Industrial policy: Raw materials stay in the ground

by time news

2023-08-23 16:02:00

Oil is still being produced at this well in Yasuní National Park.

Photo: AFP/Rodrigo Buendia

The oil under Yasuní National Park in Ecuador must remain underground. Almost 60 percent of voters voted in favor of this in a nationwide referendum that took place last Sunday parallel to the early presidential elections in the South American country. Voter turnout was 82 percent.

The result of the referendum is binding. The state oil company Petroecuador must now halt oil production in the Amazon rainforest area, shut down all wells and dismantle and remove all oil infrastructure. She has a year to do that.

After the result became known, environmentalists spoke of a “historic vote” and a “great victory”. Amazon Watch’s Kevin Koenig said: “Ecuadorians have sent a clear message to the world: the Amazon forest, indigenous rights, biodiversity and our climate are more important than oil.”

The Yasuní National Park – with an area of ​​10,227 square kilometers and a core area of ​​around 5000 square kilometers, the largest of its kind in Ecuador – was declared a biosphere reserve by Unesco in 1989 together with an adjacent indigenous reserve. Located between the Napo and Curaray rivers and named after the Rio Yasuní that runs through it, the wet forest area is one of the places with the greatest biodiversity. With a total of 2274 tree and bush species, 644 identified species can be found here on a single hectare – a world record. That’s more than all of North America’s native tree species combined.

This is one of the reasons why the crude oil production, which began in the Amazon region of Ecuador in 1967, was controversial from the start. Nevertheless, more than 200 wells are currently active in the Ishpingo-Tambococha-Tiputini (ITT) oil field, and a further 500 have been planned so far. Around 55,000 barrels of crude oil are currently produced there every day, around 12 percent of Ecuador’s oil production.

The development area gained international attention from 2007 through the attempt to keep the energy resource in the ground under the national park. Alberto Acosta, energy minister of the then newly elected left-wing government under President Rafael Correa, launched the Yasuní-ITT initiative: Ecuador offered rich countries not to drill for oil if they paid for half of the estimated export value. The initiative was seen as a pilot project that could be imitated in as many countries of the Global South that depend on raw material income as possible.

A fund was set up at the time, but the estimated sum of 3.6 billion US dollars did not come close to being raised. And so the innovative compensation deal failed due to the reluctance of the industrialized countries. President Correa ended the initiative in 2013 and gave the green light for oil production in the 2000 hectare ITT oil field in Yasuní Park, in the so-called Block 43.

Not content with this, civil society groups in the country launched a campaign in the same year for a referendum to ban oil production. In a short time they collected the required number of signatures. But the referendum was repeatedly postponed – until the constitutional court of Ecuador ruled last May that the vote must take place.

In the run-up to the referendum, representatives from business and politics put forward the usual arguments: A yes to the oil freeze would lead to a loss of government revenue, jobs and economic growth. In addition, the deadline for dismantling the oil infrastructure within one year is too short and will lead to high costs. Supporters of the production freeze countered that the decline in oil revenues could easily be offset by a wealth tax and stricter action against tax evasion. These arguments resonated with a majority of voters.

A second referendum on the same day in the metropolitan area of ​​Quito resulted in a clear majority for more environmental protection. Almost 70 percent of citizens voted to end the mining of gold and copper in the Chocó Andino highland biosphere reserve. The sanctuary with Andean cloud forests, clean rivers and numerous endangered species such as cougars and spectacled bears is just 90 minutes north of the center of the Ecuadorian capital. Local residents, most of whom make a living from agriculture and animal husbandry, have long complained that mining activities are having a massive impact on local ecosystems, water cycles and soil. As in Yasuní, environmental protection should take precedence over economic interests in the future.

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