Ecuador's Risky Energy Grab

Imagine a country where the currency has been totally replaced by US dollars. Imagine the impacts on communities living with intense toxic pollution from oil production. Imagine regions of the Amazon where ongoing unrest due to economic and environmental abuse has shut down important oil pipelines and toppled presidents.

This week Ecuador kicked Occidental Petroleum out of the Amazon. Ecuador may have picked a fight with a major bully, but there are people celebrating in Ecuador.

This is an informative article, even if the perspective is a bit patronizing. As well, notice the veiled threat in the closing: “This Latin drama is far from over.”

Intervention is a well worn and bloody tool for the protection of US corporate investment in the Americas.

With oil prices so high, it’s not surprising that Ecuador has joined fellow energy-rich Latin American countries Bolivia and Venezuela in booting foreign oil companies or drastically raising royalties and taxes. In all three countries, the majority of the population is poor and needs better schools, hospitals, and highways. Governments want to get their hands on more of those oil profits to pay for these popular programs.

But Ecuador’s decision to expel U.S. oil company Occidental, the country’s biggest foreign investor, is a risky move that not only could disrupt oil production but also hurt nonoil exports by scuttling trade agreements with its biggest trading partner, the U.S. “The blatantly illegal expropriation of Oxy’s assets by the government of Ecuador is a clear violation of our contract, Ecuadorian and international law, and the U.S.-Ecuador Bilateral Investment Treaty,” a company spokesman said. “This action will have a chilling effect on foreign investors for years to come.”

Ecuador is just one more country that has been spurred by high oil prices to take more control over its natural resources. On May 1, Bolivia nationalized its oil and natural gas industry, telling foreign oil companies, including Brazil’s Petrobras and Spain’s Repsol-YPF, to fork over 82…

Posted by manyhues
I believe I found GNN and started reading from these pages during the 2000 election fiasco, but I started this manyhues blog on September 11, 2005, while working on pulp and wood products industry issues in Southern Chile. I posted another series of blogs...

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