Oil Sparks in the Amazon

Local Conflicts, Indigenous Populations, and Natural Resources

Patricia Vásquez, Scott Jones, William Keller

• Editorial: University of Georgia Press
• Año: 2014
• ISBN:
  9780820346380
• Categoría: Politique et relations internationales
• Categoría: Relations internationales

For decades, studies of oil-related conflicts have focused on the effects of natural resource mismanagement, resulting in great economic booms and busts or violence as rebels fight ruling governments over their regions' hydrocarbon resources. In Oil Sparks in the Amazon, Patricia I. Vasquez writes that while oil busts and civil wars are common, the tension over oil in the Amazon has played out differently, in a way inextricable from the region itself.

Oil disputes in the Amazon primarily involve local indigenous populations. These groups' social and cultural identities differ from the rest of the population, and the diverse disputes over land, displacement, water contamination, jobs, and wealth distribution reflect those differences. Vasquez spent fifteen years traveling to the oilproducing regions of Latin America, conducting hundreds of interviews with the stakeholders in local conflicts. She analyzes fifty-five social and environmental clashes related to oil and gas extraction in the Andean countries (Peru, Ecuador, and Colombia). She also examines what triggers local hydrocarbons disputes and offers policy recommendations to resolve or prevent them.

Vasquez argues that each case should be analyzed with attention to its specific sociopolitical and economic context. She shows how the key to preventing disputes that lead to local conflicts is to address structural flaws (such as poor governance and inadequate legal systems) and nonstructural flaws (such as stakeholders' attitudes and behavior) at the outset. Doing this will require more than strong political commitments to ensure the equitable distribution of oil and gas revenues. It will require attention to the local values and culture as well.

CHAPTER 1
Tracing Oil- and Gas-Related Conflicts

CONFLICTS AROUND hydrocarbons are not new in the three countries under study, and they can be traced back to the beginning of oil operations in Colombia at the beginning of the twentieth century. But it was not until the large oil discoveries of the 1970s and 1990s that the dynamics of the oil-related conflicts as we know them today started to develop, particularly in the western Amazon region. It was then that the discovery of large oil reserves turned Ecuador, Colombia, and Peru into oil and gas producers, and the first seeds of oil-related conflicts were planted in the region.

Since then, oil investments have come and gone throughout the years, in tandem with shifts in domestic oil policies and fiscal incentives and the international price of crude. Investor interest has become particularly strong in the past decade, when conventional world oil reserves started to dwindle and high international oil prices turned previously expensive unconventional Amazon oil into a more tangible option. The western Amazon suddenly took a prominent place in the oil and gas map of Latin America, and its share of world hydrocarbons is expected to continue to grow as world demand for oil and gas increases.

This chapter traces the historical development of the oil and gas industries in the three countries and the growing importance of western Amazon in that process. It analyzes Latin America’s increasingly prominent stand in the world oil and gas scenario, evidenced by the current rapid growth of foreign direct investments in those sectors of the economy.

THE WORLD OIL AND GAS CONTEXT

The world map of oil and gas developments has changed dramatically in the past two decades. The Western Hemisphere has been taking a progressively significant role in the discovery of new reserves, and South American countries are among the leading forces behind that trend. Brazil is set to become a world oil superpower and to challenge Middle Eastern oil producers. Colombia’s oil production has grown so fast during the past decade that the country managed to reverse a long tendency of output drop that threatened to turn it into a crude importer. And Peru became South America’s first exporter of liquefied natural gas in 2010, while Argentina is third in the global ranking of countries with potentially large shale gas reserves, after China and the United States (EIA 2012b).

During the 1980s Mexico and the North Sea produced much of the world oil supplies outside the Middle East. But in the 1990s and the first decade of the twenty-first century, much of those crude supplies came instead from South America, China, and Middle Eastern countries that are not members of the Organization of Petroleum Exporting Countries (IEA 2010, 28).¹ With the end of the era of cheap and easy-to-find conventional oil and turmoil in the Middle East that threatened steady crude flows, companies started to look for new, largely unexplored areas holding nonconventional reservoirs, and South America quickly became a magnet.²

The increase in oil prices—from twenty-three U.S. dollars a barrel in 2001 to one hundred in May 2011—played a fundamental role in rapidly turning previously expensive hydrocarbons resources into more available options. Risky, unknown, and largely unexplored areas deep in the Amazon jungle became suddenly more attractive for investors. This tendency was further accelerated by China’s—and to a lesser extent India’s—growing hunger for imported fossil fuels to meet their burgeoning domestic energy demand. In terms of oil production, Latin America is expected to be the second-fastest-growing region (after North America) and will become increasingly well placed to meet the expected growing world demand of coming decades (IEA 2010, 78–93).

Worldwide demand for oil is expected to continue to grow in coming decades. China’s oil demand could almost double by 2035, to 15.3 million barrels per day, from 8.1 million in 2009 (IEA 2010, 102). In 2009 China imported a total of 5.1 million barrels per day of oil, of which 14 percent—or 360,000—came from Latin America (BP 2010, 20). The International Energy Agency (2010, 78–193) predicts that in a hypothetical, and extreme, scenario of no new government policies for meeting energy or climate targets (such as those aimed at reducing greenhouse gas emissions), world demand for oil will shoot up to around 108 million barrels per day by 2035, from 85 million in 2009. Of that projected total demand, as much as 57 percent will come from China.

World demand for natural gas has followed a similar pattern of fast growth over the past two decades, and it will continue that trend for years to come. Much as with oil, gas demand is expected to increase globally, but particularly in China, where it is projected to skyrocket from around 315 billion in 2009 to 14.1 trillion cubic feet in 2035 (IEA 2010, 180–81). Latin America is projected to provide 17 percent of that total world demand, up from 11 percent in 2008 (IEA 2010, 190–92). Gas will most likely overtake coal in the next two decades as the second fuel in the world energy mix after oil (IEA 2011, 19–22). More than half of that growth will be as liquefied natural gas, as trade in this form of gas will more than double to 17.6 trillion cubic feet by 2035 from 2008 figures. Trinidad and Tobago were the only exporters of liquefied natural gas in the region until 2010, when Peru followed suit from its giant Camisea field, located in the Amazon jungle (Petroleum Economist 2011).

OIL AWAKENING IN THE AMAZON

Outside of Venezuela, a significant part of Latin America’s still-undeveloped and partly unexplored onshore gas and oil reserves are located in hard-to-reach areas of the Amazon jungle in Peru, Ecuador, and Colombia. There are also reserves in deep-sea waters off the coast. For the past two decades governments and investors have been increasingly focusing their attention in these areas to make up for the scarcity of conventional reserves around the world. High oil prices and increasing world demand suddenly made unconventional Amazon and deep-water areas more cost effective to develop.

Nine countries share the Amazon basin: Brazil, Bolivia, Colombia, Ecuador, Guyana, French Guyana, Peru, Surinam, and Venezuela, but most of it—around 68 percent—is in Brazil. The proportion of the Amazon basin in Peru, Ecuador, and Colombia is relatively small: 13 percent in Peru, 5.5 percent in Colombia, and 1.7 percent in Ecuador. But the basin acquires immense importance in proportion to the national territory of each of the countries: it expands across 75 percent of Peru, 45 percent of Ecuador, and 36 percent of Colombia (Fontaine 2007b). The eastern portion of the Amazon basin is located entirely in Brazil, while the western area extends across Colombia, Ecuador, Peru, and Bolivia.

In general, references to Amazon environmental threats are concerned with the eastern Brazilian portion, which has been traditionally characterized by high deforestation. In 2011 the eastern Brazilian Amazon was the focus of much local opposition to plans for building two hydroelectric projects—the Belo Monte Dam and the Madeira River Complex (Salazar-Lopez 2011). But much attention has also focused on western Amazon, where there has been a considerable increase in the number of oil and gas licenses in the past decade, particularly in Peru, and to a lesser extent in Ecuador and Colombia. Peru granted eighty-six oil and gas licenses in 2010 (up from just twenty-eight in 2003), of which almost half—thirty-seven—are located in the Amazon. Scholars have documented that almost half of the Peruvian Amazon—48.6 percent—was covered with oil and gas concessions in 2007 (up from 7.1 percent in 2003), and by 2010 active and planned hydrocarbons developments expanded throughout 70 percent of the jungle in that country (Orta-Martinez and Finer 2010).

The western Amazon (Finer et al. 2008).

Initial oil exploration and production in the Amazon goes back to the 1900s and was limited to small quantities of crude produced in Peru. But the real oil boom started in the 1970s and spread throughout western Amazon. Many of the new oil exploration and development blocks there overlap with the territories of largely forgotten and marginalized Indigenous or farming populations and have caused much disruption to their lives and to the local environment. Oil projects that build new access roads also bring colonization to previously remote forest areas, which results in increased logging, hunting, and deforestation (Finer et al. 2008).

Peru, Ecuador, and Colombia are generally referred to as Andean countries, because they share the Andes mountain range and some of the cultural characteristics linked to that area. But that definition neglects the fact that these three countries also share the Amazon and all the cultural and environmental distinctiveness associated with that region. When oil operations started to expand in the Amazon, local communities with shared cultural and territorial characteristics came together in opposition to them. Later on, we will analyze in detail the nature of the conflicts that emerged from that opposition in the Peruvian and Ecuadorean Amazon. We will also point out parallels and differences with oil conflicts in the non-Amazon producing areas of Colombia, where that country’s largest crude reserves are located. In Colombia, oil operations at present occupy only 10 percent of the jungle, but they are rapidly expanding (Finer et al. 2008).

It is the Amazon that turned Ecuador and Peru into oil and gas producers in the 1970s. It is also in the Amazon that most of the social and environmental negative consequences of the expanding hydrocarbons industry are found. And it is there where the escalating number of hydrocarbons-related conflicts involving Indigenous communities occurs. This is not surprising, given Latin America’s large Indigenous population and the widespread Indigenous inhabitance in the Amazon. Peru has the largest Indigenous population overall, of around 4.4 million (in a total Peruvian population of 27.5 million) (INDEPA 2010; Office of the Ombudsman, 2006).³ The Peruvian Amazon is home to fifty-one ethnic groups (of a total of sixty around the country) that are organized in thirteen linguistic families and to fourteen or fifteen groups living in voluntary isolation (INDEPA 2010). Of Colombia’s Indigenous population of a little over 1.37 million (3.4 percent of the country’s total population), around 74 percent live in the Amazon: sixty-two Indigenous groups, of a total of eighty-three around the country (RAISG 2009; IWGIA 2010, 136; DANE 2005). In Ecuador almost 7 percent of the total population of some 14 million inhabitants are Indigenous and belong to twenty-nine different nationalities and pueblos (INEC 2001). Most of Ecuador’s Indigenous population lives in the Amazon, including two groups living in voluntary isolation—Tagaeri and Taromenane—within the boundaries of Yasuni National Park, which is also home to the country’s largest still-untapped hydrocarbons reserves. The broad intersection between Indigenous populations and hydrocarbons reserves at a time of high interest in oil and gas investments is at the core of many conflicts.

THE FIRST SPARKS

Oil and gas conflicts go back to the beginnings of oil operations, although the characteristics of the disputes have changed over time. During the first decades of the 1900s, conflicts were largely between the oil companies doing exploration work and governments or land-owning elites that kept much of the profits from the oil operations. The disputes were generally around the sharing of economic benefits from oil. For governments those benefits could take the form of loans or bribes or they could simply be arrangements with foreign oil companies that offered to facilitate access to international financing for local elites or politicians. In exchange, companies were given exceptional investment conditions and access to potential reserves. In Peru the International Petroleum Company was exempt from almost all taxes and had the monopoly on oil supply to the domestic market (Philip 1982, 21–31).

Border conflicts for control of areas rich in hydrocarbons were also common throughout the region. In 1941 Peru and Ecuador went to war over what some historians view as a dispute for the control of oil reserves, although others disagree (Martz 1987, 49–53). Before that there was the bloody Chaco War (1832–1935) between Bolivia and Paraguay for control of the Chaco Boreal.

It was not until the discovery of oil in the Amazon in the 1970s that local conflicts with the population living in the areas of exploration and production started. When oil companies arrived in the Amazon, the presence of the state there was extremely weak, as were policies for the economic or territorial development of the area and for the protection of its social and environmental patrimony. The presence of oil led to the creation of towns around the hydrocarbons activities, which in turn attracted an outside population in search of jobs. In Ecuador, for example, the arrival of Texaco to the Amazon region in the 1960s resulted in the creation of Lago Agrio, the capital of the province of Sucumbios, which later became a base for the company’s operations. Roads were built to access the hydrocarbons-producing areas, facilitating the arrival of colonizers, exacerbating tensions with the local population, and planting the seeds for future resentment.

Historically, the sources of the oil conflicts that exist today may be traced back to the early 1900s in Colombia, in relation to that country’s two initial oil concessions, Barco and De Mares. The opening up of lengthy expanses of territory for construction of two pipelines that would transport oil from the producing areas caused three types of local conflicts from early on: between the oil company and local inhabitants being displaced for construction of the pipelines, between local inhabitants and the newly arrived colonizers settling in the area and competing for oil jobs, and between oil workers (most of them newcomers) and the Tropical Oil Company, which operated the De Mares concession, for better living conditions. This last dispute had long-lasting historical consequences. What differentiated this conflict from others was that it involved a new actor: the workers’ union. In 1922 an oil workers’ union was created in Colombia to defend the rights of local inhabitants and oil workers, and after relentless activism and worker pressure it succeeded in obtaining the termination of the De Mares concession in 1951 and its takeover by the state (Avellaneda Cusaria 2004).⁴ At that point, the state-owned oil company Ecopetrol was created by Law 165, and the country’s oil industry entered a new era that would be characterized by stronger union activism and state control.

Colombia has been a pioneer in the adoption of conflict-mitigation mechanisms applied through practices of citizen participation. The 1991 constitutional reform began the development of the legal tools needed for these participatory procedures. Particularly noteworthy is Law NO. 850, passed in 2003, establishing citizen oversights (veedurías ciudadanas in Spanish), whose function is to supervise public and private expenditure and investments. Unfortunately, in several cases where citizen oversight was established for supervising the use of revenues in oil-producing departments, some of the participants were murdered and the participation process lost popularity (Quevedo 2007).

For the past forty years, a large number of oil disputes in Colombia have been connected to the country’s long-term armed conflict. This is what distinguishes them from similar disputes in Peru and Ecuador. Typically, oil conflicts in Colombia may be of two types. One that is unique to that country today is characterized by armed groups taking illegal actions, such as the seizure of oil revenues, attacks against oil infrastructure, or the kidnapping of oil workers. A second type involves mainly Indigenous Peoples, and sometimes peasant communities, who, as in Peru and Ecuador, protest the disruption to their lives brought about by the development of hydrocarbons in their territories.

HOW IT ALL STARTED

The origins and later expansion of oil and gas development in Peru, Ecuador, and Colombia went hand in hand with the creation of the first large oil corporations by the nations that dominated the world political and economic scene at the end of the 1800s. Standard Oil in the United States, Royal Dutch Shell in Europe, and later on British Petroleum Corporation in the United Kingdom, among others, were the pioneering designers of the global oil industry that was starting to emerge, and Latin America was already part of the oil map of the time (Yergin 1991, 20–164).

Oil exploration in the three countries started in the late 1800s and continued until the beginning of the twentieth century, but at relatively low levels. Commercial oil production in quantities large enough to make real profits on the market did not start until decades later. Initial oil discoveries in Peru and Ecuador were made on...