The populations and leaders of several South American countries are determining the fate of their natural resources, as the question of a green transition and deforestation loom over them. In both Ecuador and Brazil, state powers are deciding whether to approve new oil and gas licenses or put the health of the rainforest first. While many Latin American states have the potential to develop their oil and gas sectors further, some are questioning the value of their natural resources, as pressure mounts for a global green transition. But will they decide to keep drilling or focus on protecting the environment?
Last week, Ecuadorians were asked to vote in a referendum on new drilling that could affect the Amazon rainforest. On Sunday, Ecuadorians voted between eight presidential candidates in the general election, as well as on whether drilling should go ahead at the Yasuní Ishpingo-Tambococha-Tiputini (ITT) oilfield, known as block 43. The field is situated in the Amazon national park, Ecuador’s largest protected area and home to a major indigenous community, the Waorani people.
The population voted against the development of block 43, with around 6 in 10 voters against the move, meaning that the state oil company Petroecuador must end their operations in the Amazon reserve. This goes against Ecuadorian President Guillermo Lasso’s hopes to continue drilling for oil to bring in revenues to support the country’s economy. Ecuador has been struggling to boost its finances in the last year, with oil revenues declining from around $2.3 billion from January to July 2022 to just $991 million in the same period this year.
This is not the first time that Ecuador – and the rest of the world – has had to choose between the protection of the rainforest and the exploitation of the country’s oil reserves. In 2007, then-president of Ecuador, Rafael Correa, offered to leave around 850 million barrels of oil in the ground if countries would contribute to a fund at half the estimated value of the reserves, around $3.6 billion. However, this plea to support the country’s economy and natural environment was unsuccessful, with the drilling of the field later approved in 2013 across a 2,000-hectare patch of rainforest.
The population voted against the development of block 43, with around 6 in 10 voters against the move, meaning that the state oil company Petroecuador must end their operations in the Amazon reserve. This goes against Ecuadorian President Guillermo Lasso’s hopes to continue drilling for oil to bring in revenues to support the country’s economy. Ecuador has been struggling to boost its finances in the last year, with oil revenues declining from around $2.3 billion from January to July 2022 to just $991 million in the same period this year.
This is not the first time that Ecuador – and the rest of the world – has had to choose between the protection of the rainforest and the exploitation of the country’s oil reserves. In 2007, then-president of Ecuador, Rafael Correa, offered to leave around 850 million barrels of oil in the ground if countries would contribute to a fund at half the estimated value of the reserves, around $3.6 billion. However, this plea to support the country’s economy and natural environment was unsuccessful, with the drilling of the field later approved in 2013 across a 2,000-hectare patch of rainforest.
Despite pledging to bring an end to the deforestation of the Brazilian Amazon, Lula continues to support oil operations in the country, as a means of bringing in revenues and supporting Brazil’s economy. In May, Lula stated that he found it “difficult” to imagine that oil exploration in the Amazon basin would cause environmental damage to the rainforest, following Ibama’s initial ruling on Petrobras’s project proposal. This month, President Lula plead with other countries around the globe to develop a common strategy to bring an end to the deforestation of the rainforest. Yet, he refuses to call for the phasing out of fossil fuels, which Colombian President Gustavo Petro has argued is essential for the forest’s protection, stating “Even if we get deforestation under control, the Amazon faces dire threats if global heating continues to climb.”
Several South American countries are now having to decide the fate of their natural resources, choosing between continuing to develop their oil and gas resources to bring in much-needed revenues and protecting the environment to help curb the effects of climate change. With little financial support from foreign actors, many political leaders in the region must decide on what is needed for their countries as they decide on how best to develop their energy industries.
Source: OILPRICE
