A Piece of the Amazon Pie




The Bush Administration is, yet again, lending a helping hand to its chums in the natural gas industry. Now Bush and Co. are throwing their weight behind the Camisea Gas and Pipeline Project and are pushing for the Export-Import Bank of the United States and the Inter-American Development Bank to approve funding for a project that could line the pockets of some of the administration’s closest pals. This week, both banks may front the Camisea Project nearly $300 million in loans and loan guarantees. Critics charge that the funding could pave the way for even more financing for the $1.6 billion project, and that the project itself will continue to have a devastating effect on both the rainforest and its inhabitants.

The Camisea Project is described by one corporate watch-dog as one of the most destructive projects around. The project, argues Corpwatch, single-handedly harms the indigenous communities there while doing major damage to a pristine tropical rainforest in the Amazon:

“It extracts gas from the pristine Amazon rainforest, an area of extreme biodiversity where indigenous people have lived for centuries. Some of them live in voluntary isolation from the rest of the society, which makes them much more vulnerable to outside interference. They have no immunity to diseases like the common cold, and are extremely susceptible to gastrointestinal illnesses, for which immunization is not adequate. Although a reserve was established for their protection, three-quarters of the project is located inside this reserve. Over its 40-year life, the Camisea project will have irreparable impacts on the lives of those who live in and around the reserve.

In addition to its social impacts, the Camisea project has already caused irreversible damage to the environment. Massive erosion, sedimentation, and biodiversity loss have already occurred. Long-term impacts also include open access to a region previously protected by natural barriers and the project threatens one of Latin Americas most important marine reserves on the Ramsar protected Bay of Paracas.”

So, who stands to profit from the Camisea project? None other than familiar Bush and Cheney darlings: Hunt Oil (whose chairman Ray Hunt raised nearly $100,000 for the 2000 Bush campaign), and Kellogg, Brown and Root (a subsidiary of Halliburton). According to the Washington Post’s James V. Grimaldi, KBR’s parent company, Halliburton, has a $1 billion stake in the venture:

Halliburton’s KBR unit is a top candidate to build a $1 billion seaside liquefied-natural-gas plant on the Peruvian coast if Hunt goes ahead with plans to export Camisea gas to the United States by 2006.

The separation plant and pipelines slice through a forest renowned as one of the most biologically diverse places on the planet. Its inaccessibility has kept it largely untrammeled, except for an indigenous population of a few thousand. Near the coast, another processing plant is planned for the buffer zone around the Paracas reserve, home to such rare species as Humboldt penguins and green sea turtles.”

Grimaldi writes that the location of the Paracas plant was selected for purely economic reasons. Should a spill occur, the rare species in the reserve would be exterminated. Grimaldi quotes a 161-page assessment by the Export-Import Bank saying that it is “ill-prepared for a spill of any magnitude.”

Proponents of the Camisea project claim that the two pipelines (one for transporting natural gas approximately 435 miles from the Camisea fields in the southeast region of Peru to Lima, and the other for moving liquids for export to a southern port for) would considerably boost Latin America’s economy without damaging its environment, writes the Washington Times’ Zachary A. Goldfarb. The pipeline project, argue its proponents, would significantly increase Peru’s energy output while jacking up its economy:

“‘It’s a crucial project for Peru’s development. It represents almost one point of [gross domestic product] per year for the [30] years of the project. It means clean energy. It means substantive exports for us,’ said Roberto Danino, Peru’s ambassador to the United States.

“We have made sure that the project is developed in a very careful way and have taken into account all the recommendations for the past two years by the banks and the environmental [groups],” Mr. Danino said. …

‘There are aspects of the project that are highly innovative and could be considered in a model framework’ for other countries, he said. ‘We’ve spent a very significant amount of time doing the environmental due-diligence.'”

But by its own admission, in an internal report by the Export-Import Bank (released to NGOs only after a Freedom of Information Act request), the Ex-Im is totally unprepared for the environmental impacts of Camisea. Amazon Watch, which helped obtain the report, writes that:

    “According to Ex-ImÕs own evaluation, impact mitigation measures for Camisea are ‘woefully inadequate’ and will result in ‘irreversible impacts,’ ‘spread of non-indigenous diseases’ and has already caused ‘massive slides.'”

Despite all this, the Bush administration is still planning to approve financial support for the project, through both the Export-Import Bank and the Inter-American Development Bank.

It’s also worth noting that two major investors in the project — Citigroup and the Overseas Private Investment Corporation — have both pulled out of the deal citing both environmental and financial concerns.

If Hunt Oil and a subsidiary of Halliburton spreading their tenticles into the nethermost regions of the Amazon sounds bad, what about the idea of American tax dollars financing the spread? Public money funds the banks that fund loans for the project. But lawmakers are lobbying to put a halt to the public handout, writes Grimaldi:

“House Minority Leader Nancy Pelosi (D-Calif.), author of the 14-year-old law that requires environmental reviews of multilateral development bank loans, this month asked Treasury Secretary John W. Snow for a delay of the IDB vote to allow for more complete reviews. Last Tuesday, the U.S. Agency for International Development recommended to Treasury that the Pelosi amendment requires the United States to vote no on the project because the reviews were deficient.

Sen. Patrick J. Leahy (Vt.), ranking Democrat on the Senate Appropriations Committee panel that funds IDB and the Export-Import Bank, said this week that the project has ‘serious flaws.’ He also called for no public financing and a halt on further construction until damage is mitigated and ‘steps have been taken to prevent further harm.'”

According to Reuters, if the loans get the final approval from the banks, the Camisea Project will move forward full throttle, and Peru could be slated to funnel natural gas into Lima by August 2004. Both banks are projected to vote on the final approval sometime this week.