Argentinian industrialists launch Industrial Union on October 11 against wishes of local politicians

Reports indicate that on October 11 national authorities and high-profile executives from Argentinean industrial companies launched the so-called Patagonia’s Industrial Union (UIPA) during an event in Bahia Blanca, located in Buenos Aires Province. UIPA is reportedly aimed at representing the interests of industrial enterprises in the energy sector with interests in Patagonia, namely in the provinces of Río Negro and Neuquén, where the massive Vaca Muerta field, considered the world’s second-largest shale gas deposit, is located. According to UIPA’s foundational statement, the organization will lobby to allow the industrial sector greater access to Bahía Blanca docking facilities. Reports further indicate that politicians and businessmen from Neuquén, including Governor Omar Gutierrez and the Trade and Industry Association (ACIPAN) oppose the creation of UIPA.

Detractors of the newly-created industrial union argue that it will undermine the influence of traditional bodies like ACIPAN, and that it will furthermore divert investments and resources from Neuquén and Río Negro to Buenos Aires. Bearing in mind that UIPA is backed by the federal government and important industrialists in the country, those opposing the group will likely antagonize with the market-oriented proposals it will put forward to boost drilling and energy-related investments in Vaca Muerta. In particular, small-scale industrialists and local politicians from Patagonia criticize the government for allowing foreign companies to invest in Vaca Muerta under flexible conditions, arguing that average citizens are unlikely to benefit from the field’s revenue. While such fears are grossly exaggerated and serve political purposes, ACIPAN and similar groups could potentially seek to take their grievances to the judiciary, therefore prompting disputes within the opposed industrial camps. This scenario underscores increasing potential for quarrels between the government and Argentina’s southern provinces over the placement of investments and the distribution of wealth. These disputes could potentially result in political pressure to temporarily delay permits to new players seeking to invest in Patagonia’s surging energy sector. These concerns notwithstanding, foreign and national investments in Vaca Muerta are poised to continue.