and the local media are campaigning very strongly in favor of the projects,” says Fabricio Di Giacomo, a member of the Multisectorial San Matías Gulf and a resident of San Antonio Oeste, the largest city on the gulf. “Every day, stories are published that seek to confuse and demoralize in the community. But despite everything and many ups and downs, the popular mobilization continues because there are many people who are very concerned: those who live off tourism in the summer, artisanal fishermen, the Pulperos [shopkeepers’] Association, which follows a family tradition that goes back several generations, and the guides who take people to see the whales.”

Yet the projects continue to move forward. Techint, the company in charge of building the oil pipeline, began its work in February and says the pipeline will be operational in 2026. Golar, the owner of the LNG ship Hilli Episeyo, says the contract “will come into force in 2027.” The oil port is expected to begin operation the same year.

“A second ship to liquefy natural gas, which will require a new gas pipeline, is being built in China and will arrive in 2028,” Alberto Weretilneck, the Río Negro governor, said on May 22; there are plans for four more ships to arrive in successive stages.

Waters with a life of their own

The threat posed by the oil and LNG ports is compounded by the way water moves in the gulf ecosystem.

“The internal circulation of water in the gulf is a whirlpool that shifts from one side to the other depending on the time of year, spinning in a slow vortex before dispersing into the open sea,” Pérez Orsi says. This slow spinning movement means contamination like oil leaks will spread and persist throughout the gulf.

“Gulf waters are ecosystems that are different from their surroundings,” Falabella says. “Being more closed environments, they have slower water exchange rates, higher salinity, different evaporation patterns, and even their own ecological processes.”

He points to several risks to the gulf: chronic pollution, the rising possibility of a major accident, and “a change in the physical and chemical characteristics of the water.”

The LNG ship, in particular, will need vast volumes of seawater to cool the natural gas as part of the liquefaction process, before ejecting heated seawater back out into the ocean, Pérez Orsi says.

“This can lead to the blooming of harmful algae that cause red tides,” he says.

Then there’s the danger to the marine life in the gulf. The southern right whale is the main tourist attraction in the gulf, and has enjoyed population growth over the last four decades. But with more ships arriving in the area to pick up oil and LNG, the large whale population raises the risk of a ship strike.

“In an area with more whales and more ships, the probability of collisions will be higher,” says Mariano Sironi, scientific director of the ICB. “With much less maritime traffic, there are already concrete examples [of ships hitting whales] in the Valdés Peninsula,” at the southern end of the gulf.

Sironi also says noise, pollution and light pollution affect all species, including invertebrates.

“Whales and many birds are migratory, but there are sessile [immobile] species that spend their entire lives on a rock, and if the ecosystem is disturbed, they will be affected 365 days a year,” he says.

The risk of a major accident, such as those recorded in recent years at similar fossil fuel ports in Mexico and Peru, hangs over the plans. At a safety meeting in May of Argentine state-owned oil and gas company YPF, its president, Horacio Marín, said the goal is to “transform YPF into a world-class shale [unconventional oil extraction] operator in the coming years. On that path, the safety of people and operations plays a key role.”

However, Sironi expresses skepticism about the rhetoric.

“All companies in any industry guarantee maximum safety, but maximum is not total,” Sironi says. “Airlines offer maximum safety on their planes, and every so often planes crash.”

Environmental, social and economic damage

YPF says it chose San Matías Gulf for geographic and economic reasons.

“We visited more than 20 sites, weighed up qualitative and quantitative attributes, and determined that Punta Colorada offered the best conditions, among other things because it is at least 40 meters [130 feet] deep, which will allow oil tankers with greater cargo capacity to operate,” says Augusto Castagnino, executive manager of operations at YPF.

With bigger tankers come bigger revenues, which is important to offset higher transport costs.

“Being so far from other markets, logistics makes the final product more expensive, and [the operator is] looking to reduce costs,” says Ariel Slipak, research coordinator at the Environment and Natural Resources Foundation (FARN).

The oil pipeline from the Vaca Muerta wells to Punta Colorado also seeks the route with the lowest cost.

Slipak, who has a degree in economics, says it’s clear what the final outcome of the operation promoted by the Argentine government will be.

“Both the pipeline and the LNG projects are extremely harmful from every perspective: for the climate, because they increase methane and benzene emissions; for the culture of coastal communities; for the economy, because it is a terrible collective deal for the country, although very good for the companies involved; and, of course, for the environment,” he says.” Monetizing the damage from this point of view is impossible, but also incalculable. Or can anyone put a price on a whale?”

The economics are controversial. The national government and YPF estimate they will collect $20 billion annually from exports, but that’s a figure that experts such as Slipak consider overly optimistic.

“There are two ways to reach that figure: either domestic supply is compromised” — the country currently imports LNG to meet winter demand — “or Vaca Muerta’s capacity is doubled. This would increase the use of sand and water used [for fracking], causing environmental degradation in the extraction areas,” he says.

Argentina will invest $3 billion in the VMOS pipeline. It will have to spend just as much on two gas pipelines if it intends to increase the number of liquefaction ships. While many private companies are involved in the project, they receive subsidies from the government — $113 million in 2023 and around $350 million in 2024 — and multiple tax benefits and windfall gains.

“Oil and gas are to energy what VHS is to the film industry: tools that are already being replaced,” Slipak says. “They lack technological innovation and sales and prices are trending downward.”

The illusion of a new El Dorado

Many of the 9,000 inhabitants of Sierra Grande don’t share the skepticism about the projects. Located 35 kilometers inland (21 miles), Sierra Grande is the closest main town to the proposed ports.

The closure of an iron mine here in the 1970s devastated the town, and today some residents view the new oil and gas ports as a lifeline.

“I remember passing through with my family when I was younger and there were many abandoned houses. It had almost become a ghost town,” says Di Giacomo, the resident from San Antonio Oeste, north of Sierra Grande.

Local authorities say they hope for a long-awaited resurrection.

“This is a pivotal moment for our city,” Mayor Roxana Fernández said on May 21, following the agreement between the province and the oil pipeline construction companies. The agreement guarantees the municipality an initial contribution of $60 million and another $40 million annually over the next 13 years.

“Many people agree that any project that creates even a few jobs is welcome, even if they know it may be temporary or polluting,” Di Giacomo says.

Even so, there are still those who remember the end of the iron mine and view the new promises with suspicion, although they generally choose to remain silent.

“They don’t speak out because there is a lot of pressure from the municipal government,” Di Giacomo says. “There was a teacher at the Teacher Training Institute who organized a debate in 2022 … and then began to suffer mistreatment. He ended up leaving town. And in general, people prefer not to talk.”

Court cases without a ruling

Pérez Orsi, the activist and researchers, says two public hearings, one in Sierra Grande and the second in San Antonio Oeste, on the fossil fuel projects showed the amount of pressure coming from the companies and local government.

“Traditional politics used all its tools to intimidate those who had opposing views. Threatening messages were sent out beforehand, police patrols were stationed at the door, and groups of construction union workers banged drums when opponents spoke. This discouraged people from complaining,” he says. “Many are afraid.”

A court case has been opened calling for the annulment of these hearings, but no ruling has yet been issued. Another lawsuit is underway seeking to include in discussions the population of the province of Chubut, where the Valdés Peninsula is located, but the court has declared that it has no jurisdiction.

“The government of Chubut is not being faithful to the defense of its province’s interests,” Pérez Orsi says.

At these meetings, environmental impact studies were approved, but some question their accuracy.

“Right now, the National Undersecretary of the Environment is being asked to conduct a strategic environmental impact assessment to analyze the cumulative impacts that the two projects — the LNG and the oil port — will have, because what they presented were two isolated assessments, when it is logical to think that, since they are in the same area, their effects could be amplified,” says Belén Braga, a marine conservation researcher. “Especially if we consider adding more liquefaction ships.”

San Matías Gulf has long been a pristine corner of the Argentine coastline, and many who live on its shores continue to depend on the sea for tourism, whale watching, artisanal fishing, and the harvesting of octopus and other seafood. Fossil fuel activity here, they worry, threatens all of that.

 
Banner image: Southern right whales arrive to breed in September and October in the Valdés. Peninsula and San Matías Gulf, in the South Atlantic. Image courtesy of Greenpeace.

This story was first published here in Spanish on June 2, 2025.