2024-07-26 02:49:21
Antonio Gonçalves took over the Ministry of Energy, which has at least seven fronts to attend to in the mining, oil and electricity sectors.
Antonio Gonçalves takes over the Ministry of Energy, which has at least seven fronts in the electricity, oil and mining sectors. Gonçalves had been serving as an advisor to the former Minister of Energy, Roberto Luque, for two months and, according to the former official, has experience in processes to combat illegal mining and in the structuring of electrical projects.
This is because Gonçalves worked for more than 12 years at the Inter-American Development Bank (IDB). Among the challenges that the new official will have to face are, for example, the risks of regressive erosion for the oil infrastructure and the largest hydroelectric plant in the country, such as Coca Codo Sinclair.
In addition, there are power cuts and the crisis in the oil sector. Some of these challenges are detailed below:
Power cuts
The new Minister of Energy takes over an electricity sector in crisis. The situation is so vulnerable that the closure of Coca Codo Sinclair has caused nationwide power cuts, despite the fact that the reservoirs are practically full.
And in August or September 2024, the drought is expected to begin again, which could mean scheduled power cuts again. The outgoing Minister of Energy, Roberto Luque, has not ruled out the possibility of power cuts, but that they are working to avoid that scenario.
Antonio Gonçalves will have to continue with the process to hire a barge and engines for a total capacity of 430 megawatts. However, in its Annual Operating Plan, the state energy operator Cenace had anticipated that the country would require about 1,080 megawatts in the remainder of 2024 and February 2025, if it does not want to depend on imports from Colombia.
Crisis at the Esmeraldas Refinery
Although the Esmeraldas Refinery, the largest in Ecuador, has the capacity to process 110,000 barrels of oil per day, processing capacity has been declining. And in April 2024, this complex only processed 85,861 barrels.
That is, it operated at 85% of its real capacity. The situation is such in this refinery complex that the workers themselves are afraid that an explosion could occur at the plant, according to a report by Teleamazonas, which showed video images of the deterioration of the tanks and other systems within the facilities on Thursday, June 27, 2024.
Fall in oil production
Domestic production was 374,000 barrels per day on July 2, 2024, representing a drop of more than 486,222 barrels, a decrease of 110,882 barrels from what was produced on June 16, 2024, when 485,533 barrels were produced.
This drop is related to the cessation of operations of the Heavy Crude Oil Pipeline (OCP), after regressive erosion affected a section of the pipeline in the Amazonian province of Napo. There were no spills, but the suspension forced the shutdown of oil wells, which led to a drop in production.
The OCP announced on July 3, 2024 that it had resumed pipeline operations, with which Petroecuador hoped to begin lighting wells. But oil production had already been declining since the beginning of the year and will fall significantly when the ITT oil field, which contributes 12% of national production, is closed (see challenge number 4).
ITT closure
The Central Government must comply with the mandate of the majority of Ecuadorians who voted in extraordinary elections, held in August 2023, for the closure of the ITT oil field, the most promising in Ecuador.
The ITT produces 55,000 barrels of oil per day, which represents 12% of national production. The state oil company Petroecuador has warned that the costs for the State of ceasing to extract oil from the field, plus the costs of removing the oil infrastructure and compensation to companies and residents, will total USD 16.47 billion. The Constitutional Court gave a one-year deadline to comply with the popular mandate, which, in calendar time, would be fulfilled in January 2025.
Mining
On March 26, 2024, clashes between anti-mining groups and law enforcement were again reported in Palo Quemado, Cotopaxi. NEWS Another pending task that the new Minister of Energy will take on is to open the land registry
Another pending task that the new Minister of Energy will take on is to open the mining registry, an offer that President Daniel Noboa made in Canada in March 2024. The registry, which has been officially closed since 2018, is the database for investors to request concessions; without it, new exploration cannot be carried out and, therefore, the mining frontier cannot be expanded.
All this in the midst of a scenario of high social conflict. The most recent occurred in March 2024, in the parish of Palo Quedado, where protests by opponents of the La Plata mining project, run by a subsidiary of the Canadian company Atico Mining, left police officers injured.
Other companies, however, are waiting for prior, free and informed consultation, for which the Ministry of Energy issued a Manual, but which has been observed by social groups that have already filed a lawsuit before the Constitutional Court. Illegal mining is another front for the Ministry of Energy. There are illegal mining camps in 17 of the 24 provinces of the Coast, Sierra and in the Amazon of Ecuador, according to the Agency for Regulation and Control of Energy and Non-Renewable Natural Resources (Arcernnr).
Risks at the country’s largest hydroelectric plant, Coca Codo Sinclair
Oswaldo Ortiz, a resident of El Chaco, who is dedicated to rafting, an activity that has been affected by the regressive erosion of the Coca River.
There are risks on three fronts for Coca Codo Sinclair, which could permanently disable this hydroelectric plant, the largest in the country. One of them is located upstream and is the sediments that caused 19 shutdowns of the plant until June 20, 2024.
The origin of the problem could be found in the hydroelectric plant’s sand trap, which is overflowing and whose evacuation system is not working properly. The second problem has to do with the regressive erosion of the Coca River, which began in February 2020 about 20 kilometers from the hydroelectric plant’s intake works or the plant’s headwaters. It is now 6.4 kilometers from these works, which, if destroyed, would render the hydroelectric plant useless, since they constitute a small dam that allows the river’s waters to be diverted towards the mountain.
To avoid this, the Electric Corporation of Ecuador (CELEC) proposes to build a permeable dam, but erosion has already surpassed the area where it was to be built. In addition, the Public Procurement Service (Sercop) has threatened to declare the tender to build this dam void, although the former energy minister, Roberto Luque, said that he would do everything possible, from a legal and technical standpoint, to prevent this from happening and the work can be awarded.
In addition, the mud and soil left by erosion have been accumulating downstream, causing the river level to rise in the hydroelectric plant’s discharge area, which could cause the powerhouse to flood in seven years. And a third risk is the construction faults in the hydroelectric plant’s water distributors, which require constant repairs due to thousands of cracks found, many of them factory-made.
These distributors are designed to reduce the pressure of the water, which falls from a height of 600 meters, so that it enters the turbines in a controlled manner and generates electricity. The Comptroller’s Office has therefore warned that the thousands of defects found in the distributors put at risk the hydroelectric plant’s powerhouse, which alone had a construction cost of USD 1.011 billion.
Extension of the OCP contract number
The OCP was to be reverted to the State in January 2024, at no cost, because the concession period had expired. But the Government decided to extend the contract until July 31, 2024, in order to find an agreement for its extension.
The OCP transports Ecuadorian oil along a 485-kilometer route, from the oil fields in the northern Amazon to the maritime terminal of Balao, in the coastal province of Esmeraldas, from where it is exported.
With 200,000 barrels of oil transported per day in April 2024, the OCP mobilized 40% of the oil extracted in Ecuador, although the total capacity of the pipeline is 450,000 barrels per day. If the contract is extended, the OCP has offered the Government to invest in making a definitive variant of the pipeline in the face of the risk of regressive erosion of the Coca River. #ole
By: PRIMICIAS