www.flacsoandes.edu.ec

FALL 2015

HARVARD REVIEW OF LATIN AMERICA

ENERGY OIL, GAS AND BEYOND

ENERGY EDITOR’S LETTER BY JUNE CAROLYN ERLICK

Zocalo Hed 26 pt

Zocalo deck 14 point one line BY HARVARD REVIEW OF LATIN AMERICA

FALL 2015 VOLUME XV NO. 1

Oil, Gas and Beyond Published by the David Rockefeller Center for Latin American Studies I was waiting for the ship to come in. In fact, so was everyone else in Nicaragua. Gas lines VOLUME XV NO. 1 Harvard University stretched around the block. The supermarket shelves were nearly bare. Lights went out again David Rockefeller Center for Latin American Studies and again, plunging the country into frequent darkness. Telex machines couldn’t work, and we reporters had to depend on the few places with generators to file our stories (for younger Director Brian Farrell readers, this was pre-computer and smart phones). U.S. President Ronald Reagan had imposed a trade blockade on Nicaragua in May 1985. The Soviets were sending oil, dodging Executive Director ENERGY Ned Strong the blockade. ReVista OIL, GAS AND BEYOND We reporters did what we always do: we reported on the ship’s arrival. But we also Editor-in-Chief breathed a collective sigh of relief. The arrival of the Soviet ship meant hot showers and light June Carolyn Erlick to read by. Copy Editor Energy is intensely political. It shapes nations and trade and fuels wars and blockades. FIRST TAKE Anita Safran Energy, I discovered then, is also intensely personal. It shapes our lives on a daily basis. It’s not Latin America’s Oil and Gas by Francisco J. Monaldi 2 Publication Interns only a matter of how we get around or whether we have enough food to eat; energy produc- Isabel Espinosa tion affects the communities that receive it and those that produce it. It shapes attitudes Gabriela Farrell THE POLITICS OF OIL IN EVERY ISSUE toward gender and race and nationalism and identity. It pollutes the air and the rivers. It offers Diego Lasarte Brazil’s Oil Scandal by Simon Romero 8 immense economic opportunities. Or it does both. Design Energy and Politics in Brazil by Lisa Viscidi 13 You might not think of Latin America and the Caribbean right away as a big energy Jane Simon Design Mexico’s Energy Reform by Myrna Santiago 16 BOOK TALK producer or consumer. But Venezuela stands ninth in global oil production with gas reserves Printer China in Latin America by Rebecca Ray 20 Transforming U.S.-Latin American Relations almost triple those of Canada. Three countries—Venezuela, Brazil, and Mexico—account for P+R Publications by Michael Shifter 78 about 90 percent of the region’s oil production. And Latin America and the Caribbean also Contact Us THE ECONOMICS OF ENERGY Human Rights, Human Woes have the capability to provide abundant alternative and renewable energy sources: wind, solar, 1730 Cambridge Street What Powers Latin America by Ramón Espinasa and Carlos G. Sucre 24 by Daniel Gonzalez 80 geothermal and biomass, among others. Cambridge, MA 02138 The Impact of Falling Gas Prices by Luisa Palacios 28 Musical Creation and Hardship Perhaps because of my experience in Nicaragua, I started to conceive this issue in terms of Telephone: 617-495-5428 Peruvian Oil Production by Eleodoro Mayorga Alba 32 by Pedro Reina-Pérez 82 meta-politics. And there is certainly a lot of politics related to energy in the region: the politi- Subscriptions, Back Copies and Comments cal upheaval of Brazil as a result of corruption scandals in the national oil company; the turmoil [email protected] ALTERNATIVE ENERGY BUILDING BRIDGES in oil-rich Venezuela; the impact of the semi-privatization of Mexico’s oil industry; the targeting Website Wind Energy in Latin America by Carlos Rufín 36 Building Bridges with Cuban Libraries of Colombia’s energy installations by guerrilla forces in a show of strength in the context of the revista.drclas.harvard.edu The Power of the Brazilian Wind by Mauricio B. C. Salles 38 by Lynn M. Shirey 84 ongoing peace process. Facebook Solar Energy in Chile by Claudio A. Agostini ReVista, the Harvard Review of Latin America 40 But then I thought back on how the arrival of oil had been experienced on a very local and Carlos Silva and Shahriyar Nasirov personal level. I began to hear stories about the production of energy: what it felt like to grow Copyright © 2015 by the President and Geothermal Energy in Central America by Jacques E. C. Hymans 42 ONLINE up in an oil camp, how energy production affects indigenous women in one particular region, Fellows of Harvard College. Look for more content online at ISSN 1541—1443 how local communities involve themselves in deciding what is done with oil. LIVING WITH OIL revista.drclas.harvard.edu ReVista is printed on recycled stock. And just recently Alvaro Jiménez, Nieman Affiliate at Harvard ‘09, happened to mention to Life in a Venezuelan Oil Camp by Miguel Tinker Salas 46 me that he was starting a website “Crudo Transparente,” a site that monitors the Colombian Behind the Corporate Veil by Kody Jackson 50 oil industry. Out of curiosity—and as a quick break from proofreading this issue—I took a peek. Añelo and Vaca Muerta by Mariana Barrera 52 The site focuses on five areas: local economy, contracts and royalties, environment, security This issue of ReVista is made possible and human rights and ethnic conflicts. I was pleased to see how much overlap there was with through generous support of FOCUS ON THE AMAZONS ON THE COVER the themes I had chosen for this issue of ReVista. Santander Universities Global Division. Beyond Dinosaurs and Oil Spills by Theodore Macdonald 56 Petrobras Oil Platform

Although the website deals with only one country—Colombia—it felt like an affirmation Forests for Energy? by Juan Luis Dammert B. 62 Photo By Ricardo Stuckert/PR of the focus I had chosen for this wide-ranging topic. Energy is political. Energy is personal. Oil and Indigenous Communities by Barbara Fraser 66 (Agência Brasil [1]) [CC BY 3.0 Energy matters. In the Shadows of the Extractive Industry by Nelly Luna Amancio 70 br (http://creativecommons. org/licenses/by/3.0/br/deed. PREVIOUS REVISTA ARTICLES ON ENERGY 7 7 en)], via Wikimedia Commons

2 ReVista FALL 2015 REVISTA.DRCLAS.HARVARD.EDU ReVista 1 ENERGY LIVING WITH OIL

and countries. With few if any roots to the Life in a local community, workers were frequently transferred between camps, and the com- pany promoted an esprit de corps among its Venezuelan employees that centered on an all-encom- passing corporate culture. Company prac- Oil Camp tices favored hiring family members, thus Tío Conejo Meets handing down values such as the “Ameri- can way of life” from generation to genera- Uncle Sam tion. Yet despite their artificial nature, the BY MIGUEL TINKER SALAS camps left an enduring legacy in Venezue- lan culture and society. For the generations that worked in the oil industry, the camps reinforced their image as a privileged sec- I GREW UP IN A VENEZUELAN OIL CAMP. EVER tor of Venezuelan society. Just as impor- since I can remember, I have heard both tantly, the camps were sites of cultural and Spanish and English spoken all around social exchange, with the “American way of me or conveyed through music or films. life” influencing everything from politics With my family, I ate traditional Ven- to values. Those employed in the industry ezuelan arepas, cachapas, carne mechada expected the Venezuelan state to be the (shredded beef), fried plantain, and black guardian of this distinctive lifestyle. Many beans, but invitations to dinners at friends’ residents retained a collective nostalgia houses often meant sampling curry goat, for the experience of the camps, overlook- roti and thali, borscht, or U.S.- style bar- ing the racial and social hierarchy that becues. prevailed and the detachment that existed In many ways, Caripito, the oil town from Venezuelan society. where I was raised, embodied the changes Caripito was typical of this oil town cul- occurring throughout Venezuela after the enclave, and seeking to avoid the demand- and Shell Oil built residential camps to ture. The same ships that navigated the San discovery of oil. In 1930, the Standard Oil ing social expectations of the camp, my house their employees. In classic Jim Crow Juan River to load oil also brought an array Company of Venezuela built a port facil- parents moved to Los Mangos, a neigh- fashion, the companies created distinct of U.S. fruits and canned products for sale ity and began work on a refinery in this borhood of Caripito. However, they also areas for foreigners, typically white U.S. in the camp commissary. I still recall the town, in the state of Monagas in eastern recognized the importance of straddling employees or “senior staff,” Venezuelan amazement of eating individually wrapped Venezuela, to process oil from fields in both worlds, and my mother dutifully professionals or “junior” staff, and more red Washington apples for the first time, or Quiriquire, Jusepin and Temblador. The drove me everyday to the company school modest housing for workers. The senior savoring crisp Mexican tortillas that came promise of the oil attracted Venezuelans and our family selectively participated in staff clubs included a pool, golf course, in vacuum-sealed metal cans. Long before from throughout the country; many car- many camp activities. tennis and basketball courts, as well as McDonalds appeared in Venezuela, the ipiteños (people of Caripito) had roots in After oil was discovered in 1914, Ven- bowling alleys while the workers club typi- soda fountain at the company club regu- the adjacent state of Sucre. In succeed- ezuelan production was concentrated in cally had a baseball field, a bolas criollas larly served the “all American meal” con- ing decades, people from Trinidad, Italy, the interior of the country, where infra- court (bocce), a bar and a dance floor. In sisting of hamburgers, fries, and Coke. The Lebanon and even a handful of Russian structure and sanitary conditions had spite of this hierarchy, by the 1950s the Venezuelan diet quickly incorporated U.S. exiles also made their way to Caripito. By improved little since the 19th century. camps became symbols of U.S.-sponsored culinary preferences and tastes. 1939, Caripito had a population estimated To ensure operations, foreign companies “modernity,” with orderly communities, Like other children in the camps, I went at about 5,000 people, some 300 of whom took charge of basic services including higher salaries and access to a full range to a bilingual company school that incor- were “white Americans.” In Caripito, as in electricity, water, sewage, roads, housing, of services that sharply contrasted with porated both the Venezuelan and U.S.- most oil camps, to be white increasingly health services, schooling and a commis- conditions found in the local Venezuelan mandated curriculum. To a certain extent, became synonymous with being a U.S. sary. In these rural areas, the companies settlements. expatriate. By 1960, the total population supplanted the state, and local communi- The camps represented an impro- had soared to a little over 20,000 people. ties became dependent on foreign enter- vised and largely transitory society made Opposite page: workers dig a well in Caripito; This page from top: a Venezuelan work crew At an early age I became acutely aware prises for basic services. up of residents from different parts of takes a break in Caripito; a Coca Cola machine of how different the oil camp experience Standard Oil Company of Venezuela the United States and Venezuela. The at a Shell gas station reflects the prevailing was from the rest of Venezuela. After (later Creole Petroleum, a subsidiary camps allowed Venezuelans to interact “American way of life”; a Venezuelan work several years of living in the residential of Standard Oil Company of New Jersey), with people from other regions, races crew poses on the way to work in Caripito.

46 ReVista FALL 2015 PHOTO ABOVE: UNIVERSITY OF LOUISVILLE, STRYKER COLLECTION SPECIAL ARCHIVE TOP PHOTO: UNIVERSITY OF LOUISVILLE, STRYKER COLLECTION SPECIAL ARCHIVE BOTTOM PHOTOS, COLLECTION OF MIGUEL TINKER SALAS ReVista 47 ENERGY LIVING WITH OIL

tree, with adjacent loudspeakers playing seasonal melodies. Shortwave radios allowed expatri- ates—and some oil camp Venezuelans—to keep track of events in the United States and important news quickly spread. This was long before the Internet or cable tele- vision made speedy news a fact of life. I can recall seeing my U.S. teacher at the Cristóbal Mendoza grammar school break down in tears when the school loudspeak- er announced the assassination of Presi- dent John F. Kennedy. Another way of connecting to U.S. culture was through movies shown at the camp club; Spanish subtitles allowed the Venezuelan audience to follow the action without paying second thought to the overt racism present in many of the U.S. West- Opposite page: A young Venezuelan woman looks pensively out of her humble abode, which erns that stereotyped Mexicans and Native is posted with an ad for orange soda. Expatriates often overlooked the prevailing racial and Americans. Many of my U.S. classmates social hierarchies. Above: a colorful road map produced by Citibank Venezuela in the 1950s. at the camp shared LP records that came with a coonskin cap, plastic musket, and exposure to a bicultural milieu shaped the occasion as an opportunity to prepare powder horn and recounted the exploits the consciousness and personal sensibili- Southwest-style barbecues where local of Davy Crocket starring Fess Parker. ties of people like myself who inhabited beer flowed freely. Uncle Sam, the benevo- Venezuelans who did not live in the camp the campsARTS, or its environs. Beyond sim- lent fatherLANGUAGE figure that later morphed into or work in oil sought entertainment in the ply the ability to speak both languages, a symbol of U.S. imperialism, mixed freely San Luis movie house in La Sabana across the camps conveyed the importance of with Tío Conejo, a shrewd rabbit from a from the Creole Petroleum refinery. I dealing with difference. This experi- Venezuelan folk tale who regularly outwits straddled both worlds, and loved to watch ence, AND however, was not shared equally, CULTUREhis tiger nemesis, Tío Tigre. Mexican cowboy (charros) films or the and it usually fell on the Venezuelans Other festivities, however, diverged comedy of Cantinflas and Tin Tan in the to learn English. Besides understand- from Venezuelan traditions for which old-fashioned movie house that featured ing English, familiarity with U.S. norms no parallel activity existed. During Hal- a range of seating from common wooden and customs proved essential for Ven- loween, children dressed as Mickey benches to higher-priced chairs. Out- ezuelans seeking to advance in the com- Mouse,Arts, language cowboys, ghostsand culture and witches help provideside the theater, the virtual my friends bonds and Ifor looked pany. Interacting with foreigners became wandereda territory throughout that is always the senior shifting; camp forward from film to savoring to music corn empanadasto the de natural, but so did the imposition of a askingplastic for arts, candy they from befuddledconnect Venezu the Guarani- cazón (driedterritory. shark), a local favorite in social racial hierarchy reinforced by U.S. elans. Thanksgiving celebrations by the eastern Venezuela, made by an Afro-Vene- expatriates at the top of the social order. U.S. expatriate community, which often zuelan woman. Festivities in oil camps highlighted the included■■ Chamamé public gatherings, for Dummies and the con- The importance of oil to the 36 U.S. extent to which the camps represented sumption of frozen turkeys imported from economy and military thrust Venezuela ■■ Guarani in Film 40 self-contained enclaves of U.S. culture the United States, remained an exclusively into the midst of the Cold War. In 1962, in the heart of Venezuela. Seldom if ever foreign■■ A View activity. from Venezuelans the Museo outside ofdel the Barro Peace Corp volunteers were assigned43 to questioned, the pervasive influence of the oil■■ A industry Country had noof connectionMusic and to thesePoetry Caripito to teach English in secondary46 U.S. oil industry made political and cultur- events. A traditional Christmas in Venezu- schools and promote U.S. values. In case al ties with the north appear normal. Cel- ela had always included building a Nativ- their efforts failed, Green Beret advisors ebrations of the 4th of July melded with ity scene, but in the oil camps, this practice gathered intelligence and trained the Ven- Venezuelan independence on the 5th of was slowly displaced by ornament-laden ezuelan National Guard. In 1962, guerril- July, becoming shared events that allowed imported pine trees. To add to the festive las launched an offensive in eastern Ven- politicians and company officials to make mood, the oil company typically decorated ezuela. The U.S. military advisors assigned largely perfunctory claims of solidarity. a nearby oil well or water tower with col- to Caripito asked my local Scout troop to Expatriates, especially from Texas, saw ored lights in the shape of a Christmas report on “suspicious activity,” includ-

48 ReVista FALL 2015 ABOVE: UNIVERSITY OF LOUISVILLE, STRYKER COLLECTION SPECIAL ARCHIVE; OPPOSITE PAGE: COLLECTION OF MIGUEL TINKER SALAS REVISTA.DRCLAS.HARVARD.EDU ReVista 49 ENERGY LIVING WITH OIL

ing spent cartridges we might find as we odds with community memory. Former Guyanese draftsman Isaac Chin to com- ity. Lago’s local laborers well understood hiked through the rainforest. To assuage Behind the U.S. expatriates were quite vocal about plain that “my ceiling as a non-foreign- this reality. Many remembered the infa- discontent, the town’s poor also received their attachment to Lago and the Lago staff employee was barely above my head” mous strike of 1951. Though involving sacks of grain from the Alliance for Prog- Corporate Colony (1930-1985), their home on the (Where is Choy? 2002). Quality of hous- almost half of the refinery’s labor force, ress and from Caritas, a Catholic charity. island just north of Venezuela. “In my ing openly demonstrated this disparity. the protest had ended in failure, gaining As I accompanied my parents into some heart, I know where my true home is and Though given their own sports fields, only a limited wage increase and result- of the poorest neighborhoods of Caripito Veil always will be: that small desert island commissaries and houses, Caribbean ing in the deportation of several labor to distribute food packages it became evi- Company Control in the named Aruba,” Margie Pate said, remem- employees could readily see the luxuri- leaders. Assistance from the Dutch colo- dent that oil had not benefited all sectors bering her time amongst the 3000 U.S. ous lifestyle of those in the Colony, if only nial government had guaranteed Lago’s of society equally. The camps highlighted Lago Colony of Aruba employees and their families. Eugene from a distance. Indeed, the company victory. Royal Dutch Marines remained the existence of two Venezuelas, one ben- BY KODY JACKSON Williams agreed, recalling wistfully in prohibited non-white, non-managers stationed around the refinery throughout efiting from oil, and one for which the 2003 that “when we left Aruba, it was like from entering the foreign enclave except the strike, a precaution meant to safe- promise of oil remained elusive. leaving paradise.” These bold assertions to perform the service work such as gar- guard the facility that processed over 140 Oil never fully transformed Venezuela, only made Mink’s experience all the more dening and cleaning that kept life in the million barrels of Venezuelan crude oil but rather it created the illusion of moder- IT BEGAN AS MOST THINGS DO THESE DAYS, WITH incomprehensible and, consequently, all Colony so leisurely. Thus, animosities each year, employed over 33% of Aruba’s nity in a country where high levels of a simple Google search. Looking to flesh the more intriguing. Could secret resent- abounded within and outside the Colony. workforce and accounted for over 90% inequality persisted. The camps became out my graduate seminar paper on the ments possibly be hiding behind such These examples, however, fail to explain of the island’s exports. This economic a tangible symbol of this disparity. Local Lago Oil & Transport Company of Aruba, fond remembrances? the travails of Walter Mink, the victim strength ensured government patronage residents resented the inequities in life- I typed the company’s name into that in- Not everyone, after all, evaluated Col- of neither sexist expectations nor racial in the years to come, perpetuating Lago’s style; businesses complained about closed famous search bar and prayed that those ony life quite so positively. Some female limitations. dominance over unskilled Caribbean markets; the government worried about fickle gods of the Internet might have pity “Lagoites” balked at the gendered expec- Indeed, Mink’s grievance went beyond workers. Such power did not, however, divided loyalties; and the left viewed them on me, a humble researcher. The title of a tations foisted on them as part of island issues of Colony inequality, touching appear to have affected the lives of Lago’s as part of U.S. exploitation of Venezuela’s domestic court case caught my eye among life. Company policy required teachers instead on those of company author- expatriates. These engineers, by virtue labor and resources. During the 1970s, the results. “Richard Mink v. Lago Oil & and nurses to give up their careers after of their technical know-how, held more popular protest singer Ali Primera wrote Transport Co. (05/02/66),” it announced marriage, presumably to focus on their bargaining power vis-à-vis the company. Perdóname Tío Juan (Forgive me Uncle promisingly, so I clicked on the link and wifely duties. “I do not do it wisely or The company dominated Lago could not, for fear of losing valuable John): began reading. An appeal before the Su- well and I need [my husband] so badly to employees, implement the paternalistic preme Court of New York, “Mink v. Lago” help me [raise our children],” Charlotte the political and practices so commonly associated with Es que usted no se ha paseado held some startling allegations. Walter Warden wrote plaintively in her diary economic affairs of company towns (e.g. paying in scrip). por un campo petrolero/ usted no ve que Mink, a U.S. citizen and former Lago in 1947. Local residents on the payroll Instead, it had to influence the Lagoites se llevan employee, was suing the Aruban refiner also resented Colony life, though more Aruba, much like the in more subtle ways, such as reserving lo que es de nuestra tierra/ for “improper medical care” given to his based on their exclusion from it, not their notorious United Fruit certain community privileges like nicer y sólo nos van dejando newborn son Richard in 1956. In the entrapment within. Local workers earned houses, cars and Christmas trees for miseria y sudor de obrero/ Top: Escuela Cristobal Mendoza Caripito; midst of a simple procedure, company less money for equal work, prompting Company of Guatemala. those with company standing and senior- the author of this article is sitting on the y sólo nos van dejando/ doctors had misplaced an intravenous floor, second from the right, wearing a bow miseria y sudor de obrero. (You have not tie and white shirt; the washing machine is feeding tube, leading to disastrous con- visited an oil camp, you do not see that emblematic of the type of modern purchase sequences. “The fluid,” Mink explained they take what belongs to our land, and made possible by the booming Venezuelan emotionally in a 1965 court affidavit, all they leave us is misery and the sweat oil industry. “was not fed into the vein but into some of our worker’s and all they leave us is other part of [Richard’s] lower right ex- misery and the sweat of workers.) experienced during this period inform tremity…his ankle bones were literally many of the political divisions that char- ‘washed away.’” Lago doctors eventu- Having successfully created a trained acterize contemporary Venezuela. ally had to amputate Richard’s right leg and acculturated labor force imbued with to prevent infection. It was a tragedy, company values, even the oil companies Miguel Tinker Salas is Professor of the elder Mink maintained, leaving his believed the camps had outlived their use- Latin American History and Chicano/a son “sick, sore, lame, and disabled…and fulness. Despite their eventual integration Latino/a Studies at Pomona College in still suffer[ing] great physical pain and into local communities, the lived experi- Claremont, California. He is the author mental anguish.” He concluded his suit ences of those employed in the industry of Venezuela, What Everyone Needs to asking for $325,000 on the basis of his coalesced with the perspectives of mid Know (Oxford University Press, 2015) son’s disability and his own hardship. dle- and upper-classes that viewed oil as and The Enduring Legacy: Oil, Culture This case was shocking, not only the guarantor of their status. Attempts to and Society in Venezuela (Duke Univer- because of the lurid details of medical recapture the illusory sense of modernity sity Press, 2009), among other books. malpractice, but also because it stood at A poster of the Lago Colony in Aruba, 1956.

50 ReVista FALL 2015 TOP PHOTO: COLLECTION OF MIGUEL TINKER SALAS; BOTTOM PHOTO: UNIVERSITY OF LOUISVILLE, STRYKER COLLECTION SPECIAL ARCHIVE ABOVE: WWW.LAGO-COLONY.COM AND STAN NORCOM, © STAN NORCOM, 1956 REVISTA.DRCLAS.HARVARD.EDU ReVista 51