Daily Reports
In Argentina, a severe energy crisis has paralyzed major industries, halted taxi services, and blocked access to service stations across the country due to a shortage of natural gas. Amid a cold wave, the government led by President Javier Milei has ordered the suspension of gas supply to hundreds of companies and compressed natural gas (CNG) stations to guarantee service to homes, hospitals, and schools. This crisis was exacerbated by an unusual situation where the State had acquired liquefied gas from Brazil, but the shipment was delayed due to payment method issues with Petrobras. Eventually, an agreement was reached, and the government assured that the service would normalize within hours.
The gas supply restriction began in certain regions on Tuesday and expanded nationwide by Wednesday. An email from distribution companies mandated the complete suspension of natural gas sales at CNG dispensing stations and to petrochemical, oil, cereal, and agroindustrial companies to protect infrastructure and maintain provision for residential users and essential services. The government's goal was to prevent plants that generate electricity using gas from being impacted.
Last week, in anticipation of a fuel shortage amidst autumn temperatures, Enarsa, a majority state-owned company, urgently purchased twelve shipments of fuel oil and diesel from Petrobras. When the first shipment arrived at the port of Escobar in Buenos Aires, Petrobras rejected the credit note for the $22 million payment. Ministry of Energy, Foreign Ministry officials, and Argentine diplomats faced considerable distress. Although the Brazilian embassy described the conflict as technical and assisted in its resolution, some attributed the issue to the strained relations between Presidents Milei and Luiz Inácio Lula da Silva. The Argentine government now estimates that the compression and distribution process might take between 48-72 hours to stabilize.
Although Argentina has substantial reserves, it remains reliant on fossil fuel imports. The Vaca Muerta deposit, located in Neuquén, is key to achieving self-sufficiency. However, the project has been stalled as part of Milei’s fiscal adjustment program, halting necessary compressor plant works. The Néstor Kirchner Gas Pipeline, designed to transport 22 million cubic meters of gas daily from Vaca Muerta, currently operates at half capacity due to incomplete compressor installations. Enarsa owes construction companies roughly $40 million. Past government actions have been heavily criticized, with the current Secretary of Energy, Eduardo Rodríguez Chirillo, pointing out that the previous administration planned a reduction in gas imports, leaving debts with Bolivia.
In Córdoba and Santa Fe, distributors interrupted gas sales at CNG stations and restricted industrial usage to prioritize home supply amidst increased consumption due to cold temperatures. Technical defects at two compressor plants of Transportadora de Gas del Norte (TGN) in San Luis and Chaján exacerbated the issue. Companies like Litoral Gas and Ecogas emphasized that these were ‘force majeure’ problems and urged industries and CNG stations to restrict usage to ensure domestic supply. The adherence to these measures was critical to avoid regulatory fines and maintain essential household gas supply during peak consumption hours.
- Former President Cristina Fernández de Kirchner criticized the Milei government for halting essential public works, highlighting the lack of knowledge about the importance of investments that could save on larger subsequent expenses. She criticized officials who do not work and ideas that do not function effectively, specifically pointing to the gas crisis.
- The current Secretary of Energy, Eduardo Rodríguez Chirillo, defended the government's actions, citing the coldest autumn since 1980 as a cause for the increased demand. He also accused the previous administration of failing to complete essential projects and leaving debts, while dismissing concerns over climate change, a stance aligned with Milei’s government policies.
