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Amazon Watch has just released its new Mega-project report entitled: “The New Heavy Crude Pipeline in Ecuador: Fueling A Second Oil Boom in the Amazon.” The 16-page report exposes the serious adverse impacts and the growing opposition to the Ecuadorian Government’s plan to build the new pipeline, the Oleoducto de Crudos Pesados (OCP).
The OCP has been repeatedly delayed for 10 years – -mostly due to the country ’s economic and political instability and the project ’s perceived risks. However, on June 7, 2001, amidst widespread controversy and protest, the Noboa Administration gave the green light to the OCP Consortium, Ltd. (comprised of 7 multinational oil companies including Canadian Alberta Energy and US’s Occidental Petroleum) to begin construction of the $1.1 billion pipeline. Germany’s largest public bank Westdeutsche Landesbank is providing a $900 million 17-year loan package (to be syndicated to other major banks). The project is officially breaking ground this month and estimated to become operational by mid-2003.
The pipeline would double the oil production capacity of Ecuador. Sadly, most of Ecuador’s oil exports are destined for US markets, in particular, California. Already, the pipeline has begun fueling a second oil boom in the Ecuadorian Amazon. Ecuadorian government estimates that more than $2.5 billion in new oil production and exploration will be made over the next five years to fill the pipeline’s capacity. Major new wells, secondary flow lines, and processing-refinery facilities are planned on fragile and protected ecosystems such as the Yasuni National Park, Cuyabeno Wildlife Reserve and other protected areas. The pipeline route would bisect the rare Mindo Nambillo Cloud Forest Reserve and surrounding intact forests.
The controversy surrounding the OCP has united a diverse array of stakeholders including local landowners, campesinos, students, local authorities, environmental groups, conservation organizations, scientists, eco-tourism operators, and indigenous organizations. Since Spring 2001, there have been dozens of demonstrations, occupations of government offices, congressional hearings, lawsuits, and tours of fragile ecosystems along the pipeline ‘right of way’ challenging the project. This opposition is growing and is expected to further delay pipeline construction.
Under pressure from the International Monetary Fund to bring in US investments to Ecuador’s flailing economy, on May 17, President Noboa affirmed that the pipeline project must go forward. In response to public opposition, he declared, “I’m not going to let anyone screw with the country, I’ll give them war.”
The pipeline will increase reliance on oil – -the main fossil fuel responsible for climate change. Instead of expanding oil development into intact rainforest, Amazon Watch calls upon the Ecuadorian government to consider economic alternatives based on permanent protection of its forests and biodiversity. In this report, Amazon Watch urges all financial institutions to refrain from financing the OCP or related oil drilling in the Ecuadorian Amazon. We call for a phase out of all lending to fossil fuel projects in ecologically pristine and culturally sensitive areas. Instead financial institutions are urged to invest in clean renewable energy.
