Tag Archives: Ecuadorean Amazon

The New Lepers: Oil in Ecuador and Arctic Drilling

Some of Europe’s largest banks are phasing out trading services for the export of oil from the Ecuadorean Amazon, a move that reflects the growing focus of global banks on climate change and their shift away from increasingly risky fossil fuels.

On January 25, 2021, Switzerland’s Credit Suisse Group AG and Holland’s ING said that they were excluding new transactions related to exports of Ecuador’s Amazonian oil from their trading activities, citing climate change and concerns for the Amazon rainforest and its Indigenous people. France’s BNP Paribas SA, the largest bank in the eurozone and one of the region’s trading powerhouses, said in December 2020 that it would immediately exclude from its trading activities the seaborne exports of oil from the Esmeraldas region in Ecuador under its latest environmental finance policies.

Ecuador isn’t one of the world’s top oil producers, but petroleum exports are a key contributor to the country’s economy. Petroecuador, the nation’s state-owned oil company, didn’t respond to requests for comment.  The banks’ flight from Amazonian crude follows last year’s crash in oil prices and growing fears of so-called stranded assets, which are fossil fuels that lose value due to the world’s transition to cleaner forms of energy…

Banks are also facing calls from environmentalists and Indigenous peoples to limit their involvement in fossil fuels. In Ecuador, a campaign by activists and Indigenous people spurred ING and Credit Suisse to reduce their exposure to the Amazonian oil trade. The nonprofits Stand.earth and Amazon Watch published a report in 2020 that called out banks—including ING, Credit Suisse and BNP Paribas—for their financing of Amazonian crude…

Banks and insurers are also cutting ties with Arctic oil drilling. This month, Axis Capital Holdings joined fellow insurers AXA and Swiss Re in pledging not to underwrite any new oil-and-gas drilling in the Arctic Wildlife Refuge in Alaska.  The six biggest U.S. banks— Citigroup Inc., Bank of America Corp. , Goldman Sachs Group Inc., JPMorgan Chase & Co., Morgan Stanley and Wells Fargo & Co.—have also said they would end funding for new drilling and exploration projects in the Arctic.

Excerpts from Dieter Holger & Pietro Lombardi, European Banks Quit Ecuador’s Amazonian Oil Trade, WSJ, Jan. 25, 2021

Suing and Wining: Indigenous People, Ecuador

Hunter-gatherers in the Amazon sought in court on in April 2019 to stop Ecuador’s government auctioning their land to oil companies, as tension mounts over the future of the rainforest…The Waorani said the government did not properly consult them in 2012 over plans to auction their land to oil companies.

“We live on these lands and we want to continue to live there in harmony. We will defend them. Our fight is that our rights are respected,” said Nemonte Nenquimo, a leader of the 2,000-strong Waorani….Ecuador is pushing to open up more rainforest and develop its oil and gas reserves in the hope of improving its sluggish economy and cutting its high fiscal deficit and foreign debt…

The constitution gives the government the right to develop energy projects and extract minerals on any land, regardless of who owns it, but requires that communities are consulted first and are properly informed about any projects and their impact. Laws to regulate the consultation process have yet to be introduced – although the court case could push the government to do this, said Brian Parker, a lawyer with campaign group Amazon Frontlines, which is supporting the Waorani…

The government announced last year that it had divided swathes of forest up into blocs for auction, one of which – bloc 22 – covers the Waorani’s ancestral lands, raising the specter of pollution and an end to their way of life.  In two landmark cases in 2018, local courts sided with indigenous communities who said the government had failed to inform them before designating their land for mineral exploitation….The Inter-American Court of Human Rights also ruled in 2012 that Ecuador had violated its Sarayaku Amazonian community’s right to prior consultation before drillers started exploration on their lands in the late 1990s.

Excerpts Ecuador’s hunter-gatherers in court over oil drilling in Amazon, Reuters, Apr. 11, 2019

Oil Barrels Spilled in Amazon: Peru

It’s been a bad year for Peru’s Amazon – 2016 has seen seven oil spills there so far. And it’s only September. Most of these occurred across the Northern Peruvian Pipeline, in operation since 1977, which transports crude from the Peruvian Amazon to the Pacific Coast along 854 kilometers (530 miles) and is under the control of state-owned Petroperu. After the first two spills leaked around 3,000 barrels, in January and February 2016, the pipeline was shuttered for repairs. However, five additional oil spills have happened since then.According to Peru’s environment regulator OEFA, at least five oil spills were due to poor pipeline conditions, and illegal use of it after the closure. However, the oil company is blaming the latest two spills on vandalism by locals.,,

[M]ore than 190 oil spills have been recorded in Peru since 1997, according to Peru’s energy and mining agency. But the situation appears to have worsened since the beginning of 2016. After the two oil spills leaked 3,000 barrels – polluting nearby rivers and destroying the livelihood of locals – protests against pipeline’s poor conditions in February 2016 forced its shutdown.

When a third oil spill occurred in June 2016 – of 600 barrels – then-Minister of Environment, Manuel Pulgar Vidal, accused Petroperu of pumping crude illegally through the pipeline. The president of Petroperu was ousted, and a $3.5-million (around 3-million-euro) fine was levied.

But the disaster continued: During August and September 2016, four additional oil spills were recorded in the area. The last two occurred while thousands of indigenous people were demonstrating for withdrawal of the oil companies. According to the Peruvian government, Petroperu is responsible for at least five of the seven oil spills – the company has already been penalized more than $7 million. Petroperu continues to insist, however, that the oil spills were a result of extreme weather or vandalism by the locals.

The amount of oil spilled 2016 in the Peruvian Amazon – less than 10,000 barrels in seven spills – is a relatively small amount, compared for instance to the 650,000 barrels of oil that have fouls parts of the Amazon of Ecuador since the 1960s.

Repeated oil spills threaten Peru’s Amazon, DW.com, Oct. 2, 2016

Yasuni National Park Oil Drilling: Ecuador, Amazon

Ecuador’s parliament on Thursday (Oct. 3, 2012) authorized drilling of the nation’s largest oil fields in part of the Amazon rainforest after the failure of President Rafael Correa’s plan to have rich nations pay to avoid its exploitation.  The socialist leader launched the initiative in 2007 to protect the Yasuni jungle area, which boasts some of the planet’s most diverse wildlife, but scrapped it after attracting only a small fraction of the $3.6 billion sought.

The government-dominated National Assembly authorized drilling in blocks 43 and 31, but attached conditions to minimize the impact on both the environment and local tribes. Though Correa says the estimated $22 billion earnings potential will be used to combat poverty in the South American nation, there have been protests from indigenous groups and green campaigners.  About 680,000 people have signed a petition calling for a referendum.  “We want them to respect our territory,” Alicia Cauilla, a representative of the Waorani people who live around the Yasuni area, said in an appeal to the assembly. “Let us live how we want.”  Correa has played down the potential impact of oil drilling in the area, saying it would affect only 0.01 percent of the entire Yasuni basin…

Oil output in OPEC’s smallest member has stagnated since 2010 when the government asked oil investors to sign less-profitable service contracts or leave the country. Since then, oil companies have not invested in exploration.  State oil company Petroamazonas will be in charge of extraction in blocks 43 and 31, which are estimated to hold 800 million barrels of crude and projected to yield 225,000 barrels per day eventually. Ecuador currently produces 540,000 bpd

Excerpt, By Alexandra Valencia, Ecuador congress approves Yasuni basin oil drilling in Amazon, Reuters, Oct. 4, 2013

 

Chevron and Amazon: the $18 billion Ecuador Liability

The D.C. Circuit Court of Appeals  on June 12, 2012  (pdf) dealt another setback to Chevron over its $18 billion Ecuador liability, reversing a lower court decision that allowed the oil giant access to documents from a prominent consulting group for the Amazon rainforest communities that sued the company.