Can Countries Cash In by Leaving Oil Untapped?

As Peru attacks its indigenous groups for the oil in the Amazon, Ecuador tries another tack: charging rich countries to leave forests untouched.

Tensions in Peru are running high. Indigenous groups are refusing to back down and accept President Alan Garcia's plan to open up huge swaths of their land in the Amazon to foreign investors for oil extraction. Last week, a violent clash between police forces and indigenous protesters erupted, leaving dozens of people dead and hundreds wounded.By the official state estimate, 32 people-23 police and 9 protesters-were killed in a chaotic couple of days in the Peruvian Amazon. Indigenous leaders have claimed that at least 40 protesters were killed, and that bodies have been buried, burned, or dumped in rivers by the military security forces.This all serves as a stark reminder that the true cost of oil goes far beyond the price at the gas pump and the carbon dioxide that it contains.Here's a bit of back story: Last year, the Garcia government passed a number of legislative decrees-through some special powers granted temporarily by congress-to expedite and ease the development of Amazon lands. Or, as a Guardian editorial put it, "a new law that lets rip the exploitation of the Amazon forests by loggers, miners, biofuel farmers and oil men."For the past two months, indigenous groups, organized under the umbrella of AIDESEP, have been blockading roads to the potential development sites and to a pumping station for an oil pipeline. Up until last week, the protests against the imminent destruction of their land had been peaceful.Then, police forces received word from Lima to remove a blockade at the strategic (and tragically named) Devil's Curve stretch of highway. The protesters claim they were unarmed but for spears, which they bore with their traditional dress as "symbols of [their] identity." Gregor MacLennan of Amazon Watch gave this account: "Witnesses say that it was the police who opened fire last Friday on the protesters from helicopters ... [T]he demonstrators were unarmed or carrying only wooden spears and the police were firing automatic weapons."For two days the conflict raged. Lives were lost, martyrs were made, and peace throughout the whole country now seems to hang in the balance. The leader of AIDESEP, Alberto Pizango, was charged with sedition, and has since been granted asylum at the Nicauraguan embassy in Lima. Garcia has called the protesters "ignornant" and "barbaric," while hinting that foreign governments (likely meaning the regional populist rivals Evo Morales of Bolivia and Hugo Chavez of Venezuela) were complicit in "a conspiracy ... to keep Peru from using its natural riches."And so we come back to the root of the problem-oil. Garcia's tactics are deplorable. But the stark reality is that there are billions of dollars buried under that indigenous land, and the government sees that resource wealth as Peru's best opportunity to expand the country's economy and pull more of the country's most destitute 36 percent out of poverty.Could there be a better way?We might not have to look much farther than Peru's neighbor to the north to find one. Ecuador-who hasn't historically been, to be sure, any champion of indigenous rights (read up on Chevron and the state-run PetroEcuador for starters)-recently announced an innovative and unique plan to profit not by allowing international firms to drill, but by leaving oil untapped.Essentially, rich Northern nations would pay Ecuador to preserve the carbon sequestering forests of Yasuni National Park-considered by most biologists to be one of the most diverse and richest wildlife troves on the planet-and to keep the carbon-laden oil underground.Not without controversy, President Rafael Correa's plea for around $5.2 billion to keep hands off an estimated 920,000 barrels of untapped crude has been called everything from an "innovative and daring idea" to "blackmail[ing] the world." Correa, who fancies himself an ecologist, wants to preserve the forests for the sake of biodiversity and the resiliency of indigenous ways of life, but is under intense pressure from foreign oil companies to cash out to the tune of about $700 million annually.Besides the carbon sequestration potential of the forests, Ecuador hopes that the 410 million or so tons of carbon dioxide emissions embedded in its vast oil reserves are valuable as massive carbon offsets to European and American countries and companies. Can it actually work? There are plenty of hurdles, the biggest of which being the creation of some internationally binding legal mechanisms for carbon offset projects like this to work. This will be on the agenda in the Copenhagen climate talks, and plenty of groups are vowing to ensure that the rights of indigenous people aren't neglected in the negotiations. Economic devices like that proposed by Ecuador will be critical, but it would be tragic if the basic human rights of the world's most vulnerable weren't a fundamental touchstone of any solution.Original photos by flickr users (cc) JakeG and Clinton Steeds. Illustration by Will Etling.
Screenshot via (left) Wikimedia Commons (right)

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