What in The World?What in The World?Energy & Climate Change in Energy & Climate Change in

ArgentinaArgentina

Global Energy & Climate Global Energy & Climate ChangeChange

UCLA Conference Center UCLA Conference Center at Lake Arrowhead at Lake Arrowhead

October 22-24October 22-24

Lucila SerraLucila Serra Torcuato Di TellaTorcuato Di Tella

FoundationFoundation

CONTENTSCONTENTS

ENERGY SITUATIONENERGY SITUATION GHG EMISSIONSGHG EMISSIONS CLIMATE CHANGECLIMATE CHANGE ACTIONSACTIONS CONCLUSIONSCONCLUSIONS

1*1*ENERGY SITUATIONENERGY SITUATION1*1*ENERGY SITUATIONENERGY SITUATION

Argentina's Energy SituationArgentina's Energy Situation

In 2000 Argentina was South America's third largest energy In 2000 Argentina was South America's third largest energy consumer, as well as the continent's second largest emitter of consumer, as well as the continent's second largest emitter of carbon dioxide, resulting from the consumption of fossil fuels.carbon dioxide, resulting from the consumption of fossil fuels.

During the 1990s Argentina's energy demand grew annually at an During the 1990s Argentina's energy demand grew annually at an average rate of 6%average rate of 6%

In 2000, Argentina's energy profile strongly reflected the countries In 2000, Argentina's energy profile strongly reflected the countries past decade of growth. Argentina had South America's second past decade of growth. Argentina had South America's second highest per capita energy consumption at 73.2 million Btu per highest per capita energy consumption at 73.2 million Btu per person behind only Venezuela. This reflected the country's growing person behind only Venezuela. This reflected the country's growing affluence relative to other South American countries, although it still affluence relative to other South American countries, although it still measured only one-fifth the per capita energy consumption in the measured only one-fifth the per capita energy consumption in the United States (351.0 million Btu). United States (351.0 million Btu).

Energy consumption in Argentina has been dominated by the Energy consumption in Argentina has been dominated by the industrial and transport sectorsindustrial and transport sectors, and until the country's financial , and until the country's financial collapse in 2001, was expected to continue growing rapidly.collapse in 2001, was expected to continue growing rapidly.

Argentina's total energy consumption in 2000 was 2.7 quadrillionArgentina's total energy consumption in 2000 was 2.7 quadrillion Btu, or 0.7% of the world's total energy consumption. Btu, or 0.7% of the world's total energy consumption. Per capita Per capita carbon emissions in Argentina also are the second highest in carbon emissions in Argentina also are the second highest in South America, after Venezuela.South America, after Venezuela.

Energy MatrixEnergy Matrix

Fossil fuels dominate Argentina’s energy Fossil fuels dominate Argentina’s energy consumption, with an energy matrix structured consumption, with an energy matrix structured in the following way:in the following way:

Natural Gas (45%)Natural Gas (45%) Oil/petroleum (41%) Oil/petroleum (41%) Hydropower (6%)Hydropower (6%) Nuclear (2%)Nuclear (2%) Firewood (1%)Firewood (1%) Organic waste from sugar cane “Bagasse” (1%)Organic waste from sugar cane “Bagasse” (1%) Mineral carbon (1%)Mineral carbon (1%) Other sources (3%). Other sources (3%).

8% of the matrix consists of renewable energy, without 8% of the matrix consists of renewable energy, without considering the other percentage not specified (3%), which considering the other percentage not specified (3%), which includes energy sources such as solar and wind energy.includes energy sources such as solar and wind energy.

Total installed power is 25.5 GW.

Year 2005 - Total electric energy generation 92,176 GWh (5.8% above the accumulated energy in 2004)

- Total energy demand 87,778.5 GWh

Electric Energy

70.000

75.000

80.000

85.000

90.000

95.000

2002 2003 2004 2005

Generation (GWh)Generation (GWh)

70.000

75.000

80.000

85.000

90.000

2002 2003 2004 2005

Demand (GWh)Demand (GWh)

Electric Energy Electric Energy The participation per source during 2005 was: Thermal Generation

49,801.9 GWh (54.0%); Hydraulic Generation: 36,000.0 GWh (39.1%); Nuclear Generation: 6,374.1 GWh (6.9%).

The The export export of accumulated electric energy during 2005 was of 1,800 of accumulated electric energy during 2005 was of 1,800 GWh, 13.0% less than the accumulated energy during the same GWh, 13.0% less than the accumulated energy during the same period in 2004. period in 2004.

The The import import of electric energy in 2005 increased by 11.2% with respect of electric energy in 2005 increased by 11.2% with respect to 2004, reaching almost the same level as the export.to 2004, reaching almost the same level as the export.

As from 2004 there has been a major increase in fuel oil consumption As from 2004 there has been a major increase in fuel oil consumption due to the natural gas supply crisis. 634,000 tons out of the total due to the natural gas supply crisis. 634,000 tons out of the total amount consumed that year were imported from Venezuela. Fuel oil amount consumed that year were imported from Venezuela. Fuel oil consumption increased by 50% in 2005. There are also significant consumption increased by 50% in 2005. There are also significant increases in the consumption of mineral carbon and, to a lesser increases in the consumption of mineral carbon and, to a lesser extent, of gasoil.extent, of gasoil.

CUYO

CUY0 5,8%

BUENOS AIRES

BUENOS AIRES 12,4 %

COMAHUE

COMAHUE 3,8%

PATAGONIA

PATAGONIA 4,8%

CENTRO

CENTRO 8,1%

NEA

NEA 4,5%

NOA

NOA 6,6%

LITORAL

LITORAL 12,3 %

AREA METROPOLITANA

AREA METROPOLITANA 41,8%

Source: Secretary of Energy

Territorial Distribution of the SupplyTerritorial Distribution of the Supply

NOANOANGNG

NEA + LITNEA + LITHYDROHYDRO

COMAHUECOMAHUEHYDRO+NGHYDRO+NG

GBAGBACENTRE CUYOCENTRE CUYO

NUCLEARNUCLEARNG PIPELINESNG PIPELINES

PATAGONIAPATAGONIAHYDROHYDROWINDWIND

NGNG

Location of the Sources of the Location of the Sources of the Electric SupplyElectric Supply

Natural GasNatural Gas 51,453 million m3 was the accumulated production of NG in 2005 (1.0% less 51,453 million m3 was the accumulated production of NG in 2005 (1.0% less

than the accumulated production during 2004). than the accumulated production during 2004). It is the first time that It is the first time that natural gas production has decreased in the last 15 yearsnatural gas production has decreased in the last 15 years..

The NG volume delivered by distributors, accumulated during 2005, The NG volume delivered by distributors, accumulated during 2005, increased by 3.5% with respect to the same period in the previous year. increased by 3.5% with respect to the same period in the previous year. Since there has been no production growth in 2005, the rise in the demand Since there has been no production growth in 2005, the rise in the demand was satisfied by a greater gas import from Bolivia as compared to 2004 and a was satisfied by a greater gas import from Bolivia as compared to 2004 and a reduction in the exported volumes (mainly to Chile) as compared to the reduction in the exported volumes (mainly to Chile) as compared to the previous year. previous year.

During 2005 the Residential Sector demand rose by almost 8% with respect During 2005 the Residential Sector demand rose by almost 8% with respect to the previous year. Over the last 4 years, the consumption in Electric Plants to the previous year. Over the last 4 years, the consumption in Electric Plants has triggered the growth in natural gas demand, followed by GNC demand. has triggered the growth in natural gas demand, followed by GNC demand.

The total exported gas volume in 2005 diminished by 11.1% with respect to The total exported gas volume in 2005 diminished by 11.1% with respect to the total exported volume in 2004. The gas volume imported from Bolivia the total exported volume in 2004. The gas volume imported from Bolivia during 2005 reached 1,720.8 million m3, 116.6% above the imported volume during 2005 reached 1,720.8 million m3, 116.6% above the imported volume during 2004. The import volume in the last year represented 3.3% of the during 2004. The import volume in the last year represented 3.3% of the country production. Exports to Chile fell by 12.8% in 2005, mainly affecting country production. Exports to Chile fell by 12.8% in 2005, mainly affecting gas pipeline Gas Andes which supplies gas to the city of Santiago. Natural gas pipeline Gas Andes which supplies gas to the city of Santiago. Natural gas exports to Brazil fell by almost 24% as well, which have also decreased gas exports to Brazil fell by almost 24% as well, which have also decreased as compared to 2002.as compared to 2002.

The accumulated production of crude oil amounted to 38.54 The accumulated production of crude oil amounted to 38.54 million m3 in 2005 (4.7% less than the accumulated million m3 in 2005 (4.7% less than the accumulated production in 2004). production in 2004).

The accumulated export volume in 2005 was 17.0% less than The accumulated export volume in 2005 was 17.0% less than the accumulated volume in 2004. the accumulated volume in 2004.

The processed oil volume in 2003 reached 31.0 million m3, The processed oil volume in 2003 reached 31.0 million m3, showing a slight decrease with respect to the processed oil in showing a slight decrease with respect to the processed oil in the same period in 2004 (-0,6%). the same period in 2004 (-0,6%).

Oil industry activity, measured in terms of the quantity of Oil industry activity, measured in terms of the quantity of finished wells, keeps the level of 1200 wells a day, out of finished wells, keeps the level of 1200 wells a day, out of which less than 10% correspond to productive gas wells and which less than 10% correspond to productive gas wells and less than 5% to non-productive wells. Exploratory activity is less than 5% to non-productive wells. Exploratory activity is still very limited (between 60,000 and 90,000 meters of still very limited (between 60,000 and 90,000 meters of exploratory wells were drilled per year between 2002 and exploratory wells were drilled per year between 2002 and 2006, which represents less than 5% of the total drilled 2006, which represents less than 5% of the total drilled quantity.)quantity.)

Crude OilCrude Oil

Oil ReservesOil Reserves

Total País

0

5

10

15

20

25

30

35

1989 1991 1993 1995 1997 1999 2001 2003

Años

Petróleo Gas Natural

…are more scarce every day

Liquid FuelsLiquid Fuels

In 2005, the volume of fuel sales to the domestic market of In 2005, the volume of fuel sales to the domestic market of gasoil, gasoline and GNC increased by 6.9% as compared to gasoil, gasoline and GNC increased by 6.9% as compared to the volume of sales registered in 2004, thus keeping the the volume of sales registered in 2004, thus keeping the upward trend. In 2005, the sale of gasoil to the domestic upward trend. In 2005, the sale of gasoil to the domestic market was of 12.0 million m3, 7.7% more than the same market was of 12.0 million m3, 7.7% more than the same period in 2004.period in 2004.

The volume of Super Gasoline sold in the domestic market The volume of Super Gasoline sold in the domestic market during 2005 was 13.1% higher than the volume sold in 2004 during 2005 was 13.1% higher than the volume sold in 2004 (3.2 million m3). (3.2 million m3).

The GNC sale accumulated up to December 2005 amounted The GNC sale accumulated up to December 2005 amounted to 3,167.8 million m3, exceeding by 3.4% the sale registered to 3,167.8 million m3, exceeding by 3.4% the sale registered in 2004.in 2004.

The volume of liquid fuels exports: gasoil and gasoline The volume of liquid fuels exports: gasoil and gasoline accumulated up to December 2005 was 14.8% lower than the accumulated up to December 2005 was 14.8% lower than the volume accumulated in 2004, thus continuing the downward volume accumulated in 2004, thus continuing the downward trend.trend.

2* 2* GHGGHG EMISSIONSEMISSIONS2* 2* GHGGHG EMISSIONSEMISSIONS

GHG Emissions in ArgentinaGHG Emissions in Argentina

Thousands of tons of CO2 eq

1990 1994 1997 2000Total 238553 267737 280415 290843Growth 12.23% 4.74% 3.72%

CompositionComposition by Sectorby Sector

Energy 44 46 46 45Industrial Processes 3 3 3 3Agriculture and Livestock 49 47 46 47Waste 4 4 5 5

• The Transport sector represents 14 % of the Total Emissions

• Enteric Fermentation represents 20 % of the Total Emission

• The production of cement and metals represents 80% of the industrial processes emissions

CO2 Emissions - Energy SectorCO2 Emissions - Energy Sector Year 2000 in Miles of Ton of COYear 2000 in Miles of Ton of CO22

Sectoral Consumption and ApparentSectoral Consumption and Apparent ConsumptionConsumption

GHG Inventory – Argentina – year 2000GHG Inventory – Argentina – year 2000

COCO22 Emissions - Transport Sector Emissions - Transport Sector Argentina – Year 2000Argentina – Year 2000

Total: 41,9 Millions of CO2e Total: 41,9 Millions of CO2e

GHG Emissions -Transport SectorGHG Emissions -Transport Sector Argentina – year 2000 –Miles of TonsArgentina – year 2000 –Miles of Tons

CHCH44 Emissions - Sub-sector Air Traffic Emissions - Sub-sector Air Traffic Argentina – year 2000Argentina – year 2000

33**CLIMATE CHANGECLIMATE CHANGE 33**CLIMATE CHANGECLIMATE CHANGE

Impacts and Problems Caused By Impacts and Problems Caused By Fossil Fuels:Fossil Fuels:

HUMAN HEALTH IMPACTS:HUMAN HEALTH IMPACTS: Respiratory problems, Heat- Respiratory problems, Heat-related deaths and illness, Spread of disease (insect-borne related deaths and illness, Spread of disease (insect-borne diseases), drought (devastating effect on food resources, diseases), drought (devastating effect on food resources, drinking water supplies),drinking water supplies),

ECONOMIC IMPACTS:ECONOMIC IMPACTS: National Security, the end of cheap National Security, the end of cheap oil and gas, economic whiplash, Property loss & skyrocketing oil and gas, economic whiplash, Property loss & skyrocketing insurance claims,insurance claims,

ENVIRONMENTAL IMPACTS:ENVIRONMENTAL IMPACTS: Air pollution, water pollution, Air pollution, water pollution, loss of biodiversity.loss of biodiversity.

CLIMATE CHANGECLIMATE CHANGECLIMATE CHANGECLIMATE CHANGE

Climate Change:Impacts and Major Concerns in

Argentina

Water Shortage Due To Increasing Temperatures – Energy Problems

Sea Level Rise Impact In Buenos Aires (17 Cm In The Port of Bs As)

Increasing Frecuency of Extreme Weather Events & Storms

Glacier Receding

Climate Change:Impacts and Major Concerns in

ArgentinaLA PLATA RIVER BASIN (Shared With 4 Other Countries):

75 % of the Precipitation Evaporates. Only about 25 % runoff to the RiversA 4 C Warming would increase Evaporation By 30 %A 4 C Warming would increase Evaporation By 30 %

Agriculture Transportation Hydropower Navigation Water Supply

Are Highly Vulnerable Are Highly Vulnerable

To Climate Change To Climate Change !!

Upsala GlaciarUpsala Glaciar

Aerial PhotographyAerial Photography, November 1968, November 1968Satellite Image from the Satellite Image from the

Landsat Satellite , May 2004Landsat Satellite , May 2004

GLACIER’S RECEDINGGLACIER’S RECEDING (48 out of 50)(48 out of 50)

Buenos Aires - Precipitación Anual

mm

400

600

800

1000

1200

1400

1600

1800

2000

1900 1920 1940 1960 1980 2000

INCREASING FREQUENCY AND INTENSITY IN ANNUAL PRECIPITATIONS

CLIMATE CHANGECLIMATE CHANGE

FOR ARGENTINA IS VITAL TO ADDRESS FOR ARGENTINA IS VITAL TO ADDRESS CLIMATE CHANGE BECAUSECLIMATE CHANGE BECAUSE::

It is a new and additional barrier to Sustainable It is a new and additional barrier to Sustainable DevelopmentDevelopment

Its adverse effects divert resources essential to Its adverse effects divert resources essential to social policies (housing, health, education and social policies (housing, health, education and environment)environment)

Thus, it is of the country's interest to contribute Thus, it is of the country's interest to contribute to the international climate policy regime after to the international climate policy regime after 20122012

55**ACTIONSACTIONS 55**ACTIONSACTIONS

MITIGATIONMITIGATION- Policies & Programs - Policies & Programs - Regulations- Regulations- UNFCCC - Kyoto Protocol – CDM- UNFCCC - Kyoto Protocol – CDM

ADAPTATIONADAPTATION - Development of the National Adaptation Plan

ACTIONSACTIONS

Mitigation Mitigation

NATIONAL PROGRAMSNATIONAL PROGRAMS- National Program of Biofuels (Resolution SADS 1076/01) - National Program of Alternative Energies and Fuels (Disposition

SADS166/01) - - National Program of rational Use of Electric Energy (National Program of rational Use of Electric Energy (Resolution SE Resolution SE

415/04)- Goal415/04)- Goal: To give an incentive to save electric energy to : To give an incentive to save electric energy to generate a surplus for industrial uses. generate a surplus for industrial uses.

- - National Program for the Rational Use of Energy – SE - Natural GasNational Program for the Rational Use of Energy – SE - Natural Gas- The approach of price and rational energy use policy, PURE The approach of price and rational energy use policy, PURE

((Programa de Uso Racional de la EnergíaPrograma de Uso Racional de la Energía).).

LOCAL PROGRAMSLOCAL PROGRAMS- Province of Chubut - Law 4389/98 and Decree 235/99 – The

Province gives a bonus of $ 0,5 for every Kw/h generated with wind energy. It demands an increasing percentage of local manufacture.

0

10

20

30

40

50

60

70

80

%

HidraulicEnergy

Nuclear NaturalGas

Oil MineralCoal

Wood Bagasse Others

1970 2003

RESULTS: ENERGY MIX COMPARISON

MitigationMitigation

In the last three decades:

• Hydroelectric power (50% of electricity generation)

• Substitution of fuel oil for natural gas in combined cycles

• Subsidies to Wind Energy

• National Biofuels Law (5%)

• The largest automotive fleet run with natural gas (1,100,000 vehicles)

MitigationMitigation

Automotive Fleet: GNC in ArgentinaAutomotive Fleet: GNC in Argentina

The convertion of vehicles into GNC The convertion of vehicles into GNC startedstarted in 1984 with the 10 in 1984 with the 10 years Program years Program

The program was successful because of the differences in prices The program was successful because of the differences in prices between between fuelsfuels, particularly between GNC and gasoline., particularly between GNC and gasoline.

Argentina RMBA Convertion into NCG (bi-fuel)Argentina RMBA Convertion into NCG (bi-fuel)

1984................. 100 1984................. 100 converted vehicles converted vehicles 1991 ................ 100.000 “1991 ................ 100.000 “ 2000 ................ 450.000 (6,8%) 300.000 (7,6%) “ 2000 ................ 450.000 (6,8%) 300.000 (7,6%) “ 2003 ................ 950.000 (13,1%) 570.000 (13,3%) “2003 ................ 950.000 (13,1%) 570.000 (13,3%) “

19

92

19

93

19

94

19

95

19

96

19

97

19

98

19

99

0

500000

1000000

1500000

2000000

AUTOMOVILES (Vehículos Livianos)

GAS

GNC

DIESEL

1.663.115 (1993-2000)

6.193437 (1959-2000)

538.728 (1959-2000)

446.497 (1984-2000)

Light Vehicles (Cars):Light Vehicles (Cars): For the year 2000, and as a result of the For the year 2000, and as a result of the convertion of 6,8 % of the automotive fleet into NCG the CO2 convertion of 6,8 % of the automotive fleet into NCG the CO2 emission reductions were between emission reductions were between 0,5 – 0,9 0,5 – 0,9 %. %.

Heavy Vehicles (Buses and Trucks):Heavy Vehicles (Buses and Trucks): NCG in Argentina: Parliament is NCG in Argentina: Parliament is considering national billsconsidering national bills to renew urban transportation and to convert to renew urban transportation and to convert heavy fleet into NCG. (heavy fleet into NCG. (“Plan Estratégico Productivo Nacional De “Plan Estratégico Productivo Nacional De Desarrollo De La Cadena De La Industria De Artefactos Móviles Desarrollo De La Cadena De La Industria De Artefactos Móviles Propulsados A Gas”) 15 year Program.It will include NLG as an Propulsados A Gas”) 15 year Program.It will include NLG as an alternative for long distance transportationalternative for long distance transportation

CO2 Emission Reductions with NCG in CO2 Emission Reductions with NCG in ArgentinaArgentina

- Ratified UNFCCC - 1994- Ratified UNFCCC - 1994- Ratified the Kyoto Protocol - 2001- Ratified the Kyoto Protocol - 2001- Established Clean Development - Established Clean Development Mechanism (CDM) Argentina Office-1998Mechanism (CDM) Argentina Office-1998- Established the DNA – SADS- 2002- Established the DNA – SADS- 2002- Established Climate Change Office (UCC) - Established Climate Change Office (UCC) 20032003- National Decree – Development of - National Decree – Development of Argentine Carbon Fund - 2005Argentine Carbon Fund - 2005

MitigationMitigation

SECTORS FOR CDM PROJECTSSECTORS FOR CDM PROJECTS

Energy (Oil and gas, electricity)Energy (Oil and gas, electricity) Energy (Transport)Energy (Transport) IndustryIndustry Agriculture and LivestockAgriculture and Livestock WasteWaste ForestryForestry

GHG EMISSION REDUCTIONS GHG EMISSION REDUCTIONS OPPORTUNITIESOPPORTUNITIES

Electric Energy Generation: Hydraulic, Wind Power, Electric Energy Generation: Hydraulic, Wind Power, Geothermic and Biomass / Transport /CogenerationGeothermic and Biomass / Transport /Cogeneration

Transport: Biodiesel, Railways and UndergroundTransport: Biodiesel, Railways and Underground Energy Efficiency: Annual demand of electric energy Energy Efficiency: Annual demand of electric energy

91,000 MWh/year / 10 - 20 % possible reduction91,000 MWh/year / 10 - 20 % possible reduction Distribution and Transport of Natural GasDistribution and Transport of Natural Gas Municipal Solid Wastes: 15 LandfillsMunicipal Solid Wastes: 15 Landfills Forestation: 20 million hectaresForestation: 20 million hectares Waste Water Treatment PlantsWaste Water Treatment Plants Cement, Steel, Aluminum, Chemistry and Agro industryCement, Steel, Aluminum, Chemistry and Agro industry Oil & Gas (CO2 sequestration and storage / Distribution Oil & Gas (CO2 sequestration and storage / Distribution

and Transport of Natural Gas/Efficiency in Refineries)and Transport of Natural Gas/Efficiency in Refineries) Agriculture and LivestockAgriculture and Livestock

BY SECTORBY SECTOR

BY REGIONBY REGION

ConclusionsConclusions Policy priorities in Argentina: securing energy supply for its economic growth Policy priorities in Argentina: securing energy supply for its economic growth

and curbing environmental pollution, CDM offers a good instrument for and curbing environmental pollution, CDM offers a good instrument for realizing the ambitious domestic energy and environment goals;realizing the ambitious domestic energy and environment goals;

Transfer of Technology:Transfer of Technology: Argentina embraces technology cooperation with Argentina embraces technology cooperation with different parties in the field of climate change and clean energy.different parties in the field of climate change and clean energy.

Climate change is a top policy priority in Argentina. Its synergies with Climate change is a top policy priority in Argentina. Its synergies with environmental protection and energy security improvement enables it to be environmental protection and energy security improvement enables it to be integrated into Argentina’s overall development policy.integrated into Argentina’s overall development policy.

Renewable Energies are a way to promote the sustainable development of Renewable Energies are a way to promote the sustainable development of the Nation by reducing the associated growth in GHG emissions through the Nation by reducing the associated growth in GHG emissions through conservation, adoption of cleaner, more efficient, and emission-reducing conservation, adoption of cleaner, more efficient, and emission-reducing technologies, and sequestration.technologies, and sequestration.

It is important to develop wind resource and biomass (biodiesel, ethanol), to It is important to develop wind resource and biomass (biodiesel, ethanol), to keep pace with the growth.keep pace with the growth.

Argentina is now recovering from an economic and social crisis, and these Argentina is now recovering from an economic and social crisis, and these systems are gradually getting reactivated, generating new investment and systems are gradually getting reactivated, generating new investment and possibilities of development of RE. It is a favorable moment for the possibilities of development of RE. It is a favorable moment for the renewable energies to take position as the driving force of a firm and renewable energies to take position as the driving force of a firm and sustainable development. sustainable development.

MUCHAS GRACIAS!MUCHAS GRACIAS!

Lucila SerraLucila Serra Torcuato Torcuato

Di Tella Di Tella FoundationFoundation

lserra@itdt.edulserra@itdt.eduwww.itdt.eduwww.itdt.edu

ArgentinaArgentinaPerito Moreno Glaciar Perito Moreno Glaciar

ArgentinaArgentina