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Opinion: Why oil drilling in Ecuador is ‘ticking time bomb’ for planet – CNN.com

Opinion: Why oil drilling in Ecuador is ‘ticking time bomb’ for planet – CNN.com.

By Antonia Juhasz, oil industry analyst, special to CNN
March 1, 2014 — Updated 1233 GMT (2033 HKT)
Alicia Cahuilla's Waorani tribe has lived on the edge of Ecuador's Yasuni National Park for thousands of years. But they're worried about new oil exploration in the area. Alicia Cahuilla’s Waorani tribe has lived on the edge of Ecuador’s Yasuni National Park for thousands of years. But they’re worried about new oil exploration in the area.
 STORY HIGHLIGHTS
  • Ecuador’s Yasuni National Park is one of world’s most biologically diverse areas
  • Last year the government cleared the way for oil exploration in the park’s most pristine area
  • Villagers say oil exploration in Yasuni will dramatically affect their way of life
  • Oil firms say they are complying with environmental regulations

Editor’s note: Antonia Juhasz, an oil industry analyst, is author of several books, including “Black Tide” and “The Tyranny of Oil.”Juhasz’s investigation is supported by a grant from the Max and Anna Levinson Foundation, which makes grants to nonprofits committed to “developing a more just, caring, ecological and resilient world.” Her work has also appeared in Rolling Stone, Harper’s Magazine, and The Atlantic’s website.The opinions expressed in this article are solely those of the author.

(CNN) — Alicia Cahuilla doesn’t try to hide her anger. The native Waorani tribal leader stands in front of an exposed, thickly black crude oil pit, as two gas flares burn violently overhead, the stinging stench of crude heavy in the air. Until about 50 years ago, this area, like most of the central Ecuadorian Amazon rainforest in which it sits, was Waorani land, a pristine expanse filled with nothing but trees and streams.

Antonia Juhasz

Antonia Juhasz

The Waorani have lived here, on the northwestern edge of one of the most biologically rich places on Earth, for thousands of years. But today their land is also home to hundreds of operations seeking to extract the vast oil reserves buried deep below the forest floor.

Experts believe that in order to avoid the worst of a future climate change catastrophe, most of the planet’s fossil fuels must be left in the ground. Ecuador’s ambitious Yasuni-ITT Initiative, launched in 2007, was hailed as a landmark plan to keep oil exploration out of the country’s most pristine forest and to preserve the homes of indigenous tribes living there. ButEcuador abandoned the plan last year, and drilling could now begin any time.

Leila Salazar of the U.S.-based NGO Amazon Watch equates oil exploration in Ecuador’s rainforests with “ignoring a ticking time bomb for the entire planet.” But the once global struggle to secure the Yasuni-ITT Initiative has now largely fallen on the shoulders of a few indigenous tribal communities who have pledged to fight, some to the death, to keep oil companies out of their communities and their oil in the ground.

Activists Killed in the Amazon

African rainforest fights for survival

Will the world back them up? It is a question with significance far beyond Yasuni National Park. The age of “easy oil,” if it ever existed, is over. What is left is in places like the Yasuni, previously deemed too sensitive, valuable, or risky to drill. The cost to both the planet and local people of pursuing such oil grows in tandem with the difficulty of extracting it. The Yasuni presents a critical opportunity to demonstrate that a different path is possible, though fortunately it is not the only place where the effort to leave our “oil in the soil” has taken root.

Yasuni: Biological and ethnic diversity worth saving

In November I travelled to the Yasuni National Park in northeastern Ecuador and marveled at its beauty, diversity, and bounty. It alone sits at the intersection of the Amazon, the Andes Mountains, and the Equator. It is a biological hot spot for mammals, birds, insects, plants, and more. One hectare of the Yasuni contains not only more tree species than are native to the whole of North America, but also 100,000 insect species, the highest diversity per unit area in the world for any plant or animal group, according to one estimate. The United Nations declared the Yasuni a World Biosphere Reserve in 1989.

READ MORE: Rainforest’s vast treasury of life

Within the park lies the Ishpingo, Tambococha, and Tiputini (ITT) area, home to one of the most intact sections remaining in the Amazon River Basin. Its natural bounty allows the ITT to support the only remaining uncontacted tribes left in Ecuador—two groups of Waorani who have remained in isolation from the outside world for thousands of years — the Taromenane and Tagaeri. It is also perched atop Ecuador’s largest untapped oil reserves.

Ecuador currently gets about half its national revenue from oil. President Rafael Correa hopes to increase this amount — and in so doing reduce rampant poverty — by carving up much of his country’s share of the Amazon into oil blocks.

Yet, in response to the global climate movement’s call for nations to leave their “oil in the soil,” in 2007 Correa made a bold proposal. If the global community agreed to put up $3.6 billion — roughly half the value of the 850 million barrels of crude estimated to be under the ITT area of Yasuni — Ecuador would leave the oil untouched indefinitely. World leaders failed to pay up, however, and Ecuadorpronounced the death of the deal last year.

Drilling in the ITT will come at a steep price, explains Dr. Matt Finer, a research biologist with the Amazon Conservation Association. “You’re basically talking about the only spot on earth where you get this maximum diversity for everything, in addition to being one of the last places on earth where people can still live without any contact with civilization,” he said. “You have a national park created to protect that super mega diversity, and you will now have drilling [there]. It represents a serious incursion into what should be a refuge.”

Lives in the balance?

Cahuilla was born in the Yasuni but today lives in the tiny hamlet of Noneno wedged between two oil fields, the Cononaco and Armadillo, where President Correa is trying to expand oil production.

Her community considers it their responsibility to protect and speak on behalf of the uncontacted Waorani still living in the ITT and Yasuni, but this is not just out of loyalty. Oil operations are already pushing the Taromenani into contacted Waorani land, resulting in escalating violence, including murder, kidnapping, and territorial conflict.

ITT is one of the last places on earth where people can still live without any contact with civilization.
Dr. Matt Finer, research biologist

As we talk, Cahuilla says she wishes she had her spear so she can “kill someone.” Though she is nonviolent, it is not a hollow threat. It is how the male elders of her village have pledged to deal with any oil firm that dares come near their home.

The Waorani leader argues that regardless of how they’re perceived, her people are not poor. “We have the richness of the forest and the river. We need for nothing, except what the oil companies destroy.” As for the rest of Ecuador, she adds, “All the people need clean air to live. Clean water. With this oil development, what kind of life is the government actually hoping to give its people?”

An estimated 1,500 people call the Yasuni and ITT home. In addition to the uncontacted tribes, there are Waorani and Kichwa who, just like Cahuilla’s community, are in contact with the outside world but still primarily lead lifestyles that are not far removed from the traditions followed by their ancestors. Though I saw the odd television and radio on my way through the forest, the majority of the peoples’ needs are still met directly from the land and water.

As I hiked in the ITT, I was shown trees used to build houses, blowguns for hunting, and canoes; plants used to make jewelry and plates, and to cure ailments; and a bounty of seeds, fruits and even a pack of wild boar comprising the majority of the communities’ diet. In return, the tribes treat the forest with deep respect.

“Cutting a tree is like cutting a person,” Kichwa tribal leader Holmer Machoa of the community of Llanchama in the ITT, told me. “If the oil companies come, they will cut and they will kill. They will be the destruction of the forest. They will kill the water and poison the land.”

Environmental concerns

The Napo region, including the Yasuni, is now one of the 14 major deforested areas in the world. Ecuador has the highest deforestation rate of any Latin American country, in part because oil is located so deep within the forest that extensive systems of roads must be built to reach it. The roads also fragment the Yasuni, harming already threatened animal species that require large intact forest areas to survive, and opening the park to new settlers andincreased and illegal hunting.

This threat reaches beyond the Yasuni, as the two principal causes of global warming are the burning of fossil fuels and deforestation.

There are also other concerns. The Ministry of the Environment reported 539 oil spills in Ecuador between 2000 and 2010, a rate of nearly two a month. But INREDH, an Ecuador-based human rights group, says the rate is more than two a week, citing nearly 500 recorded spills from 2003 through 2005 alone.

Last June, Petroecuador’s Trans-Ecuadorian Oil Pipeline burstunder the weight of a landslide caused by heavy rains. Some 420,000 gallons of oil was dumped into the Coca River, which then spread into the larger Napo River. The oil polluted the drinking water of Coca, a city of 80,000 people, and at least thirteen smaller communities.

The waterways of rural Ecuador are filled with people bathing, washing dishes and clothes, playing, and drinking from the water. As oil operations expand, so too do the dangers of this way of life. The Napo River, which marks the entire northern edge of the Yasuni, is now a major industrial highway with a constant flow of giant barges carrying equipment to support oil operations leaving black clouds of pollution in their wake.

We are not aware that any adverse health effects occurred due to our operations [in Ecuador].
Melissa Schoeb, Vice President of Occidental

2002 study in the International Journal of Epidemiologyconcluded that the prevalence of cancer was significantly elevated in those counties in Ecuador where oil firms operated versus non-oil-producing regions. The study found significantly elevated rates for “cancers of the stomach, rectum, skin melanoma, soft tissue and kidney in men and for cancers of the cervix and lymph nodes in women,” and an increase in haematopoietic cancers in children under age 10.

Cahuilla also points to Texaco’s legacy in Ecuador’s Lago Agrio region. In November Ecuador’s highest court ruled that California-based Chevron (which purchased Texaco in 2000) owes locally-impacted communities $9.51 billion for decades of substandard practices that severely polluted land and waterways and which continue to harm human health and the environment today. Chevron has appealed the court judgment, calling it “a manifest denial of justice.”

Others point to California-based Occidental’s (Oxy) operation in Ecuador from 1985 to 2006.Oxy settled a court case filed in 2006 in which Ecuadorian plaintiffs charged it with “unauthorized drilling, expropriation of tribal lands, utilizing child labor, and polluting the local water supply” in Oil Block 15. People protesting against Oxy’s operations there, they argue, were “attacked on or near Block 15, tortured, and illegally detained by the [government] Special Forces” acting for Oxy. Oxy has denied each such allegation in the case, which was settled under a strict gag order.

In response to a request for comment, Melissa Schoeb, Vice President of Occidental, said in a written statement: “We are not aware that any adverse health effects occurred due to our operations. During the company’s tenure [in Ecuador], Occidental had an exemplary record of environmental and safety performance, both in complying with laws and regulations and in pursuing numerous voluntary initiatives.”

The Ecuadorian government did not respond to multiple requests for comments for this story.

On my visit to the Kichwa community of Sani Isla situated on land in the Yasuni and across the Napo River in Oil Block 15, schoolteacher Maximo Grefa told me: “For decades, oil companies have been causing environmental damage to the water and air. I think it is the reason why we have so many kids with special needs, mental and physical disorders. The children drink the water without any treatment. That affects their health.”

Fighting back with ecotourism

Within virtually every community in and near the Yasuni, I am told that tourists, not oil companies, are the preferred outsiders. I am then pointed to Sani Isla, renowned for the Sani Lodge, a highly successful ecotourism venture catering to wealthy Western clientele.

At Sani Isla, Kichwa tribal leader Blanca Lourdes Tapuy Grefa says that oil development is incongruous with a healthy environment, including that desired by tourists, and is in direct conflict with the success of her community. Without Sani Lodge she asks: “What are we going to leave our children?”

With this oil development, what kind of life is the government actually hoping to give its people?
Alicia Cahuilla, Waorani tribal leader

In May, her brother, Leonardo Tapui president of the community, told President Correa that Sani Isla opposed new oil operations and warned that if the army came, they would respond with war. It is a war that Blanca and her fellow Kichwa, just like Alicia Cahuilla and the Waorani, intend to fight with spears, blowguns and machetes.

“It doesn’t matter what the government says,” Blanca told me, “because I have my machete and I have my spear, and I’m going to defend this place. I’m not afraid. No matter what.”

A fight of global significance

Local organizations such as Quito-based Accion Ecologica have gathered more than half of the requisite signatures needed by April to hold a national referendum on halting drilling in the Yasuni. That President Correa still proudly displays the UN Visionary 2012 trophy he received for the Initiative may be evidence that he and his government can yet be convinced to change course, particularly if the global community finally commits to the $3.6 billion.

Moreover, the effort that led Correa to propose the Yasuni-ITT Initiative is not limited to this proposal or to Ecuador. Last month, an international gathering of indigenous groups, NGOs, and others convened in Ecuador under the auspices of the Global Alliance for the Rights of Nature, members of which came up with the original idea for the Initiative in 1997. They declared their commitment to fight not only for the Yasuni, but also for continued success elsewhere.

In April, for example, Mora County, New Mexico became the first U.S. county to permanently ban all oil and natural gas development (Shell Oil company has sued, claiming its rights as a “person” to those minerals), while in November three cities in Colorado joined dozens of others U.S. cities and town in voting to ban hydraulic fracking (a technique used for both oil and natural gas).

These efforts come from a growing realization that with the end of “easy oil” and the intensification of climate change, we are all now ultimately on the front lines of the battle over what is to be done with the world’s remaining fossil fuels.

Guide/Translators: Jose Proano from Land is Life and Yury Guerra from Altruvistas.

Opinion: Why oil drilling in Ecuador is 'ticking time bomb' for planet – CNN.com

Opinion: Why oil drilling in Ecuador is ‘ticking time bomb’ for planet – CNN.com.

By Antonia Juhasz, oil industry analyst, special to CNN
March 1, 2014 — Updated 1233 GMT (2033 HKT)
Alicia Cahuilla's Waorani tribe has lived on the edge of Ecuador's Yasuni National Park for thousands of years. But they're worried about new oil exploration in the area. Alicia Cahuilla’s Waorani tribe has lived on the edge of Ecuador’s Yasuni National Park for thousands of years. But they’re worried about new oil exploration in the area.
 STORY HIGHLIGHTS
  • Ecuador’s Yasuni National Park is one of world’s most biologically diverse areas
  • Last year the government cleared the way for oil exploration in the park’s most pristine area
  • Villagers say oil exploration in Yasuni will dramatically affect their way of life
  • Oil firms say they are complying with environmental regulations

Editor’s note: Antonia Juhasz, an oil industry analyst, is author of several books, including “Black Tide” and “The Tyranny of Oil.”Juhasz’s investigation is supported by a grant from the Max and Anna Levinson Foundation, which makes grants to nonprofits committed to “developing a more just, caring, ecological and resilient world.” Her work has also appeared in Rolling Stone, Harper’s Magazine, and The Atlantic’s website.The opinions expressed in this article are solely those of the author.

(CNN) — Alicia Cahuilla doesn’t try to hide her anger. The native Waorani tribal leader stands in front of an exposed, thickly black crude oil pit, as two gas flares burn violently overhead, the stinging stench of crude heavy in the air. Until about 50 years ago, this area, like most of the central Ecuadorian Amazon rainforest in which it sits, was Waorani land, a pristine expanse filled with nothing but trees and streams.

Antonia Juhasz

Antonia Juhasz

The Waorani have lived here, on the northwestern edge of one of the most biologically rich places on Earth, for thousands of years. But today their land is also home to hundreds of operations seeking to extract the vast oil reserves buried deep below the forest floor.

Experts believe that in order to avoid the worst of a future climate change catastrophe, most of the planet’s fossil fuels must be left in the ground. Ecuador’s ambitious Yasuni-ITT Initiative, launched in 2007, was hailed as a landmark plan to keep oil exploration out of the country’s most pristine forest and to preserve the homes of indigenous tribes living there. ButEcuador abandoned the plan last year, and drilling could now begin any time.

Leila Salazar of the U.S.-based NGO Amazon Watch equates oil exploration in Ecuador’s rainforests with “ignoring a ticking time bomb for the entire planet.” But the once global struggle to secure the Yasuni-ITT Initiative has now largely fallen on the shoulders of a few indigenous tribal communities who have pledged to fight, some to the death, to keep oil companies out of their communities and their oil in the ground.

Activists Killed in the Amazon

African rainforest fights for survival

Will the world back them up? It is a question with significance far beyond Yasuni National Park. The age of “easy oil,” if it ever existed, is over. What is left is in places like the Yasuni, previously deemed too sensitive, valuable, or risky to drill. The cost to both the planet and local people of pursuing such oil grows in tandem with the difficulty of extracting it. The Yasuni presents a critical opportunity to demonstrate that a different path is possible, though fortunately it is not the only place where the effort to leave our “oil in the soil” has taken root.

Yasuni: Biological and ethnic diversity worth saving

In November I travelled to the Yasuni National Park in northeastern Ecuador and marveled at its beauty, diversity, and bounty. It alone sits at the intersection of the Amazon, the Andes Mountains, and the Equator. It is a biological hot spot for mammals, birds, insects, plants, and more. One hectare of the Yasuni contains not only more tree species than are native to the whole of North America, but also 100,000 insect species, the highest diversity per unit area in the world for any plant or animal group, according to one estimate. The United Nations declared the Yasuni a World Biosphere Reserve in 1989.

READ MORE: Rainforest’s vast treasury of life

Within the park lies the Ishpingo, Tambococha, and Tiputini (ITT) area, home to one of the most intact sections remaining in the Amazon River Basin. Its natural bounty allows the ITT to support the only remaining uncontacted tribes left in Ecuador—two groups of Waorani who have remained in isolation from the outside world for thousands of years — the Taromenane and Tagaeri. It is also perched atop Ecuador’s largest untapped oil reserves.

Ecuador currently gets about half its national revenue from oil. President Rafael Correa hopes to increase this amount — and in so doing reduce rampant poverty — by carving up much of his country’s share of the Amazon into oil blocks.

Yet, in response to the global climate movement’s call for nations to leave their “oil in the soil,” in 2007 Correa made a bold proposal. If the global community agreed to put up $3.6 billion — roughly half the value of the 850 million barrels of crude estimated to be under the ITT area of Yasuni — Ecuador would leave the oil untouched indefinitely. World leaders failed to pay up, however, and Ecuadorpronounced the death of the deal last year.

Drilling in the ITT will come at a steep price, explains Dr. Matt Finer, a research biologist with the Amazon Conservation Association. “You’re basically talking about the only spot on earth where you get this maximum diversity for everything, in addition to being one of the last places on earth where people can still live without any contact with civilization,” he said. “You have a national park created to protect that super mega diversity, and you will now have drilling [there]. It represents a serious incursion into what should be a refuge.”

Lives in the balance?

Cahuilla was born in the Yasuni but today lives in the tiny hamlet of Noneno wedged between two oil fields, the Cononaco and Armadillo, where President Correa is trying to expand oil production.

Her community considers it their responsibility to protect and speak on behalf of the uncontacted Waorani still living in the ITT and Yasuni, but this is not just out of loyalty. Oil operations are already pushing the Taromenani into contacted Waorani land, resulting in escalating violence, including murder, kidnapping, and territorial conflict.

ITT is one of the last places on earth where people can still live without any contact with civilization.
Dr. Matt Finer, research biologist

As we talk, Cahuilla says she wishes she had her spear so she can “kill someone.” Though she is nonviolent, it is not a hollow threat. It is how the male elders of her village have pledged to deal with any oil firm that dares come near their home.

The Waorani leader argues that regardless of how they’re perceived, her people are not poor. “We have the richness of the forest and the river. We need for nothing, except what the oil companies destroy.” As for the rest of Ecuador, she adds, “All the people need clean air to live. Clean water. With this oil development, what kind of life is the government actually hoping to give its people?”

An estimated 1,500 people call the Yasuni and ITT home. In addition to the uncontacted tribes, there are Waorani and Kichwa who, just like Cahuilla’s community, are in contact with the outside world but still primarily lead lifestyles that are not far removed from the traditions followed by their ancestors. Though I saw the odd television and radio on my way through the forest, the majority of the peoples’ needs are still met directly from the land and water.

As I hiked in the ITT, I was shown trees used to build houses, blowguns for hunting, and canoes; plants used to make jewelry and plates, and to cure ailments; and a bounty of seeds, fruits and even a pack of wild boar comprising the majority of the communities’ diet. In return, the tribes treat the forest with deep respect.

“Cutting a tree is like cutting a person,” Kichwa tribal leader Holmer Machoa of the community of Llanchama in the ITT, told me. “If the oil companies come, they will cut and they will kill. They will be the destruction of the forest. They will kill the water and poison the land.”

Environmental concerns

The Napo region, including the Yasuni, is now one of the 14 major deforested areas in the world. Ecuador has the highest deforestation rate of any Latin American country, in part because oil is located so deep within the forest that extensive systems of roads must be built to reach it. The roads also fragment the Yasuni, harming already threatened animal species that require large intact forest areas to survive, and opening the park to new settlers andincreased and illegal hunting.

This threat reaches beyond the Yasuni, as the two principal causes of global warming are the burning of fossil fuels and deforestation.

There are also other concerns. The Ministry of the Environment reported 539 oil spills in Ecuador between 2000 and 2010, a rate of nearly two a month. But INREDH, an Ecuador-based human rights group, says the rate is more than two a week, citing nearly 500 recorded spills from 2003 through 2005 alone.

Last June, Petroecuador’s Trans-Ecuadorian Oil Pipeline burstunder the weight of a landslide caused by heavy rains. Some 420,000 gallons of oil was dumped into the Coca River, which then spread into the larger Napo River. The oil polluted the drinking water of Coca, a city of 80,000 people, and at least thirteen smaller communities.

The waterways of rural Ecuador are filled with people bathing, washing dishes and clothes, playing, and drinking from the water. As oil operations expand, so too do the dangers of this way of life. The Napo River, which marks the entire northern edge of the Yasuni, is now a major industrial highway with a constant flow of giant barges carrying equipment to support oil operations leaving black clouds of pollution in their wake.

We are not aware that any adverse health effects occurred due to our operations [in Ecuador].
Melissa Schoeb, Vice President of Occidental

2002 study in the International Journal of Epidemiologyconcluded that the prevalence of cancer was significantly elevated in those counties in Ecuador where oil firms operated versus non-oil-producing regions. The study found significantly elevated rates for “cancers of the stomach, rectum, skin melanoma, soft tissue and kidney in men and for cancers of the cervix and lymph nodes in women,” and an increase in haematopoietic cancers in children under age 10.

Cahuilla also points to Texaco’s legacy in Ecuador’s Lago Agrio region. In November Ecuador’s highest court ruled that California-based Chevron (which purchased Texaco in 2000) owes locally-impacted communities $9.51 billion for decades of substandard practices that severely polluted land and waterways and which continue to harm human health and the environment today. Chevron has appealed the court judgment, calling it “a manifest denial of justice.”

Others point to California-based Occidental’s (Oxy) operation in Ecuador from 1985 to 2006.Oxy settled a court case filed in 2006 in which Ecuadorian plaintiffs charged it with “unauthorized drilling, expropriation of tribal lands, utilizing child labor, and polluting the local water supply” in Oil Block 15. People protesting against Oxy’s operations there, they argue, were “attacked on or near Block 15, tortured, and illegally detained by the [government] Special Forces” acting for Oxy. Oxy has denied each such allegation in the case, which was settled under a strict gag order.

In response to a request for comment, Melissa Schoeb, Vice President of Occidental, said in a written statement: “We are not aware that any adverse health effects occurred due to our operations. During the company’s tenure [in Ecuador], Occidental had an exemplary record of environmental and safety performance, both in complying with laws and regulations and in pursuing numerous voluntary initiatives.”

The Ecuadorian government did not respond to multiple requests for comments for this story.

On my visit to the Kichwa community of Sani Isla situated on land in the Yasuni and across the Napo River in Oil Block 15, schoolteacher Maximo Grefa told me: “For decades, oil companies have been causing environmental damage to the water and air. I think it is the reason why we have so many kids with special needs, mental and physical disorders. The children drink the water without any treatment. That affects their health.”

Fighting back with ecotourism

Within virtually every community in and near the Yasuni, I am told that tourists, not oil companies, are the preferred outsiders. I am then pointed to Sani Isla, renowned for the Sani Lodge, a highly successful ecotourism venture catering to wealthy Western clientele.

At Sani Isla, Kichwa tribal leader Blanca Lourdes Tapuy Grefa says that oil development is incongruous with a healthy environment, including that desired by tourists, and is in direct conflict with the success of her community. Without Sani Lodge she asks: “What are we going to leave our children?”

With this oil development, what kind of life is the government actually hoping to give its people?
Alicia Cahuilla, Waorani tribal leader

In May, her brother, Leonardo Tapui president of the community, told President Correa that Sani Isla opposed new oil operations and warned that if the army came, they would respond with war. It is a war that Blanca and her fellow Kichwa, just like Alicia Cahuilla and the Waorani, intend to fight with spears, blowguns and machetes.

“It doesn’t matter what the government says,” Blanca told me, “because I have my machete and I have my spear, and I’m going to defend this place. I’m not afraid. No matter what.”

A fight of global significance

Local organizations such as Quito-based Accion Ecologica have gathered more than half of the requisite signatures needed by April to hold a national referendum on halting drilling in the Yasuni. That President Correa still proudly displays the UN Visionary 2012 trophy he received for the Initiative may be evidence that he and his government can yet be convinced to change course, particularly if the global community finally commits to the $3.6 billion.

Moreover, the effort that led Correa to propose the Yasuni-ITT Initiative is not limited to this proposal or to Ecuador. Last month, an international gathering of indigenous groups, NGOs, and others convened in Ecuador under the auspices of the Global Alliance for the Rights of Nature, members of which came up with the original idea for the Initiative in 1997. They declared their commitment to fight not only for the Yasuni, but also for continued success elsewhere.

In April, for example, Mora County, New Mexico became the first U.S. county to permanently ban all oil and natural gas development (Shell Oil company has sued, claiming its rights as a “person” to those minerals), while in November three cities in Colorado joined dozens of others U.S. cities and town in voting to ban hydraulic fracking (a technique used for both oil and natural gas).

These efforts come from a growing realization that with the end of “easy oil” and the intensification of climate change, we are all now ultimately on the front lines of the battle over what is to be done with the world’s remaining fossil fuels.

Guide/Translators: Jose Proano from Land is Life and Yury Guerra from Altruvistas.

Peak Oil Barrel: OPEC Oil Production

Peak Oil Barrel.

OPEC just published their latest Monthly Oil Market Report with crude only production data through November 2013. Their October numbers were revised downward by 67,000 barrels per day to 29,827 kb/d. Their November production was 29,633 /b/d. That was 261 kb/d below their unrevised October production and 194 kb/d below their revised October production numbers.

OPEC 12

OPEC production at 29,633,000 bp/d is at their lowest point since June 2011. As you can see from the chart OPEC has hat two peaks since 2005. Actually these are the two highest peaks ever for OPEC if the EIA data is correct. I only have MOMR data going back to January 2005.

The July 2008 peak was 31,672,000 bp/d and the April 12 peak was 31,619,000 bp/d. I thought it might be interesting to plot who was up and who was down since those two peaks. The Gainers were Ecuador, Iraq, Kuwait, Saudi Arabia, UAE and Venezuela. Ecuador and Venezuela were up only slightly however. Here is a chart of the six gainers.

Gainers

In July 2008 the combined Gainers production stood at 19,976,000 bp/d. In November their combined production stood at 21,769,000 bp/d, up 1,793,000 bp/d since that point

The losers were Algeria, Angola, Iran, Libya, Nigeria and Qatar.

Losers

The Losers peaked in December 2007 at 11,870,000 bp/d. In November 2013 their combined production stood at 8,498,000 bp/d, down 3,372,000 since their peak. Libya and Iran account for 2 million bp/d of this. So even if both were producing flat out the losers would still be down almost 1.4 mb/d.

However even before the sanctions Iran was in serious decline. If sanctions were lifted tomorrow they would be lucky to get back to half a million barrels per day below their 2005 level of about 3.9 million barrels per day. Their November production stood at 2.7 mb/d.

Libya, after the revolution could only get up to within 200,000 barrels per day of their pre-revolution production numbers. They will likely not ever get that close again however.

But something is always happening somewhere. One can say, “if there were no sanctions, no revolutions, no terrorists attacks and no other political problems then they could produce a lot more”. But there has never been a such a time in recorded history and it is not likely there will ever be such a time. So we can only measure what each country is producing today and go with that.

One person has posted me and seems very concerned over the sudden rise in US consumption. It also caught OPEC’s attention. From the latest MOMR, link up top, page 32:

US Demand

China Is On A Debt Binge And A Buying Spree Unlike Anything The World Has Ever Seen Before

China Is On A Debt Binge And A Buying Spree Unlike Anything The World Has Ever Seen Before.

Chinese Black Dragon - Photo by Angelus

When it comes to reckless money creation, it turns out that China is the king.  Over the past five years, Chinese bank assets have grown from about 9 trillion dollars tomore than 24 trillion dollars.  This has been fueled by the greatest private debt binge that the world has ever seen.  According to a recent World Bank report, the level of private domestic debt in China has grown from about 9 trillion dollars in 2008 to more than 23 trillion dollars today.  In other words, in just five years the amount of money that has been loaned out by banks in China is roughly equivalent to the amount of debt that the U.S. government has accumulated since the end of the Reagan administration.  And Chinese bank assets now absolutely dwarf the assets of the U.S. Federal Reserve, the European Central Bank, the Bank of Japan and the Bank of England combined.  You can see an amazing chart which shows this right here.  A lot of this “hot money” has been flowing out of China and into U.S. companies, U.S. stocks and U.S. real estate.  Unfortunately for China (and for the rest of us), there are lots of signs that the gigantic debt bubble in China is about to burst, and when that does happen the entire world is going to feel the pain.

It was Zero Hedge that initially broke this story.  Over the past several years, most of the focus has been on the reckless money printing that the Federal Reserve has been doing, but the truth is that China has been far more reckless

You read that right: in the past five years the total assets on US bank books have risen by a paltry $2.1 trillion while over the same period, Chinese bank assets have exploded by an unprecedented $15.4 trillion hitting a gargantuan CNY147 trillion or an epic $24 trillion – some two and a half times the GDP of China!

 Putting the rate of change in perspective, while the Fed was actively pumping $85 billion per month into US banks for a total of $1 trillion each year, in just the trailing 12 months ended September 30, Chinese bank assets grew by a mind-blowing $3.6 trillion!

I was curious to see what all of this debt creation was doing to the money supply in China.  So I looked it up, and I discovered that M2 in China has grown by about 1000% since 1999…

M2 Money Supply China

So what has China been doing with all of that money?

Well, they have been on a buying spree unlike anything the world has ever seen before.  For example, according to Reuters China has essentially bought the entire oil industry of Ecuador…

China’s aggressive quest for foreign oil has reached a new milestone, according to records reviewed by Reuters: near monopoly control of crude exports from an OPEC nation, Ecuador.

Last November, Marco Calvopiña, the general manager of Ecuador’s state oil company PetroEcuador, was dispatched to China to help secure $2 billion in financing for his government. Negotiations, which included committing to sell millions of barrels of Ecuador’s oil to Chinese state-run firms through 2020, dragged on for days.

And the Chinese have been doing lots of shopping in the United States as well.  The following is an excerpt from a recent CNBC article entitled “Chinese buying up California housing“…

At a brand new housing development in Irvine, Calif., some of America’s largest home builders are back at work after a crippling housing crash. Lennar, Pulte, K Hovnanian, Ryland to name a few. It’s a rebirth for U.S. construction, but the customers are largely Chinese.

“They see the market here still has room for appreciation,” said Irvine-area real estate agent Kinney Yong, of RE/MAX Premier Realty. “What’s driving them over here is that they have this cash, and they want to park it somewhere or invest somewhere.”

Apparently a lot of these buyers have so much cash that they are willing to outbid anyone if they like the house…

The homes range from the mid-$700,000s to well over $1 million. Cash is king, and there is a seemingly limitless amount.

“The price doesn’t matter, 800,000, 1 million, 1.5. If they like it they will purchase it,” said Helen Zhang of Tarbell Realtors.

So when you hear that housing prices are “going up”, you might want to double check the numbers.  Much of this is being caused by foreign buyers that are gobbling up properties in certain “hot” markets.

We see this happening on the east coast as well.  In fact, a Chinese firm recently purchased one of the most important landmarks in New York City

Chinese conglomerate Fosun International Ltd. (0656.HK) will buy office building One Chase Manhattan Plaza for $725 million, adding to a growing list of property purchases by Chinese buyers in New York city.

The Hong Kong-listed firm said it will buy the property from JP Morgan Chase Bank, according to a release on the Hong Kong Stock Exchange website.

Chinese firms, in particular local developers, have looked overseas to diversify their property holdings as the economy at home slows. Chinese individuals also have been investing in property abroad amid tight policy measures in the mainland residential market.

Earlier this month, Chinese state-owned developer Greenland Holdings Group agreed to buy a 70% stake in an apartment project next to the Barclays Center in Brooklyn, N.Y., in what is the largest commercial-real-estate development in the U.S. to get direct backing from a Chinese firm.

And in a previous article, I discussed how the Chinese have just bought up the largest pork producer in the entire country…

Just think about what the Smithfield Foods acquisition alone will mean.  Smithfield Foods is the largest pork producer and processor in the world.  It has facilities in 26 U.S. states and it employs tens of thousands of Americans.  It directly owns 460 farms and has contracts with approximately 2,100 others.  But now a Chinese company has bought it for $4.7 billion, and that means that the Chinese will now be the most important employer in dozens of rural communities all over America.

For many more examples of how the Chinese are gobbling up companies, real estate and natural resources all over the United States, please see my previous article entitled “Meet Your New Boss: Buying Large Employers Will Enable China To Dominate 1000s Of U.S. Communities“.

But more than anything else, the Chinese seem particularly interested in acquiring real money.

And by that, I mean gold and silver.

In recent years, the Chinese have been buying up thousands of tons of gold at very depressed prices.  Meanwhile, the western world has been unloading gold at a staggering pace.  By the time this is all over, the western world is going to end up bitterly regretting this massive transfer of real wealth.

Unfortunately for the Chinese, it appears that the unsustainable credit bubble that they have created is starting to burst.  According toBloomberg, the amount of bad loans that the five largest banks in China wrote off during the first half of this year was three times larger than last year…

China’s biggest banks are already affected, tripling the amount of bad loans they wrote off in the first half of this year and cleaning up their books ahead of what may be a fresh wave of defaults. Industrial & Commercial Bank of China Ltd. and its four largest competitors expunged 22.1 billion yuan of debt that couldn’t be collected through June, up from 7.65 billion yuan a year earlier, regulatory filings show.

And Goldman Sachs is projecting that China may be facing 3 trillion dollars in credit losses as this bubble implodes…

Interest owed by borrowers rose to an estimated 12.5 percent of China’s economy from 7 percent in 2008, Fitch Ratings estimated in September. By the end of 2017, it may climb to as much as 22 percent and “ultimately overwhelm borrowers.”

Meanwhile, China’s total credit will be pushed to almost 250 percent of gross domestic product by then, almost double the 130 percent of 2008, according to Fitch.

The nation might face credit losses of as much as $3 trillion as defaults ensue from the expansion of the past four years, particularly by non-bank lenders such as trusts, exceeding that seen prior to other credit crises, Goldman Sachs Group Inc. estimated in August.

The Chinese are trying to get this debt spiral under control by tightening the money supply.  That may sound wise, but the truth is that it is going to create a substantial credit crunch and the entire globe will end up sharing in the pain…

Yields on Chinese government debt have soared to their highest levels in nearly nine years amid Beijing’s relentless drive to tighten the monetary spigots in the world’s second-largest economy.

The higher yields on government debt have pushed up borrowing costs broadly, creating obstacles for companies and government agencies looking to tap bond markets. Several Chinese development banks, which have mandates to encourage growth through targeted investments, have had to either scale back borrowing plans or postpone bond sales.

This could ultimately be a much bigger story than whether or not the Fed decides to “taper” or not.

It has been the Chinese that have been the greatest source of fresh liquidity since the last financial crisis, and now it appears that source of liquidity is tightening up.

So as the flow of “hot money” out of China starts to slow down, what is that going to mean for the rest of the planet?

And when you consider this in conjunction with the fact that China has just announced that it is going to stop stockpiling U.S. dollars, it becomes clear that we have reached a major turning point in the financial world.

2014 is shaping up to be a very interesting year, and nobody is quite sure what is going to happen next.

 

 

Ecuador Approves Oil Drilling in Amazon Rain Forest

Ecuador Approves Oil Drilling in Amazon Rain Forest. (FULL ARTICLE)

OSCAR LEÓN, TRNN PRODUCER: On October 3, 2013, Ecuador’s National Assembly authorized the project to drill for oil in the Yasuní national forest, which is a biosphere reserve and home of endemic tribes and unique animal species.

It is estimated by the Ecuadorian government that in that area, there are around 920 millions barrels of crude oil, for which Ecuador could get up to 7 billion dollars, maybe more, some say much more, over the next 30 years. This accounts for 20 percent of the country’s oil reserves.

The Ecuadorian National Assembly passed the legislation, with 108 votes in favor against 25 authorizing the operation of the oil fields.

GABRIELA RIVADENEIRA, NATIONAL ASSEMBLY CHAIRWOMAN (SUBTITLED TRANSL.): We will drill for oil in blocks 31 and 43. The intangible zone is excluded, which is the south of the park, of course….

 

Yasuni: Ecuador abandons plan to stave off Amazon drilling | World news | theguardian.com

Yasuni: Ecuador abandons plan to stave off Amazon drilling | World news | theguardian.com.

 

Julian Assange Discusses Mainstream Media, the “Wikileaks Party” and our Global Awakening | A Lightning War for Liberty

Julian Assange Discusses Mainstream Media, the “Wikileaks Party” and our Global Awakening | A Lightning War for Liberty.

 

If You Protest, Testify Against, or Report On Chevron, the Oil Giant Will Get Your Metadata | Motherboard

If You Protest, Testify Against, or Report On Chevron, the Oil Giant Will Get Your Metadata | Motherboard.

 

Biden asks Ecuador to refuse Snowden asylum – Americas – Al Jazeera English

Biden asks Ecuador to refuse Snowden asylum – Americas – Al Jazeera English.

 

Quote Of The Day: Assange Praises Snowden, Slams Nobel Prize | Zero Hedge

Quote Of The Day: Assange Praises Snowden, Slams Nobel Prize | Zero Hedge.

 

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