The UK is planning to invest in Argentina’s controversial oil shale industry using a £1bn export finance commitment intended to support green energy, according to government documents seen by the Guardian.
UK Export Finance, the government’s foreign credit agency, promised in 2017 to offer loan guarantees up to £1bn to help UK companies export their expertise, including in “infrastructure, green energy and healthcare”.
Instead official records, released through a freedom of information request, have revealed the government’s plan to prioritise support for major oil companies, including Shell and BP, which are fracking in Argentina’s vast Vaca Muerta shale heartlands.
One government memo, uncovered by Friends of the Earth, said that while Argentina’s clean energy sector was growing, it was “Argentina’s huge shale resources that offer the greatest potential” for the UK.
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The Guardian has collaborated with leading scientists and NGOs to expose, with exclusive data, investigations and analysis, the fossil fuel companies that are perpetuating the climate crisis – some of which have accelerated their extraction of coal, oil and gas even as the devastating impact on the planet and humanity was becoming clear.
The investigation has involved more than 20 Guardian journalists working across the world for the past six months.
The project focuses on what the companies have extracted from the ground, and the subsequent emissions they are responsible for, since 1965. The analysis, undertaken by Richard Heede at the Climate Accountability Institute, calculates how much carbon is emitted throughout the supply chain, from extraction to use by consumers. Heede said: "The fact that consumers combust the fuels to carbon dioxide, water, heat and pollutants does not absolve the fossil fuel companies from responsibility for knowingly perpetuating the carbon era and accelerating the climate crisis toward the existential threat it has now become."
One aim of the project is to move the focus of debate from individual responsibilities to power structures – so our reporters also examined the financial and lobbying structures that let fossil fuel firms keep growing, and discovered which elected politicians were voting for change.
Another aim of the project is to press governments and corporations to close the gap between ambitious long-term promises and lacklustre short-term action. The UN says the coming decade is crucial if the world is to avoid the most catastrophic consequences of global heating. Reining in our dependence on fossil fuels and dramatically accelerating the transition to renewable energy has never been more urgent.
The briefing note was prepared before a key meeting between the UK government’s trade envoy to Latin America, the UK ambassador to Argentina and Argentina’s energy minister in February this year.
Tony Bosworth, a campaigner at Friends of the Earth, said: “With the world hurtling towards catastrophic climate change, and parliament declaring a climate emergency, it’s outrageous that the UK government is continuing to back huge fossil fuel developments abroad.”
Separate records, also uncovered by Friends of the Earth, revealed that there had been no fewer than 13 meetings between the UK and oil companies operating in Argentina’s Vaca Muerta hydrocarbon reservoir since the beginning of last year.
The companies include Shell, Andina Resources, Phoenix Global Resources and Pan American Energy (PAE), a subsidiary of BP. They have contributed donations amounting to more than £40,000 to fund birthday celebrations for the Queen held at the British embassy in Bueno Aires over the past two years. There have been no meetings with renewable energy companies, according to the records.
Argentina has become a magnet for major oil companies after discovering the world’s third largest shale reserves. It hopes to replicate the US energy revolution by encouraging oil companies to exploit the reserves within the Vaca Muerta region despite strong opposition from local communities.
A Guardian investigation this month revealed that the fracking industry had already caused irreversible damage to the ancestral homeland of Argentina’s indigenous Mapuche people after an oil fire burned for more than three weeks next to a freshwater lake in Vaca Muerta.
Argentina delivered its first-ever export of light crude and liquified natural gas from Vaca Muerta earlier this summer, five years after local community protest was quashed by authorities using teargas and rubber bullets.
The UK’s loans to support work in Argentina have been modest to date, but are expected to rise as Argentina’s burgeoning shale industry increases production. One of the largest provisions has been for £346,000 to support the UK company working with BP’s PAE in the 2017-2018 financial year.
The government’s plan to support Argentina’s shale industry comes after an investigation revealed an eleven-fold increase in support for fossil fuels over the past year to almost £2bn.
The plans are strongly opposed by MPs on the environmental audit committee, which branded the UK’s foreign fossil fuel investments as the “elephant in the room” undermining the UK’s climate leadership.
The UK government legislated earlier this year to commit to a zero-carbon economy by 2050, and is preparing to host the UN’s next major climate talks in Glasgow next year. The government’s climate efforts will be led by a new sub-committee within the cabinet office to be headed by the prime minister.
Friends of the Earth warned that Boris Johnson must show global leadership ahead of the Glasgow UN summit by putting environmental responsibility and decarbonisation at the heart of every government policy – both at home and abroad.
“Boris Johnson’s pledge to lead the world in slashing climate-wrecking pollution will be meaningless if his government continues to back the exploitation of massive oil and gas developments in Argentina,” Bosworth said.
A UKEF spokesperson said “The UK has a wide range of economic and commercial interests in Argentina. In support of this UKEF can provide its support for exports on a commercial basis across all sectors; it does not ringfence support for a specific industry. UKEF welcomes the opportunity to support all viable UK exports including in the renewables and green growth sectors to Argentina”. UKEF did not offer evidence that it had met any renewable energy developers in Argentina.
After publication of this article, UKEF said its appetite for market risk in Argentina had been downgraded since 2017 and loan guarantee applications were now considered on a case by case basis. It did not say when the downgrade had happened.
