The New Frontiers of Energy Extreme Extractivism in Latin America Contents What do we Understand by Extreme Energy?...... 4 Anihilating Space Through Time...... 10 Biotechnology in the Service of Extractivism...... 20 Blowing up the Ocean...... 26 Pre-salt: Extreme Energy from the Entrails of the Earth...... 34 An Iceberg Called “Vaca Muerta”...... 44 Colombia: “Heavies” Expand the Extractive Frontier...... 54 Violence as a Model...... 64

Coordination: Hernán Scandizzo Extreme Orinoco: The Oil Belt and the Mining Arc, Design: Patricia Peralta High Risk Extractivism...... 74 Translation: Nancy Viviana Piñeiro Cover image: Diego di Risio Coal 2.0: Another Chapter in the Latin American Title page: Alexis Vichich Unconventional Plot...... 82 Oilwatch Latinoamérica www.oilwatchsudamerica.org [email protected]

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You are free to copy, distribute, and make derivative works of this material provided you give appropriate credit under the terms of the Creative Commons license, Attribution 2.5 Argentina. By Tatiana Roa Avendaño (Censat Agua Viva - Friends of the Earth Colombia) and Hernán Scandizzo (OPSur Argentina)

Original in Spanish. Translated by What Nancy Piñeiro. do we Understand by Extreme Energy?

mages of the fire on the Deepwater and social risks, coupled with high ac- IHorizon oil rig as it was drilling the cident rates as compared to other tra- Macondo well in the Gulf of Mexico in ditional forms of resource extraction. April 2010 are still fresh. The explosion The era of easily recoverable hydrocar- killed eleven workers, and it was only bons is coming to an end, if it is not al- after three months of intense work ready with us. To sustain the fossil fuel that the oil company BP managed to energy matrix, companies and govern- control the situation. By then, more ments are now targeting tight sedi- than 700 million liters of crude oil and mentary formations, heavy and extra millions more of formation water had heavy crude oil, bituminous sands, and spilled into the Gulf. The magnitude of even applying biotechnological innova- the disaster reflects the risks that will tions for enhanced hydrocarbon recov- be posed by the expansion of the ex- ery in depleted wells. tractive and technological frontier. This is what analysts like Michael T. Klare Part of the same package are off- have called “extreme energy”. shore reservoirs, which are increas- ingly farther away from the coast The concept pertains not only to the and in deeper waters; some are even characteristics of hydrocarbons, but extracted after piercing through thick also to a context in which gas, oil, and layers of salt. Such fields are also en- coal exploitation entail ever greater geo- joying the “gifts” of hydraulic fracturing logical, environmental, labor-related, (fracking) used to revert the decrease

Deepwater Horizon drilling unit on fire 4 (Nieznany – US Coast Guard) 5 Extreme What do we Understand by Extreme Energy?

in production. Coal reservoirs deep Moreover, this expansion of frontiers under the earth, inaccessible to con- to extreme settings entails more haz- ventional mining, as well as the gas ardous working conditions. Those contained in them (coal bed meth- who work on extreme energy projects ane), spark the interest of govern- are not only exposed to harsh weath- ments and companies. Thousands of er conditions –as in the Arctic or the tons of carbon would be emitted to high seas– but also to the toxicity of the atmosphere if such hydrocarbons chemicals used for example in frack- were extracted and pumped into the ing; to biotechnological developments energy market and the petrochemical designed to increase levels of extrac- industry, further extending the decay tion and enhance hydrocarbon trans- of our fossil civilization. formation processes; and to a higher risk of explosions and other accidents The other feature of this extreme ex- at work. traction model is that in many cases accessing these reserves of gas, oil, Additionally, the gas and oil found in and coal means expanding the extrac- deep and/or tight reservoirs, or in re- tive frontier over the lands of peas- mote places, require more infrastruc- ants and small scale producers, the ture, and the deployment of logistical waters of small-scale fishermen, and support both to bring them to the well the territories of indigenous and Afro- head and to inject them into the mar- descendant peoples. The expansion ket. This translates into the drilling of goes hand in hand with rights abuses, thousands of wells, duct laying, installa- displacing populations and leading to tion of compressor stations, tanks, etc. Christening ceremony of P-52 drilling unit for exploitation of pre-salt in ultra-deep reservoirs the disappearance of knowledges and In short, it results in greater territorial (Ricardo Stuckert – Agencia Brasil) cultures, and the death of local and occupation, and industrialization of ru- regional economies. That is, it consti- ral areas and the landscape in general, Crude oil prices drop, To continue in the game, companies tutes a threat to the food and territorial together with the expulsion of popula- extreme projects continue reduce the production costs by laying sovereignty of peoples, a symbolic and tions that are not functional to the new off staff or promoting their “voluntary material violence inherent to extreme uses of the space. The sustained drop in oil prices well retirement”; doing away with labor energy that leads to an escalation of below $100 has not automatically victories (non-financial benefits like violence against bodies and non-hu- On top of that, each barrel obtained from changed the oil policies of Latin Ameri- breaks, food quality in the workplace, man Nature. That is not only due to extreme energy projects requires higher can governments nor has it made ex- etc.); getting rid of intermediaries; de- the intrusion in fragile ecosystems and energy consumption, i.e., its efficiency treme energy projects unfeasible. There veloping and applying technological in- the increasing degradation of those al- is lower. Their production also needs is undoubtedly a slowdown, but as long novations; among other variables. The ready impacted, but also to the contin- greater financial resources than conven- as there is no political will and enough corporate sector also lobbies in order ued reliance on the energy matrix that tional fuels. In many cases this means mobilizing to move towards the defos- to receive incentives like subsidies, tax is responsible for the current climate public subsidies, tax concessions and silization of the energy matrix and the concessions, and domestic prices low- crisis and global warming. artificially inflated prices, all transferred productive model (hydrocarbons as a er than their international equivalents. from the taxpayers’ pockets. non-energy input), these projects will Thus the financial costs –in addition continue to represent the new frontier to the social and environmental– are in the face of the global depletion of the transferred to the users, who pay more big conventional reservoirs. for energy and fuels, as is the case in

6 7 Extreme What do we Understand by Extreme Energy?

Argentina. It should also be noted that 3,400 m of water column and anoth- countries like Ecuador and Venezu- er 3,000 m below the ocean floor in Behind the discourse of salvation ela have made oil-for-loan deals with search of hydrocarbons: a milestone and abundance with which China, pushing the frontier in the Am- in the region, in a country without a re- extreme energy projects are azon region and the Orinoco Belt. In cord of hydrocarbon exploitation. Co- promoted in our countries, there the case of the Bolivarian Republic of lombia is also moving towards deep- lie other realities like those Venezuela, the loan amounted to more water extraction in the Caribbean Sea, mentioned above. With these than 46 billion dollars. as are Nicaragua and Honduras. Chile, lines we inaugurate a series of due to successful drilling by the state- articles about the extreme nature run company ENAP, seeks to consoli- not only of the energy projects Ecuador and Venezuela have date its offshore developments in the but also of the infrastructure made oil-for-loan deals with Strait of Magellan and expand tight and finance required for the China, pushing the frontier in gas exploitation in Tierra del Fuego. reproduction of globalized the Amazon region and the Meanwhile, heavy and extra heavy capitalism. Orinoco Belt. crude oil are key in countries like Ven- Otto Candies / USCG Press. ezuela, with its Orinoco Belt, and Co- The extreme frontiers of lombia, in the plains region. Beyond There is another frontier in the region the characteristics of its hydrocarbons Latin America that keeps expanding: offshore opera- and the formations that contain them, Even though from early 2014 and well tions. Since the discovery of a pre-salt both the Amazon region and the South into the year hydrocarbons from shale field a decade ago, Brazil made a strong American Chaco constitute the new and fracking were in the agendas of bid for its exploitation. Brazilian authori- frontier par excellence for Bolivia, Co- most countries in the region with more ties have not given much importance lombia, Ecuador, Paraguay, and Peru. or less conviction, this has not been to shale blocks with oil and gas poten- In many cases, drilling targets indige- translated into more advances in the tial, nor have these been of interest to nous territories, peasant communities, territory. Regionally, the phenomenon companies during the last rounds of oil and protected natural areas. of shale has only had a relatively large leases. The impetuous decision to ad- impact in Argentina in the Vaca Muerta vance into the sea was seen in the con- Behind the discourse of salvation and formation. In Mexico, the other fracking flict that arose in 2015, when the federal abundance with which extreme energy government tried easing environmental projects are promoted in our countries, Deepwater Horizon Response (U.S Coast Guard photo protagonist, the impact has been mild- by Chief Petty Officer John Kepsimelis). er. As for Colombia, authorities have a licensing systems for offshore exploita- there lie other realities like those men- firm interest in moving in the same di- tion, a reform resisted by the workers tioned above. With these lines we in- rection. This does not mean that inter- of environmental control agencies. In augurate a series of articles about the est in tight formations has faded away. pre-salt formations, hydrocarbons are extreme nature not only of the energy How to cite this article: It has actually gained momentum in situated at a depth of 7,000 m; 90 % of projects but also of the infrastructure Roa Avedaño, Tatiana and Argentina, Mexico, and the southern- proven oil reserves and 70 % of gas re- and finance required for the reproduc- Scandizzo, Hernán (2017). most part of Chile. “Production” costs serves are found there. tion of globalized capitalism. “What do we Understand by for tight sands are considerably lower Extreme Energy”. in Extreme. than those of shale, which makes them The French company Total drilled a The New Frontiers of Energy especially attractive for companies. well 200 km off the shore of Uruguay in 2016. Although the final depth is un- Extractivism in Latin America. known, it was projected to go through Oilwatch Latinoamérica.

8 9 Extreme By Nicholas Hildyard (The Corner House United Kingdom) Anihilating Space ThroughTime Extreme Infrastructures and the Expansion of Global Capitalism

t is undoubtedly true that the fossil from points of consumption, requiring Ifuel industry now employs increas- “extreme infrastructure” to speed up ingly extreme methods – both tech- the process of exchange, and hence nologically and in terms of human and profit-taking. environmental oppression – to secure the oil, coal and gas needed to keep None of this is taking place without the wheels of capital accumulation resistance –both from humans and rolling: hence the term “extreme ener- from nature. While extreme forms of gy”. But such “extreme production” is production signal the direction of travel not unique to the energy sector: min- that globalised forms of capital require ing companies too are increasingly if they are to expand, the ultimate tra- forced to open up remote and ecolog- jectory will not be written in the mas- ically intransigent areas to extract the terplans that oil industry or mining minerals they need, in turn necessitat- executives draw up or by the delibera- ing new forms of “extreme technology” tions of intergovernmental meetings, and “extreme finance” to wrestle min- nor, indeed, inscribed within some pre- erals from the ground. Manufacturers sumed, steam-roller logic behind global are no less trapped: to exploit cheap capitalism, whose coherence is never labour, they must move production to as coherent as theorists project. It will sites that are more and more distant be determined by the ways in which

Trans-Alaska Pipeline / U.S. Geological Survey Employee 10 11 Extreme Anihilating Space Through Time

those plans interact with other agents, tourism developments as secondary human and non-human, both now and offshoots. In southern Africa, a race in the future. A better understanding of is on to develop the shortest corridor the systemic forces and ad hoc political routes to the sea from Zambia’s cop- alliances that are driving “extreme pro- perbelt province and the Democratic duction may therefore assist activists Republic of the Congo’s mineral-rich fighting “extreme extraction” in all in var- Katanga province. Corridors serving ious forms, not least by identifying po- iron ore, copper, coal, nickel and other tential linkages to other struggles and mines are also planned in northern and by revealing some of the undoubted central Mozambique, Botswana, Gha- vulnerabilities that extreme extraction na, Liberia and Sierra Leone. itself creates for capital. No less ambitious plans are on the drawing board for South America. Un- Infrastructure corridors der current proposals, some 579 proj- One area that is perhaps worth ex- ects, costing an estimated $163 bil- ploring is the current push by capital lion, have been identified, of which 89 per cent involve roads, airports, ports, for “infrastructure corridors”, not least 21st-Century Maritime Silk Road (Estudios de Política Exterior). because it is where various strands of inland waterways and ‘multimodal’ “extreme production” –from oil and gas transport schemes, 9 per cent energy archipelago. Militarisation of these pro- designed to go from China’s coast to companies to mining and agribusiness projects and the rest communications posed sea routes and the exclusion of Europe via both the Indian Ocean and conglomerates and off-shoring manu- infrastructure. Of these, 107 have been local fisherfolk is anticipated. the South Pacific. The corridor would facturers– are coalescing to make com- completed and 169 are under con- involve not only shipping but, report- mon cause. No (inhabited) continent is struction: the rest are still at the plan- But the Big Daddy of attempted time- edly, deep seabed mining in the Indian excluded. From Africa to Asia and the ning stage. space annihilation (and, some would Ocean. Arctic to South America, infrastructure All the countries of Asia have similar argue, of contemporary struggles for masterplans have been drawn to re- plans. In Indonesia, six corridors are regional hegemony) is China’s ‘One Belt, configure whole land masses (and the being promoted under an ambitious One Road’ (OBOR) programme, official- Eliminating space seas connecting them) into ‘production 15-year, $1 trillion Masterplan for Ac- ly launched in 2013. Encompassing 60 and time and distribution hubs’, ‘transit zones’, countries (thus potentially half of the celeration and Expansion of Indonesia’s Multiple social, ecological and politi- ‘development corridors’, ‘export zones’, world), OBOR is intended to create a Economic Development. Over 1,000 cal dynamics lie behind this push for ‘spatial development initiatives’, ‘inter- network of free trade areas connected infrastructure and logistics projects corridors; but one bundle of influential connectors’ and ‘intermodal logistics by both terrestrial and marine corridors are planned, including roads, railways drivers stands out. They stem from a terminals’. Some of the plans are na- stretching from the Pacific to the Bal- (particularly to haul coal), airports and problem that some people in finance tional in scale, others regional and still tic Sea. Its ‘belt’ (officially the ‘New Silk ports. Each of the six interconnect- now term the ‘production-consumption others continent-wide or near-global. Road Economic Belt’) consists of four ing corridors is centred on developing disconnect’. This disconnect arises in land corridors that would collectively In Africa, over 30 corridors have been key industries or natural resources part from economies of scale that have connect China to Central Asia, Russia, initiated, principally to enable the ex- (notably coal and palm oil) through enabled more remote deposits of raw Europe, the Persian Gulf, Southeast traction of agricultural produce and clustered manufacturing hubs and materials for industrial production to be Asia, South Asia and the Indian Ocean. minerals. The majority are ‘anchored’ Special Economic Zones (SEZ). Plans extracted; in part from the increasing The ‘road’ is in fact a marine corridor around mining projects but many are also afoot for marine corridors to distances between those deposits and (the ‘21st-Century Maritime Silk Road’) have ancillary agricultural corridors or connect the islands of the Indonesian the industrial sites where the extracted

12 13 Extreme Anihilating Space Through Time

canals, straighter rivers and longer air- carriers had been developed that were port runways. The resulting economies twice the size of anything previously of scale in transport stimulate further available, enabling Japan to import iron economies of scale in production (and ore from the newly-developed Cara- vice versa), reducing the costs of raw jas mine in the Brazilian Amazon over materials and finished goods, stimulat- 12,000 miles away ‘more cheaply than ing demand and triggering yet another US Steel could ship its iron ore across round of pressures to reduce costs by the Great Lakes’ (Bunker and Ciccantell compressing time and distance. One 2005). wave of innovation thus creates pres- sures for yet further innovation. As bigger and faster forms of As bigger and faster forms of transport transport are developed and are developed and the costs of moving goods fall relative to other costs, the the costs of moving goods geographies of raw material extraction fall relative to other costs, the and production are reconfigured. Com- geographies of raw material panies have a wider choice of loca- extraction and production are Reginaspics / pixabay tions for a factory, increasingly able to reconfigured. move anywhere in the world in search resources are transformed into con- leitmotif that runs through the report’s of cheap labour, favourable tax regimes sumer goods; and in part from the dis- 380 pages. or weak regulatory environments. It Today, the distances between points tances between those production sites Distance is a key theme, defined by becomes more possible for capital to of production and points of consump- and the places where the ‘global con- fragment production processes to an tion are often huge, involving multiple suming class’ live. the Bank not in Euclidean terms but as a measure of time and money – and, unprecedented degree and to move journeys and multiple forms of trans- The problem is not new. Almost 150 more specifically, ‘the ease or difficulty production further and further afield to port. A standard desktop computer, years ago, Karl Marx revealed how the for goods, services, labour, capital, in- areas that promise greater profitability, for example, typically involves the more that capital expands, the more formation, and ideas to traverse space’. even though these may be often thou- assemblage of some 4,000 compo- it needs to improve infrastructure to Distance matters because time mat- sands of miles from the major points of nents manufactured by as many as ‘annihilate space by time’. That reality ters. And time matters because the consumption. 250 different suppliers whose various factories are likely to be dotted around remains a core challenge for contem- faster commodities can be produced Likewise, remoter sources of raw mate- porary infrastructure planning within and exchanged, the greater the profits areas of cheap, skilled labour, nota- rials become commercially viable. Until bly Asia. Those components in turn would-be global politburos, such as for individual capitalists and the sharp- the 1950s, for example, the high costs the World Bank. Marx may not get a er their competitive edge over rivals. rely on minerals being extracted from of transporting iron ore (typically 60 per all over the globe. The coating for a mention in the Bank’s flagship 2009 cent of production costs) meant that World Development Report Reshap- To overcome diseconomies of space, standard monitor alone contains com- bigger, more powerful and more effi- steel mills needed to be sited close to pounds manufactured from sulfur, ing Economic Geography (its takeaway the point of iron ore extraction. But by policy summary: ‘No country has cient ships, trucks, trains, barges and zinc, silver, bauxite, gold and a host of cargo planes must be built. These in the 1960s, developments in shipping other minerals whose names are unfa- grown to riches without changing the had made it competitive for the Japa- geographic distribution of its people turn necessitate “extreme infrastruc- miliar to all but mineralogists – alunite, ture” in the form of expanded or up- nese steel industry to transport huge azurite, boronite, enargite, cerargyrite, and production for market access’); volumes of iron ore from Australia over but ‘annihilating space by time’ is the graded railway systems and ports, realgar and tetrahedrite – all mined or wider roads bigger bridges, deeper 5,000 miles away. By the 1980s, bulk processed in countries that are often

14 15 Extreme Anihilating Space Through Time

Extreme finance the World Bank, such sources could not conceivably finance all the projects that The combined pressures of econo- capital needs for its ‘annihilate space by mies of scale, the off-shoring of manu- time’ demands. Oil and gas companies facturing, the extraction of oil, gas and face a similar challenge with “extreme minerals from remoter and remoter energy” projects. areas, the growth of a ‘global consum- ing class’ and just-in-time delivery sys- Globally, there is now a massive gap tems are now playing out in the push between the available funding for new for corridors. infrastructure and the amounts said to be needed. Some estimate that $50–70 But extreme infrastructure is costly – trillion will need to be raised between necessitating “extreme finance”. Many now and 2030, of which about 37 per of the individual projects, and certain- cent would be for infrastructure in ly the wider schemes as a totality, are emerging countries. This would mean simply beyond the resources that can finding $0.5 trillion to $1.5 trillion every be raised through historical forms of in- year over and above what is currently frastructure finance. being spent – and that is just for road, Take the mining projects that are in- rail, port, airport, water and telecom de- tended to act as anchor investments for velopment: schools, hospitals and oth- many of the corridors in Africa. In the er social infrastructure would be extra. past, mining companies have generally The shortfall in the transport sector funded the dedicated infrastructure that alone is an estimated $260 billion every connects ‘pit to port’ off their own balance year between now and 2030. The short- Mike Kelley sheets, albeit often with guarantees from falls in the energy sector are even high- multilateral development banks and tax er – some $530 billion a year (OECD thousands of kilometres from where in the Amazon commercially viable re- breaks and other subsidies from states. 2015c). A study for the 2015 meeting the computer will be assembled, let quire ‘huge deposits of high-quality ore But this is no longer an option for most of the leaders of the G20 was blunt: alone finally be purchased and used. to fill ships on a regular basis and with new mines. The routes are too long and ‘Traditional funding sources will not be minimum delay in harbour’ (Bunker the scale of the infrastructure too costly, sufficient to meet these financing gaps’ To squeeze profits from such geo- and Ciccantell 2005). In the calculus of particularly for small- to medium-sized (World Bank et al. 2015). graphically dispersed sites of produc- global manufacturing chains, ‘every day mines, for a single operator to finance by tion, companies have increasingly in ocean travel that a country is distant themselves. A study by the World Bank’s Globally, there is now a massive adopted ‘just-in-time’ inventory sys- from the importer reduces the proba- International Finance Corporation found gap between the available funding tems, not least in order to cut down on just one mining project that was ‘bank- bility of sourcing manufactured goods for new infrastructure and the the costs of traditional warehousing: able’ as a purely privately financed proj- from that country by 1 per cent’ (World amounts said to be needed. Some trucks, trains and ships are effectively Bank 2009). ect (di Borgo 2012). The costs are also used instead as mobile warehouses. beyond the wherewithal of many nation- estimate that $50–70 trillion will The slightest delay in transporting com- al governments and private banks, even need to be raised between now ponents can thus cause major finan- when acting in consort. Although some and 2030, of which about 37 per cial losses. Similarly, the economies of projects could be financed by bringing in cent would be for infrastructure in scale that make mines such as Carajas multilateral sources of finance, such as emerging countries.

16 17 Extreme Anihilating Space Through Time

projects) to provide both an entice- World Bank (2009) Reshaping Economic ment to private investors and the foun- Geography. World Development Re- dation stone on which other extractive port 2009. Washington, DC: World forms of finance can be built. Bank. A failure to entice the sums required World Bank/IMF/OECD (2015) Capital from investors thus creates a major Market Instruments to Mobilize In- vulnerability for capital’s corridor pro- stitutional Investors to Infrastructure gramme: and, as such, it has turned and SME Financing in Emerging Mar- the financing of “extreme infrastruc- ket Economies: Report for the G20. ture” into a potent emerging arena of Nicholas Hildyard works with The struggle. This may offer scope for new Corner House, a UK solidarity and alliances among those challenging cor- research group. He is author of Li- ridors, “extreme energy” projects and censed Larceny: Infrastructure, finan- other forms of “extreme extractivism”. cial extraction and the Global South, For those whose livelihoods are organ- from which this article is drawn. The ised not around just-in-time delivery book is available from Manchester systems but around the collective right University Press. of all to survive, the linkages surely mer- it further exploration.

Integration and development hubs envisaged by the Initiative for the Integration of the Regional Infrastructure in South America (IIRSA) Maps: James Onnig Bibiography: Bunker, S. G. and Ciccantell, P. S. (2005) As in the past, capital has few options Today, capital must similarly move Globalization and the Race for Re- but to attempt to expand the pool of to tap new sources of finance, in this sources. Baltimore: The Johns Hop- finance on which it can draw. The joint instance wider capital markets, if it is kins University Press. stock company, for example, arose in not to implode. Hence the new allianc- part to raise the huge sums needed to es that oil and gas companies, mining di Borgo, P. (2012) Shared Mining In- finance the infrastructure capital need- companies and others are building frastructure: Too Good to be True? ed in the 1860s (as Marx remarked, with new financial actors – notably Trends, Challenges and Opportunities ‘Without joint stock, the world would private equity funds. Hence the re-en- for Private Financing of Mining-As- still be without railways’ – it would gineering of infrastructure finance sociated Transport Infrastructure in simply have taken too long for any to make it more attractive to private SSA. Washington, DC: IFC, 2 Febru- owner-capitalist acting alone to accu- investors by governments providing ary 2012. mulate capital sufficient for their con- guaranteed income streams, com- OECD (2015c) Official Development struction). Likewise, multilateral devel- pensation against new legislation that Finance for Infrastructure: Support How to cite this article: opment banks and syndicated bank might affect profits and the like. And by Multilateral and Bilateral Develop- Hildyard, Nicholas (2017). loans emerged to finance post-colo- hence the push for Public-Private Part- ment Partners: OECD Report to G20 “Anihilating Space through time”, nial infrastructure development in the nerships (which are central to every Finance Ministers and Central Bank in Extreme. The New Frontiers global South. one of the proposed corridors and, in- Governors. September 2015. of Energy Extractivism in Latin deed, increasingly important to the fi- America. Oilwatch Latinoamérica. nancing of individual “extreme energy”

18 19 Extreme By Felipe Gutiérrez Ríos (OpSur, Argentina)

Original in Spanish. Translated by Nancy Piñeiro. Biotechnology in the Service of Extractivism

The manipulation of living organisms movements and regulatory agencies. in laboratories to help sustain the agri- ETC Group, a Mexico-based organiza- business model is a known fact; GMO tion working globally to research new seeds are an unwanted reality. How- technologies –mainly but not limited ever, little is known about the develop- to the agricultural sector–, and their ments of synthetic biology in hydrocar- impact on communities, has published bon extraction. ETC Group has recent- a report about it: La biología sintética ly published a report on this topic, the y las industrias extractivas (available consequences of which are still hard to in English as ‘Extreme Biotech Meets assess. We interviewed Verónica Villa, Extreme Energy’). The report explores a member of the organization, who ex- the new ways of genetic modification plains how the laboratories working on as it meets with extractive industries, those investigations went from being especially with the oil industry. Veróni- critical of the oil civilization to underpin- ca Villa, part of the group in charge of ning its industry. the Spanish version, talked to us about the report. radually, synthetic biology devel- Gopments aimed at hydrocarbon –What is biotechnology and what has extraction or processing have started been used for historically? to be applied experimentally outside Those in the business argue that hu- the labs, even if its impacts are diffi- man communities have always used cult to assess. This issue managed biological transformations, that ev- to remain unnoticed by most social erything is biotechnology and thus we Synthetic biology projects itself as an oil industry ally capable of eliminating the frontiers 20 of hydrocarbon extraction. (Christopher Halloran / Shutterstock.com) 21 Extreme Biotechnology in the Service of Extractivism

should not be so critical of it. So there An example of that is synthetic vanilla. is a first distinction I really like making, You can put a yeast to a microorgan- and it is that there is a biotechnology re- ism so it ferments into a sugary liquid, lated to the development of productive synthesizing the processes that the forces for the good of communities, vanilla plant would make to produce but there is also a tipping point where such active ingredients, and thus ob- biotech has been kidnapped and devel- tain a substitute of vanillin, which is the oped in the image and likeness of cap- ingredient that gives vanilla its flavor. italist development. That is a process That is why synthetic biology can be we can also find throughout the devel- considered a branch of bioengineering, opment of science and technology. So, because it adopts mechanistic premis- biotech as we know it today is domi- es to manipulate living beings. All this is nated by private companies and is ded- computer-assisted.

icated to developments in the service ETC Group of business. Even if they tell you there is –How was synthetic biology devel- a development that is going to be good oped? How has it been used? predigested by sugar-fed microbes. they got into the business of microbi- for health, it turns out it has been pre- The industries involved in synthetic bi- They also wanted to push for a boom ally enhanced hydrocarbon extraction, viously privatized, so it is already inac- ology discovered the way to substitute in algae biofuels. The CEOs of synthet- with the novelty that the microbes cessible to most people. biosynthesized ingredients for botani- ic biology companies openly criticized would be genetically modified for op- cal compounds for the cosmetics and the high greenhouse gases emission timal recovery of hard-to-reach oil and –In that context of biotechnology, what pharmaceutical market. That means, of fossil fuels. According to the ETC gas reservoirs. So, of course, this is a is synthetic biology or extreme genetic of course, breaking the first link in the Group report: “Alan Shaw, CEO of the very important shift in the business engineering? supply chain of raw materials –which, Synthetic Biology biofuel company because they realized there are many The synthetic has two senses. On the as we know, is mostly agricultural Codexis, claimed that his company’s new ways of reversing the oil peak. On one hand, it means something that is communities. That is what we call the technology would, ‘enable the tran- the one hand, most reserves, which not natural, as when you say a fabric second wave of synthetic biology. sition from an oil based economy to are unconventional, can be extracted; is synthetic, it is neither cotton nor oth- what is known as the sugar economy.’ on the other hand, designer microor- er organic material. The other sense And the third wave is the one aimed And that, ‘biotechnology is a primary ganisms can “refine” gases to obtain points to a synthesis of processes. at helping extractive industries. It is driver of this transition from a 20th new products. So, synthetic biology is thus named something very funny because the promoters of the first wave criticized century dependence on oil to what will because it is a kind of biology that is So it was merely a movement of the oil industry; they said they were try- be a 21st/22nd century dependence not concerned with the course of nat- businesses: the industry’s old guard, ing to replace the oil economy’s filth. on sugar’.” ural processes in the metabolism of such as Shell, BP, Total, allied with Now it turns out they serve the oil in- living beings; on the contrary, it seeks –How did synthetic biology go from the new companies focused on syn- dustry directly. through manipulation to make metab- criticizing oil industry to being its ally? thetic biology, like Calysta, Intrexon, olisms follow the path indicated to ob- At first, they realized that it was go- and Coskata. tain an industrial product, for example, Microbes for hydrocarbons ing to be impossible to replace the an active ingredient. That is where its –What synthetic biology techniques The pioneers of synthetic biology were huge demand for fossil fuels, in terms relation with extreme genetic engineer- are currently used in the oil industry? first dressed in green. The reasoning of critical mass, with biomass fuels. ing comes from –synthetic biology was that it was possible to substi- Then they noticed that it is easier Synthetic biology can also be under- shortens, alters, manipulates and sup- tute easy-to-produce agrofuels for oil to imitate secondary petrochemical stood as a biological platform for the presses processes. because biomass cellulose would be products and patent them. And finally transformation of a carbon-based

22 23 Extreme Biotechnology in the Service of Extractivism

compound into another, using living microbes to transform heavy crude into presented as part of climate change re- the oil industry through the manipula- organisms that “process” them. One of lighter oils, and methanogen microbes mediation and mitigation schemes that tion of living organisms. As Verónica these techniques is biological refining to convert coal into gas. are being subsidized. So, you have an Villa stresses, “We cannot do without a via gaseous fermentation, which uses industry like fracking, extremely pollut- democratic debate on the ethical and methane and synthetic gas as raw ma- ing, but they try to save face talking to moral issues posed by the manipula- terials to refine fuels and produce plas- Microscopic bubble? their partners about synthetic biology: tion of life.”. tic and other industrial substances. –What kind of companies are promot- they can get those little bugs that will ing those investigations? capture gas, arguing that those tech- niques allow for negative or net zero So, you have an industry like Biotech has been kidnapped Among the big investors in synthet- emissions. fracking, extremely polluting, but and developed in the image ic biology are six of the ten biggest oil transnationals, six of the ten biggest they try to save face talking to and likeness of capitalist –What are in your opinion the greatest agribusiness companies, six of the ten their partners about synthetic development. risks of using synthetic biology? biggest chemical companies, and sev- biology: they can get those en big pharmaceuticals. There are also We have the risks I have already men- little bugs that will capture gas, public initiatives such as the REMOTE tioned with regards to their use in ag- –That is to say, these organisms are in- arguing that those techniques program (Reducing Emissions using riculture or extractive activities. For troduced so that, so to speak, they eat allow for negative or net zero Methanotrophic Organisms for Trans- instance, if it is used to replace inputs the gas and defecate refined substanc- emissions. portation Energy) of the US Energy produced by rural communities or if es, like plastic. Department, whose aim is to capture new frontiers are opened up for sug- Exactly, that is the companies’ uto- “stranded gas” from fracking and other ar cane or corn plantations serving pia. Another possible use is mining oil and gas extraction operations using as feedstock for the microbes, local Source: by microbes, which would enhance synthetic biology techniques. economies would be disrupted. Envi- Grupo ETC (2015). La biología sintética direct extraction techniques. If you go ronmental destruction is also an issue, y las industrias extractivas. Cuad- through the research, you realize that –Bearing in mind the oil companies’ since monocultures require more fertil- erno 113, diciembre. English: (2015, microbes that already feed on meth- need for stock market finance, and the izers, more pesticides, etc. November). Extreme Biotech meets ane gas –the methanotrophs– were risks posed by a decline in reserves, Extreme Energy. Communiqué num- On top of all that, you have to think how targeted by these companies who do you think these kind of investiga- ber 113. wanted to manipulate them. tions, beyond their real applications, this is going to interact with a living or- can be aimed at showing through new ganism. The risks taken by a handful of We should take into account that be- techniques that these companies are companies have to do with problems tween 40 and 60 % of oil is very hard “alive” in the market? that might be irreversible, like allowing a to obtain, and requires tertiary recov- modified organism that has never exist- Yes, of course, speculation in the stock ery techniques. So the microbes de- ed before, whose interaction with other market is very important, even if the signed through synthetic biology are truly natural processes is unknown, to technology is not a commercial suc- helping that extraction by degrading escape [into the natural environment]. cess or is never put into practice. Our oil to make it flow more easily. That is Once that happens there is no going report also underscores how this gives How to cite this article: why it is called microbial enhanced hy- back. That is why we are trying to dis- arguments in favor of the ideology of Gutiérrez Ríos, Felipe (2017). drocarbon recovery. This technique al- cuss this in our organizations, with the false solutions to climate change, be- “Biotechnology in the Service of ready existed. But the new thing is that grass roots. cause methanotrophs will supposedly Extractivism”, in Extreme. The New now the microbes used are genetically capture gas instead of burning it in the Frontiers of Energy Extractivism modified through synthetic biology. All ETC Group advocates for precaution air. So these techniques are classified in Latin America. Oilwatch this is in an experimental phase that and, on that basis, they seek to declare as carbon capture and storage, and Latinoamérica. also includes research to use mining a moratorium on the attempt to sustain

24 25 Extreme By Roberto Ochandio (Geographer, former oil worker, Field Engineer, Argentina)

Original in Spanish. Translated by Blowing up Nancy Piñeiro. theOcean

Offshore fields, just as their onshore 2011: 2). For that reason, high well equivalents, are becoming more dif- productivity is a must to be able to ficult to discover. New offshore oil justify the investment. and gas reservoirs are not enough to offset the energy depletion resulting As it happens with onshore exploita- from humanity’s growing consump- tions, the offshore industry regulates tion levels. With this in mind, gov- itself. The American Petroleum Insti- ernments do not hesitate to approve tute (API), created by oil companies, hydraulic fracturing to maximize ex- is the highest authority deciding over traction in offshore wells. the destinies of the sector worldwide. Governments accept its competence to regulate the activity and establish ffshore drilling began in Califor- safety standards. However, once again, Onia in 1896. Since then, the in- the industry’s priorities go against the dustry has developed methods to needs of the society and the current reach deeper reservoirs in more ad- reality, marked by unprecedented glob- verse conditions. For example, a well al warming. API regulations are not as just drilled in Uruguay 250 km from strict as to hamper the economic inter- the coast is 3,400 m deep and goes ests of the companies financing the API 3,000 m below the ocean floor (IPS, (National Commission, 2011: 228-229). 9/06/2016). Equipment and technol- ogy necessary for such drilling opera- tions are extremely expensive, its de- Swept under the carpet ployment demanding, in some cases, Maritime hydrocarbon exploitation en- the expenditure of up to one million tails a series of risks due to the hostile dollars daily (National Commission, environment where it occurs. A mobile

Cover of the Center for Biological 26 Diversity’s report 27 Extreme Blowing up the Ocean

Hydraulic fracturing in there is a growing risk of environmental offshore wells pollution (Schlumberger, 2002: 40). Offshore fields, just as their onshore Added to the problems that all off- equivalents, are also becoming more shore oil wells face, we now have the difficult to discover. New offshore oil known issues of fracking: use of toxic and gas reservoirs are not enough to chemicals, air pollution, waste genera- offset the energy depletion resulting tion, use of massive amounts of pota- from humanity’s growing consumption ble water. These operations require a levels. With this in mind, governments mix of unidentified chemicals together do not hesitate to approve hydraulic with hydrochloric acid and hydrofluoric fracturing, or fracking, to maximize ex- acid, which improve rock permeability. traction in offshore wells. The indus- These are injected into the well at very try faces different requirements. As is high pressures in hostile environments. the case in any extractivist project, the need to maximize production in order to increase profitability is paramount. Offshore fields, just as their At the same time, the geological char- onshore equivalents, are also acteristics of some areas make the use becoming more difficult to of different techniques to enhance well discover. New offshore oil and Hydraulic fracturing sites on the high seas, Santa Barbara Channel (FracTracker Alliance) productivity mandatory. gas reservoirs are not enough to offset the energy depletion Hydrocarbon formations in the Gulf of Mexico are mainly made up of uncon- resulting from humanity’s drilling rig makes the well and is fol- success of which cannot be guaran- solidated sandstones. Under such con- growing consumption levels. lowed by a permanent production plat- teed (van der Tuuk Opedal, Nils et al., ditions, sand loosens from the rocks form. The platforms that receive the 2013). In other words, the dust is being reducing the effective permeability of material extracted in the wells carry out swept under the carpet. formations and blocking hydrocarbon a preliminary cleaning of the oil (remov- flow into the well. To solve that- draw ing brine) and gas (removing CO2) and Offshore and onshore wells share the back, a technique known as “frac pack- then pump it onshore through several same problems: pipe cementing fail- ing” is used, by which a low volume of thousand kilometers of pipelines. ures, leaks due to inadequate cement- fluids is injected at a low pressure to ing or through cracks in pipes and fracture rocks near the wellbore. During Brine is discharged in the sea, and CO2 threads, and generalized corrosion fracturing, gross sand is injected to pre- injected into deep permeable forma- (Vengosh, Avner et al., 2011). All marine vent fine sand from blocking holes and tions through a parallel well, following structures are exposed to permanent well tools. This operation uses a lower procedures known as Carbon Capture corrosion from the moment they are volume of water and chemicals than and Storage (CCS). However, this con- installed, requiring constant inspection that used for unconventional fractur- Gulf of Mexico - Offshore Gas Fields (U.S. Energy finement is not guaranteed permanent- Information Administration) and cathodic protection methods to ing. However, the Schlumberger report ly, since there is no certainty that the delay as much as possible the effects states that 65 % of sand-control opera- seal capping the CO2 will not rupture of decay. But even so, the life span of tions in the Gulf of Mexico use the frac and let the gas escape. The method the installations is very limited (Techni- packing method, thus the generalized is a large-scale experimental trial, the cal Report, 2006). application of this technique means

28 29 Extreme Blowing up the Ocean

Fire in the gulf Regulation and Enforcement (BOEM- takes place. Marine platforms are out wind hinder provisioning of supplies RE) was created, with more authori- of reach for helicopters; it is only pos- as well as crew change or medical The most serious oil spill in the Gulf ty and scope of action. However, as if sible to access by water. Waves and assistance. of Mexico occurred in 2010 when nothing had happened, the new fed- the Deepwater Horizon rig caught eral agency approved massive drill- fire. The Commission investigating ing and fracking on the US coasts. the accident highlights in its report an accumulation of mistakes on These series of fatal mistakes took the part of BP (formerly known as place in the United States, a country British Petroleum), the owner of the with the means and experience nec- well; the staff of Transocean (owner essary to control such problems. If of the drilling rig); and finally Halli- we compare the legislation of the burton, in charge of cementing of US to that of Mexico –its neighbor the casing. As usual, there was not and Gulf of Mexico oil drilling com- only one reason for the disaster. Hal- panion–, we see the difference in liburton used inappropriate slurry for regulations. If in the US poor regu- the conditions of that well. In order lation cannot be effectively imple- to cut costs, BP’s CEO ordered not mented, in Mexico, legislation and to run cement evaluation logs, which controls are downright non-existent would have detected the failures at (Greenpeace México, 2012: 21). the bottom of the well that later lead to a blow-out. Transocean opera- Eleven workers died as a result of the tors did not know how to interpret Deepwater Horizon oil rig fire, and it pressure variation results from seal was the biggest ecological disaster in tests. Finally, when the uncontrolled the US. During the accident, 4.9 mil- lion barrels of oil (780,000 m3) were gas release began, the blowout pre- Vessels assisting in the drilling of the Deepwater Horizon relief well in the Gulf of Mexico (AP Photo / Patrick Semansky) venter (BOP) that should have com- spilled, contaminating 1,728 km of pletely shut the well and stopped the coastline and affecting countless gas leak also failed (National Com- numbers of marine and coastal spe- Operators are authorized to dump on the surface. Toxic products are then mission, 2011: 89-127). cies. Incalculable damage has been toxic waste into the ocean (Truthout, discharged in highly sensitive areas caused to local economies, depen- 24/06/2016 y NPDES, 23/01/2014). that are already impacted by human The operation’s magnitude exceed- dent on fishing and tourism, leaving This happens both off the US coast activities (Center for Biological Diversi- ed the control capacity of the state thousands unemployed. as in unconventional drilling off the ty, 2014). For instance, the Gulf of Mex- agency Mineral Management Ser- UK coast (The Guardian, 15/06/2016). ico is seriously contaminated, not only But the accident in the Gulf of Mexi- vices (MMS), in charge of monitor- Restrictions are only applied when the by the use of fertilizers, pesticides, and co was not the only one. Similar ca- ing and controlling drilling activities. waste contains oil traces. In such cas- the discharge of agriculture chemical tastrophes occurred in the North Sea, There were ongoing communication es, it is sent to big pools where oil is waste, but also by the oil industry. Indonesia, Mexico, and Brazil. In every failures between the different ac- separated from water before the latter case, spill containment and emergen- tors involved and the Government is discharged into the sea. Generally, cy efforts have been made difficult officials. The MMS was closed as a this process begins with a visual in- by the inhospitable environment in result of the accident, and the Bu- spection to verify that the water in the which this type of drilling operations reau of Ocean Energy Management, pools does not have any oily remains

30 31 Extreme Blowing up the Ocean

To this we must add the risks faced statistics, increases sevenfold the risk Sources: Petroleum Safety Authority Norway by workers. A well pad worker typ- of work-related deaths (Oil + Gas Moni- Center for Biological Diversity, 2014. (PSA). Report Nro 3496. ically works long shifts of up to 20 tor, 13/09/20). Troubled Waters. Offshore Fracking’s hours per day, which, according to the The Guardian, 15/06/2016. UK fracking Threat to California’s Ocean, Air and firm plans to dump wastewater in Seismic Stability. September, USA. . the sea. —- 28/06/2016. Obama Administration Truthout (Mike Ludwig), 24/06/2016. Permitted 1,200 Offshore Fracks in Obama Administration Approved Gulf of Mexico Gulf Fracking During Deepwater Environmental Protection Agency, Re- Horizon Disaster. issuance of National Pollutant Dis- van der Tuuk Opedal, Nils et al., 2013. charge Elimination System (NPDES), Potential Leakage Paths along Ce- 23/01/2014. General Permit for Off- ment-Formation Interfaces in Well- shore Oil and Gas Exploration, Devel- bores; Implications for CO2 Storage. opment and Production Operations Science Direct. Off Southern California, 79 Fed. Reg. 1643. Vengosh, Avner et al., 2011. A Critical Review of the Risks to Water Re- Greenpeace Mexico (2012).Perforar sources from Unconventional Shale aguas profundas. La gran estupidez. Gas Development and Hydraulic Mexico. Fracturing in the United States. En- Inter Press Service (IPS), 09/06/2016. vironmental Science &Technology. Uruguay busca un futuro petrolero Critical Review. August, USA. en sus aguas ultraprofundas. National Commission on the BP Deep- water Horizon Oil Spill and Offshore Drilling (2011). Deep Water – The Gulf Oil Disaster and the Future of Offshore Drilling. Report to the Presi- dent. January, USA. Oil + Gas Monitor (Jeffrey Raizner and Doyle Raizner LLP), 13/09/2013. Off- shore Fracking Injuries. Schlumberger, 2002. Frac Packing: Fracturing for sand control. How to cite this article: Technical Report, 2006. Material Risk Ochandio, Roberto (2017). Jarred Rodríguez for Tuthout.org – Ageing Offshore Installations. “Blowing up the Ocean”, in Extreme. The New Frontiers of Energy Extractivism in Latin America. Oilwatch Latinoamérica.

32 33 Extreme By Beto Loureiro, Daniela Meirelles, Flávia Bernardes, Fabíola Melca y Marcelo Calazans (FASE Espírito Santo, Brasil)

Original in Portuguese. Translated into Spanish by Rosa Santa Isabel. Translated from Spanish Pre-salt: into English by Nancy Piñeiro. Extreme energy from the Entrails of theEarth

Spain and Holland fight for the the biggest proven oil reserves were in rights to the sea, but it belongs Venezuela, with 298.3 billion barrels. to the seagulls and those who know how to sail it. Even onshore, in a supposedly more controllable environment, and at more Leila Diniz superficial depths, the survey, extrac- tion, transport, and storage of oil and gas are highly complex and risky, with 1) Human time and numerous accidents, explosions, and geological time spills; what about oil exploitation at Discovered in 2006, the so-called Bra- 300 km offshore, with waves of up to zilian pre-salt province takes up an 12 meters, currents of 2 knots, carried area of 800 km by 200 km along the out at 7 thousand meters below the wa- Atlantic coast in the states of Santa ter level, with high pressure drilling and Catarina, Paraná, Rio de Janeiro, and temperatures of up to 302°F? Espírito Santo. According to the Na- Underneath the large salt layer of the tional Petroleum Agency classification South Atlantic, in extreme tempera- (ANP in Portuguese), it includes the ture and pressure conditions, chemical sedimentary basins of Santos, Cam- and physical reactions allowed for the pos, and Espírito Santo. It is the big- formation of hydrocarbons from the gest crude oil reservoir discovered in decomposed organic matter: the im- the past 10 years, with an estimated mense fauna and flora of the ancient 80 to 170 billion barrels (needless to supercontinent of Gondwana. These say, such calculations cannot be trust- deposits are found both on the Brazilian ed!). By way of comparison, in 2014 and African coasts.

Building of P-51 FPU rig, which operates in the 34 Brazilian pre-salt (Keppel Corporation) 35 Extreme Pre-salt: Extreme Energy from the Entrails of the Earth

It is estimated that the pre-salt, consid- in natural gas production, going from Lower oil prices as from 2014 and the of a crisis –with several Petrobras ex- ered to be the most important oil fron- 87.4 to 144.4 million m3/day. With its economic and political crisis did away ecutives, politicians, and businessmen tier in Brazil, was formed between 100 name associated to the host country of with the dreams of an oil country, lead- in jail– when she began implementing and 130 million years ago, with the slow the FIFA World Cup and the Olympics, ing states and municipalities depen- a gradual process of privatization and separation of the American and African and with strong publicity on radio, TV, dent on that expansion into bankruptcy, asset sale as part of a plan of disin- continents. In terms of geological time, and internet, the company’s slogan was like Campos and Macaé, in the north vestment and private appropriation of History and Prehistory are but a mo- pretty clear: “Petrobras: the challenge is of Rio de Janeiro, the south of Espírito important resources of the national oil ment. After all, what are 150,000 years our energy”. Santo, Bahía, Rio Grande do Sul, Per- company by construction firms and of hominids or 2,500 years of Western nambuco, Ceará. With the “petrolão” politicians from the ruling and opposi- history or 2,016 years of Christianity or Without having at least a contingency of the operation known as Lava Jato,2 tion sectors. The economic crisis deep- even 300 years of capitalism as com- plan, it did not matter how extreme pre- carried out by the Public Prosecutor’s ened and it dissolved the political gov- pared to Earth’s time? If the ghosts of salt energy was; Petrobras, backed by Office, the state’s governance political ernance pact that sustained Dilma up that recent historical past still haunt the a powerful media superstructure, and strategy came to light, and with it the to that moment. mental and infrasubjective territories of national symbolism in full bloom, could power pacts sustained in part through postmodern societies in the 21st cen- face any risk, no matter the costs. At “tips” from the State and Petrobras’ in- As interim president, Michel Temer and 3 tury, what about that deeper temporal the same time, the company was set- vestments, involving regional political its soon-to-be minister, José Serra, abyss with Earth’s time? ting up a huge oil infrastructure, steer- oligarchies, the financial sector and big announced a bill of law that would cut ing public and private investment to- construction companies. Taking into to 30 % the requirement for Petrobras’ wards it, and mobilizing an economy account only those “tips”, in its 2014 participation in pre-salt exploitation. 2) Addicted Brazil: pre-salt and society increasingly more depen- financial report the company acknowl- As Petrobras’ president, Pedro Par- 1 as droga prima dent on that resource. The infrastruc- edged losses of more than USD 1 bil- ente, stated in an interview with CBN ture includes ports, refineries and (21/09/2016), pre-salt exploitation is With oil prices at USD 100 per barrel, lion. Petrobras’ debt reached USD 200 petrochemical complexes; shipyards, economically viable even with oil pric- pre-salt –a huge challenge in terms of billion; its market value in 2002 was probes, ships, and platforms; pipelines es around USD 40 a barrel, bearing in its exploitation– became the main in- USD 15 billion; in 2010, USD 350 billion, and tanks, gas treatment units, and mind that in the early stages of exploi- vestment target of the State, the state- and USD 70 billion. roads. It also involves sectors associ- tation the drilling of a well could take controlled oil company Petrobras, and ated to mining activities, and the steel Due to the lack of resources for pre-salt 330 days, and in 2016 that time was the Ministry of Mining and Energy dur- and metal industry, in addition to the exploitation investment, the govern- cut down to 90 days. With the privatiza- ing the administrations of Luiz Inácio armed forces to “protect pre-salt” by ac- ment sought to “attract” big interna- tion of TRANSPETRO, in charge of the Lula Da Silva (2000-2010) and Dilma quiring fighter planes and developing a tional oil companies for the licensing of transport and pipelines network, the Rousseff (2011-2014). Petrobras’ busi- nuclear-powered submarine. new exploration blocks, without hold- sale of 66 % of Carcará to the Norwe- ness plan for 2013-2017 projected in- ing any deep debate with society. Dilma gian oil company Statoil, and Chinese vestments for USD 236.7 billion. The In 2014, Brazil ranked 13th in the world was still in the presidency, in the middle Ten-year Energy Expansion Plan for ranking of oil producing countries (with 2014-2024 (PDE, by its Portuguese 2.3 million barrels/day), and 5th in glob- acronym) forecasted a 121.7 % rise in al oil consumption (with 3.2 million bar- 3 Ed. Note: Dilma Roussef was impeached and re- oil production, going up from 2.3 to 5.1 moved from office. The process was petitioned by rels/day). Domestic consumption rose 2 Editor’s Note: The Lava Jato operation (“Car the Chamber of Deputies on suspicion that there million barrels per day, and a 65.2 % rise by 57 % between 2004 and 2014. In wash”), also known as Petrolão, is a corruption were grounds for “criminal responsibility”. How- 2016, ten years after its discovery, pre- investigation conducted by the Brazilian Federal ever, the main accusation was not related to the Police. It became public n March 17th 2014 with bribery scandal in Petrobras, but to the violation salt reached an output of 1 million bar- the execution of more than a dozen arrest and im- of fiscal laws, and masking of the budget deficit. 1 Translator’s note: droga prima, from the rels per day (bpd), i.e., 40 % of oil pro- prisonment warrants, which reached several politi- During the proceedings, the head of State was Portuguese matéria prima (raw material), literally duction in Brazil, obtained from 52 pro- cians and businessmen in the country. The aim replaced by Michel Temer, who continued holding “raw drug”, i.e., oil as a drug (addictive substance) was to investigate a money laundering scheme the presidency after Dilma’s removal from office, of which capitalism cannot get rid. ducing wells, according to Petrobras. said to divert more than 10 billion Brazilian reals. and appointed Serra as Foreign Affairs Minister.

36 37 Extreme Pre-salt: Extreme Energy from the Entrails of the Earth

investment through an oil-for-loans de Janeiro, to Florianopolis, in Santa deal in addition to the new licensing Catarina. There are 8 platforms in this rounds announced for 2017, the road area only; the first tests were conduct- chosen by the new Administration in ed in 2009, and production start-up relation to the pre-salt and Petrobras begun in 2010 in the Lula field (FPSO4 becomes clear. Ciudad de Angra dos Reis). The technicians of the General Oil and 3) Environmental licensing: Gas Coordination (CGPEG in Portu- the right to say ‘No!’ guese) and the Brazilian Institute of Environment and Renewable Natural In recent years, the environmental li- Resources (IBAMA in Portuguese), in censing process has been sharply and charge of granting Brazil’s offshore en- consistently criticized by the govern- vironmental licenses for all the oil and ment and oil companies. The media gas operations, proposed that licensing broadcast a discourse of environmen- of such activities should be done in a tal racism, in which indigenous popu- coordinated, cumulative and synergic lations, environmentalists, academics way, in contrast to individual and iso- and independent technicians from pub- lated impact assessments for each of lic institutions are accused before so- the projects. At first, both Petrobras and ciety of being the main obstacle to the IBAMA’s licensing board thought the plans of economic acceleration (PAC, proposal was relevant, given the reach “¡Yemayá is against Pre-salt!” Art intervention in Praia do Arpoador, Rio de Janeiro - Campanha Antipetroleira by its Portuguese acronym). Nem Um Poço a Mais. and spatial and temporal magnitude of Environmental legislation, prior con- the impacts of all the oil operations pro- sultation, socio-environmental im- jected in that sedimentary basin. Also, mainly for the quilombolas,5 fishermen unilaterally breaching the agreements. pact studies and assessments, public the fundamental principles of precau- and indigenous communities living In a public letter of November 2015, hearings, contingency and monitoring tion and prevention had to be factored in the region. Petrobras accepted the ASIBAMA-RJ denounced: “Let’s look plans, restrictions and compensations: in, as well as transparency, and consent Terms of Reference and organized sev- at the facts, and the unfortunate role for the State and the companies, they of the affected populations. eral meetings with the Forum of Tradi- recently played by Petrobras: 1) the are the main “enemies” of jobs and the tional Communities, which participated According to the Association of Fed- company commits itself to a project Brazilian economy. Even nature itself, in the licensing. After the first granted eral Environmental Officers in the State that will tackle the inadequacies of the with its endemic species of reptiles and license, the company, supported by of Rio de Janeiro (ASIBAMA-RJ, by its existing environmental impact study amphibians, is deemed as an obstacle IBAMA’s board, began questioning the Portuguese acronym), during five pub- and will provide qualified information in to development! whole process and ceased the dialogue, lic hearings with a high regional civil the subsequent processes of environ- For the State, pre-salt operations licens- society turnout different environmental mental licensing, relevant to the same ing should be a quick process, since projects were initiated, which included region, and with important cumulative the resource is expected to be the main socioeconomic factors, identification 5 Ed. Note: Quilombolas are the inhabitants of rural effects; 2) the previous license is grant- agent of economic acceleration. The and monitoring of foreseeable impacts, communities (quilombos) composed of descen- ed by IBAMA on the grounds of that dants of enslaved Africans, who keep a strong commitment; 3) Petrobras adopts dif- licensing of Polo Presal, in the Santos cultural identity; most of them depend on subsis- basin, is a good example of this. It is the tence agriculture. Quilombos originated as refuge/ ferent initiatives that indicate they are biggest sedimentary basin on the Bra- resistance communities created by slaves who taking precautions to execute the proj- 4 Ed. Note: Floating, Production, Storage and could escape from the plantations during Brazil’s ect; 4) based on such initiatives, CGPEG zilian sea, from Arraial do Cabo, in Rio Offloading (FPSO). slavery period.

38 39 Extreme Pre-salt: Extreme Energy from the Entrails of the Earth

recommends and IBAMA issues most more than R$ 6 billion. Petrobras’ board IBAMA showed the power of a unilater- and people living in the urban indus- of the installation and operation licens- of licensing –going against its own al board, subject to the interests of the trial districts where these projects take es contemplated for stage 1 of the Polo technical team– ignored proceedings companies, when it reduced the partici- place. Presal; 5) finally, Petrobras, more than and regulations, breached agreements pation of civil society to the public hear- two years after agreement on condi- with traditional communities, under- ings, when it rejected the independent Bearing in mind the totality of the indus- tions, lodges an appeal before the Li- mined the value of the prior informed technical team of IBAMA itself, when trial complex –hydrocarbon refining, censing Board requesting the cancella- consent procedure, and made installa- it failed to observe the terms agreed uses, flaring and discharge of deriva- tion of the conditions”. tions and oil operations exempt from upon with the civil society of affected tives (plastic, gasoline, diesel, naphta, any conditions. communities, when it failed to build kerosene, lubricants, fertilizers, cos- Also in the second stage of licensing, communication channels with the tra- metics, anxiolytics, etc.), and emissions Petrobras sets an utterly irresponsible In a communiqué, ASIBAMA-RJ de- ditional peoples of the region. of CO2 and other greenhouse gases– aim of doubling national production by nounces “the dangerous trends in en- it can be seen that oil affects the lo- 2017, with a leap from 10 to 23 plat- vironmental licensing in Brazil”, and cal and global society, and it is directly forms in the Santos basin. Those were points to the unbridled pace of that ex- 4) Local resistance and linked to different diseases, mainly can- mega projects under study: the instal- pansion: “The unilateral withdrawal of social actors of the energy cer. Oil kills. In spite of that, no state or lation of 13 new “production and flow the environmental projects that were a transition private campaigns are warning about developments”, and 7 new “long-term precondition for Stage 1 of pre-salt, and those risks. tests” with the FPWSO6 Dynamic Pro- the position of the licensing director re- In the oil-producing Brazil, local resis- ducer and the FPSO BW Ciudad de São tance and struggles against the in- At sea, the prohibition of traditional Vicente were planned. The total value stallation and expansion of the indus- fishing routes, heavy ship traffic, in- trial complex are violently attacked by stallation of pipelines, and exploratory Petrobras, state governments –both surveys scare the fish away to increas- neoliberal and developmentalist–, ingly further distances, out of the reach Petrobras’ board of licensing and even by nationalist left and right of artisanal and family fishing boats. going against its own technical wing social movements, because, as Countless dredging operations and team ignored proceedings the poet Drummond de Andrade said: docks building for the installation of and regulations, breached “Some die for oil convinced that they ports such as Açu (north of Rio de Ja- agreements with traditional die for the motherland”. neiro), Super Porto e Itaoca offshore communities, under-mined (south of Espírito Santo), or the con- However, at sea and along the Atlantic the value of the prior informed struction of shipyards like Jurong (in coast, pre-salt exploitation generates a Aracruz, Espíritu Santo) also destroy consent procedure, and made wide range of impacts, as well as seri- installa-tions and oil operations strategic fishing areas, mangroves and ous conflicts and socio-environmental great marine biodiversity. Contamina- exempt from any conditions. injustices in all its stages: before instal- tion of those areas, known as laminhas, lation, during prior consultation; during Marcelo Rampazzo. destroys the habitats of many species operations, and monitoring; or after ac- of shrimp, shellfish, lobsters, and crabs, was R$ 120 million, in addition to the li- cidents or environmental crimes, and in censing of the Libra field, in which there where baits are obtained for each type the reparation processes. There is also of artisanal and family fishing. The con- were five long-term tests projected with garding the delay in the scheduling of a permanent and systematic violation the FPSO Pioneiro, and investments for environmental projects in Stage 2, both tamination and destruction of laminhas of human rights, economic, social and affects food sovereignty, and in a deep show that the companies’ interests environmental rights of traditional fish- trump those of the rest of the groups way, the livelihood and work of many ing peoples, quilombolas, indigenous women who live off shellfish (maris- 6 Ed. Note: Floating Production Workover Storage involved” (05/09/2015). peoples, peasants, other rural groups, and Offloading (FPWSO). queiras).

40 41 Extreme Pre-salt: Extreme Energy from the Entrails of the Earth

the State Federation of Fishermen from Espírito Santo; the Forum of Oil and Countless dredging operations Gas Affected Peoples (Rio de Janeiro); and docks building for the the Forum of Traditional Communities installation of ports such as Açu, of South of Rio de Janeiro and north Super Porto e Itaoca offshore, of Sao Paulo; in addition to networks and movements, such as the National or the construction of shipyards Movement of Artisanal Fishermen and like Jurong also destroy strategic Women (MNPP); the National Forum fishing areas, mangroves and of Climate Change and Social Justice; great marine biodiversity. the Campaign “Not One More Well”; the Group Carta de Belém, and the Brazil- ian Network of Environmental Justice. They denounce at different institutional levels the destruction of nature and the Earth’s climate, the contamination of life, water, and people. They urge the companies, states, municipalities, and Demonstration against the installation of an oil rig in an artisanal fishing area in Espirito Santo - Campanha Nem Um the corresponding public bodies, to pro- Poço a Mais vide social and environmental justice. On land, the traffic of trucks; crude Santo, and Campos and Macaé, in the The actors of the energy transition are storage facilities; gas treatment units; north of Rio de Janeiro. plural and heterogeneous. They defend pipelines invading indigenous lands, natural territories, and territories of the quilombolas, coastal communities, ru- In cities and urban districts, cycling mind, to be free of oil, and free to live ral settlements and peasant commu- activists, garbage recyclers, visual art- well and coexist. There will be limits to nities, all contaminate the water and ists, communicators, independent re- oil dependence and the farce of devel- Pre-sal / Jornal Brasil em Folhas soil, and hinder people’s cultures and searchers, academics, human rights opment. Long is the time of the Earth. livelihoods. In a few years, small com- activists, environmentalists, women munities dedicated to artisanal fish- and youth groups join the struggle of Sources: ing turned into urban, industrial and/or traditional peoples. Along the pre-salt CBN Brazil. (21/09/2016). “Pré-sal é port districts, attracting thousands of areas, local resistance multiplies, as do viável com o petróleo abaixo de US$ workers, mostly men, for a short time protests, complaint letters, manifestos, 40, diz presidente da Petrobras”. In- to build production plants. Without legal processes, video and text produc- terview to Pedro Parente. public health policies, education, water tions, murals, and more. systems, proper sewage, and security, In the territories threatened and tram- ASIBAMA-RJ (05/09/2015). “A descon- each of those districts replicate a social struçao do licenciamiento ambiental How to cite this article: pled on by the oil complex, people orga- Loureiro, Beto et al (2017). “Pre- tragedy: unemployment, prostitution, nize around local struggles, articulated do pré-sal”. violence, early pregnancies. This has salt: Extreme Energy from the in forums and regional and national Entrails of the Earth”, in Extreme. a huge impact on the life of the whole campaigns, such as the Association of native society, especially on women The New Frontiers of Energy Men and Women of the Sea (AHOMAR), Extractivism in Latin America. and young people. This is the case of in Bahía de Guanabara (Rio de Janeiro); Barra do Riacho, in the north of Espírito Oilwatch Latinoamérica.

42 43 Extreme By Hernán Scandizzo (OPSur, Argentina)

Original in Spanish. Translated by Nancy Piñeiro. An Iceberg Called “Vaca Muerta”

Vaca Muerta (literally, ‘dead cow’ in cultural, public health, and economic Spanish) is often used as a synonym dimensions. A wider view is necessary for the nearest town, Añelo, but its limits to measure the intensity of the fracking go well beyond that small locality in boom. the Patagonian province of Neuquén, which has become the capital of Massive exploitation of unconventional unconventional hydrocarbons. The reservoirs first made its appearance in 1 name Vaca Muerta to Argentinians now Argentina early in the present decade , usually conjures up fracking, but it is amidst a decrease in oil and gas extrac- 2 much more than that. Therein lies its tion, and growing fuel imports. The extreme nature. federal government, then headed by Cristina Fernández, and the company aca Muerta is the only massive YFP –now partially controlled by the Vshale oil and gas project that has reached commercial scale outside the United States and Canada. Set in 1 Even if by 2006 there were 40 wells drilled in tight the north of the Argentine Patagonia, sands and 2 in shale formations in Neuquén prov- ince, it was only in 2012 when the upsurge began, it sparked an anti-fracking movement reaching more than 1,150 unconventional wells due to the environmental impacts as- currently in production. Energy Ministry Statistics, sociated to the technique. However, the August 2016. transformation triggered by it over a 2 Fossil fuels make up around 90 % of primary energy sources in the country. In 1998, there was vast terrain concerns more than air, wa- a peak in oil extraction, and the peak for gas was ter, and soil pollution –and their social, in 2004. Since then, conventional extraction levels have been falling. Loma Campana concession, Argentina’s most drilled area for shale extraction through fracking 44 (Image: Alexis Vichich) 45 Extreme An Iceberg Called “Vaca Muerta”

(2016). This equals “more than 6 times have kept to their bet on Vaca Muerta,5 the amount of conventional oil reser- even if the global decline in crude oil voirs and, for shale gas, more than 27 prices in 2014 somewhat dampened times the amount of conventional gas the initial enthusiasm. In the last five reservoirs,” underscores the report pub- years, Vaca Muerta ceased to be just lished in February 2016 (pp. 123-124). a shale formation of 30,000 km2 and And it concludes, “If the necessary con- became a “Region” taking up unequal ditions are in place, and the hypotheses parts of Neuquén, Río Negro, La Pam- mentioned are confirmed, the afore- pa, and Mendoza. Now it is also said to mentioned amounts would entail, not be apt for tight oil and gas exploitation. only the possibility to reach [fossil fuel] Its relevance goes beyond the energy self-sufficiency, but also an opportunity sphere and it is built around a dismiss- for Argentina to become an exporting al not only of socio-environmental criti- and price-setting country.” cism6 but also of warnings about the short-lived production horizon of those In just a few lines, Strategic Studies reservoirs –as fracking wells empty goes from proven reserves to hypoth- out fast– and about extraction costs.7 eses mentioned, but it still keeps a tone typical of brochures: “The agri- Well drilling in Loma La Lata Norte area, Añelo, Neuquén province (Image: Fabián Ceballos) culture and livestock boom that be- gun towards the end of the 19th cen- state but run by the Spanish Repsol3 at Muerta,”4 highlights the third part of the tury covered a much larger area and that time– cast them as the only choice report “Strategic Studies for Territorial lasted many years, but it did not have 5 The domestic price of oil above international for the country in the face of the energy Development of the Vaca Muerta Re- the magnitude that the shale phenom- values, as well as the rise in the price of gas at well head and fuel prices at the pump reflect the deci- crisis. Since then, the shale formation gion”, drafted by the national govern- enon could have. Neither is it compa- sion to keep betting on unconventional fuels. called “Vaca Muerta” has a leading role ment together with technical teams rable to the industrialization process 6 Warnings about the environmental and health in the “Argentina, energy power” saga, from the provinces of Neuquén, Río Ne- of the mid-20th century in terms of impacts of this technique were dismissed by geographic concentration or poten- provincial and national authorities, who repeated displacing transgenic soy monoculture gro, La Pampa, and Mendoza, as part the arguments of oil and service companies as as a protagonist. of the Institutional Strengthening Pro- tial for massive initial growth [of Vaca if they were their own, made fun of critiques, and gram of the Under-secretariat of Ter- Muerta] (Undersecretariat of Planning, dubbed opposition as “environmental terrorism”. “According to estimates, proven re- ritorial Planning of Public Investment 2016: 124).” This short passage clearly See Pechen pidió educar en contra del “terrorismo serves in the Vaca Muerta field, com- ambiental” (Río Negro, 14/12/2013 and La Mañana reflects the place given by the state to Neuquén, 21/03/2014). bined with those of the San Jorge and massive development of unconven- 7 Based on the North American experience, the Post Austral Magallanes basins, amount to tional hydrocarbons. Carbon Institute concluded that the production approximately 27 billion barrels of oil 4 It is worth noting that the advance and public decline curve in unconventional wells is reduced and 802 TCF (trillion cubic feet) of gas, planning of unconventional activities was inter- Five years after the first announce- in more than half after the second year (EJES nationally triggered by the US Energy Information 2016b). Also, the North American company Exxon of which 80 % corresponds to Vaca Agency, and that estimates, return and profitability ments, both provincial governments announced towards the end of October, 2016, that rates of shale formations are being questioned. the Pink House [Argentina’s presiden- “Quantities that could be required to be de‑booked For example, the Polish energy agency reduced its tial residence] –which now houses the as proved reserves on an SEC basis amount to ap- shale gas resource estimate for Poland to a tenth proximately 3.6 billion barrels of bitumen at Kearl of what its North American equivalent originally businessman Mauricio Macri– and [Canada], and about 1 billion oil-equivalent barrels 3 In May, 2012, the Argentine government seized estimated. That is why, coupled with the low in other North America operations,” that is, 19 % of 51 % of YPF’s shares, previously owned by Repsol. productivity of wells and social resistance, some its total reserves, if it determined that the financial The process ended two years later with a com- projects of big companies like Chevron were costs make such projects unfeasible (Exxon Mo- pensation settlement between the parties. aborted (EJES, October 2016a). bile press release, October 28th, 2016).

46 47 Extreme An Iceberg Called “Vaca Muerta”

Geological maneuver increased loss of productive soil and the The growing demand for urban soil, increase of abandoned native forests; due to the urbanization process in the The Vaca Muerta boom made the sub- health risks in fruit due to light pollution; Alto Valle del Río Negro and Neuquén, soil swap places, as in a game of chess: fragmenting of productive space, which also generates a strong advance over it emerged from the depths of the Earth makes controls en bloc more difficult orchards, where land sales flourish, and displacing what exists –peoples, cul- (...) and irrigation systems maintenance fruit groves are replaced with square tures, economies, lives– to become more complex (...); added to a high risk feet of cement. While this trend pre- the new surface. The landscape is now of water tables and surface water con- dates the unconventional boom, the valued in barrels of oil equivalent. What tamination.” He also warned that “ex- construction of Vaca Muerta as a land existed before is prehistory. In the case port standards could change, and fruit of abundance speeded up the process. of Neuquén, official reports document- could be rejected in the future.”12 He According to the Strategic Studies re- ing the advanced processes of soil and highlights, “From the capitalist logic of port, between 2009 and 2013 around water degradation as a result of almost free market, land rent for hydrocarbon 2,300 hectares were lost in the Alto Valle a century of hydrocarbon extraction extraction is much higher than its value del Río Negro and Confluencia regions. were doomed to silence (UNDP, 2010).8 for agricultural use. But in this equation, The report points out, “Without taking A study issued by the UNDP in 2010 the cost represented by the loss of pro- into account those that could have been warned that the situation could serious- Chelo Candia. ductive soil, with its infrastructure, the lost between 2013 and 2015, another ly affect agro-industrial development,9 loss of social capital which also took 2,440 productive hectares are expected which since the mid-1990s has been years to build, and the jobs lost, are not to be lost only due to the urbanization presented as the centerpiece of differ- advance of drilling (OPSur, 4/08/2016 taken into account.” These statements required by population growth.” If the ent provincial plans aimed at diversify- and 20/10/2016). The same applies to are included in his report “Advance of hydrocarbon sector recovers the level ing the economy. labor expectations: high salaries paid by the oil industry diminish interest in the Hydrocarbon Frontier on Produc- of activity prior to the fall in oil prices, Against this backdrop of a geological agricultural activities. Both the authori- tive Soil. Estación Fernández Oro, Alto the population of the Metropolitan Re- ‘castling move’, small-scale producers, ties of Neuquén and Rio Negro10 affirm Valle del Río Negro,” (Rodil, 2015) which gion of the Valle and Confluencia would and peasant and indigenous communi- that productive and extractive activities he planned to present at the Seventh ties are caught between resistance –to can coexist, even in spite of well explo- Congress of Ecological Economics of The incompatibility of these preserve land/territorial tenure, liveli- sions, leaks, and other accidents re- the Argentine-Uruguayan Association activities can be seen in the 11 of Ecological Economics, which took hoods and modes of production–, and corded in the orchards area. increased loss of productive soil negotiation with a view to participating place in Neuquén in November, 2015. Diego Rodil, technician at the National However, even though his presentation and the increase of abandoned in the abundance being marketed or, native forests; health risks in fruit at least, receiving some kind of benefit Institute of Agricultural Technology had been already accepted by the orga- due to light pollution; fragmenting in the face of a seemingly unavoidable (INTA), argues that “the incompatibility nizing committee, the National Institute of these activities can be seen in the of Agricultural Technology did not au- of productive space, which thorize his participation. makes controls en bloc more difficult; added to a high risk of 8 See also UNDP and Neuquén Province (1998) and water tables and surface water Copade. General Directorate of Programs and 10 In Río Negro, the advance of oil exploration and Projects. General State Secretariat of Neuquen exploitation occurs on the fertile valley that contamination. (2006). positioned the province as the country’s most 9 Beyond the authorities’ current opinions regarding important producer of pears and apples. increase by 200 thousand inhabitants these reports, the diversification discourse has 11 The most recent was a salt water spill from a well, 12 In this regard, organic producer Jessica Lamperti, not changed, although the actors did. The leading flooding the adjacent orchard and drying out pop- from Allen (Río Negro), denounced that a client in at least five years, reaching a total of role is now played by big investors, linked to high- lars and fruit trees (Río Negro, 29/10/2016). For stopped buying her products because there is 1 million inhabitants, according to of- tech “corporate farms”. See OPSur (7/06/2016), more information, see the book by Martín Álvarez fracking in that locality. For more information see ficial estimates. For example, Añelo, a (13/06/2016) and Scandizzo (2016). Mullally (2015). Río Negro, 01/11/2015.

48 49 Extreme An Iceberg Called “Vaca Muerta”

city that often serves as an operations the potassium extraction project in base for Vaca Muerta, went from hav- the south of Mendoza, which was sus- ing 2,500 inhabitants in 2010 to 6,000 pended by the mining company Vale13 in 2014, after the boom. If the activ- in 2013, and the construction of the hy- ity surges again, the city could have droelectric complex Chihuidos, which 41,000 people in about five years, as would mean both generating electricity the estimates published in the Strate- and controlling over the Neuquén river gic Studies report indicate. waters, whether it is to enable new ir- rigation areas, avoid floods or ensure It is worth mentioning at this point that supply for the hydrocarbon sector. 14 while the official planning problematiz- es the loss of productive soil resulting Meanwhile, from the business sector, from the expansion of urbanization, it Dow Chemical noted that an increase does not do the same with the installa- in the gas supply –thanks to the mas- tion of well locations –which replaces sive development of reservoirs in the the fertile topsoil with limestone soil Neuquén basin– would enable the ex- compaction of 40 to 50 cm– and the pansion of their site in the petrochemi- infrastructure needed for oil and gas cal industrial park in Bahía Blanca, in projects. the south of Buenos Aires province.15 In 2013 this US company partnered The massive exploitation of shale with YPF to jointly develop El Orejano area, in Neuquén, and secure the gas Infrastructure of the Vaca Muerta megaproject (Iconoclasistas / EJES) and tight sand formations entails supply for its PBB Polisur plant (YPF, But Vaca Muerta’s expansive wave is Añelo.17 In Entre Ríos, where there are an expansion of the geographic 15/12/2015). Towards the end of the and technological frontiers but, much bigger if we take into account, more than 40 municipalities that have 1990s, both companies, together with for instance, the silica sand extraction declared themselves ‘fracking free’, as a consequence of large-scale Petrobras, set up the Mega SA com- infrastructure and logistics, it in Dolavon (Chubut province), and Al- socio-environmental assemblies chal- pany to supply its plants in the south of dea Brasilera and Gualeguay (in Entre lenged last October the extraction of also makes way for starting up Buenos Aires with gas from the Loma Ríos). This sand is used for injections new ventures. La Lata field in Neuquén. during the fracking process, and it is used to prop open the rock fissures to 17 On June 24th, 2016, the Legislature of that Extractivist synergies let the gas and oil flow. According to province declared silica sand to be a public good, studies by the US National Institute for which makes the state a strategic partner in the The massive exploitation of shale and activity. “What is yet to be determined,” said the tight sand formations entails an expan- Occupational Safety and Health, people Patagonian news outlet Big Sur, “are the royalties sion of the geographic and technologi- 13 It is relevant to note that in 2010 Vale signed an exposed to silica dust, such as work- that the province will obtain for the extraction of cal frontiers but, as a consequence of agreement with YPF to secure the supply of gas ers in fracking operations, are at risk of its natural resources; what health impacts it will (El Cronista, 07/12/2010). From early 2016 there developing silicosis, an incurable lung have for the populations of Dolavon, 20 de Julio, large-scale infrastructure and logistics, has been rumors about the reactivation of the Gaiman, and Trelew; what environmental impact 16 it also makes way for starting up new mining project (El Diario de La Pampa, 26/04/2016 disease. In spite of that, 20 silica sand it will have on the waters of the Chubut river; what ventures. The federal government and and Los Andes, 13/09/2016). trucks leave each day from Dolavon to damage the passing of 20 sand trucks a day will 14 See Subsecretaría de Planificación Territorial de la do to the routes; what added value can be gener- provincial agencies that participate Inversión Pública de la Nación (2016: 105). ated in the area besides the ’40 direct jobs’ prom- in the strategic planning of the Vaca 15 Corporate media like Revista Petroquímica ised by YPF; and what will happen when there is Muerta Region speculate that there will (Petrochemical Magazine), reported on these only one well left. All that remains a mystery, but, statements as if they were the announcement of meanwhile, the trucks come and go, silently unit- be a synergistic reactivation of both a mega project on the horizon. 16 More information in OPSur (27/05/2016). ing the provinces” (Big Sur, 04/07/2016).

50 51 Extreme An Iceberg Called “Vaca Muerta”

sand transport between Dolavon and of production costs, since distance and Añelo,18 but to go even further and link time with global markets would also both basins, which would “articulate an be shortened.20 Such requirements not operational/productive integration” (Un- only determine the feasibility of oil and dersecretariat of Territorial Planning of gas extraction in unconventional res- Public Investment, 2015: 263). On the ervoirs, but also of mining projects or other hand, Vaca Muerta reawakens large-scale agro-industrial production. the authorities’ interest in inter-oceanic From the neck of this cow hangs a bell, corridors, as part of the Initiative for the and its ringing lures other extractive Integration of the Regional Infrastruc- projects. ture in South America (IIRSA)19 and the South American Council of Infrastruc- ture and Planning. This can be seen in the improvement works at border crossings in north Patagonia and the expansion of roads and railways –such as the train to Chile–, but also in the creation of new customs posts aimed, in principle, at easing the imports (Río Negro, 31/07/2014 and La Nación,

Advancing of the extractive frontier over fruit orchards in Rio Negro province (Alexis Vichich) 19/05/2015), but which also work for exports. If for Vaca Muerta the Pacific sand in quarries in Gualeguay, pushed coming from Dolavon (Chubut) would has always been close, now the plan is to bring it closer. forward by authorities. By mid 2015 be installed. Currently interrupted is the Drilling Allen (Fabián Ceballos). this province supplied half of YPF’s de- construction of a new branch line from Fracking emerges as the tip of an ice- mand of sand (OPSur, 07/10/2016 and Chichinales to Rincón de los Sauces, as berg called Vaca Muerta, whose drift Consult the bibliography of this article El Diario de Madryn, 15/07/2015). part of the potassium mining project, can profoundly transform the territory, in:: https://tinyurl.com/hjjtwc7. and there is also a historical plan of ex- even more than the apparent water, air, The works carried out so far in the tending the railway from Zapala to Pino Vaca Muerta Region have to do with and soil pollution risks associated with Hachado to link it with Chilean railroads the technique or the loss of productive improvement and expansion of routes, How to cite this article: for access by train to the Pacific ports” soil. One of the requirements for mas- and the simplification of import and ex- Scandizzo, Hernán (2017). (Undersecretariat of Territorial Planning sive exploitation of unconventional port of inputs and capital goods. The “An Iceberg Called Vaca Muerta”, of Public Investment, 2016: 23). reservoirs is the construction of infra- recovery and expansion of railroads, in Extreme. The New Frontiers structure corridors that can optimize and construction of aqueducts and gas The rail corridors are key to “synergize of Energy Extractivism in Latin the flow of inputs, machinery, people, and electricity supply networks are all in infrastructures, companies already America. Oilwatch Latinoamérica. the pipeline. The federal government’s established, and staff in RVM (Vaca etc., which translates into a reduction report lists the following: “Among the Muerta Region) so as to direct services projects under consideration are the ex- to the San Jorge gulf,” as the Undersec-

tension of the railway branch from Bar- retariat of Territorial Planning proposes. 18 See La Nueva (05/05/2015). da del Medio to Añelo, where a classifi- On the one hand, the plan is not only 19 For a critique of IIRSA, see Raúl Zibechi (2006) 20 For a thorough analysis of this aspect, see Nicho- cation and dispatch plant for the sand to build a rail network that speeds up and Ceceña, A. E.; Paula Aguilar and Carlos Motto las Hildyard’s article (info TBD), which is part of (2007). this series on extreme energy.

52 53 Extreme By Tatiana Roa Avendaño (Censat Agua Viva - Friends of the Earth Colombia)

Original in Spanish. Translated by Colombia: Nancy Piñeiro. “Heavies” Expand the Extractive Frontier In July 2014 Ecopetrol and Pacific Ru- A couple of decades ago, the Colom- biales announced the cancellation of bian economy started depending on their in situ combustion Star project, oil exports. To increase the inflow of with which the companies aimed to in- foreign currency, the national Govern- crease hydrocarbon production at the ment is extracting hydrocarbons at Quifa field. Its failure had been predicted very high rates, leading to a sudden by social organizations and the oil indus- fall in reserves. According to the Na- try union, Unión Sindical Obrera. Com- tional Development Plan 2014-2018, munity leaders had been denouncing for oil makes up about 50 % of the coun- years the environmental problems they try’s exports. More than 60 % of hy- suffered as a consequence of the oil ac- drocarbon production is exported to tivity. In spite of the negative experience, international markets: “In 2013, it was president Juan Manuel Santos’ adminis- estimated that Colombia had 2,445 tration keeps an eye on heavy oils, but million barrels of crude oil reserves, and resistance to those projects keeps grow- in 2015 the country produced 1,009 ing. Voices of opposition resound in Ca- KBPD. From its beginnings, the admin- quetá, Meta, Putumayo, and Magdalena istration of the president of the Repub- Medio “Water, not oil.” This article seeks lic, Juan Manuel Santos, has identified to review the situation of heavy oils in the extractive sector as a pillar of the the country, and the role they play in the Colombian economy, providing incen- hydrocarbon sector, as well as the con- tives for its expansion. Six years after flicts they create. the president took office, the sector now accounts for 42 % of the coun- try’s exports” (FIDH & CAJAR, 2016: 7).

Panoramic view of the Rubiales field (La República, Colombia) 54 55 Extreme Colombia: “Heavies” Expand the Extractive Frontier

However, no reservoirs have been dis- is promoted, so called due to the geo- covered since the 90s, when the big oil logical complexity of the fields, the in- fields of Cusiana and Cupiagua1, in the corporation of risky technologies, the east, were found. elevated energy and water demands, as well as the bigger capital invest- 2 The depletion of conventional reservoirs, ments, higher environmental and labor the high demand for hydrocarbons, and risks. Quifa, located in Puerto Gaitán, the high peak in oil prices early in the department of Meta, is one of several century shifted the interest of compa- heavy oil fields under exploitation. nies towards the exploitation of uncon- ventional fields in many places around the world. Colombia follows that trend: Heavy oils between 2000 and 2015, the heavy oil Thirty percent of the total world re- production3 in the country went from serves is made up of conventional oil, being 1 % of the total, to 53 % (La and 70 % of unconventionals, of which República, 20/06/2015).4 The adminis- 25 % are heavy oils, and 45 % are ex- trations of Álvaro Uribe Vélez and Juan tra heavy oils, and bitumen. The major Manuel Santos have promoted politics heavy oil reservoirs are located in Al- to attract foreign investment and have berta, Canada (tar sands); in the Ori- tried to expand oil and gas reserves by noco Belt, Venezuela (extra heavy oils); advancing over new frontiers. From the Russia, and the US. Latin America is the Well on fire at the Quifa field during the development of the STAR Project (Still frame capture by Óscar Vanegas) center of the country, where oil exploi- continent concentrating the biggest re- tation began in Colombia, conventional serves in the world of this kind of crude (La República, 20/06/2015). What is Nation’s hydrocarbon reserves. In 2008, and unconventional oil production ex- oil, hosting 48 % of them: 2 billion BOE. more, estimates indicate that the coun- the ANH promoted the Heavy Crudes pands towards the Amazon region, Ori- Venezuela boasts around 1.7 billion try’s heavy oil reserves will reach 60 % Development Project, which through a noco, Pacific, the savannah, the Carib- BOE (representing 87 %), whereas Co- of the total in 2016, that is, 15 % more special round for boosting the heavy bean Sea, and they even climb up the lombia’s reserves only make up 0.6 % than the current amount (Ape.com.co, crudes market granted areas for the ap- high mountains of the eastern Andes. of the total: 12 million BOE (Campetrol, 23/08/2013). praisal phase. Thus, eight special areas Thus the extraction of extreme energy 18/06/2015). Heavy oils also account were granted under Technical Appraisal for an important part of the reserves of The boost in heavy crudes exploration contracts to six well-known companies: Ecuador, Mexico, Peru, and Brazil. and exploitation results from policies Ecopetrol, Exxon, BHP Billiton, Talisman, 1 The Cusiana field was discovered in 1991. After implemented by recent national Gov- Shell, Pacific Rubiales, and Pluspetrol Heavy oils comprise an estimated 40 % assessments and commercial viability reports, ernments. Between 2002 and 2010, (Colombia Energía, 23/01/2013). In the reserves of 2 billion barrels of light crude oil were of Colombia’s hydrocarbon reserves Uribe Vélez’s administration granted Colombia licencing round 2010, of the announced. and about half of its oil production. 2 Sweet or light crude oil of easy extraction and important benefits to foreign investors, 78 blocks awarded for oil exploitation, According to the company Ecopetrol refining. under the slogan of “investor confi- at least 50 were located in the depart- 3 Heavy crude oils have a gravity of 10 to 20 API, (Empresa Colombiana de Petróleos), dence” and liberalization of the sector. ments of Meca, Casanare, Arauca, and and a viscosity of 100 to 10 000 cp. “Calculation of “the proportion of conventional crude API gravity uses surface measurement of specific By decree n° 1760 of June 26, 2003, Vichada, which concentrates the high- oils (sweet or light) will fall in the follow- gravity of degassed oil. The formula relating Ecopetrol’s organisational structure est production of crudes with an API specific gravity (S.G.) at 60°F to API gravity is API ing 10 years from 15 % to 10 % and was modified, and the National Hydro- gravity below 17° (UPME, 2012). Gravity = (141.5/S.G.) -131.5” Conaway (1999). from 32 % to 21 %, while unconven- carbon Agency (ANH, by its Spanish ac- 4 It should be noted that the market price of heavy tionals (heavy crudes) will go up from oils is lower due to its high content of sulfur and ronym) was created. The Agency was Although heavy crudes are contained heavy metals. 52 % to 69 % of the total production” given complete administration of the in 6 of the country’s 16 onshore basins,

56 57 Extreme Colombia: “Heavies” Expand the Extractive Frontier

developments have begun in 4 of them: High risk extraction In situ combustion is a conventional Llanos Orientales, Magdalena Medio, Pu- thermal technique based on heating Heavy crudes have high viscosity and tumayo, and Caguán; in the fields of Rubi- the reservoir to recover high viscos- density, making its extraction, trans- ales, Apiay, Ombú, Castilla, San Fernando, ity crudes.8 It burns part of the oil in port, and refining notably complex. Due Teca, Nare, and Jazmín. The major reser- the reservoir (about 10 %) to generate to their high content of salt and toxic voirs are located in the Llanos Orientales, heat –air or oxygen can even be in- substances like sulfur, heavy metals, and have been estimated in between jected into the well–, so that volumet- and sometimes, hydrogen sulfide, they 6,806 MMbbl y 319,455 MMbbl (Co- ric sweep efficiency can be increased, are even more contaminating than lombia Energía, 23/01/2013), while the that is, the crude that can be extracted conventionals. As is the case with other Rubiales field is deemed to be the main after reducing its viscosity. While the unconventional hydrocarbons, heavy discovery of heavy oil, and its reserves combustion area expands, the oil heats oil exploitation is energy intensive, have been estimated in 4.17 million bar- up, distilling the most volatile fractions consumes high volumes of water and rels of oil of 12.5° API. This field was re- through thermal cracking. Although chemicals, requires special infrastruc- cently given back to public control after the method is quite old, it still has se- Yet another key hurdle of heavy crudes ture and greater investments, and it an intense struggle led by the oil workers rious limitations and generates many is transportation. For example, gasoline causes more environmental damage. organized under the union Unión Sindi- technical and environmental problems, is used to dilute crude oil. This repre- Thermal and chemical stimulation are cal Obrera (USO), political parties such as which is why other thermal processes, sents additional monetary and logistic applied during the extraction process, the Polo Democrático, and other sectors like steam injection, have been favored. costs. In some countries, like Ven- for which different steam injection or supporting state control of resources. Some techniques are in pilot phase, ezuela, with important heavy and ultra in situ combustion are used. This sig- The field had been owned by the Cana- such as the use of CO2 through carbon heavy crude reserves, upgraders have nificantly reduces the recovery factor,7 dian Pacific Rubiales for decades, which, capture and storage (CCS), considered been installed to facilitate transporta- which ends up being less than 20 %, in addition to Quifa, was also in charge to be a type of geoengineering. This tion of crude oil. These units, similar to whereas in conventional wells it can be of Sabanero and Rubiales. Towards the method “captures” CO2 using pipelines refineries, reduce the density of heavy of up to 35 %. That is to say, less oil can Piedemonte Llanero region, Ecopetrol is and injects it at high pressure deep into crudes through special treatments, be extracted from the hydrocarbons operating the Chichimene, Castilla, and the earth so that it pushes the crude up obtaining synthetic crude oil, and thus contained in the reservoir. Some of Apiay fields. Humberto Calderón Berti, to the surface. make it easier to export and market the extraction techniques are: i) water founder and president of oil company (Acción Ecológica, 2013). In spite of steam injection, predominantly used Energy needs for heavy and extra heavy Vetra, and also Venezuela’s Energy and these possibilities, only huge reserves in heavy and extra heavy crudes; ii) in- crude exploitation are very high. Some Mining Minister between 1979 and 1983, justify such investments. troduction of liquids through injection stated, “We may not have an oil belt in of the main problems are the huge wells; iii) tertiary or enhanced recovery, Colombia,5 [...] there are signs of a heavy volumes of water and the high risk of Another alternative to mobilize heavy which basically consists in injecting oils belt6 in the Llanos region, which could contamination by sulfides and heavy crudes is modifying the system of a mix of water and chemical solvents have important reservoirs” (Colombia En- metals (nickel, vanadium, and molyb- pipelines and instead transporting the and heating the well bottom to a high ergía, 23/01/2013). denum). Thus, impacts of the activity oil while it’s hot, making the use of temperature. increase both in extraction and refining dilutants such as gasoline unneces- sites (Acción Ecológica, 2013: 8). sary. However, all these options entail greater environmental risks and require 5 He refers to the Orinoco Oil Belt (FPO, by its Spanish acronym), a vast area rich in heavy and intensive energy use. In the Colom- extra heavy crude oil, situated to the North of the 8 Although most combustion projects are imple- bian case, until 2015 hundreds of tank Orinoco River in Venezuela. It is deemed to be the mented in heavy crude oil reservoirs, they are trucks were used to transport crude oil, biggest crude oil reservoir in the world. being increasingly used to recover light oil in which traveled daily through the high- 6 The Llanos basin has a heavy crude oil belt, com- 7 Percentage of oil or gas in a given field that can deep reservoirs. In the US, currently operational posed of, among others, the Castilla, Quifa, and be extracted through primary or secondary tech- combustion projects in light crude reservoirs way connecting Campo Rubiales to the Rubiales fields. niques. outnumber those in heavy crude reservoirs.

58 59 Extreme Colombia: “Heavies” Expand the Extractive Frontier

rest of the country. Later, the Bicenten- 2,100 °F, melting the pipelines (Vane- nial oil pipeline and its booster stations gas, s.f.) and causing uncontrollable fire ER1 and ER2 became operational. Dur- and explosions that expelled sand and ing all the years of truck transportation, ashes spreading over a radius of thou- the vehicles generated air pollution sands of meters, causing irreparable due to airborne particulate matter (red damage to the ecosystems. Combus- powder, gas, oils, and other chemicals), tion gases reached to the surface and seriously affecting the farmers living contaminated the air with hydrogen near the highway. sulfide, carbon dioxide, and sulfur di- oxide, among others. A recent report by the International Federation of Hu- The Star technology was man Rights and the lawyers’ collective tested in the laboratories of Corporación Colectivo de Abogados the Colombian Oil Institute, “José Alvear Restrepo” details the com- but several onsite drilled wells munity’s numerous complaints, includ- had to be abandoned due to ing serious impacts on streams and technical failures. morichales,10 the flora and fauna, in addition to air pollution and other prob- lems (FIDH & CAJAR, 2016: 46-50). In situ combustion process scheme (insitucombustion.ca) Star Project or in situ People in the communities warned the combustion authorities that the streams were dry- onset of the Star Project, seismic activ- success, Ecopetrol acknowledged that In 2011, Ecopetrol and Pacific Rubiales ing up, and the aquifers were contami- ity increased in Puerto Gaitán, a region the goals had not been met. According decided to implement a Star technol- nated with discharges and oil spills, but with little or no seismicity. From April to the state company’s assessment in ogy (Synchronized Thermal Additional no response came from bodies like the 2nd 2013 until June 28th 2016, 976 January 2014, the project met 60 % of Recovery) pilot project in Quifa,9 a field National Authority of Environmental Li- quakes have been recorded, and from the production baseline agreed upon whose reserves were originally esti- censing, in charge of following up on January 31st 2014 there have been in 2011 (Blu Radio, 27/01/2014). The mated in 900 million barrels (Vanegas, the environmental management of the at least 99 quakes of magnitude 4 or Comptroller’s General Office reported s.f.). The Canadian company promoted projects. Springs and ponds in the area higher on the Richter scale, which have that more than USD 250 million were this new technology to double reserves presented residues from oils and other been reported by the Colombian Geo- invested in the project, without achiev- in heavy oil fields, and increase the re- chemicals. According to the communi- logical System (FIDH & CAJAR, 2016: ing the expected results. covery factor up to 45 %. ty, as a result of the seismic survey and 69). This phenomenon is explained by following the implementation of the the increase of water injection at the On July 23rd 2014, a joint report by Eco- The Star technology was tested in the Star project, groundwater levels had a Rubiales and Quifa fields; the FIDH and petrol and Pacific Rubiales announced laboratories of the Colombian Oil Insti- sharp decrease (Vanegas, s.f.). CAJAR report warns that Pacific Rubia- the end of the Star pilot project. The clo- tute (ICP in Spanish), but several onsite les is injecting more than 3 million bar- sure was preceded by numerous com- drilled wells had to be abandoned due In addition, the Colombian Geological rels of water per day at the aforemen- plaints by the affected communities, to technical failures. Some reached a Service and Colombia’s National Seis- tioned fields (2016: 68 – 69). organizations and politicians who fore- downhole temperature of more than mic Network reported that from the casted its failure and the many envi- In January 2014, the comptroller ap- ronmental problems it would cause. In pointed to the mining and energy sec- spite of the negative experiences, Juan tor claimed that while Pacific Rubiales Manuel Santos’ administration has set 9 Quifa is a continuation of the Rubiales and Pirirí 10 A type of palm tree that grows on the Amazonas fields. and Orinoco river basins. ensured that the Star Project was a eyes on increasing production at heavy

60 61 Extreme Colombia: “Heavies” Expand the Extractive Frontier

Poster of the campaign against the Rubiales field concession (Unión Sindical Obrera)

crude oil fields. In line with this, in 2015 Fuentes: Ecopetrol finished the construction of Acción Ecológica (2013). Pungarayu. a deasphalting demonstration plant El horror de los crudos pesados. De- in Chichimene, Meta, with technology cember, Quito, 169. developed by the Colombian Oil Insti- tute. The plant will have a processing Ape.com.co (23/08/2013). “Crudos capacity of 200 oil barrels per day, it pesados: Un negocio de talla mayor”. received investments of over USD 35 Blu Radio (27/01/2014). “Contraloría million, and it was built in a year and a encontró diferencias entre Ecopetrol half. Its purpose is to reduce the viscos- y Pacific por proyecto Star” ity of heavy and extra heavy crude oils of the Llanos region for easier transport Campetrol (18/06/2015). “Crudos pesa- through pipelines. dos: el reto para Colombia”. Unión Sindical Obrera. By way of conclusion, instead of walk- Colombia Energía (23/01/2013). “Cru- ing the path of sustainability, investing dos pesados, la gran apuesta del in research and application of alterna- sector”. La República (20/06/2015). “Ecopetrol Energía, República de Colombia, De- necesita aumentar eficiencia en cru- cember, Bogotá. tive sources of energy, it is the fossil Conaway, C. (1999). The Petroleum In- dos pesados”. fuel path that is given priority. Howev- dustry: A Nontechnical Guide. Tulsa: VANEGAS, Oscar, s/f. Verdades sobre el er, resistance to these projects keeps Pennwell Publishing Co. In Oilfield Portafolio (03/08/2011). Producción Proyecto Star growing in the region and the country. Review 18 (2006): 35-59. mundial de crudo pesado crecerá el Voices of opposition resound in Caque- 44 % en 10 años. FIDH & CAJAR (2016). El costo humano How to cite this article: tá, Meta, Putumayo, and Magdalena del petróleo: Estudio de impacto en Schlumberger, Oilfield Review (2006). Roa Avendaño, Tatiana (2017). Medio. Opponents and proponents of los derechos humanos de las activi- La importancia del petróleo pesado. Colombia: “‘Heavies’ Expand the extractive projects are coming head to dades de Pacific Exploration & Pro- Pp. 38 – 59. Extractive Frontier”, in Extreme. head. Colombia’s new peace will have duction Corp. en Puerto Gaitán. The New Frontiers of Energy as a leading actor the struggles over UPME (2012). Escenarios de Oferta Extractivism in Latin America. water and against oil. International Energy Agency (2012). y Demanda de Hidrocarburos en Oilwatch Latinoamérica. World Energy Outlook. Colombia. Ministerio de Minas y

62 63 Extreme By Alexandra Almeida (Acción Ecológica Ecuador)

Original in Spanish. Translated by Nancy Piñeiro. Violence as a Model

The oil frontier has fenced off and put Taromenane, culturally related to the pressure on indigenous territories, un- Waorani. This means that the extreme leashing acts of violence such as the nature of energy in this case does not massacre of groups in voluntary iso- come from the technological compo- lation, the death of members of the nent, but from the processes it triggers. Waorani indigenous people –recently contacted–, and of mestizo peasants. The group most affected by Ecuador’s These events are not limited to a given oil history has been the indigenous, on moment in history, but are part of Ecua- whose ancestral territories the extrac- dor’s extreme extractive model. tive infrastructures are installed. The Waorani people, with a territory stretch- xtreme energy is a concept gener- ing from the Napo river to the Curaray Eally associated with the application river, is one of the most impacted, not of new and sophisticated technologies only by oil exploration –beginning at that facilitate the expansion of the oil the end of the 30s–, but also by the rub- frontier, which entails huge geologi- ber industry before, from 1890 to 1920, cal, environmental, and social risks. In a time when they were held captive and Ecuador, this type of energy is derived enslaved in the big plantations. Com- from crude oil exploitation in fields merce along the rivers also affected situated inside and around the mega the communities located in Shiripuno biodiverse territories of the Amazon. and Tiputini. Many deaths were reg- These are traditionally occupied by in- istered back then; years later, the Wa- digenous peoples, of which at least two orani extended their territory after being are uncontacted: the Tagaeri and the displaced by rubber exploitation and

The expansion of the oil frontier triggers violence against indigenous peoples in Ecuador. 64 (Remi Benali) 65 Extreme Violence as a Model

and loss of territory suffered as a result Labaka, and the nun Inés Arango both of the expansion of the oil frontier and died speared. After several attempts, the work of the SIL (Proaño, 2010). they could not halt extractive activities in the area. They had entered Tagaeri In 1964 concessions were granted by territory because the army would evict the Ecuadorian government to the oil the zone to let CEPE begin the seismic company Texaco for exploration and survey. Before embarking on his trip, exploitation in 500,000 hectares of the Bishop is quoted to have said: “If I tropical forest, in the current provinces don’t go, they will be killed” (Cabodevilla, of Sucumbíos and Orellana, ancestral 1999). territories of the Cofán, Kichwa, and Waorani peoples. Three years later, the In the 80s, a new policy opened up the company discovered the first commer- country for oil leasing –rounds were or- cial oil field in the region of Lago Agrio, ganized for foreign companies to start on the border with Colombia. In the fol- exploring and exploiting in indigenous lowing years it expanded its operations territories and protected areas, such southwards. In its 28 years presence as the Yasuni National Park. The land- in the country, Texaco drilled 399 wells ing of new oil companies in the zone Mapping of incidents affecting indigenous peoples in isolation (Paola Maldonado and Braulio Gutiérrez, Colectivo de Geografía Crítica) and built 22 production stations. When meant more pressure on indigenous it left, in 1992, the oil fields began to be territories, which translated into more agricultural estates. This led to con- enforced contact, grouping and reloca- operated by the state-owned Petroec- violent episodes. One of the most strik- flicts and attacks with other indigenous tion of most of the clans, with the lo- uador, currently Petroamazonas EP. ing is the attack to the oil camp El Tigüi- peoples of the area (Cabodevilla, 2010). gistical support of oil companies. Such no in 1989, in which an oil worker and actions favored the entry of compa- Texaco, in consortium with the State a woman were speared to death, and The first oil period began in 1937, when nies, since the Waorani were displaced Petroleum Corporation (CEPE, by its two Tagaeri warriors were shot. Days Shell set up a camp in Arajuno, built from their vast ancestral territory, and Spanish acronym) hired the French ex- after the incident, a green helicopter roads and airports, and hired Kichwa cornered to a much smaller one. The ploration company CGG to carry out the opened fire at the Tagaeri house, and workers, who had several confronta- success of this move was due to the seismic survey south of the river Napo, three women were riddled with bullets tions with the Waorani, situated from interrelation between missionaries- a territory traditionally occupied by the (Cabodevilla, 1999). Arajuno up to the mouth of the Yasuni. Waorani and oil companies-the military Waorani and other isolated peoples. It has been recorded that the Waorani (Cabodevilla, 2010). Many attacks and The expansion of the extractive frontier Until 2012, Ecuador launched 11 inter- attacked Arajuno and killed 20 Kichwas. deaths occurred in the same period of where isolated peoples took refuge, and national oil leasing rounds, thanks to Later, the war against Peru in 1942, time in clashes between already con- the deadly incidents that occurred in oil which some 15 transnational compa- linked to oil interests, also endangered tacted and uncontacted Waorani, and blocks during the 70s and 80s made nies disembarked in the country. There the Waorani. There were no Waorani in also with the Tagaeri, who were already these communities visible to the pub- are currently 65 oil blocks, of which 38 Peru. It is told that the Peruvians sailed isolated. lic opinion. Those decades saw direct are operational and 27 are about to be up all the rivers, including the Yasuni, confrontations between oil workers and leased. Nineteen big operational blocks and captured Waorani, Sapara and The isolation of Waorani groups –mis- isolated indigenous peoples. One of the are owned by Petroamazonas, and the Kichwa people. taken for Tagaeris– dates back to the most notorious incidents occurred in other 19 –mostly small– are operated oil boom during the 60s and 70s. Some 1977 in Shiripuno, where three CGG oil by transnational companies. Chinese In 1956, Evangelical missionaries from researchers claim that the isolated workers died speared by the Tagaeiri companies are typically operating the US Summer Institute of Linguis- Tagaeri and Taromenane refused con- (Cabodevilla, 2010). In 1987, the Bishop blocks or supplying services to other tics (SIL) entered Waorani territory and tact during the pacification, relocation of the Aguarico Vicariate, Monsignor firms.

66 67 Extreme Violence as a Model

Oil marks remain uncontacted”.1 During the last 20 years, the territories of the Tagaeri Oil exploitation in Ecuador has left a and Taromenane have been occupied nefarious impact both on the Amazon by oil blocks and camps, the limits of ecosystem –known for its mega biodi- which overlap with ancestral Waorani versity–, and the indigenous and peas- territory, the Yasuni National Park, and ant population living there. A detailed parts of the untouchable area. description of the disaster can be found in court documents from the trial initi- Eight years later, in 2007, by Decree ated against Texaco, currently Chevron, n° 2187, the Ecuadorian government by Amazon inhabitants. Some studies designated the Untouchable Tagaeri- indicate, for example, that Texaco’s en- Taromenane Zone (ZITT, by its Span- try in today’s Sucumbíos speeded up ish acronym), ratifying that “in this area the process of extinction of the Tetete the right of the Huaorani and ancestral people, now non-existent. peoples in voluntary isolation to carry out traditional activities of hunting and In an attempt to pass regulations that fishing, as well as the customary use of would protect isolated peoples, in 1999 biodiversity resources with subsistence the Ecuadorian government declared Demonstration against exploitation of the Yasuní Park (EFE) purposes will be guaranteed”.2 Article the southern area of the Yasuni Na- 2 of the Decree established a “Buffer tional Park, with 758,048 hectares, Zone of ten kilometers wide adjacent to The untouchable zone of the Yasuni Na- of Dicaro, Yarentaro, Iro, and Gabaron, all the untouchable area”. In the “buffer tional Park, intended for the territories within block 16, operated by Repsol. zone it is forbidden to carry out extrac- of peoples in isolation, is completely The permanent presence of isolated Oil exploitation in Ecuador has tive activities of forest products with surrounded by oil concessions. To the indigenous peoples in block 14, be- left a nefarious impact both on commercial purposes; also forbidden north it borders blocks 14 (Petroriental), tween the rivers Tivacuno y Mencaro the Amazon ecosystem, and is the granting of mining licenses.” 16 (Repsol), 31 (Petroamazonas) and (Tiwino river), is also confirmed (Proa- the indigenous and peasant 43 (Petroamazones); to the west, block ño and Colleoni, 2008). It is evident that However, the web page Geoyasuni.org population living there. Some 17 (Petroriental); to the south, blocks the current limits of the Untouchable offers interesting information about the 83 (Andes Petroleum), 84 (Hydrocar- Tagaeri-Taromenante Zone do not co- studies indicate, for example, situation in the Buffer Zone, which has bons Secretariat) and 87 (Hydrocar- incide with the territoriality exerted by that Texaco’s entry in today’s an area of 467,530 hectares. Seventy bons Secretariat); to the east, blocks 39 the isolated peoples. Sucumbíos speeded up the eight per cent of the surface is occupied (Repsol Exploration Peru), 121 (SubAn- process of extinction of the by oil blocks: 59.99 % in Ecuador, and dean) and 67 (Perenco) in Peru. The presence of external agents such Tetete people, now non-existent. 18.02 % in Peru, while the blocks Ishpin- as the oil companies gave way to col- go, Tambococha, Tiputini (ITT) and 31 Moreover, according to research con- lateral activities, like disorderly coloni- intersect with the Untouchable Zone, ducted in 2008, there is presence of zation, legal or illegal logging activities, “untouchable zone of conservation with a surface of 30,202.25 hectares, isolated indigenous peoples outside construction of roads, and the ecologi- –where it is forbidden in perpetuity any and 10,391.80 hectares respectively. the limits of the Untouchable Zone. cal destruction of the territories inhab- kind of extractive activity– the dwell- This report shows that the Yasuni Na- ited by isolated indigenous peoples. In ing and development lands of the Hua- tional Park and its buffer zone are ar- addition to generating high levels of orani groups, known as Tagaeri, Taro- eas of transit for Isolated Indigenous noise that, according to several testi- menana, and eventually others who 1 Executive Decree N° 552, published in Suplemento Peoples. Their presence has been monies, disturb the isolated peoples, del Registro Oficial N°.121, February 2nd 1999. documented around the communities it has also created the conditions to 2 Executive Decree N° 2187, January 3rd 2007.

68 69 Extreme Violence as a Model

from the place, an oil crew was working in block 16, operated by Repsol. The lack of political will in this regard perpetuates the violence, The massacre of end of March 2013, and the violation of collective in which at least 20 Taromenane were killed in revenge for the death of the human rights, which deepen the Yarentaro elders. It possibly happened extreme nature of the Ecuadorian 30 km from the Armadillo field, and crude oil. the perpetrators came from the fields in block 16. It should be noted that the of ethnocide, which shall be classified Inter American Commission on Hu- as such by law.” 3 man Rights had granted precautionary measures to the Taromenane. That is, There is also international legislation the Ecuadorian state had the obliga- protecting the rights of isolated indig- tion to protect these peoples, which it enous peoples, for example, according failed to do. to the United Nations guidelines for in- digenous peoples in voluntary isolation, On January 25th 2016 another violent contracts with extractive purposes shall event was registered in the river Shi- be immediately terminated and forbid- ripuno. One Waorani men died speared, den (United Nations, Human Rights, and a woman was injured. The attack 2012). However, pressure exerted by occurred within the Untouchable Zone, the companies to expand the extractive Map of the Yasuní Biosphere Reserve showing oil blocks and the presence of uncontacted indigenous peoples (S. some 25 km in a straight line from the Crespo and P. Cabrera) frontier curbs the possibilities of imple- Armadillo block. menting protection policies for the af- intensify interethnic conflicts due to The attack of March 2008, in which a fected groups. Instances of recent de- the pressure exerted on their territo- lumber industry worker was speared, In spite of all these events, govern- cisions by the State that will worsen ries. Thus the fundamental rights of and died. It happened a few kilometers ments have always prioritized the eco- pressure on indigenous peoples have these peoples are being violated. near the oil road known as Auca road, nomic returns of oil exploitation and occurred in blocks 14, 17, 43, 31, 83, close to the Armadillo oil field. promoted the expansion of the extrac- In the last two decades violent acts tive frontier, neglecting the rights and and 66 in Armadillo field. have been registered, which are direct- The attack of 2009, in which three mem- lives of indigenous peoples, even of Armadillo was offered for leasing as ly or indirectly related to the oil policies bers of a settler family were speared to isolated communities protected by the a marginal field, in the 10th Oil Round promoting the extension of the extrac- death, and a baby was kidnapped (and Constitution of the Republic: “The terri- in 2012, in spite of the fact that by the tive frontier: found alive two days later, near the site tories of the peoples living in voluntary time there was already evidence of of the attack). This happened a few isolation are an irreducible and intangi- isolated peoples in the area. The field The massacre of 2003, in which at meters from the Hormiguero oil well, in ble ancestral possession and all forms was not granted to any company, so least 15 isolated indigenous people block 17, operated by the Chinese com- of extractive activities shall be forbid- Petroamazonas began surveying. In died. Although it did not happen near pany Petroriental. den there. The State shall adopt mea- oil infrastructure, its perpetrators –Wa- sures to guarantee their lives, enforce orani warriors of the Babeiri group– be- The attack of March 5th, 2013, in which respect for self-determination and the long to a community highly dependent two Waorani elder died speared. It hap- will to remain in isolation and to ensure 3 Second paragraph, subsection 21, article 57 of the on the oil activity. pened a few kilometers near the road Political Constitution of the Republic of Ecuador observance of their rights. The violation (2008). [English version retrieved from: leading to the Daimi well, near the of these rights shall constitute a crime http://pdba.georgetown.edu/Constitutions/Ecua- Yarentaro community. A few meters dor/english08.html]

70 71 Extreme Violence as a Model

February 2015 Petroamazonas signed National Park. One of the arguments of In the same vein, the Minister of the Proaño José and Colleoni Paola (2008). a contract with the Ecuaservoil con- the initiative was precisely that the place Environment, Marcela Aguiñaga, said Taromenane Warani Nani. Pueblos sortium (Belorusneft, Edimpetrol) to is home to isolated indigenous peoples, in August 2013, after the March mas- Indígenas en Aislamiento Voluntario optimize the operation of the block. A so it was necessary for the prevention of sacre: “The Minister of Justice will have Tagaeri Taromenane en la Amazonía campaign was launched to prevent genocide. Procedures to begin exploita- to make a statement regarding the ecuatoriana. Ediciones Abya Yala, the approval of an environmental li- tion of blocks 31 and 43 were nonethe- scientific evidence of the presence or Quito. cense for seismic survey –intended to less put in place right away. absence of these peoples in the zone” United Nations. Human Rights (2012). be done even outside the block–, due (Vera, 23/08/2013). Directrices de protección para los to evidence of isolated peoples in the On January 25th 2016, at about the pueblos indígenas en aislamiento y en area. The east and southeast parts of same time that the Yasuni massa- Any kind of protection program for contacto inicial de la Región Amazóni- the block were finally excluded from the cre was taking place, the government isolated indigenous peoples must ca, el Gran Chaco y la Región oriental survey, but this does not eliminate the signed a contract for provision of ser- contemplate the adjudication of a ter- de Paraguay. OHCHR, Geneva. risk, since presence points are outside vices with the Chinese firm Andes Pe- ritory and the prohibition of oil extrac- the exclusion zone. It was also possible troleum for exploitation of blocks 79 and tion therein. That must also be a step Vera, Carlos Andrés (23/08/2013). Los to halt the development of the Yampu- 83, on territories where the government towards a transition to a new economic Taromenani no existen, in Polificción. na, Avant, Tiwae, and Aguila platforms, itself has acknowledged the presence of model, a post-petroleum Ecuador. The situated in blocks 14, and 17. Still, the isolated peoples, that are also home to lack of political will in this regard perpet- threat continues. The Chinese compa- the Sapara and Kichwa ethnic groups. uates the violence, and the violation of collective human rights, which deepen ny Petroriental is presenting the terms The most serious violation against iso- of reference to begin seismic survey in the extreme nature of the Ecuadorian lated peoples is that they do not have crude oil. the aforementioned blocks. a territory– it is a violation of collective human rights. If they have no territory, If they have no territory, they have they have no place where they can exert Sources: no place where they can exert their rights. Thus it is necessary to cre- Acción Ecológica. Etnocidio: Del Horror their rights. Thus it is necessary ate one while they remain in isolation, in a la búsqueda de responsabilidades. accordance to the national and interna- to create one while they remain tional legislation on indigenous rights, Cabodevilla, M. A. (1999). Los Huaorani in isolation, in accordance to so as to protect their rights and prevent en la historia de los pueblos del ori- the national and international genocide. Unfortunately, government ente. CICAME, 2nd Edition. legislation on indigenous rights, officials of the different administrations ------(2010). La Nación Waorani. No- so as to protect their rights and have tried to deny the presence of iso- ticias Históricas y Territorio. Orellana, Presentation before the IACHR on the Tagaeri and prevent genocide. Unfortunately, lated indigenous peoples. As an exam- Ecuador. Taromenani case, and the legal and illegal exploitation government officials of the ple we have the statements given to the of their natural resources. (IACHR) Pappalardo, S.E. and De Marchi, M. media in February 2010 by the former different administrations have (2013), Geografía de la Zona Intan- Minister of Non-Renewable Natural Re- tried to deny the presence of gible Tagaeri Taromenane ¿Una jaula sources, the economist Wilson Pastor. isolated indigenous peoples. petrolera? He said there was no clear evidence of How to cite this article: Almeida, Alexandra (2017). Furthermore, in August 2013, the Ecua- the presence of isolated peoples, and Proaño, José (2010). Voces de la Selva. that it could be a “made up fact”, influ- Noticias recientes sobre los Pueblos “Violence as a model”, in Extreme. dorian government decided to put an The New Frontiers of Energy end to the Yasuni ITT initiative, which encing with his omission the policies indígenas aislados en la Amazonía that affect peoples in voluntary isola- ecuatoriana. Quito, Ecuador. Extractivism in Latin America. sought to keep in the subsoil 20 % of oil Oilwatch Latinoamérica. reserves of block 43, situated inside the tion (Acción Ecológica, 8/04/2013).

72 73 Extreme By Emiliano Teran Mantovani (Oilwatch Latinoamérica, Venezuela)

Original in Spanish. Translated by Extreme Nancy Piñeiro. Orinoco: The Oil Belt and the Mining Arc, High Risk Extractivism

f we analyzed Venezuela’s extraor- of Zulia (West) and north of Monagas Idinary crisis in historical terms, we and Anzoátegui (East) –most of them would notice that it is a long-term one, with more than seventy years of mas- marked by the exhaustion of the oil sive exploitation– are on the road to rentier accumulation model. Not only depletion, and facing rising costs for can this be seen in the consequences primary and secondary recovery. of the “Dutch disease” in the Venezue- lan economic structure; the remarkable This situation has given the Orinoco instability of the international energy Oil Belt (FPO, by its Spanish acronym) market; the sharp macroeconomic im- greater historical importance; it is a balances unfolding since the 80s; or the vast accumulation of heavy and extra sustained grown of the domestic con- heavy crude oil in the north of the Ori- sumption of natural resources and, in noco river, extending over more than more general terms, of social metabo- 55,000 km2. Since President Hugo lism, but it is also seen in the meaning- Chávez’ administration –mainly since ful transformations that took place in 2004–, the project was relaunched and the makeup of the Venezuelan oil. This reformulated to set ambitious “produc- means that the favorable conditions tion” goals with the aim to increase it up that enabled an accelerated develop- to 4 million barrels/day in the FPO only, ment of rentier capitalism in the 20s with investments of up to USD 236 bil- and 60s have been progressively trans- lion until 2021. At the time, President formed, with relevant economic, politi- Chávez described the FPO as the basis cal, geopolitical, and environmental im- that would transform Venezuela into plications. The conventional reservoirs “energy world power”.

Orinoco Mining Arc area, where Venezuela’s gold, diamond, and coltan reserves are said to be concentrated 74 (Lapatilla.com) 75 Extreme Extreme Orinoco

The national government has suc- national territory to relaunch extractiv- ceeded in reaching historic extraction ism, this time with a profile that can be rates in the FPO during the last years: described as “extreme”. 1,228,300 barrels/day in 2014 –as com- pared to 563,000 barrels/day in 2006–, In this new national map, which be- especially in the Junín and Carabobo gan unfolding in 2004-2005 during blocks. Thus, heavy and extra heavy Chavez government –and keeps for- crude oil extraction went from account- malizing under the current administra- ing for 38 % of the total oil extracted in tion of Nicolás Maduro–, the Orinoco Venezuela in 2006 to 58.8 % in 2014. basin represents a key geographical core, where a big “development pole” Notwithstanding, the fall in oil prices is being imposed, trying to unify the in 2014 and the national economic cri- FPO with the mega project of the Ori- sis mean that huge obstacles are be- noco Mining Arc (AMO). The AMO is a ing faced to meet the expansion goals large mineral belt of 111,843.70 km2 set for the FPO, and the business it- (12 % of the national territory, the size self has become shaky. The projects of Cuba), which covers all the north in the belt require constant drilling to of Bolívar, south of the Orinoco river, “Water is worth more than gold”, the motto that binds together struggles against extractivism in Latin America (Diario sustain production, and the liquidity and is being negotiated for the extrac- Jornada, Argentina) crisis of Petróleos de Venezuela (PD- tion of gold, diamond, iron ore, coltan, VSA) makes it impossible to keep up bauxite, among other minerals. To- with the pace. A slowdown in produc- gether, the AMO and the FPO make and geological risks posed by these Three to four barrels of water are used tion growth in FPO is likely, which is up an enormous development pole of projects, to the greater intensity of the in the FPO to obtain one barrel of (en- also part of a sustained drop at the 175,000 km, and are part of what Pres- intervention and transformation meth- hanced) synthetic crude oil. It is nec- national level, at least since 2011. The ident Chavez dubbed in 2011 the “Stra- ods used in the territories, to the higher essary to deploy an even bigger infra- total oil production rate in 2015 was tegic Action Plan in Two Horizons”. energy consumptions of the extractive structure network for the extraction, 2,746,000 barrels/day, in a country activities involved, or to higher produc- processing (which in this case is dou- that has been having a yearly average Extreme Orinoco: the tion costs. But also, at the same time, ble, since it requires enhancement be- production of over 3 million bpd. the extreme nature is due to increas- fore refining), and distribution of these new geographic pole of ing deregulation of capital accumula- extra heavy crudes. Huge amounts of Although the government bets on high-risk extractivism tion (in the form of primitive accumu- toxic waste are generated (including maintaining and accelerating invest- lation) negotiated in the agreements coke and sulfur), and spills can be far ments in the belt, at least until now The shift of oil extraction towards the FPO and the AMO, together with a re- with transnational companies, and the more devastating, just to mention a few this project does not seem to provide policing and military devices of control consequences. In the AMO, the scale of answers for the crossroads at which launching of offshore gas projects in the long Caribbean and Atlantic coasts, and surveillance of occupied zones. All mining intensity are unheard of in the the national model of capital accumu- these elements take place in an envi- history of Venezuela. The huge foot- lation stands. In this sense, the coun- or the advance of the coal frontier in the Sierra de Perija, among others, ronmental context scarred by a centu- print of materials in such large-scale try is not only moving in the direction ry of oil exploitation, and in other less open-pit mining projects entails high of unconventional hydrocarbons, but shows that the Venezuelan economy has entered a new historical phase, disturbed ecosystems in the new ex- levels of deforestation and loss of biodi- also towards an expanded and in- traction frontiers, which are vulnerable versity, in one of the most delicate bio- tense penetration into “new commod- this time under a profile of extreme energies. This is the case, whether to the drive of territorial colonization. regions in the country, which is home to ity frontiers”. This entails a significant the majority of its indigenous peoples. geo-economic reorganization of the one looks at the greater environmental

76 77 Extreme Extreme Orinoco

At the beginning of 2016, PDVSA an- nounced its plans to invest USD 900 million for exploration and production, especially in the Orinoco Oil Belt. In September that same year a project of great magnitude –“like few in the world”– was announced; it would en- compass the drilling of 480 wells with the aim to raise production in the belt in 250,000 bpd during the following 30 months. The investment reached USD 3,230 million and involves com- panies lie Schlumberger, Horizontal Large quantities of water would be nec- Well Drillers, Baker Hughes, Hallibur- essary to obtain one ounce of gold, in ton, and the Venezuelan Y&V. Likewise, exchange for serious contamination Venezuela has secured financial sup- with cyanide, arsenic, and other toxic port from China to increase produc- substances that threaten many of the tion, commitment from Russian com- vital rivers that makeup the Orinoco ba- panies like Rosneft, and Venezuelan Telesur. sin, one of the main water reservoirs of corporate federations to keep invest- of paperwork requirements, fiscal and security measures taken to protect the the country. ing in the project. customs incentives for the companies, exploitation zones. Together with the It is important to highlight that these The key of the business lies in deepen- labor flexibilization (and also environ- decree for the creation of the ZEDN in projects do not only impact the territo- ing the economic flexibilization of regu- mental, as is suspected), creation of ad AMO, a Military Security Zone was es- ries where they take place, but they also latory frameworks, doing away as far hoc territorial authorities, among oth- tablished “with the aim to relaunch new affect the whole life of the country for as possible with obstacles to the cor- ers. On February 19th, President Madu- business that will enable the compre- they hamper the distribution of water porations’ profits. For example, since ro decreed the FPO as a ZEDN, and did hensive development of the southern in densely populated urban areas, alter early 2016, the Oil Minister, Eugenio Del the same on the 24th with the AMO. margin of the Orinoco river”. Likewise, at the end of October, the Defense Min- rain patterns and make a greater contri- Pino, has proposed that the FPO should Those projects, especially the AMO, are bution towards climate change, among have a “special investment scheme to ister, Vladimir Padrino López, activated imposed by force, without consulting the Special Security and Protection Unit other repercussions. As mentioned be- reach its full development”. These mea- the inhabitants of the affected areas, fore, in addition to socio-environmental sures are part of the “Comprehensive many of whom are indigenous. Neither externalization, economic externaliza- Regionalization Law” (LRI), passed in is there any transparency regarding the tion also worsens. In spite of the nega- November 2014 –Official Gazette No. Far from being a solution, agreements reached, if we take into ac- these trends deepen the tive timing –in terms of investment 6151 Special, Decree 1425–, which count not only the lack of information extractivist and rentier nature and profitability–, in order to boost ex- contemplates the creation of “Strategic and data about the operations, but also pansion of unconventionals, the great National Development Zones” (ZEDN) the secrecy that so far has been typical of the Venezuelan economy, its needs of natural resources of capitalist and “Special Economic Zones” (EEZ), of agreements signed with transnation- profound dependence on food centers and emerging economies, and taken from the Chinese model. In these al mining companies. The factor com- imports, its tendency towards the links in Venezuela between foreign zones a comprehensive liberalization pleting these extreme modalities of high energy and materials debt and repayments in oil –mainly to process of geographical regions be- appropriation of natural resources and consumption, and its socio- China–, promote and drive forward the comes formal, with suspension of tar- generation of energy has to do with the ecological unsustainability. growth of these projects. iff restrictions and taxes, simplification

78 79 Extreme Extreme Orinoco

Sources: PDVSA (2016). “Informe de Gestión An- ual 2015”. AVN (21/10/2016). “Activan unidad especial de seguridad en Faja PDVSA (24/02/2016). “Presidente Mad- Petrolífera del Orinoco”. uro firmó decreto de Zona de Desar- rollo Nacional del Arco Minero del AVN. (25/01/2016). “Proponen para la Orinoco”. Faja Petrolífera del Orinoco régimen especial de inversiones”. Reuters (8/07/2016). “Venezuela y China unen esfuerzos para elevar Baptista, A. (2004). El relevo del capital- producción de la Faja Petrolífera del ismo rentístico: hacia un nuevo bal- Orinoco”. ance de poder. Caracas: Fundación Polar. Teran Mantovani, E. (2014). El fantas- ma de la gran Venezuela. Caracas: Official Gazette of the Bolivar- Fundación Celarg. ian Republic of Venezuela (2014). Decree with the full rank, val- Teran Mantovani, E. (2016). “Las lu- ue, and force of the Comprehensive chas contra el megaproyecto del Map of the Orinoco Mining Arc (Bolivarian Government of Venezuela) Regionalization Law for the Socio- Arco Minero del Orinoco, Venezuela”. productive Development of the EJAtlas. Homeland. 6151 Special. Decree Últimas Noticias (21/09/2016). “Pdvsa in the FPO. These measures constitute Far from being a solution, these trends 1425. the militarization of natural resources deepen the extractivist and rentier na- inicia la perforación más grande del and the establishment of low-intensity ture of the Venezuelan economy, its Ministerio del Poder Popular de Petróleo mundo en la Faja Petrolífera del Ori- states of exception, in the context of in- profound dependence on food imports, (25/10/2016). “Del Pino y Sechin noco”. tense political dispute and geopolitical its tendency towards high energy and conversaron sobre el consenso entre Últimas Noticias (24/02/2016). “Crean tensions over the control of these stra- materials consumption, and its socio- productores”. Zona de Desarrollo Estratégico del tegic resources. ecological unsustainability. Moreover, Ministry of Petroleum of the Popular Arco Minero del Orinoco”. they are very telling of the inability of the Power. (19/02/2016). “Presidente As we have seen, extreme energies UNEP (2013). “Recent Trends in Mate- leaders and sectors of the opposition to Maduro decretó Faja Petrolífera del unfold not only for the search of hydro- rial Flows and Resources Productiv- propose an alternative model that pro- Orinoco como Zona de Desarrollo carbons and mining resources in more ity in Latin America”. motes the autonomy of territories and Estratégico”. environmentally and geologically risky the economy, and the capacity to guar- and complex areas, but they also en- antee a dignified and healthy life for pres- Moore, Jason W. (2000). “Sugar and tail comprehensive policies that seek ent and future generations. Meanwhile, the Expansion of the Early Modern to regulate territories, economy and indigenous communities, and social and World Economy”, in Review, 23(3), How to cite this article: life. The crisis of the progressive period environmental organizations keep offer- pp. 409-433. Terán Mantovani, Emiliano (2017). in Latin America, the stagnation of the ing resistance inside and outside the new Navarro, I. (2016). “Pymes y Pdvsa in- “Extreme Orinoco: The Oil Belt global economy, and dangerous geo- commodity frontiers in Venezuela, to try vertirán $900 millones en la Faja”. and the Mining Arc, high risk political disputes over the control of to stop the advance of this extreme ex- PDVSA (2015). “Informe de Gestión An- extractivism”, in Extreme. The New strategic natural resources are factors tractivism. that explain the pressure to advance ual 2014”. Frontiers of Energy Extractivism with high risk extractive activities. in Latin America. Oilwatch Latinoamérica.

80 81 Extreme By Hernán Scandizzo (OPSur, Argentina)

Original in Spanish. Translated by Nancy Piñeiro. Coal 2.0: Another Chapter in the Latin American Unconventional Plot

In spite of global campaigns to dis- countries, like Chile, it goes up to a third. courage its use and reduce CO2 emis- In 2013, coal production in the region sions, coal proponents insist and was only 2 % of the world total.1 even claim that its exploitation by the unconventional technique known as However, in spite of its scarce rel- underground gasification is “clean”. evance, coal exploitation is triggering Others jumping on the bandwagon serious conflicts in Latin America. For are those who suggest extracting gas instance, in Colombia –the main “pro- trapped in coal seams. Latin America ducer” in the region– it is directly linked has fewer reserves of this resource in to human rights violations and it is re- comparison to other regions, but that sponsible for adverse socio-environ- 2 does not mean our territories are safe mental impacts. In Venezuela, the ex- from them. pansion of the extractive frontier has unleashed territorial disputes in the ntil the mid 60s, coal was the main Uprimary source of energy in the world; it still is for China, and contin- 1 Colombia, with almost 89 %, and Venezuela, with ues being very important in the United almost 11 %, accounted for the regional exports. Growth has been significant between 1990 and States, Germany, and Australia, and 2009, increasing five-fold. As for Venezuela, also in some East European and Asian exports were almost the only destination of pro- countries. In contrast, in has a marginal duction. In Colombia, it went from accounting for 62 % of the production in 1990, to almost 95 % in participation in Latin American energy, 2009 (Yáñez et al., 2013). accounting for approximately 8% of 2 For more information see Roa Avendaño, T. and primary sources, although in some Navas, L. M. (Coord.) (2014); Garay Salamanca, L. J. (Dir.) (2013); and Moor, M. and van de Sandt, J. El Cerrejón coal mine in Guajira, 82 Colombia (Santiago La Rotta) 83 Extreme Coal 2.0: Another Chapter in the Latin American Unconventional Plot

guarantee safety in the mines. These are the management of process wa- are, very briefly, some of the argu- ter –usually brackish–, contamination ments of environmental friendliness of surface and underground water presented by those who promote un- sources, and subsidence (sinking of derground coal gasification and coal the soil).5 seam gas exploitation.4 Its supporters also claim that they constitute alter- This technique has been used com- natives not only for matrix diversifica- mercially for at least three decades 6 tion and energy imports reduction –a in the United States, Canada, and problem common to the countries of Australia. There are also policies for the region–, but also, as in the case of its implementation in China (Petro- shale, they promote gas as the bridge leoamerica.com, 12/2016), Indonesia, fuel towards clean sources. and Mozambique (Anderson, 2014). In Latin America, Colombia –main Beyond the conviction of their advo- coal producer and exporter–, became cates, these developments seek to the first country to grant concessions overcome the technical and financial for coalbed methane exploitation. In limits that prevent the exploitation of March 2016, the president of the Natu- coal in seams that are too deep or too ral Gas Colombian Association, Edu- thin, or have a low quality, which is the ardo Pizano, announced that the State case of most of the existing reserves had approved the first license for the in the world. The challenge is to gener- Drummond company, in the Depart- Map of CBM reservoirs in Colombia (Julián De Bedout Ordóñez) ate the conditions for gas –synthetic or ment of Cesar. Exploitation would be- trapped in the rocks– to reach the en- gin with the drilling of 70 wells, requir- Sierra de Perija.3 While in Chile, where Friendly Coal ergy and petrochemical markets, there- ing an investment of USD 126 million the #NoMasCarbon campaign (No fore prolonging the fossil fuel matrix. (El Pilón, 18/03/2016; y La República, Coal trapped in deep mantles, in thin More Coal) was launched, the poten- 17/10/2015). seams of low quality, can undergo a tial exploitation of five mines put the controlled underground combustion Colombia on the methane According to a report commissioned Isla de Riesco on alert, in the south- process to obtain synthesis gas or by the National Hydrocarbons Agency ernmost part of the country. These crusade syngas. In addition, through the use of (ANH, by its Spanish acronym), the types of problems and conflicts are To extract coalbed methane it is nec- carbon capturing systems, emissions more “attractive” regions for these kind an unavoidable reference point when essary to drill down into the seam, and are reduced and the in situ process of exploitations are Cesar-Ranchería, discussing projects of clean coal, in the first stage, extract mainly the wa- solves the problems caused by ashes, La Guajira, Cordillera Oriental, and promoted as such because they sup- ter it contains. As the hydrostatic pres- since they remain in the combustion Cauca-Patía, the four basins with the posedly help reduce greenhouse gas sure drops, methane is liberated from cavity. The same happens with gas in highest potential in the country. In this emissions (GHG). the rock. In some cases, hydraulic frac- the rock, which has taken the lives of sense, the Agency stated in 2013 that turing (fracking) is applied to increase mining workers for centuries. For de- seam permeability. Some of the main cades, it has been possible to extract problems posed by these operations it by adapting techniques used in hy- 5 A summary of the critical aspects of coal seam drocarbon exploitation, which enable gas exploitation can be found in the infographics GHG emissions reduction, since it is published by Frack Off (11/07/2013). 3 For more information see the articles by Teran 4 For a description and critical assessment of UCG, 6 On the impacts in Canada see Caldicott, A. Mantovani, E. (7/04/2011) and (10/11/2016). not released in the atmosphere, to see Ochandio, R. (18/06/2015). (03/02/2009) and in USA: San Juan Citizens Alliance.

84 85 Extreme Coal 2.0: Another Chapter in the Latin American Unconventional Plot

it was working on the drafting of regu- Lloyd Smith (11/2015) begins her re- 2016, prohibition of the technique has stated that UCG “poses numerous and lations that would open exploitation port on the impacts of underground been pushed for in Queensland (OP- serious environmental risks”.13 Months areas for leasing (Colombia Energía, coal gasification in that country. The Sur, 27/04/2016) and Victoria (OPSur, before that, Cluff Natural Resources 03/12/2013).7 Soon after, in the 2014 work, together with the “Independent 31/07/2016), with the aim of preserv- had cancelled a project in that country. Colombia Round, 8 blocks were of- Scientific Panel Report on Under- ing their agriculture-based economy. According to Friends of the Earth Scot- feredfor coal seam gas exploration (El ground Coal Gasification Pilot Trials”, Moreover, Linc Energy executives are land (25/8/2015), this was due to pres- Heraldo, 22/02/2014). published in 2013 (OPSur, 7/12/2016), subject to criminal charges (OPSur, sure from organized opposition, which are key critical materials of the tech- 14/11/2016)12 after it was determined requested the technique to be included In this race, the Ministry of Mines, the nique, and they acquire special rele- in a report by Queensland’s Environ- in the current moratorium on uncon- National Mining Agency (ANM), and vance because its proponents cite the mental Department that the company ventional gas. the ANH joined the Global Methane Ini- Australian experience as successful.9 had been responsible for contaminat- tiative, a multilateral voluntary alliance They even claim that UCG is commer- ing farmland used for growing wheat, “to promote the reduction, recovery, cially exploited in that country, when barley, cotton and grazing cattle. The The South also exists and use of methane as a clean energy in fact the projects of Cougar Energy, state government imposed an “ex- In spite of the attention received by source, creating an international net- Linc Energy, and Carbon Energy10 have cavation exclusion zone” of 314km2, coal exploitation in Chile and Argen- work of partner governments, mem- not been approved for commercial due to hydrogen leakage and methane tina, its reserves are significantly lower bers of the private sector, development activity.11 What is more, throughout in the soil. Farmers are banned from in terms of energy and development banks, universities, and non-govern- digging deeper than two meters (Solo- models than those of Brazil, Colombia, 8 mental organizations”. mons y Willacy, 10/08/2015). Venezuela, and Mexico,14 and they do not rank high in global terms. However, 9 To mention only one example, Cristián Barrien- Not only in Australia did the authori- Experimenting with the tos, manager at Mulpun Energy –joint venture both countries are among the few in between Antofagasta Minerals and Carbon Energy ties decide to stop this technique. Last the region in which UCG has been or is “energy from hell” for the development of a project near Valdivia, October the Scottish government an- being promoted.15 In 1913, Vladimir Lenin described un- Chile–, stated to El Mercurio (17/08/2010) that nounced it would not approve UCG af- “at an international level the process has been Chile’s dependency on energy imports derground coal gasification (UCG) as successful, and it is being commercially carried ter reading the findings of a report con- the “great victory of technology” that out in Australia, South Africa, China, and Russia”. ducted by the University of Glasgow. cleared the way for the launching of the would liberate workers from the dan- On the same project see also the coverage of The Energy Minister, Paul Wheelhouse, Mulpún Project in 2009, by Antofagasta one of Valdivia’s TV channels, which echoes the Minerals, owned by the Luksic Group gers of working in the mines. Today, advantages listed by promoters of underground in southeast Queensland, Australia, it gasification. –one of the biggest in the country– and is called Syngas, the energy of hell. It 10 On Google’s financial information page, Carbon the Australian Carbon Energy. The envi- is with this reflection that Dr. Mariann Energy is listed as providing comprehensive on seams have been developed in the Soviet ronmental body had approved the first services in underground coal gasification, from site Union for more than 40 years. In spite of research stage; however, since 2013 the project selection to termination of the process. Its projects and pilots all around the world, no viable UCG include Bloodwood Creek, in Australia; Claromecó [Underground Coal Gasification] project has been basin, in Argentina; Proyecto Mulpún, in Chile; and commercially developed in the West,” stated David 7 The Policy Guidelines on the Granting of Explora- Haoqin Coal Field, in China. The state of the Austra- Creedy and Heather Tilley (2001) in their summary tion and Exploitation Rights for Coalbed Methane lian and Chinese projects is a mystery that will not of a report issued by the Department of Trade and 13 For more information see BBC (6/10/2016). and the Development of Technical Regulations for be solved in this article; however, we can confirm Industry’s Cleaner Coal Technology Transfer Pro- 14 Proven reserves in Latin America and the Carib- its Exploitation were already established in 2008; that in Chile, the Proyecto Mulpún has been stalled gramme of the United Kingdom. The Independent bean, 2009, in million tn: Brazil, 32,312; Colombia, three years later studies about reserves were initi- for years due to financial disagreements, while in Scientific Panel of Queensland reached a similar 6,720; Venezuela, 1,368; México, 1,211; Argentina, ated. The country’s important coal potential, and Argentina, prospection requests by Grupo Delmo conclusion ten years afterwards. Interestingly, the 422; and Chile, 148 (Bariloche Foundation e accidents reported in mines due to the presence –also present in Australia, and with which Carbon Spanish newspaper El País published an article IEE- San Pablo University, 2013). Brazil has more of gas motivated the survey (Colombian Geologi- Energy has an agreement for gasification develop- on the topic in 1980, stressing the potential of reserves but, as they contain low calorific value cal Service). ments– have not even been approved. UCG, but warning of its embryonic state (Vaquero, coal, it imports most of what it consumes. 8 ANM, Taller Internacional. Gas metano Asociado a 11 “Research has been carried out mainly in Western 12/10/1980). 15 The others would be Brazil and Colombia, but Carbón: Diferencias conceptuales y técnicas entre Europe, USA, China, the former USSR, and 12 Other records on the impacts of this technique the information is not precise (Correa, M. J. et al., CBM y CMM. Australia; large-scale superficial schemes based can be found in Sosa, S. M. (2016). 2014).

86 87 Extreme Coal 2.0: Another Chapter in the Latin American Unconventional Plot

own interest, given that YPF had been other one by the local branch of the Na- Attempts to reinvent coal do not seem to granted a concession in the same area. tional Technological University of Rio stop. But the bans on underground gas- Other statements of discovery, pre- Turbio (CAI, 25/11/2015), the cradle of ification in Australia and Scotland illumi- sented by individuals, and more than Argentine coal. Regarding the role of nate the resistance to such attempts. 100 prospecting requests filed between public universities in the experimenta- February 2008 and January 2010, have tion and promotion of UCG, the leading Meanwhile, in Argentina the not received as much publicity. Such institution in the country is the Institute development of unconventionals requests are still pending approval by of Mineral Resources of the National provincial Mining Department, whether University of La Plata, which signed a co- seems to clear the way for the it is due to non-compliance with require- operation agreement with Delmo Group. assessment of other sources ments –e.g., pending documents– or and techniques with limited because the official body did not reach Beyond the particular underground development at the global level. a decision yet.16 gasification projects, in the last decade there was an attempt in Argentina to Towards the end of 2014, the secre- position it as en energy source. Con- Coal exploration in the Claromecó Basin (Isidoro tary of Public Services of Buenos Aires struction of a coal-fired power plant be- Schalamuk) stated that the government was in- gan in Rio Turbio, home of the only coal is interrupted due to financial prob- terested in taking advantage of coal’s reservoir in the country currently under lems. That same year a spokesman of energy potential in the province. After exploitation. Although the plant was in- Antofagasta Minerals maintained that the change of government in Decem- augurated at the end of 2015, at pres- the company was also interested in ber 2015, no further statements were ent it is not operational due to malfunc- gasifying coal deposits near the south- made, but officials of the sector said tion (InfoSur, 09/09/2015). Also at the ern city of Punta Arenas (Diálogo Sur. off-the-record that interest is still la- end of the same year, President Cristina cl, 2/5/2013). tent (OPSur, 19/08/2016). It is relevant Fernández introduced a bill in parlia- Meanwhile, in Argentina the develop- to note that in 2010 the provincial ment to create the company Yacimien- ment of unconventionals –with com- Ministry of Production carried out the tos Carboníferos Fiscales S.E., in which mercial exploitation of gas and oil, and Study of Clean Technologies for Exploi- “the development of exploration and shale and tight reservoirs in north Pa- tation and Utilization of Mineral Coal, exploitation of mineral coal and its de- and in May 2015 the Under-Secretariat rivatives as source of power energy tagonia– seems to clear the way for Linc Energy pilot plant in Chinchilla, Australia. (Linc Energy). the assessment of other sources and of Public Service Development began generation” is declared as being in the techniques with limited development procedures for file 2174-369 on the national interest (OPSur, 9/12/2015 y 17 at the global level. This context helps Production of Electric Energy through 24/11/2015). The initiative was ap- understand why UCG projects are be- Gasification of Mineral Coal in - Claro proved in the Chamber of Deputies but Consult the bibliography of this article ing promoted, and why coal seam gas mecó Basin, which is continuing. has not been voted in the Senate yet. in:: https://tinyurl.com/krss7an Also in 2015 a bill was introduced to was even included as an unconven- In addition to the Buenos Aires projects, tional source of energy in the Hydro- promote the production of liquefied fu- How to cite this article: two more would be under evaluation in els derived from gas and mineral coal carbons Law reform of 2014. the southern province of Santa Cruz, Scandizzo, Hernán (2017). (HCDN, 2015). “Coal 2.0: Another Chapter in the In 2010, the company Barranca Sur one of them presented by Guevara and Asociados (Correa et al., 2014), and the Latin American Unconventional Minera announced the discovery of Plot”, in Extreme. The New Frontiers coal in the Claromecó basin, in the 17 For more information see OPSur (9/12/2015) and of Energy Extractivism in Latin province of Buenos Aires. The discov- OPSur (24/11/2015). America. Oilwatch Latinoamérica. ery was made public in the company’s 16 For more information see OPSur (10/09/2016).

88 89 It is time to create Annex 0!

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