Ecuador's Challenges with Oil Development

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A May 31 pipeline break in Ecuador leaked an estimated 420,000 gallons of oil. The oil contaminated rivers, the urban water supply of Coca, and traveled downriver into neighboring Peru. Brazil has placed itself on alert in case the spill crosses its borders.

In recent days, the incident has made headlines for good reason. A spill of that size in an ecologically fragile area rightfully deserves widespread attention.

An Oil Infrastructure Past Its Prime

At the same time, oil spills in Ecuador are anything but unusual. May’s spill is just one of many that occur on a regular basis, adding up to an enormous amount of oil spilled over the years.

This June 13 BBC article (Spanish) quotes Diego Mosquera, World Biologist and Director of Tiputini Biodiversity Station in Ecuador's Yasuní National Park, who states, "In the past 30 years of oil operations in the Amazon have been spilled something like 20 million gallons of oil."

Additionally, says Mosquera, Ecuador's Ministry of the Environment reports that between 2000 and 2010 there were almost 50 spills per year, and in 2011, 60 oil spills were reported. This adds up to more than one oil spill per week for 2011.

While the current spill was due to a pipeline break caused by a landslide, the Ministry of the Environment reports that only 1.5% of the spills that occurred between 2000 and 2010 were the result of natural causes. The rest were due to pipeline corrosion (28%), mechanical failure (17%), and 'attacks' (26%).

The corroded pipeline is of particular concern. Built in the 1970s, the pipe is past its prime. However, Ecuador plans to continue to use the pipeline for future oil development.

Longstanding Negligence and Law Shirking

Adding insult to injury, Chevron, who acquired Texaco in 2000, is attempting to shirk responsibility for Texaco's long history of operations negligence in Ecuador.

Between 1970 and 1992, Texaco is reported to have dumped 16 billion gallons of toxic water into Ecuador's streams, harming both the environment and humans. A $19 billion lawsuit was slapped onto Chevron by an Ecuadorian court, but Chevron CEO John Watson has taken the lead in denying responsibility for the contamination, and has done all he can to keep Chevron from paying the court-ruled fines.

Those frustrated by Chevron's attempt to evade the Ecuadorian court ruling might be additionally disappointed to learn that a Toronto court has just stayed the case because the corporation primarily conducts its operations through subsidiaries. And a court in Argentina lifted a freeze on the corporation's assets. The good news is that this shouldn't affect a parallel judgement that, if granted, will allow affected indigenous communities to claim $3.5 billion in assets in compensation for past damages.

In general, the troubles that oil extraction have caused Ecuador demonstrate the inherent problems and risks that come with the industry.

While the southern part of the Amazon is still largely pristine for now, oil has badly affected the northern section. Mosquera states, "'If you do a tour through the southern part of the Amazon, where are we, there still see wildlife in the wild. On the other hand in the North is what we call a 'toxitour,' a tour where you will seeing all the direct and indirect effects that oil exploitation has left on the environment."