SHALE GAS IN SOUTH AMERICA. FROM THE UNITED STATES’ ENERGY SECURITY TO THE PROMISES OF A REGIONAL BOOM SHALE GAS EN AMÉRICA DEL SUR. DE LA SEGURIDAD ENERGÉTICA NORTEAMERICANA A LAS PROMESAS DE UN BOOM REGIONAL

Even though oil continues leading energy discussions worldwide the share of natural gas in total energy is expected to equal that of oil by 2030. The United States (US) has played a key role in that transition: in the last two decades a qualitative technological leap forward has driven this country to an energy revival through the exploration and production of unconventional gas and oil.Since its independence Latin America has been considered theUnited States‘ backyard with notorious emphasis in Central American andCaribbeancountries. However, the increasing energy potential that others Latin American countries like Argentina and Brazil have turned to posses in the unconventional hydrocarbons industry have led to a renewed interest in the region beyond its traditional partners. The aim of this paper is to explore what could be the interest for theUSin shale developments inSouth America; which are the countries with more potential in developing shale gas industries based on their reserves and above ground factors; and which is the current state of the foreseen South American shale revolution.

pursuit, western powers have devoted great deal of its policies to the creation of systems, regimes or critical infrastructure, among others, to enhance their perception of safety in energy realms.
Although energy as a statesmen's concern can be traced to the early 20th century its most popular definition is credited to Daniel Yergin (2011) as the availability of sufficient energy supply at affordable prices; the concept has gained more complexity following the lead of more complex societies and realities.
For the United States of America (US) securing resources became even more important after the collapse of the Soviet Union not only as a key contributor to the nation' survival but also as a powerful leverage in word politics, a central piece for the continuity of its relevance in shaping a new world order and sustaining its role within it.
Even though oil continues leading energy discussions worldwide the share of natural gas in total energy is expected to equal that of oil by 2030 (BP, 2013, p. 18). In 2017, natural gas accounted for the largest increment in energy consumption followed Noemí Soledad Rabbia DOI: 10.12957/neiba.2020.44899|e44899| ISSN: 2317-3459 by the renewables and then oil (BP, 2018, p. 1). The US played a key role in that transition: in the last two decades a qualitative technological leap forward has driven the US to an energy revival through the exploration and production of unconventional gas and oil; a period generally defined as the shale revolution.
For decades geologists generally believed that hydrocarbon resources could be extracted only if they had migrated to the reservoir rock, where there were interconnected pore spaces through which the oil and gas could flow. If you drill a well into the reservoir rock the pressure underground can send the oil and gas flowing up to the surface. Traditionally, if you drilled a well into shale, you were wasting your time.
Advances in two technologies in the late 1990s and early 2000s changed all that, although at first only for gas (Crooks, 2015).
When shale gas became commercial at the beginning of this century triggered a transforming process of the world energy geopolitics which started with the potential, and then real, transition of the US to become a net exporter of natural gas. As a consequence of that, once again, the country's foreign agenda and how the US relates with other regions and countries were reshaped.
Since its independence Latin America has been considered the US's backyard, with notorious emphasis in Central American and the Caribbean countries. However, the increasing energy potential that others Latin American countries, like Argentina and Brazil, have turned to posses in the last decade has led to a renewed interest in the region beyond its traditional partners. This abbreviation stands for Trillion Cubic Feet. 2 A resource assessment is used to assess the resources or skills that exist among the people or communities with which you hope to work. It provides an understanding of the quantity, quality, and geologic distribution of world oil and gas resources. They are conducted in an impartial manner and are performed in collaboration and partnership with energy experts within and outside governments. Through synthesis and improved understanding of global oil and gas data, they seek to establish a geologic basis for predicting energy production trends. Until date, the EIA/ARI World Shale Gas and Shale Oil Resource Assessment (2013)  Bearing this information in mind, the aim of this paper is to explore what could be the interest for the US in shale developments in South America; which are the countries with more potential in developing shale gas industries based on their reserves and above ground factors; and which is the current state of the foreseen South American shale revolution.
This work claims that the US interest in a South American shale revolution is lead by its advantages in the sector (mostly technology and expertise), the pursuit of control over the shale energy market's future and the externalization of the negative impacts, mainly land and water pollution, associated to the use of fracking. I also claim that in the short term a combination of below and above ground factors constraint the occurrence of a shale revolution in the Southern part of Latin America. Finally, for the case of the country with the biggest potential due to the size of its shale gas reserves -Argentina-the lack of political stability will continue to prevent the generation of a business environment that contributes to the replication of the US success in the shale gas sector.  Since then shale gas production in the US has risen by more than a 1000% between formations" (Vaughan, 2018); currently, it involves pumping large amounts of water down a well at high pressure, along with sand and chemicals that fracture the rock and release the gas or oil, which flows to the surface.
Along the last decade has found as many detractors as supporters; as Vaughan (2018) states for the case of the United Kingdom (UK), governments and enterprises involved in the business have repeatedly said that fracking can be done safely and without harming the environment or human health, so long as it is properly regulated.
However, even though new rules mean that companies have to closely monitor and report seismic activity, as well as potential water and air pollution, has not been the case throughout fracking's history, particularly when it grew rapidly in the US.
As mentioned above, fracking uses enormous amounts of water, which must be transported to the site at significant environmental cost.

THE SOUTH AMERICAN SHALE DREAM
While the existence and recoverability of shale resources in South America is apparent (Table 2) "the economic viability of extracting them is [still] unclear, given production costs, volumes, and wellhead prices. Beyond purely economic considerations, a variety of factors including the regulatory framework, infrastructure, access to capital, and environmental and other political considerations could potentially retard development of the sector, especially as the pace of shale gas development quickens and investors concentrate elsewhere" (Gómez Jr., 2014, p. 3).
A key challenge among these countries in order to duplicate the US experience are property rights: while in the US the fracking boom has largely been private-sector In addition Argentina's location in the Southern Atlantic Ocean Basin offers access to demand from the US but especially from Asia. For instance, "China doesn't have much tight oil, but it has far and away the world's largest reserves of shale gas, and it has strong reasons to want to develop them, both in terms of pursuing greater energy security (and reducing reliance on energy imports), and also in order to reduce the amount of coal it burns for electricity and heat-and all of the toxic smog that that entails.
[…] For Beijing, water scarcity and the remote locations of its shale regions will compound the problems that many other countries face (like a lack of mineral rights and a dearth of fracking expertise)" (The American Interest, 2017).
Water availability and a much lower average population density than in the US are other two key factors when it comes to asses Argentina' shale industry advantages. In spite of that, after 8 years the initial optimism Argentina has not become a commercial production boom yet. In 2014 over 20,000 horizontal wells were expected to be drilled  (107) and Paying taxes (169).
In spite of the government change in 2015 and Mauricio Macri's promises of reform many of them did not come true due to domestic economic and political constraints. Some estimations address that USD 10 billions annually in investments are required for developing shale industry in Argentina; in 2018 they reached USD 3 billions, which is a fine number but not enough closed to meet expectations.
"Daniel Gerold, at G & G Energy Consultants in Buenos Aires, says companies will now start to invest more in shale oil, which is much simpler to export than natural gas -not least because, for now, Argentina lacks the gas pipelines and liquefaction plants that would make exporting over long distances possible" (Mander, 2018).
In 2017  Designed to boost gas output in Vaca Muerta, the government committed to paying gas producers the difference between the sale price and $7.50 per million BTU (British thermal unit), falling each year to $6 by 2021 when the programme ends (Mander, 2018). In other words, the resolution approved subsidized generation of liquid gas by paying a higher price than the market for the fuel resulting from new investment projects. currently producing more than 2.5 millions of barrels per day while its consumption rounds 3 millions; the Pre-Salt fields respond for about 48% of the national oil production.
Regarding the renewable sector, it is expected to continue to grow and play a vital role in the county's energy mix. Even though it faces challenges for its expansion, currently hydropower is a well-developed energy sector; onshore wind power capacity is expanding and biofuel production is already used extensively in the transport and industrial sectors 4 .
The importance of natural gas in the country's overall energy mix is also growing and there have been official announcements of interest in exploring Brazil's gas potential, including its unconventional gas resources. The country "has considerable reserves of shale gas in the states of Paraná and Mato Grosso, two large producers of soya beans. The production of fertilizers in loco could provide an opportunity for developing this industry close to its end users, and at the same time promote some energy efficiency gains in terms of transport (currently most fertilizers are produced in the Southeast region, and need to be transported inland)" (Growth Analysis, 2014, p.18). Additionally, Chile's location between Argentina and Bolivia and existing gas import/export infrastructure to north and south have made extremely difficult to promote local shale industry and attracting investors due to the lack of relative competitive advantage.
Paraguay faces a similar situation due to its vicinity with Argentina; also lack of infrastructure and political instability can be added as supplementary obstacles for the shale industry development scenarios. In the case of Venezuela, a volatile economic and political context creates also extra reluctance for investors.
Even when Uruguay does not hold comparable reserves to its neighbors there has been some interest shown by the government in promoting shale developments.
However, after more than 5 years of the first assessment made by the US EIA, little progress has been achieved. Among these countries, Chile and Uruguay would be considered to have a more stable regulatory environment combined with the country's openness to investment and security, which are encouraging conditions seem not to be sufficient to encourage exploration and exploitation commercially.

US, FRACKING AND SOUTH AMERICA
The continue growth of its gas production driven by shale industry has given the US "the United States will promote the use of shale gas. Now, I know that in some places is controversial. But natural gas is the cleanest fossil fuel available for power generation today, and a number of countries in the Americas may have shale gas resources. If developed, shale gas could make an important contribution to our region's energy supply, just as it does now for the United States" (2010).
Countries were selected to participate in GSGI based on the known presence of natural gas-bearing shale within their borders, market potential, business climates, geopolitical synergies, and host government interest (ECPA, 2019). South American countries that participate in GSGI include Argentina, Chile, Colombia, Peru, and Uruguay.
"The GSGI uses government-to-government policy engagement to bring the US federal and state governments' technical expertise, regulatory experience and diplomatic capabilities to help selected countries understand their shale gas potential" (ECPA, 2019). Programs are tailored to each country's specific needs and availability of funding, and activities can include shale gas resource assessments, guidance on appropriate regulatory policies and fiscal structures challenges, as well as invitations to conferences, meetings, training and public-private sector events in the US.
In spite of unmistakable official efforts to promote the industry outside the US, in 2016, before the New York primary's election, Hillary Clinton's campaign aired a commercial on upstate television stations touting her work as secretary of state forcing "China, India, some of the world's worst polluters" to make "real change." She promised to "stand firm with New Yorkers opposing fracking, giving communities the right to say 'no.'" (Fang, 2016). Later on, Wikileaks -an international non-profit organisation that publishes news leaks, and classified media provided by anonymous sources-released have an impact on shale gas investors in the region. "As Trump looks to incentivize companies to invest domestically, the United States' investment overseas may shrink (O'Connor and Viscidi, 2017)". For the case of Argentina, this can be particularly challenging due to ideological and political differences between the two countries.

CLOSING REMARKS
The shale oil and gas have become relevant sources of energy in the last years due to the advance of technology which has increased the possibilities for diversification of supply beyond conventional hydrocarbons. They have also impacted world politics, first due to the renewed leverage given to the US as main holder of the expertise and technology associated to this industry; and secondly, due to its worldwide distribution which is more spread than conventional oil and gas, which are mainly held in big quantities in few regions.
It also could be said that in spite of its significance, shale gas exploration and extraction outside the US in general, and South America in particular, still resembles far from the boom experienced in the former at the beginning of this century. For the case of South America the initial optimism -which foresaw an unconventional energy revolution in 2011 and 2013-has been replaced for more cautious prospects in order to set more feasible goals which vary depending on specific factors from case to case. As mentioned above, the most promising reserves are located in Argentina, where elections held in October -with the Peronista party's victory-creating greater uncertainty. The size of its reserves and domestic market, its existing infrastructure, expertise (derived from conventional hydrocarbon industry) and demography are certainly advantages but still they do not have enough weight to dissipate uncertainty for foreign investors; a national strategic plan may mitigate historical records of legal insecurity in order to incentivize greater amounts of foreign investments required for a further expansion of production; some progress has be done in the last 3 years but certainly not at the pace expected.
Conflict in loco is also on the rise: whether is scientific consensus or not on the environmental impact of shale industry, skepticism (in part inherited from the conventional hydrocarbons exploitation) persists mainly related to pollution of water and soil and mismanagement of wastewater not only in Argentina but also in Brazil, Uruguay and Paraguay. In Colombia there is also criticism but the debate between the national government and those against fracking is focused on tight oil rather than shale gas.
Outside Argentina and Brazil -who has not shown interest in the shale industry so far-there is a combination of below and above ground factors that constraints the occurrence of a shale revolution. To the smaller sizeable reserves factors like an adverse public opinion towards fracking -Colombia, Uruguay-; a deficient infrastructure and lack of technology and expertise -Paraguay-; investors distrust and political instability -Paraguay, Venezuela-and increasing security concerns -Colombia, Paraguay-can be added. Argentina's proximity and the increasing Bolivian production of conventional gas are other two factors which reduce their competitiveness and prospects of shale developments at least in the short term.
North America continues to be the shale industry most successful case worldwide; this leverage offers the opportunity and increases the interest on securing resources beyond the US borders in order to enhance its energy security while reducing Noemí Soledad Rabbia DOI: 10.12957/neiba.2020.44899|e44899| ISSN: 2317-3459 environmental costs and controversy raised by public opinion against the technique.
Initiatives launched by the US governments -along with the emails revealed by the 2016 Wikileaks scandal involving Hillary Clinton-acknowledge such goal and show that when it comes to pursuit the replication of the US shale boom political and economic interests are intertwined.
In spite of who the US would prefer to associate with in South America, as the above mentioned assessments prove, currently Argentina holds the most sizeable shale gas reserves and has official interest in a full scale shale development based not only in its bellow ground advantages but also the country's hydrocarbon expertise and the lack of any other comparable energy industry to rely on. However, with a change of government in Argentina as a possibility ahead, which may have ideological discrepancies with Donald Trump's administration; additional uncertainty should be expected in the short term.
Further studies should be develop in order to explore the relation between the size of recoverable reserves, governmental interest in the industry and the anti-fracking sentiment which already exists in Argentina but is relatively localized in the environmentally most affected areas in the Southern region.