Oil production encroaches deep into Ecuador’s Amazon to feed California’s thirst for engery

Dec 2, 2021 | 11 comments

Despite a court order to stop the practice, an oil gas flare burns at a processing plant in the Yasuní National Park in Ecuador’s Amazon.

By Rich Schapiro, Christine Romo and Santiago Cornejo

The bulldozers rumble through after sunrise, clearing out massive amounts of trees in this remote and remarkable section of the Amazon rainforest.

It’s a place where giant otters patrol the waterways and endangered white-bellied spider monkeys swing from tree to tree. Where a dazzling array of birds — upward of 600 species — nest in the dense canopy. Where more than 60 kinds of snakes and 140 different frogs and toads inhabit the ground below.

The Yasuní National Park is home to one of the most diverse collections of plants and animals on the planet. But beneath this 3,800-square-mile swath of forest lies another kind of treasure: crude oil. More than 1 billion barrels of it.

Over the past 50 years, oil companies have extracted immense amounts of crude from the Amazon, causing the destruction of rainforest crucial to slowing climate change and jeopardizing the Indigenous tribes who rely on it.

One of the oil drilling sites in Yasuni National Park.

Now, a state-run oil company that subcontracts its field operations to the Chinese is building a road to reach what will be a new section of wells deep inside Yasuní.

“It hurts me to see the little that is left of our rainforest inside this protected area,” Nemo Guiquita, a leader of the Waorani tribe, told NBC News during a boat trip through the national park. “We should be fighting to protect our rainforest in Ecuador, but instead they are granting more oil concessions.”

The oil extracted from Yasuní and the wider Amazon is exported around the world, but 66 percent goes to the U.S. on average and the vast majority of that to one state in particular: California, according to a new report shared exclusively with NBC News.

The report by the environmental groups Stand.earth and Amazon Watch found that on average 1 in every 7 tanks of gas, diesel or jet fuel pumped in southern California last year came from Ecuador’s Amazon rainforest. Among the top 25 largest corporate consumers are companies such as Costco, PepsiCo and Amazon, according to the report.

“This is no longer one of those things where we’re supposed to have sympathy for a crisis that’s happening somewhere else,” said Angeline Robertson, a senior researcher at Stand.earth and the lead author of the report. “It’s occurring in California, and it’s linked to Amazon destruction.”

Oil boom and bust
Oil drilling in the Ecuadorian Amazon began in the 1960s with the promise of bringing prosperity to the South American nation. A symbolic first barrel of crude oil was paraded through the streets of the capital city, Quito, as if it were a national hero.

Ecuador’s economy soared over the next decade. But by the 1990s, the oil boom had faded, and the country entered a severe recession, resulting in a flurry of deals with foreign oil companies and eventually mounting debt.

Nemo Guiquita, a leader of Ecuador’s Waorani community, continues are fight against oil drilling.

Ecuadorian President Guillermo Lasso, who was sworn in this past May, has vowed to double the country’s oil production. Perhaps nowhere is expected to be impacted more than Yasuní National Park.

The park in eastern Ecuador — which sits at the confluence of the Andes foothills, the western Amazon basin and the equator — is about the size of Rhode Island and Delaware combined.

It contains more varieties of trees in a single hectare (2.5 acres) than in all of the U.S. and Canada combined. Yasuní is also the home of the Waorani people as well as ​​two uncontacted tribes who live deep inside the forest: the Tagaeri and the Taromenane.

Oil exploration began here in the 1970s, but in 2007 then-President Rafael Correa proposed a novel plan to protect the rainforest from drilling. He called on the international community to donate about $3.5 billion — roughly half of the revenue Ecuador estimated it would have earned from mining the oil under Yasuní. But the plan was abandoned six years later, after Ecuador raised less than 10 percent of the target figure.

“The world has failed us,” Correa said in 2013 as he announced a lifting of the moratorium on oil drilling in Yasuní. Environmentalists said it was Correa who failed the Amazon.

The move to drill hundreds of new wells in the national park requires the building of roads and other infrastructure that is likely to accelerate deforestation, environmentalists say. Construction of an initial road inside the park is now less than 1,300 feet from the “no-go” zone designed to protect the uncontacted tribes, according to the report.

Kevin Koenig, the climate and energy director for Amazon Watch, noted that forests like this one play a vital role in mitigating climate change. Forests absorb immense amounts of carbon, which helps to reduce the rate at which carbon dioxide builds up in the atmosphere. “It’s a recipe for climate disaster to be looking for new oil and felling standing forest to get at it,” Koenig said. “It’s sort of a double whammy that everybody should be really worried about.”

Gas flares
Nemo Guiquita, the Waorani leader, has been fighting the expansion of oil drilling in her tribe’s ancestral homeland for years. She said her grandmother, Nayuma, was the first Waorani to make contact with the outside world 60 years ago. “The rainforest for us is home,” Guiquita said. “It’s our life, our pharmacy, our everything.”

Bulldozers cut a new road through the jungle to connect oil production facilities.

More than 400 gas flares dot the scarred landscape in the Ecuadorian Amazon. They spew clouds of chemicals into the air from the burning off of natural gas produced from oil wells.

In January, an Ecuadorian court ordered oil companies to cease the use of gas flares after a group of Amazonian girls filed a lawsuit alleging that the flares contaminated the air and water in the area and contributed to more than 200 cancer cases among their community.

Javier Solis, a lawyer who represents one of the local communities, said the government has yet to set a date for the removal of old flares. Solis escorted an NBC News videographer into a section of forest outside Yasuní to see what he described as one of the Amazon’s biggest oil flares.  “The contamination can reach a circumference of 300 meters [330 yards], and this affects the groundwater and rivers used by nearby communities,” Solis said.

The road being built in Yasuní has pushed several miles deeper into the forest over the last couple of years, according to Pedro Bermeo, a spokesperson for YASunidos, a group created to protect the park.

Risking arrest, Bermeo’s group launched a drone over the area in July and captured footage of bulldozers carving through the rainforest and excavators digging out the road. “I always think, ‘What if we find oil underneath Quito,’” Bermeo said. “Would we displace the people of Quito to extract the oil? Of course not. But when it’s in the rainforest and involves Indigenous communities, there is no respect, no regard for their health.”

Bermeo is keenly aware of the economic forces driving the expansion of oil drilling in the Amazon.

The Ecuadorian government owes more than $18 billion in debt to China, according to a database run by Boston University and the Inter-American Dialogue think tank, and oil revenues are critical to paying down the loans.

Ecuador has sold oil exploration rights in and around Yasuní National Park to a consortium of Chinese state-owned oil companies despite fierce opposition from Indigenous groups and environmentalists. “The companies who profit are the Chinese oil companies,” Bermeo said. “The Ecuadorian oil companies subcontract to the Chinese for the exploration, drilling and infrastructure. They are the ones making the money here.”

The Chinese oil companies, Andes Petroleum and PetroOriente, did not respond to a request for comment.  The Ecuadorian Embassy in Washington also did not respond to a request for comment.

Where the oil goes
Ecuador is not the only South American country to export oil from the Amazon, but it far and away dominates the market, according to the report shared with NBC News.

Colombia and Peru accounted for roughly 7 percent of the total volume of Amazon oil exported around the world. Ecuador makes up the other 93 percent, the report said (Brazil and the other South American countries that contain the Amazon were not found to export any oil sourced from beneath it).

Last year alone some 70 million barrels of oil from the Amazon rainforest in Ecuador flowed to the U.S., making it the largest global consumer by far. Panama was second (almost 22 million) followed by Chile (13 million) and China (nearly 10 million), according to the report.

California accounted for nearly 56 million barrels, far more than the five other states that received it: Texas (6 million), Louisiana (6 million), Mississippi (0.5 million), Washington (0.4 million).

In a statement, the California Environmental Protection Agency said the state is investing more than $15 billion in its climate agenda, including $4 billion to accelerate the transition to zero-emission vehicles.

“We cannot sacrifice the habitability of our planet or the survival of vulnerable indigenous communities for a dying industry,” the agency said. “This report illustrates exactly why California must eliminate dependence on fossil fuels, whether they come from critical regions like the Amazon or next to homes and schools right here in the state.”

The report’s researchers tracked shipments of oil from beneath the Amazon to the U.S. and beyond by combing through records from the U.S. Energy Information Administration, the United Nations Comtrade database and import/export databases for Ecuador, Colombia, Peru, Brazil and the U.S.

The researchers also reviewed a host of other sources, including state and federal government databases and company reports, to calculate fuel consumption estimates for the amount of Amazon oil used by the U.S. companies highlighted in the report. About half of the Amazon oil exported to California went to three refineries in and around Los Angeles, the report said.

California drivers fill up on Amazon oil at gas stations operated by major brands such as Marathon, Chevron and Shell. The highest-consuming brand in 2020 was Marathon (339 million gallons), according to the report, but it still trailed unbranded gasoline (479 million).

Motorists also purchase oil from the Amazon at supermarket fueling stations at places like Costco, Safeway and Walmart. Those companies also use them for their fleets. Last year Costco was the top consumer of Amazon oil (19 million gallons), the report said.

Major airlines operating in California consumed a total of 123 million gallons of jet fuel sourced from the Amazon last year. The top consumer was American Airlines (31 million gallons) followed by United (30.05 million gallons) and Delta (30 million gallons), according to the report.

PepsiCo (4 million gallons) was the top consumer of Amazon diesel among food and beverage delivery companies. Among parcel delivery companies, Amazon (13.3 million gallons) slightly edged out UPS (13.1 million gallons) and FedEx (12 million).

The report urged corporate leaders to call for no new oil expansion in the Amazon and set “aggressive goals for electric vehicle use and other strategies designed to reduce fossil fuel consumption.”

NBC News reached out to all of the companies named in this story. Delta was the only one to comment, saying the company is working to move away from jet fuel to sustainable aviation fuel and hopes to make it 10 percent of the overall fuel supply by 2030.

Ed Hirs, an energy fellow at the University of Houston, said he’s not surprised that such a large amount of oil from the Amazon ends up in California given its proximity.

“It’s probably just transportation cost,” Hirs said. “It’s seven or eight days to California” from Ecuador “as opposed to weeks from the Middle East.”

Hirs said the report underscores a hard reality of the global marketplace for oil: Even if California were to stop consuming the crude from the Amazon, another country would merely take its place.

“I can’t argue with what they’re talking about in terms of the damage and environmental issues,” Hirs said. “Is it a problem? Absolutely. Can California do anything about it? No. For another 50 cents a barrel, that oil would just go someplace else.”

Robertson said she and her colleagues are not asking for California to immediately stop using oil from the Amazon, but she hopes government officials and corporate leaders take steps to reduce their dependence as part of an overall strategy to curtail the use of fossil fuels.

“It’s within the realm of the possible, and it’s part of the necessary,” Robertson said. “It should become something that is central to California’s climate crisis strategy.”
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This article was produced in partnership with the Pulitzer Center’s Rainforest Investigations Network.

Credit: NBC News

 

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