Jorge Dimópulos, Director of Strategic Planning of the Tecpetrol Energy Transition Unit, spoke at the special event organized by EconoJournal to discuss the challenges heralded by the energy transition and analyze where Argentina stands as it faces this new paradigm. The session was held with the main participants attending in person and was also broadcast via streaming.

The Tecpetrol executive participated in the opening panel of the event, alongside Sean Rooney (President of Shell Argentina) and Dominique Marion (General Director of TotalEnergies), who explained the decisions that the oil majors are taking in the context of the paradigm shift underlying the move from shale oil in Vaca Muerta to renewable energies and green hydrogen.

Dimópulos began by highlighting three key issues to bear in mind when analyzing the energy transition: “In the first place, CO₂ emissions are intertwined with development: the most developed countries are also those with the highest emissions levels. Second, there is an issue of responsibility that has to be addressed, for both countries and individuals: at the country level, nations that developed with the Industrial Revolution, such as the U.S. and Europe, together produce per capita emissions which are six times greater than Argentina and 36 times more than India or Africa. At the individual level, 10% of the world's richest population consumes goods and services that represent 50% of emissions. Thirdly, it should be recalled that energy transition processes so far have taken place in the economic ecosystem, in a natural way: we went from brute human or animal force, to burning wood, then coal, and later hydrocarbons. Humanity has always sought to achieve greater energy intensity at a lower cost. The new thing about this is that in the long term, we can expect to see increasing costs associated with global warming, which must be taken into account. All these factors determine a specific context for the energy transition because it is a phenomenon that not only has an impact on the environment but also affects various sectors of society. We must strike a balance between combating poverty, accelerating development, increasing competitiveness, and looking after the planet. This is why I believe that the energy transition should be analyzed in Argentina in an integrated manner, and involve all of society.”

Businessmen have not hesitated to highlight the great opportunities for Argentina, particularly with the development of Vaca Muerta. Along these lines, Dimópulos referred to “the COP26, the most recent United Nations Conference on Climate Change which was held earlier this year in Glasgow (United Kingdom), where several countries agreed to reduce coal consumption levels, and thirty-four countries specifically promised to eliminate it altogether. This is extremely relevant as far as Vaca Muerta is concerned because coal will largely be replaced by natural gas, so this is the right moment.” He also emphasized the importance of keeping an eye on any opportunities arising which could help to speed up development across the country, as "it’s important to invest in those resources that are most competitive."

All the panelists emphasized the need for more infrastructure to be built in the short term, to take advantage of the current demand for natural gas to replace coal. This requires a State policy geared towards promoting investment, with clear rules designed to foster greater trust from the private sector. Regarding gas transportation infrastructure, Dimópulos indicated that “we need to select the best course for the pipeline and the most appropriate project and move forward as quickly as possible. We cannot delay this. Today, Vaca Muerta is the only play in the region able to generate gas to offset the shortfall in Bolivia, the Argentine Northwest, and the south, as well as to substitute imports, boost regional exports, and help us to start planning an LNG (liquefied natural gas) project.”

Looking to the next ten years, in reference to the message given by Techint CEO Paolo Rocca at the Alacero meeting (Latin American Steel Association), the executive emphasized the need to focus more on-demand and less on supply. “At some point, the additional costs involved in creating and consuming products with a lower carbon footprint will have to be absorbed by consumers. The private sector can invest efficiently in this transition process up to a certain point, but in a competitive market context, there are additional costs that cannot be absorbed wholly without shifting them onto customers,” reflected Dimópulos.

It is clear that the energy transition issue is already topping the agenda for countries, States, companies, and societies alike. In Argentina, the main challenge in the short term is to coordinate work between the different players involved in making the investments needed to take advantage of the considerable potential of Vaca Muerta—and develop competitive renewable resources. Timing is crucial, and the time is now!