Hydraulic Fracturing in Latin America: Prospects and Possibilities?

Abstract

During the last three decades, unconventional gas and oil development has substantially transformed the energy section. One of main developments is hydraulic fracturing, or “fracking”, a practice which has had substantial impact on people’s economic, social and political lives in those areas where unconventional energy reserves are present and are being exploited or could be exploited.

Latin America is one of the world regions with the highest potential for unconventional gas and oil development. Thus, the objective of this chapter is to look at unconventional oil and gas from a geopolitical perspective in the Latin American region, and in particular, the evolution of the industry and related energy policies in key countries of the Western hemisphere (namely Mexico, Argentina and Colombia) since the U.S. shale revolution of the early 21st century.

This chapter begins with a brief review of how hydraulic fracturing works and where in the world it is currently operational. The chapter then presents a review highlighting subsequent developments in the Americas over the last 10 years, giving special attention to Mexico, Argentina and Colombia, countries with large assessed reserves. The chapter thus shows the availability of oil and gas shale resources in Latin America, the developments that have been emerging to regulate the sector, and the enabling regimes/policies. The chapter concludes by considering the extent to which resolving environmental – and particularly water – issues related to hydraulic fracturing may be key for the economic growth for these Latin American countries (i.e. Mexico, Argentina and Colombia). These hurdles must be considered and addressed, in order to better shape the future of Latin American fracking in the coming years.