Ecuador's OCP Pipeline ~ A False Promise of Wealth
Written by Lorna Li
Monday, 25 June 2007
A 35 min documentary dealing with the OCP oil pipeline
and drilling operations which run against the wishes of the indigenous
people in the Ecuadorian Amazon.
Ecuador's controversial oil pipeline project known as the Oleoducto de Crudo Pesado (OCP) or Heavy Crude Pipeline went live in 2003, against the wishes of the indigenous people who live in Yasuni National Park, Cuyabeno National Park and many other rainforest and tribal reserves in the Ecuadorian Amazon.
The project was delayed for over a decade due to intense opposition from the indigenous peoples, Ecuadorian and foreign activists, who fought the project through mass demonstrations, tree sits, and international campaigns against the project's financiers.
The OCP pipeline transports heavy crude from the Ecuadorian Amazon to the Pacific Coast, wreaking environmental havoc through fragile ecosystems and devastating numerous communities along its 300-mile route. It is also an environmental disaster waiting to happen. The OCP pipeline crosses 94 seismic fault lines and 6 active volcanoes, passing high
mountain ecosystems and tropical forests which are unstable and where
there are frequent landslides. The probability of rupture is extremely
However, the destruction caused by the OCP pipeline is not limited to the immediate vicinity that flanks its route from the rainforest to the sea. In order to fill the OCP, Ecuador must double its current oil production, and has thus embarked on an unprecedented wave of new oil exploitation in vast, pristine Amazonian frontier - areas where the last isolated indigenous peoples dwell and the country's last old growth rainforests stand.
More Oil, More Poverty
Petroleum is Ecuador's single largest industry. In 2005, petroleum accounted for 56% of its exports, generating approximately $5.05 billion. Supporters of the pipeline, which include most of the political and business leadership of Ecuador, argue that the $ 1.1 billion project is vital for the nation's economic recovery and repayment of its massive $16 billion external debt.
Hernan Lara, president of OCP Ecuador, argues that increased oil production is necessary for Ecuador's economic well-being, and that those who protest it want Ecuador to remain an undeveloped nation.
"We have some extremist organizations that are against not only the pipeline but everything that is needed for development in the modern world," he says. "They are against the oil industry."
In spite of the arguments made by the business and political elite that greater oil development will bring more wealth to the nation as a whole, the statistics present a dramatically different picture.
Starting from the first petroleum boom in 1972, the external debt of Ecuador went from $344 million dollars to $20 billion dollars.
In 30 years of oil exploitation, Ecuador has lost more than 2,000,000 hectares (about 5,000,000 acres) of primary forest.
17 million gallons of petroleum have leaked into the environment through more than 50 breaks in the current pipeline.
The percentage of poverty grew from 47 % in 1975 to more than 80 % of the population in 2002.
Oil exploitation in the Ecuadorian Amazon has devastated indigenous populations and is responsible for an exploding health crisis throughout local communities.
One Amazonian indigenous nationality has already disappeared (the Tetete), and four more are threatened: the Siona, Secoya, Huaorani, and Cofán.
The Cofán people have had 95% of their territory taken over by Texaco.
A high percentage of Huaorani suffer from Heptatitis B and C, diseases introduced by the oil workers and for which there is no cure.
Doubling petroleum exploitation through the Americas is a strategic plan of the United States to supply its energy demand. Ecuador's massive debt to the United States has made the country vulnerable to external demands to increase oil production, with projects such as the OCP pipeline built into its repayment obligations.
To fill the OCP Pipeline, oil exploitation must increase in the Amazon from 350,000 barrels to more than 700,000 barrels per day
85% of the oil revenues will be for the transnational corporations involved, the rest will go to paying off the foreign debt.
In order to increase payments of Ecuador's external debt from $1.5 billion/year to $3.5 billion, the IMF have made the pipeline a condition of Ecuador's loan.
If Ecuador refuses to cooperate, the IMF will bankrupt the country.
In 1992, when Ecuador passed legislation that would see only 90% of the revenues from the pipeline paying off the loan and 10% for social programs, the IMF threatened retaliation demanding 100% of the oil revenues.
In 2006, payments on Ecuador's external debt reached a massive 38% of government revenues. The UN recommends that developing nation spend not more than 10-13% of revenues of external debt repayments.
Who is Behind the OCP?
Though cloaked in promises of national wealth, the OCP pipeline and the
oil it carries enriches, for the most part, transnational corporations
and Ecuador's elite. According to Amazon Watch , the major players in the OCP pipeline initiative are:
The International Monetary Fund's promotion of oil and gas expansion as a means of servicing external debt has pushed the Ecuadorian government to try to meet payments on its huge US$16 billion debt through a massive oil development program in the Amazon.
The OCP Consortium includes several transnational oil companies, some of which have abysmal environmental track records.
EnCana (Canada, 31.4%)
Repsol-YPF (Spain, 25.6%)
Pecom Energia (Argentina, 15%)
Occidental Petroleum (U.S., 12.2%)
ENI-AGIP (Italy, 7.5%)
Techint (Argentina, 4.1%)
Perenco (UK, 4.0%)
The German bank Westdeutsche Landesbank (WestLB) provided a $900 million syndicated loan to finance the OCP, in violation of its own environmental and social policy guidelines. Other financing banks include Citi Group, Banco Bilbao Vizcaya Argentaria, and Banca Nazionale del Lavoro (BNL).
The Ecuadorian Government
During 30 years of oil dependency, poverty has increased in Ecuador. The Ecuadorian government continues to present the OCP as an economic panacea for the nation; opposition to the project is not tolerated. During 2000 to 2003, national security forces confronted OCP opponents with increasingly draconian repression, using bullets, tear gas and beatings to disperse peaceful demonstrators, resulting in deaths, injuries and many arrests.
Ecuador's oil exports are primarily destined for consumption in the United States, particularly California. U.S. reliance on oil - the main fossil fuel responsible for climate change - is accelerating the destruction of the Amazon heartlands.
At the heart of oil conflicts worldwide is the developing world's insatiable desire for the black gold that feeds production, economic growth, and the dream of material affluence. The right to drive an SUV or worse, a Hummer, comes at the cost of real human suffering elsewhere, from war, violence, contamination, disease, and poverty caused by the oil industry's incursions into the areas where residents have little political voice.
However, though, far removed from the Ecuadorian oil conflict, citizens of developed nations can take action by first, reducing fuel consumption, and second, boycotting the companies responsible for the damage. As the American activist Julia Butterfly Hill succinctly states in this documentary:
"Boycott the corporations that are destroying our planet! How dare they? They will call people like us extremists, radicals, and now in today's world, they even call us terrorists. How dare they? We have to stand up and look them in the eye and say, 'How dare you treat the Earth and us like that? And then dare to call us the terrorists?'"