To Drill or not to Drill

The cumbersomely titled Yasuní-ITT Initiative is more elegant than its name would suggest. It proposes a neat response to two major global problems: North-South inequality and climate change. Recently signed by the Ecuadorian government and the United Nations Development Program, the initiative secures funds from developed countries to preserve a section of Ecuador’s untouched Amazon rainforest from oil exploitation. The idea is that Ecuador will receive vital payment—petroleum is the country’s main export—for not delivering up a large quantity of oil to the global market. The oil will remain underground, even as foreign currency flows into the government’s coffers. Graciela Chichilnisky, an architect of the Kyoto Protocol, has called the arrangement an example of “the new economics of the planet.”

For all its elegance, Yasuní-ITT has a troubled, not to say schizophrenic history. Rafael Correa, Ecuador’s youthful socialist president, champion of human rights and the “rights of nature,” actually abandoned the proposal—one he’d long championed—at the beginning of this year. Then, a month later, he reneged on his reneging and said Yasuní-ITT would go ahead.

And then the initiative sat on Correa’s desk for months, unsigned. Meanwhile his government reflected his cross-eyed attitude. Vice-President Lenin Moreno made speeches about the virtues of the initiative, while Wilson Pastor, oil executive and Minister of Nonrenewable Natural Resources, spoke of its inevitable failure. For years Correa’s administration had advocated the incredible proposal to leave petroleum under the ground—all the while threatening to exploit the same resource. What accounts for this Janus-like policy, with one face turned toward preservation and the other toward despoliation?

“Yasuní” is the name of a portion of Ecuador’s Amazon rainforest that was made into a National Park in 1979. “ITT” stands for the three sections of jungle within that portion that the initiative proposes to save from drilling: Ishipingo, Tiputini, and Tambococha. In a twisted result of successful indigenous protests against the oil company Maxus in the early ’90s, the entire rain forest was divided into numbered “blocks.” ITT is in Block 31, in the easternmost part of the spectacular park.

The most thorough catalog of this land’s biodiversity comes from Matt Finer, author of the first peer-reviewed articles about the ecology of Yasuní-ITT. As Finer writes, “The Yasuní herpetofauna—150 species of amphibians and 121 species of reptiles—is the highest documented in the world. The park’s bird (around 600 species) and mammal (around 200 species) richness is extremely high. For plants, the Yasuní region is one of the few places on Earth with at least 4,000 species per 10,000 km[2].”

Of course, the rainforest also cleanses the air of a lot of carbon. Yasuní is sometimes referred to as one of the “lungs of the world.” Drilling it for petroleum would bring the world’s lungs—or its stable climate, at any rate—that much closer to collapse.

In 2005, oil revenues accounted for 43 percent of Ecuador’s federal budget. At that time Occidental, Petrobras, and a half dozen other corporations were extracting oil from the Ecuadorian Amazon, and had their eyes on Block 31, which sits atop 850 million barrels of proven reserves. In 2004, the Ecuadorian government had given Petrobras, the Brazilian national oil concern, a license to exploit Block 31. The announcement unleashed a huge public backlash that gave birth to the “Save the Yasuní” campaign, among other antidrilling mobilizations.

In November 2006, Rafael Correa was elected president. Entering office on the populist wave of his “Citizen’s Revolution,” with a political platform defined by the protection of both human rights and the “rights of nature,” he inherited estimates of nearly a billion barrels of oil, and Petrobras’s control of Block 31. He nevertheless vowed to to keep the block “untouchable.”

So began the Janus-faced policy. On April 4, 2007, Correa signed a memorandum of understanding with Brazil’s Lula, reaffirming Petrobras’s right to exploit Block 31. However, according to Dr. Laura Rival of Oxford, “A few days later . . . the then Minister of Energy and Mines, Alberto Acosta, led a counterproposal for the block, which would allow Ecuador to generate needed state revenues by keeping the Yasuní oil under the ground.”

Thus the Yasuní-ITT proposal was born. It proposed that Ecuador would not drill these three sections of Block 31 if the world community compensated the country for the resulting loss of revenue. The compensation would amount to at least half the value of the estimated recoverable oil in perpetuity, or USD $350 million a year for the next ten years (until the contract would be renewed). Under the initial proposal, foreign governments (and citizens) were asked to contribute to a fund managed by the UNDP, which would pass the money along to Ecuador.

Such a concept wasn’t entirely new. Programs for carbon credits had existed for at least fifteen years, and the UN formally adopted one in 2008. An Italian think tank, Oilwatch, along with an Ecuadorian environmental organization called Accíon Ecologia, put together a proposal to generate funding by not-drilling almost ten years ago. But it took minister Acosta, a former economist, to turn the idea into a political possibility.

Two months after signing the agreement with Petrobras, in June 2007, Correa reversed course and announced that the government wanted to leave the oil underground. In July of the same year, he visited Coca, a dismal oil town on the edges of the Amazon, and proclaimed, “Oil has brought us more bad than good. We need to do something about it.”

In September 2007, Correa addressed the United Nations on the occasion of a conference on climate change. He told the UN about his Citizen’s Revolution, about economic equality, about the evils of the neoliberal creed, and finally about Yasuní-ITT. He said, regarding not-drilling, “We’re ready to make this great sacrifice.” He asked for the world’s cooperation in “inaugurating a new economic logic for the 21st century, where we compensate the production of value and not only the production of commodities.”

After Correa’s speech at the UN, his government assembled a committee to draft the initiative. An official website was launched. Several European countries pledged financial support, in some cases promising set amounts. According to a history compiled by Matt Finer, Petrobras “suddenly” left Block 31 in September 2008. In 2009 celebrities got involved: Leonardo DiCaprio, Bill Gates, Edward Norton, Glenn Close, James Cameron in the throes of his Avatar activism—all discussed the proposal with the Ecuadorian government. Al Gore scheduled an appearance in November 2010 to celebrate its signing. The UNDP drew up a document outlining exactly how the initiative would work. The governmental committee’s goal was to have the documents ready to sign at the climate change negotiations in Copenhagen in December 2009. By October, Ecuador had raised $1.7 billion.

But Correa’s government was still playing a double game. Correa canceled his trip to Copenhagen at the last minute. On January 9, in his weekly radio address, he said that the proposal was a threat to Ecuadorian sovereignty, and declared that Petroecuador, the state oil firm, would drill ITT in June 2010. Most members of the governmental committee that had put together the Yasuní proposal responded by quitting. Correa named a new Minister of Nonrenewable Natural Resources: Wilson Pastor, CEO of Petroamazonas, a subsidiary of Petroecuador. Pastor announced that Petroamazonas was moving exploratory equipment to the blocks surrounding ITT. Correa’s administration reminded reporters of the clause in Ecuador’s new constitution—the first in world history to endow nature with formal rights—granting the government the right to exploit any of its own natural resources if the President deems this a national priority.

The final about-face came in March of this year, when Correa put together a new committee and started talking to the EU again. Somewhat surprisingly, the European countries were still interested. Germany had promised $50 million a year for thirteen years, one seventh of the total proposal, and stuck to this offer. Spain, Italy, Norway, Switzerland, and Sweden also expressed an interest in contributing to the Yasuní fund.

In early April Correa attended a climate change conference in Bolivia hosted by fellow socialist Evo Morales. He also announced a July 2011 deadline to begin all formal payments to the UNDP Trust Fund he’d so vehemently rejected. But in Bolivia, Correa talked about exploitation, not preservation. In the tones of a threat, he said, “The one making the major sacrifice here is Ecuador. Financially, our interest lies in extracting the oil. . . . So we are demanding co-responsibility with the rest of the world. If this doesn’t happen, we will have to extract the oil.”

The contrast between this language and his 2007 rhetoric about the problem of oil and the new economic logic of the 21st century was stark.

This past spring, Lenin Moreno said one day that Yasuní-ITT was the President’s preferred policy. The next day, Wilson Pastor told an interviewer it was likely the President would exploit Block 31. Meanwhile more and more countries signed up as contributors to the fund, including OPEC members Saudi Arabia and the UAE. Turkey said it was interested. As of May 18 the official count was fifty-two countries. CNN did a six-minute story on Yasuní National Park and the initiative to preserve ITT.

And in the end, on August 3, the government signed the papers in the Hall of Heroes in Quito. The reasons for Correa’s years of back-and-forth are less important than the excellence of his final decision. Still, it is a fundamental question: Was this “21st-century socialist” playing a canny game all along, the better to ensure broad contributions to the initiative? Or was he sincerely uncertain about whether to exploit or preserve Block 31? It is impossible not to hope that the eco-left of the next decades will be distinguished more by strategic intelligence than by wishy-washiness, even if it’s not always easy to tell the two apart.

In an otherwise depressing year for people concerned with global warming—with no legislation forthcoming from the US Congress, and in the aftermath of the failed talks in Copenhagen—the news from Ecuador offered rare cause for hope and celebration. Here is a model for escaping the tragic choice—destroy the climate or leave the population in poverty—facing other poor but resource-rich countries, including Bolivia, Nigeria, and Venezuela. Yasuní-ITT also suggests that a number of European countries, if not yet the US, may be sincere when they claim that the welfare of future generations is more important than a few more months or years of cheap oil. Much depends on whether Yasuní-ITT comes to look like a quixotic exception amid the relentless overheating of the planet, or whether in the decades ahead we will be able to look back on August 3, 2010, as a turning point.

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