Constitutional protection, Judge gives way to request on Chevron frac deal in Argentina

Constitutional protection, Judge gives way to request on Chevron deal by Fermín Koop, August 14, 2013, Buenos Aires Herald
The agreement between YPF and Chevron to exploit shale reserves in Neuquén could soon face new restrictions from the courts after a federal judge accepted a request for constitutional protections filed by an environmental group on the controversial hydraulic fracturing technique used to extract oil and gas from rocks. The move does not imply hydraulic fracturing, commonly known as fracking, must be suspended, but marks the latest potential obstacle to a controversial agreement that could still face restrictions in the courts. Last month, the national government signed a deal with Chevron to exploit Vaca Muerta, a shale oil and gas formation, mostly located in the province of Neuquén. Chevron will put in US$1.24 billion to launch a joint pilot hydraulic fracturing project in a new area known as the “Enrique Mosconi.” If all goes successful, a second phase in the project would require some 1,500 wells and US$15 billion that the two companies would split equally. “Federal Judge María José Sarmiento accepted the request we presented last week and asked the federal government to present a report,” Luján Pérez Terrone, executive director of the Patagonia environmental lawyers association (AAAP), said yesterday. The federal government will now have to outline whether fracking involves risks to the environment. Lawyers with expertise on the issue told the Herald yesterday that the report will have to be presented in five working days. While she approved the request for constitutional protection, Sarmiento also rejected the demand to put a stop to the technique, saying there is no immediate risk. … The process is carried out vertically or, more commonly, by drilling horizontally to the rock layer, which can create new pathways to release gas or can be used to extend existing channels. “This type of technique is in an experimental phase and its consequences are still unknown,” Pérez Terrone said. “Nevertheless, it involves enormous risks and because of that numerous European countries have forbidden its use.” [Emphasis added]

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