New Internationalist

Toxic blocks

Issue 413

Following the trail of a little known environmental wipeout, David Ransom explores the terrible record and destructive potential of the oil business in Ecuador.

Photo: http://yasunigreengold.org / OSCAR FRANCINO / ALI SUPAY
Dirty and dangerous – workers who clean up oil spills often suffer neurological and digestive problems. Cancer rates are higher in areas close to oil activity than in the rest of Ecuador. Photo: http://yasunigreengold.org / OSCAR FRANCINO / ALI SUPAY

Trash Yosemite! Contaminate the Lake District! Crush Uluru! Kill the Tiger! You don’t hear this kind of thing every day of the week, but it’s just what’s being proposed (only worse) for the people and bio-reserve of the Yasuní National Park in Ecuador, at the headwaters of what remains of the world’s greatest rainforest. It is hard to think of anywhere on earth where the environmental catastrophe that accompanies the production of oil would be more complete.

In 1967 Texaco discovered large reserves of oil some distance north and west of the Yasuní National Park, on the border with Colombia. With the completion of a pipeline to the coast in 1972, the large-scale export of crude oil from Ecuador – mostly to the US – began.

By the time Texaco left the country, almost exactly 20 years later, more than 19 billion gallons of toxic wastewaters had been dumped and 16.8 million gallons of crude oil had spilled from the main pipeline through the forest. At least two groups of indigenous peoples, the Tetetes and the Sansahuari, had been wiped out by the destruction and pollution caused by the production process.

Litigation against Chevron – which merged with Texaco in 2001 – continues in the courts of Ecuador, 15 years after one of the worst environmental human-made disasters in history. Yet, hidden away in the Amazon as it was, it remains one of the least known – and the devastation keeps following the industry as it creeps south and east, into the Yasuní National Park itself.

*Heavy crude*

All oil companies work in much the same way. Seismic (explosive) prospecting begins a process of violent disturbance. Access roads are cut to test wells. Toxic lubricants are required for rigs, which produce contaminated solid waste. The sulphurous, viscous ‘heavy’ crude oil in Ecuador corrodes equipment and the wells themselves, which regularly collapse and have to be bored again. Flaring waste gases pours acid rain over forest, rivers and people alike.

The deposits in Ecuador are suspended in hot, toxic water, which comes to the surface with the oil, sometimes in as much as 10 times the volume. Among many other things, high levels of salt in this water dissolve radioactive substances and attract wildlife – salt is scarce in rainforests – which is then poisoned and dies. To drill, say, 130 new wells produces the rough equivalent of 13,000 dump-truck loads of solid waste and 65,000 dump-truck loads of liquid waste – in the middle of primary rainforest where dump trucks are not as yet a native species.

No completely safe way of disposing of this waste water exists. The best available (and most expensive) option is to ‘reinject’ it into the subsoil, which by no means guarantees that it will not seep out again. The easiest (and cheapest) option is to discharge it directly into the rivers. This may be prohibited, but ‘accidents’ can happen – and invariably do. Because the oil fields in Ecuador are in the headwaters of the Amazon, pollution is carried downstream into the ecosystems beyond.

An entire ‘zone’ has to be constructed so that the oil can be processed and delivered to world markets. Around places like Sushufindi, some distance to the north of Yasuní, 30,000 people have converged and are surrounded by five storage stations, a refinery, a processing plant, a pipeline, over 100 waste pits – some covered, others not – and deforested wasteland saturated with toxic wastewater. The place has the highest rate of tuberculosis in the country and alarming levels of violence, primarily due to the trafficking of chemicals and white gasoline from the oil industry, which are used for illicit drug production.

*Transnational giants*

There are two sorts of companies that do this work, and the difference between them is subtle but significant.

To the first group belong the familiar ‘majors’: giant transnational oil corporations, almost all of them based in North America or Europe. In Ecuador they have been represented at one time or another by Texaco/Chevron, Shell, Conoco, Occidental, Repsol-YPF, ELF, EnCana and a few others, and they have been responsible for a good deal of the havoc to date. They make their money not just from producing oil but from trading concessions, particularly when exploration produces the bonanza of proven reserves. At regular intervals they engage in lucrative raids on each other. The countries and cultures in which they operate are alien to them and, as a result, they have over the years provoked deep and lasting hatred.

The history of Block 16 which encroaches into Yasuní (see box on page 16) provides just one example. Its original acquisition by Conoco in 1986 was quickly followed by conflict with the indigenous peoples that has continued ever since. The block was taken over in 1995 by the Argentinean state oil business YPF. In 1999 YPF was part of a privatization scam devised by President Menem of Argentina – and was bought by Repsol, the privatized state oil company of Spain. Repsol-YPF, as it then became, has a bad reputation throughout Latin America, particularly in Bolivia and Peru. In 2003 a leaked secret contract revealed that the Ecuadorian military was acting as a private security contractor to Repsol-YPF. The contract stated that ‘the Company will be responsible for the relationship with the indigenous peoples and the Contractor [the military] will comply with the policies and directives dictated by the Company’.

Ingrained contempt for indigenous peoples is a recurrent theme, but it has not been confined to gringos and the oil companies alone. There is, in addition, a network of contractors and subcontractors, providing everything from major construction projects to domestic waste disposal (a polite term for dumping). A reporter at one recent poolside party for the local – largely Latin American – management of Skanska (a Swedish construction company, one of the world’s biggest), found the people who lived there routinely described as ‘developmentally disabled’ and ‘apes’.

Photo: http://yasunigreengold.org / OSCAR FRANCINO / ALI SUPAY
Photo: http://yasunigreengold.org / OSCAR FRANCINO / ALI SUPAY

*National companies*

The majors are, however, no longer very active in Ecuador. National or state oil companies have taken over, particularly in and around the Yasuní National Park (see map, over) – part of a worldwide trend that is easing the majors out.

Prominent in Ecuador is the national oil company Petroecuador. It produces anywhere between a third and a half of the country’s oil, and in 2006 took over the Block 15 concession (the most productive in the country) from California-based Occidental, which is suing the Government of Ecuador for $1 billion as a result. Petroecuador is also proposing the ITT Project, a concession block named from the initials of the three test wells already drilled. This is a key block, located entirely within the Yasuní National Park, which is said to contain upwards of a quarter of the country’s remaining oil reserves. To raise the $3-5 billion investment required to begin production, Petroecuador is seeking partnerships with national companies in Latin America and China.

In the past Petroecuador has had other partners. It was in there with Texaco throughout its operations in the country – a fact that is central to Chevron’s legal defence. When Petroecuador operates on its own account, its record is equally bad. In 2001 the company was responsible for 75 oil spills – its average of spills is said to be equivalent to another Exxon Valdez every year. A survey in 2003 found that everyone living near Petroecuador installations suffered from some form of poisoning. For its workers and the communities where it works, it shows no special concern. In 2003 it was directly implicated in the assassination of the environmental activist Angel Shingre.

Given the thirst for energy in China, its national companies are likely to become much more active in Ecuador. But they are by reputation the dirtiest oil companies of all. Sinopec (one of the largest companies in China) is being touted as a potential partner in the ITT Project. Yet its operations in the rainforests of Gabon were suspended in 2006 when it was accused by the National Parks Council – even in that utterly corrupt country – of violating environmental regulations. After it began producing oil from Sudan in January 2006, Harvard University in the US withdrew its investments in the company because of Chinese complicity in the conflict in Darfur.

*The price*

Petroecuador is now in the vanguard of attempts to wreck any alternatives for the National Park, purportedly in the economic interests of the country. But the oil industry has brought no particular benefits to the poor majority of Ecuador in the 35 years of its existence so far. No convincing evidence suggests that it will do so in the 35 years of life that remain to it now. There is, finally, no economic justification whatever for the destruction of Yasuní.

Meanwhile, the full environmental price of oil is paid not just in carbon emissions but in the process of producing it. A halt will have to be called sometime, somewhere, and the Yasuní National Park offers a better place than most to begin. Those who are making that call in Ecuador are acting not just on their own behalf, but for the rest of us who, one way or another, share their fate. By comparison, the price of keeping the poison underground is a mere trifle that should properly be paid by us all.

David Ransom is a Co-Editor of New Internationalist magazine.

Sources: Much of this feature, up to the year 2005, is based on the invaluable Atlas Amazónico produced by Acción Ecológica in Ecuador and available online (in Spanish) at accionecologica.org Other sources (in English) include: www.amazonwatch.org, www.chevrontoxico.com, www.saveamericasforests.org, www.upsidedownworld.org, www.latinpetroleum.com, Multinational Monitor September/October 2007 and the websites of the oil companies involved.

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