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Ecuador’s oil nationalization may hurt environment

Ecuador’s oil nationalization may further hurt environment

Ecuador’s oil nationalization may hurt environment
May 23, 2006

Oil nationalization in Ecuador may be bad for the environment

Last week Ecuador seized Amazon oilfields controlled by Occidental, an American oil firm which produces about 20 percent of the country’s oil output and has invested about $1 billion since 1999. The decision will bring a short-term boost in government revenue while appealing to street protestors who have caused havoc for the country’s politicians over the past few years. However, looking the beyond the politics, the seizure could have implications for the environment of the country which is home to some of the world’s most biodiverse ecosystems.

While Occidental’s environmental record was by no means exemplary — critics blame the firm for polluting local waterways and rainforest clearing — a recent study suggests the alternative option — a state-run operation — may be even worse.

Research in Gabon led by William F. Laurance of the Smithsonian Tropical Research Institute found that Shell-Gabon was actually a better steward of the environment than the local government, perhaps due to concern over its corporate image.

Laurance and his team argue that “as a multinational conglomerate, Shell-Gabon’s interests in environmental management at Rabi [an oil concession in Gabon, a country in West-Central Africa]… largely reflect their sensitivity to international opinion and pressures from consumers.”

Pipeline in Ecuador

Earlier this year, pressure from international environmental groups forced Petrobras, the Brazilian state oil company, to abandon plans to build an access road into Yasuni National Park, in the Ecuadorian Amazon.

Drawing on their personal experiences in Africa and Latin America, the researchers write that “smaller corporations based in developing nations are sometimes less interested and often less capable of financially investing in environmental protection.” This observation leads the researchers to ask, “As conservationists, do we pressure large, multinational corporations based in industrial nations to forgo major projects in developing countries in an effort to limit environmental degradation, or do we favor such firms over smaller, national companies in the hope that they will be more sensitive to international pressures?”

In Ecuador, it is conceivable that Petroecuador, a national oil company directly accountable to no one except the government, would be even less responsive to environmental concerns, especially in a post-Texaco climate where there is intense pressure on multinationals operating in ecologically sensitive areas.

Texaco, a large American oil company that operated in Ecuador’s biologically rich Amazon rainforest from 1967 through 1992, was notorious for its poor environmental record. In a pending multi-billion dollar lawsuit, the firm — now owned by Chevron — stands accused of dumping more than 18 billion gallons of toxic waste into rainforest waterways over a 26-year period. More than 30,000 local people were affected.

Despite its small area, Ecuador is the eighth most biodiverse country on Earth. It has almost 20,000 species of plants, over 1,500 species of birds, more than 840 species of reptiles and amphibians, and 341 species of mammals.

Ecuador also has the distinction of having the highest deforestation rate and worst environmental record in South America. Oil exploration, logging, and road building have had a disastrous impact on Ecuador’s primary rainforests, which now cover less than 15 percent of the country’s land mass.

“Impacts of Roads and Hunting on Central African Rainforest Mammals” William F. Laurance, et al. Conservation Biology Vol 19, Issue 1, pp. 268.


Roads tied to bushmeat hunting in Africa May 9, 2006
A new study ties the presence of roads to bushmeat hunting in the Congo rainforest and also raises important questions for global conservation. The study, published in the current edition of Conservation Biology, found that roads and associated hunting pressure reduced the abundance of a number of mammal species including duikers, forest elephants, buffalo, red river hogs, lowland gorillas, and carnivores. The research suggests that even moderate hunting pressure can significantly affect the structure of mammal communities in central Africa.

Oil firm abandons road project for Amazon rainforest park in Ecuador April 26, 2006
The Brazilian national oil company Petrobras abandoned plans to build an access road into Yasuni National Park, in the Ecuadorian Amazon. The decision follows years of intense pressure from environmental groups and recent criticism by the Ecuadorian government. Instead the company will use helicopter transportation inside the park, according to a statement from Petrobras. Last summer Petrobras filed a lawsuit against the Ecuadorian government for blocking the road’s construction into the National Park, but the suit was rejected in court, paving way for the firm’s decision to shelve the project.

Venezuela plans 5000-mile pipeline across Amazon rain forest January 25, 2006
Hugo Chavez, Venezuela’s president, announced a plan to build a massive gas pipeline that would carry natural gas from the oil rich state 5,000 miles south. Environmentalists fear that the project could damage the Amazon rain forest by polluting waterways and creating roads that would attract developers and poor farmers, while analysts question the wisdom and viability of the plan which may cost $20-50 billion depending on who makes the estimate.

Chevron faces Billion-Dollar Liability for damage in Ecuador August 24, 2005
ChevronTexaco, now Chevron Corp (CVX), appears to be losing ground in the environmental “Trial of the Century” in Ecuador’s rainforest over Texaco’s operation of a former concession, according to the environmental group Amazon Watch.

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