Ecuador's oil resources
Ecuador has the third largest oil reserves in South America and the oil sector accounts for more than half of the country's export earnings as well as approximately two-fifths of public sector revenues (EIA, 2015). National oil companies (NOCs) such as Petroecuador, Petroamazonas, and Operaciones Rio Napo account for the majority of oil producton in Ecuador while the remaining is attributed to fields operated by international oil companies (IOCs) such as Respol (Spain), Eni (Italy), and Tecpetrol (Argentina's stated owned company). In Ecuador, the Ministry of Non-renewable Natural Resources is responsible for energy policy decisions while the Hydrocarbons Regulation and Control Agency regulates the oil sector (EIA, 2015). While hydrocarbon resources are exclusively owned by the state, Ecuador limits foreign investment in the sector. For example, foreign oil and natural gas companies are allowed to enter into service contracts that offer a fixed per-barrel fee for their exploration and production activities (EIA, 2015). As for oil production, Ecuador is the fifth-largest producer in South America but production has been stagnant over the past ten years with a slight increase in recent years. The majority of oil reserve fields are located in the Ishpingo-Tambococha-Tiputini (ITT) fields in Yasuni National Park - an estimated 846 million barrels of reserves are held here. Development of the ITT region could be challenging and costly however, to minimize environmental damage and cost, ITT projects require foreign investment and expertise for horizontal drilling (EIA, 2015). This limits the amount of drilling done in the area as the current pro-nationalism stance has Ecuador keeping away from foreign investors. Ecuador exports about 70% of crude oil it produces as well as being the leading source of crude oil for the U.S. West Coast - in 2014, the U.S. imported 210,000 bbl/d of Ecuadorean crude oil (EIA, 2015). This made Ecuador the third-largest source of foreign oil for the U.S. West Coast but Ecuador diversified and exported to Chile, Peru, India, and China in 2014. In Ecuador there are two major pipeline systems: Sistema Oleducto Trans-Ecuatoriano (SOTE) and Oleducto de Crudos Pesados (OCP). Both are roughly 300 miles long and transport up to 450,000 bbl/d. Ecuador also uses one transnational pipeline called the TransAndino. This pipeline transports 50,000 bbl/d from Ecuador to the Colobian port of Tumaco (EIA, 2015). Aside from oil, Ecuador also produces natural gas and electricity via hydro and thermal power.
Ecuador has the third largest oil reserves in South America and the oil sector accounts for more than half of the country's export earnings as well as approximately two-fifths of public sector revenues (EIA, 2015). National oil companies (NOCs) such as Petroecuador, Petroamazonas, and Operaciones Rio Napo account for the majority of oil producton in Ecuador while the remaining is attributed to fields operated by international oil companies (IOCs) such as Respol (Spain), Eni (Italy), and Tecpetrol (Argentina's stated owned company). In Ecuador, the Ministry of Non-renewable Natural Resources is responsible for energy policy decisions while the Hydrocarbons Regulation and Control Agency regulates the oil sector (EIA, 2015). While hydrocarbon resources are exclusively owned by the state, Ecuador limits foreign investment in the sector. For example, foreign oil and natural gas companies are allowed to enter into service contracts that offer a fixed per-barrel fee for their exploration and production activities (EIA, 2015). As for oil production, Ecuador is the fifth-largest producer in South America but production has been stagnant over the past ten years with a slight increase in recent years. The majority of oil reserve fields are located in the Ishpingo-Tambococha-Tiputini (ITT) fields in Yasuni National Park - an estimated 846 million barrels of reserves are held here. Development of the ITT region could be challenging and costly however, to minimize environmental damage and cost, ITT projects require foreign investment and expertise for horizontal drilling (EIA, 2015). This limits the amount of drilling done in the area as the current pro-nationalism stance has Ecuador keeping away from foreign investors. Ecuador exports about 70% of crude oil it produces as well as being the leading source of crude oil for the U.S. West Coast - in 2014, the U.S. imported 210,000 bbl/d of Ecuadorean crude oil (EIA, 2015). This made Ecuador the third-largest source of foreign oil for the U.S. West Coast but Ecuador diversified and exported to Chile, Peru, India, and China in 2014. In Ecuador there are two major pipeline systems: Sistema Oleducto Trans-Ecuatoriano (SOTE) and Oleducto de Crudos Pesados (OCP). Both are roughly 300 miles long and transport up to 450,000 bbl/d. Ecuador also uses one transnational pipeline called the TransAndino. This pipeline transports 50,000 bbl/d from Ecuador to the Colobian port of Tumaco (EIA, 2015). Aside from oil, Ecuador also produces natural gas and electricity via hydro and thermal power.
Effects of oil on human health
In northeast Ecuador, oil contamination has had a direct impact on the lives of many people in the area. For over five decades these people have struggled to survive as a result of the contamination on their living conditions. Indigenous people have been strongly influenced by the oil waste left behind by petroleum operation. Oil waste causes pollution that contaminates water supplies of the communities in the area. Discarded petrochemicals such as formation water have been released into the environment and have leached into the Amazon Basin's headwaters which serve as the water supply for many communities (Gay et al., 2010). The water is used no only for human use (drinking, cooking, bathing, washing clothes) but also for livestock to drink. With an increase in contamination, humans, livestock, and wildlife (mainly fish) have suffered the health effects. Skin rashes, cancer of the skin, stomach, rectum, soft tissue, kidney, cervix, and lymph nodes, and sores have been reported in people within proximity to the oil fields and contaminated areas. For women living in the area, miscarriages were more common in women who lived in close proximity to oil-contaminated areas (Gay et al., 2010). In response to the effects of oil contamination on the health of those that live there, peasants and indigenous people from the Amazon have presented their complaints to various administrations of the national Government of Ecuador. Through their own organizations and with support from national environmental groups, these residents have demanded that the companies clean up the pollution and that the people are compensated for the damages caused by oil-related contamination (Sebastian & Hurtig, 2004). Some small things that have been done to help include covering some waste pits, building schools, and constructing roads. All of which do not face the root causes of the problem but instead "patch" the problem. It is argued that oil is of importance to Ecuador's development however, despite the revenues, improvements in socioeconomic conditions in the country have fallen short of expectations (Sebastian & Hurtig, 2004). In order to fix the problem at hand, measures for cleaning up contaminated sites should be put in place and enforced. Future development planning should have strict environmental controls and careful long-term monitoring of oil activities.
In northeast Ecuador, oil contamination has had a direct impact on the lives of many people in the area. For over five decades these people have struggled to survive as a result of the contamination on their living conditions. Indigenous people have been strongly influenced by the oil waste left behind by petroleum operation. Oil waste causes pollution that contaminates water supplies of the communities in the area. Discarded petrochemicals such as formation water have been released into the environment and have leached into the Amazon Basin's headwaters which serve as the water supply for many communities (Gay et al., 2010). The water is used no only for human use (drinking, cooking, bathing, washing clothes) but also for livestock to drink. With an increase in contamination, humans, livestock, and wildlife (mainly fish) have suffered the health effects. Skin rashes, cancer of the skin, stomach, rectum, soft tissue, kidney, cervix, and lymph nodes, and sores have been reported in people within proximity to the oil fields and contaminated areas. For women living in the area, miscarriages were more common in women who lived in close proximity to oil-contaminated areas (Gay et al., 2010). In response to the effects of oil contamination on the health of those that live there, peasants and indigenous people from the Amazon have presented their complaints to various administrations of the national Government of Ecuador. Through their own organizations and with support from national environmental groups, these residents have demanded that the companies clean up the pollution and that the people are compensated for the damages caused by oil-related contamination (Sebastian & Hurtig, 2004). Some small things that have been done to help include covering some waste pits, building schools, and constructing roads. All of which do not face the root causes of the problem but instead "patch" the problem. It is argued that oil is of importance to Ecuador's development however, despite the revenues, improvements in socioeconomic conditions in the country have fallen short of expectations (Sebastian & Hurtig, 2004). In order to fix the problem at hand, measures for cleaning up contaminated sites should be put in place and enforced. Future development planning should have strict environmental controls and careful long-term monitoring of oil activities.
Oil conflicts
After more than 30 years of oil production, Ecuador was experiencing sporadic and persistent flare-ups between a state-oil alliance and Indigenous organizations, social and environmental justice NGOs, and oil-affected communities. The core problem: oil-dependency and multinational exports the wealth and natural resources of local people leaving behind contaminated environments and impoverished communities. The construction of OCP brought disputes between the affected people and the state and/or oil sector. Since the late 80's, the Sarayacu community has been battling the state and oil multinationals as the Los Angeles-based Atlantic Richfield Company (ARCO) acquired the rights to explore for oil within the community's territory. The community then put up a strong resistance and was able to block oil extraction from several multinationals (Kimerling, 2006). The Sarayacu community was able to continue to block exploration and extraction until 2003 when the government threatened to militarize the area in order to force the search and flow of oil. A month later, the Sarayacu community declared a state of emergency and numerous national and international Indigenous and environmental organizations declared their solidarity with the community. Around the same time, a court case between 13,000 affected people of the Amazon and Texaco started a 10-year battle of appeals and six motions to dismiss the case (Kimerling, 2006). More on this conflict can be seen in the reflection below (Chevron in Ecuador and the effect on Indigenous people). A third oil conflict arose between Achuar and Shuar Indigenous communities and ARCO as the company granted Burlington Resources the right to explore Block 24. For the longest time, these indigenous communities resisted oil extraction within their territories with the power of awareness: awareness of the environmental, health, and social impacts on northern Indigenous communities following the oil extraction of the 1970's and 1980's. And to add to the chaos, the construction of the OCP pipeline instigated the mobilization of professional environmental NGOs and international NGOs. At this point, Ecuadorian society was being pulled in two directions. One being a continues economic commitment to the benefits of oil production. The other was the economic diversification, economic and environmental sustainability, and a political commitment to higher education, environmental, health standards (Kimerling, 2006). Although these conflicts arose from the intent to explore and extract oil fields, they could have been avoided if the multinational corporations had sat down with the Indigenous people as well as the NGOs to create compromises for oil export.
After more than 30 years of oil production, Ecuador was experiencing sporadic and persistent flare-ups between a state-oil alliance and Indigenous organizations, social and environmental justice NGOs, and oil-affected communities. The core problem: oil-dependency and multinational exports the wealth and natural resources of local people leaving behind contaminated environments and impoverished communities. The construction of OCP brought disputes between the affected people and the state and/or oil sector. Since the late 80's, the Sarayacu community has been battling the state and oil multinationals as the Los Angeles-based Atlantic Richfield Company (ARCO) acquired the rights to explore for oil within the community's territory. The community then put up a strong resistance and was able to block oil extraction from several multinationals (Kimerling, 2006). The Sarayacu community was able to continue to block exploration and extraction until 2003 when the government threatened to militarize the area in order to force the search and flow of oil. A month later, the Sarayacu community declared a state of emergency and numerous national and international Indigenous and environmental organizations declared their solidarity with the community. Around the same time, a court case between 13,000 affected people of the Amazon and Texaco started a 10-year battle of appeals and six motions to dismiss the case (Kimerling, 2006). More on this conflict can be seen in the reflection below (Chevron in Ecuador and the effect on Indigenous people). A third oil conflict arose between Achuar and Shuar Indigenous communities and ARCO as the company granted Burlington Resources the right to explore Block 24. For the longest time, these indigenous communities resisted oil extraction within their territories with the power of awareness: awareness of the environmental, health, and social impacts on northern Indigenous communities following the oil extraction of the 1970's and 1980's. And to add to the chaos, the construction of the OCP pipeline instigated the mobilization of professional environmental NGOs and international NGOs. At this point, Ecuadorian society was being pulled in two directions. One being a continues economic commitment to the benefits of oil production. The other was the economic diversification, economic and environmental sustainability, and a political commitment to higher education, environmental, health standards (Kimerling, 2006). Although these conflicts arose from the intent to explore and extract oil fields, they could have been avoided if the multinational corporations had sat down with the Indigenous people as well as the NGOs to create compromises for oil export.
Chevron in Ecuador and the effect on Indigenous people
In the 1960's, Chevron entered into a contract with Ecuador's government to extract oil from the Amazon basin. At a well site, pits were dug to hold toxic oil wastes that come up during drilling. In general, two to three pits were dug at each site to hold the waste and once drilling was done, they were left uncovered (crazyjulieta, 2010). Over the course of 26 years, Chevron extracted billions of gallons of oil for revenue but left a very big impact on the basin (Justicia para Ecuador, 2013). At one point, Chevron officials told locals that the oil in the water was full of vitamins and minerals but was far from that. Petroleum Hydrocarbons found in the soils of the Amazon lead to liver damage, cancers, and miscarriages. If Chevron had lined their oil pits and reinjected toxic waste water as required by law, then all of this destruction and health problems could have been avoided (Justicia para Ecuador, 2013). Rather than keeping industry standards, Chevron looked at Ecuador as a source of revenue rather than land and people that should be protected from the harmful aftermath of oil drilling. Chevron exposed the Amazon people to dangerous levels of oil pollution and argued that oil companies should be allowed to dump contamination at levels 100 times greater than the standard in America. In 2011, Amazonians sued Chevron for dumping billions of gallons of oil waste into Ecuador's Amazon rainforest since the 70's. Chevron was ordered to pay $8.6 billion fine and another $8.6 billion to the Amazonian people for damages but would get a lowered bill if they issued an apology within 15 days of the sentence. Chevron refused to pay as they stated the ruling was "illegitimate and unenforceable" and the plaintiffs believe that the amount is too low for the amount of damages (DemocracyNow, 2011). Chevron believes that the charges are fraudulent and that those responsible for the charges should be sued rather than their company. This case is historic because it is the first case where a multinational corporation is being sued by indigenous people in the country where crime was committed (DemocracyNow, 2011).
In the 1960's, Chevron entered into a contract with Ecuador's government to extract oil from the Amazon basin. At a well site, pits were dug to hold toxic oil wastes that come up during drilling. In general, two to three pits were dug at each site to hold the waste and once drilling was done, they were left uncovered (crazyjulieta, 2010). Over the course of 26 years, Chevron extracted billions of gallons of oil for revenue but left a very big impact on the basin (Justicia para Ecuador, 2013). At one point, Chevron officials told locals that the oil in the water was full of vitamins and minerals but was far from that. Petroleum Hydrocarbons found in the soils of the Amazon lead to liver damage, cancers, and miscarriages. If Chevron had lined their oil pits and reinjected toxic waste water as required by law, then all of this destruction and health problems could have been avoided (Justicia para Ecuador, 2013). Rather than keeping industry standards, Chevron looked at Ecuador as a source of revenue rather than land and people that should be protected from the harmful aftermath of oil drilling. Chevron exposed the Amazon people to dangerous levels of oil pollution and argued that oil companies should be allowed to dump contamination at levels 100 times greater than the standard in America. In 2011, Amazonians sued Chevron for dumping billions of gallons of oil waste into Ecuador's Amazon rainforest since the 70's. Chevron was ordered to pay $8.6 billion fine and another $8.6 billion to the Amazonian people for damages but would get a lowered bill if they issued an apology within 15 days of the sentence. Chevron refused to pay as they stated the ruling was "illegitimate and unenforceable" and the plaintiffs believe that the amount is too low for the amount of damages (DemocracyNow, 2011). Chevron believes that the charges are fraudulent and that those responsible for the charges should be sued rather than their company. This case is historic because it is the first case where a multinational corporation is being sued by indigenous people in the country where crime was committed (DemocracyNow, 2011).
Works Cited
crazyjulieta (2010). Chevron vs. Indigenous Tribes in Ecuador - The real price of oil [Video]. Available from: https://www.youtube.com/watch?v=Qx1s2JtfSLA
DemocracyNow (2011). Ecuadoran Court Orders Chevron to Pay $17 Billion for Oil Pollution in Amazon [Video]. Available from: https://www.youtube.com/watch?v=zeGVvsIwMRE
Gay, J., Shepherd, O., Thyden, M., & Whitman, M. (2010, December 15). The Health Effects of Oil Contamination: A Compilation of Research[Scholarly project]. Retrieved December 30, 2017, from https://web.wpi.edu/Pubs/E-project/Available/E-project-121510-203112/unrestricted/Health_Effects_of_Oil_Contamination_-_Final_Report.pdf
Justicia para Ecuador (2013). The True Story of Chevron's Ecuador Disaster [Video]. Available from: https://www.youtube.com/watch?v=_azgdnGBdh8&feature=youtu.be
Kimerling, J. (2006). Indigenous Peoples and the Oil Frontier in Amazonia: The case of Ecuador, ChevronTexaco, and Aguinda v. Texaco. Retrieved from https://amalavidaexperience.weebly.com/uploads/3/9/0/2/39029957/paper-chevrontexacoindegenouspeople2006.pdf
Sebastián, M. S., & Hurtig, A. K. (2004). Oil exploitation in the Amazon basin of Ecuador: a public health emergency. Revista Panamericana de Salud Pública,15(3), 205-211. doi:10.1590/s1020-49892004000300014
U.S. Energy Information Administration (2015, March 17). Ecuador's Oil Resources. Retrieved December 30, 2017, from https://amalavidaexperience.weebly.com/uploads/3/9/0/2/39029957/paper-ecuadoroilresources2015.pdf
Widener, P. (2007). Oil Conflict in Ecuador. Organization & Environment,20(1), 84-105. doi:10.1177/1086026607300321
crazyjulieta (2010). Chevron vs. Indigenous Tribes in Ecuador - The real price of oil [Video]. Available from: https://www.youtube.com/watch?v=Qx1s2JtfSLA
DemocracyNow (2011). Ecuadoran Court Orders Chevron to Pay $17 Billion for Oil Pollution in Amazon [Video]. Available from: https://www.youtube.com/watch?v=zeGVvsIwMRE
Gay, J., Shepherd, O., Thyden, M., & Whitman, M. (2010, December 15). The Health Effects of Oil Contamination: A Compilation of Research[Scholarly project]. Retrieved December 30, 2017, from https://web.wpi.edu/Pubs/E-project/Available/E-project-121510-203112/unrestricted/Health_Effects_of_Oil_Contamination_-_Final_Report.pdf
Justicia para Ecuador (2013). The True Story of Chevron's Ecuador Disaster [Video]. Available from: https://www.youtube.com/watch?v=_azgdnGBdh8&feature=youtu.be
Kimerling, J. (2006). Indigenous Peoples and the Oil Frontier in Amazonia: The case of Ecuador, ChevronTexaco, and Aguinda v. Texaco. Retrieved from https://amalavidaexperience.weebly.com/uploads/3/9/0/2/39029957/paper-chevrontexacoindegenouspeople2006.pdf
Sebastián, M. S., & Hurtig, A. K. (2004). Oil exploitation in the Amazon basin of Ecuador: a public health emergency. Revista Panamericana de Salud Pública,15(3), 205-211. doi:10.1590/s1020-49892004000300014
U.S. Energy Information Administration (2015, March 17). Ecuador's Oil Resources. Retrieved December 30, 2017, from https://amalavidaexperience.weebly.com/uploads/3/9/0/2/39029957/paper-ecuadoroilresources2015.pdf
Widener, P. (2007). Oil Conflict in Ecuador. Organization & Environment,20(1), 84-105. doi:10.1177/1086026607300321