Exploring Energy and the Environment in Argentina- Take 2

 

By: Cullen Aulwurm, Katie LoNigro, and Bill O’Donnell

 

After eight days of exploring the bustling city of Buenos Aires, it’s good to be back in Colorado.  The varied business visits gave us some interesting insights and points of view on energy, the environment, and sustainability and we’re going to break that down for you:

 

Energy

If you recall from the previous post, the energy industry is massive around the globe, but there’s a special focus on Argentina with the amount of recoverable shale oil they have found in Vaca Muerta.  Specifically, there is a lot of foreign interest in Argentina and the Vaca Muerta, but luckily pretty much everyone in the industry agrees that foreign involvement is necessary since such specialized technology and knowledge is required to extract shale.

 

Another interesting topic regarding energy in Argentina: government subsidies.  It seems like all the government does is spend money on subsidies, one reason the economy is so unstable, especially in regards to energy and utilities.  Check out these interesting articles from last year about energy subsidies:

 

Argentina Devours Energy Subsidies Budget in Six Months

Argentina to Halve Energy Subsidies as Imports Erode Reserves

 

In case you were dying to know even MORE about energy, here are some quick observations:

 

Main gas stations include: Shell, Axion, YPF

 

 

 

 

 

 

Gas prices: Typical gas (or nafta in español de Argentina) is $12.16 pesos/liter (approx. $5.15/gallon)

 

Traffic: The New York-esque roadways show a clear demand for gasoline

 

 

Environment & Sustainability:

 

Most people have heard of the EPA (Environment Protection Agency), one of the main environmental regulatory agencies in the United States, but have you ever heard of the regulatory agencies in Argentina?  Right, neither have we.  That’s because environmental regulations and authority are spread over the national, provincial, and municipal levels, which is not only confusing, but weak and hard to enforce.  This has led to some very different ideas of sustainability and Corporate Social Responsibility (essentially taking responsibility for the company’s effects on the environment and social welfare) than what we might be used to in the United States.

 

We met with Cresud, a huge real estate and agriculture firm. This company buys non-usable land, usually dry lands, which are home to unique ecosystems, and then develops the land over seven years with the end goal of it being used for commercial or private use. Within that seven-year period, they create a ranch to raise livestock and to enrich the soil, after the soil is enriched they start to use it for agriculture. When they can no longer use it for agriculture they either sell it back to farmers or they begin to develop the properties for commercial or private real estate.

 

From a purely business standpoint this model is incredible and provides a great long-term investment that yields massive profit margins. They also conduct such a unique business that they have zero competition because no other business has the resources to do what they do.

 

However, when taking a closer look it turns out they are not necessarily a well-rounded company. Cresud takes natural land and destroys it with the purpose of turning it into usable farmland in the future. And when asked by our cohort, “What do you do to be environmentally minded?” their only response was that they follow all of the guidelines put in place. There were a couple more questions asked about their mission statement and core values, both turned up more mediocre responses, further revealing the true nature of the company.

 

Cresud is best described as a profit seeker, and it is sad to see a company with such high potential for impact on the Argentine communities waste its potential. To compare to the United States, most major firms maintain a focus Corporate Social Responsibility otherwise they risk upsetting their stakeholders.

 

Maybe there is a little Boulder in Buenos Aires…

Even though it seems like sustainability is the furthest thing from the Argentine Corporate mind, we have proof otherwise.

 

Restaurants and supermarkets are very careful about the way they handle their trash and recycling. Because water is not free to drink at a restaurant like it is in the United States, they are very careful to save and reuse the bottles used to serve water. After talking to the owners and managers of multiple restaurants and bars near our hotel, we found this to also be true for many soda and beer bottles. There are even incentives for people who bring a bottle back to a supermarket when buying a new one. You can receive a discount on your next purchase for returning your old bottle. Furthermore, there are trash and recycle bins located on the streets nearly every block. This helps keep the city clean as well as providing the citizens a better opportunity to keep the streets clean.
The pèice de résistance of sustainability came with our final visit to La Bioguía.  In short, their one office building holds a company that recycles buttons and resin into unique decorations, a social media campaign to boost awareness for the environment (using adorable pictures, like baby hedgehogs, to tug your heart strings), and a green consulting company to help companies turn their focus to sustainability.  Although the sustainability movement has really only start in the past six or seven years, it’s rapidly growing.  Who knows, maybe one day Argentina will be just as green as Boulder.

 

We highly encourage you to check out La Biogía’s Facebook page for some heartwarming photos sure to help you reconnect with nature.

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