Bolivian gas conflict
Bolivian gas conflict | |||
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Part of the Pink tide | |||
Date | September 2003 - May 2006 | ||
Location | |||
Caused by | |||
Goals | Nationalization of natural gas | ||
Methods | |||
Resulted in | Protestor victory
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Parties | |||
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Lead figures | |||
Bolivia portal |
The Bolivian gas conflict was a social confrontation in Bolivia reaching its peak in 2003, centering on the exploitation of the country's vast natural gas reserves. The expression can be extended to refer to the general conflict in Bolivia over the exploitation of gas resources, thus including the 2005 protests and the election of Evo Morales as president. Before these protests, Bolivia had seen a series of similar earlier protests during the Cochabamba protests of 2000, which were against the privatization of the municipal water supply.
The conflict had its roots in grievances over the government's economic policies concerning natural gas, as well as
The "Bolivian gas war" thus came to a head in October 2003, leading to the resignation of President
The governing coalition disintegrated forcing Goni to resign and leave the country on October 18, 2003. He was succeeded by the vice president,
Background
Gas reserves of Bolivia
The central issue was Bolivia's large natural gas reserves and the prospect for their future sale and use. The Bolivian gas reserves are the second largest in South America after Venezuela, and exploration after the privatization of the national oil company YPFB showed that proven natural gas reserves were 600% higher than previously known. The cash-poor, state-owned company could not afford the exploration costs. These reserves mainly are located in the southeastern Tarija Department, which contains 85% of gas and petrol reserves. According to the United States Department of Energy, another 10.6% is located within the department of Santa Cruz and 2.5% in the Cochabamba Department.[3] After further exploration from 1996 to 2002, the estimated size of the probable gas reserves was calculated to be 12.5 times larger, passing from 4.24×10 12 cu ft (120 km3) to 52.3×10 12 cu ft (1,480 km3). This number has declined somewhat to 48×10 12 cu ft (1,400 km3) probable reserves. The proven reserves are 26.7×10 12 cu ft (760 km3).[3] With the declining importance of tin mines, those reserves accounted for the majority of foreign investment in Bolivia.
The price which Bolivia is paid for its natural gas is roughly US$3.25 per million British thermal units ($11.1/MWh) to Brazil and $3.18 per million BTU to Argentina.[4] Other sources state that Brazil pays between $3.15 and $3.60 per million BTU, not including $1.50 per million BTU in Petrobras extraction and transportation costs.[5] As a comparison, the price of gas in the US as a whole in 2006 varied between US$5.85 and $7.90 per million British thermal units ($20.0 and $27.0/MWh),[6][7] although some years earlier the price of natural gas spiked at $14 per million BTU in California[8] due to lack of pipeline capacity to and within California as well as due to electricity outages.[9] While according to Le Monde, Brazil and Argentina pay US$2 per thousand cubic meter of gas, which costs from $12 to $15 in California.[8]
In 1994, a contract with Brazil was passed, two years before 1996's privatization of the 70-year-old, state-owned Yacimientos Petroliferos Fiscales de Bolivia (YPFB). The construction of the Bolivia-Brazil gas pipeline cost US$2.2 billion.
A consortium called Pacific LNG was formed to exploit the newly discovered reserves. The consortium comprised the
Government ministers hoped to use the gas profits to bolster the sagging
Santa Cruz autonomy movement
The wealthier, eastern departments of Santa Cruz, Beni, Tarija, and Pando recently had been mobilizing in favor of autonomy. Important issues were opposition to the seizure of resources though nationalization, the confiscation of land from local control by outside ethnic groups (mainly the Aymara and Quechua), and a greater share of taxes collected within Santa Cruz to support roads and schools.[10] Community leaders are supported by the Comite Pro Santa Cruz, local co-ops, and by business organizations such as cattle ranchers and farmers. A strike against the new constitution was recently held which was observed in Santa Cruz, Beni, Tarija, and Pando.[11] Tensions have been raised by the cultural and philosophical rift exposed by the push for a new constitution. As a basis for a new constitution, the western, Altiplano-based MAS party envisions a "council of indigenous peoples" along with a curtailment of private ownership, while Santa Cruz looks to western culture and capitalism.[12] Cultural divisions exist because people in eastern Bolivia, called "Cambas" (meaning "friends" in Guarani), are primarily of mestizo descent (mix of European and several native tribes the largest of which are the Guaraní), while the western Altiplano is dominated by a small white elite and a historically oppressed Quechua and Aymara majority.
The first signs of the modern autonomy movement occurred in 2005 when a march for autonomy was attended by hundreds of thousands of people.[13] A result of this was the change in law to allow the election of departmental prefects. Another area of tension was the result of ongoing population shifts and the resulting demands for proportionally greater representation in Bolivia's Congress to reflect these shifts by Santa Cruz.[14] A compromise was reached to allow Santa Cruz to receive some of the seats warranted by population growth, and for the highlands to keep seats despite population losses.
Left-wing intellectuals
Dispute over pipeline route
The dispute arose in early 2002, when the administration of President Jorge Quiroga proposed building the pipeline through neighboring Chile to the port of Mejillones, the most direct route to the Pacific Ocean. However, antagonism towards Chile runs deep in Bolivia because of the loss of Bolivia's Pacific coastline to Chile in the War of the Pacific (1879–1884).
Bolivians began campaigning against the Chilean option, arguing instead that the pipeline should be routed north through the Peruvian port of Ilo, 260 km further from the gas fields than Mejillones, or, better yet, first industrialized in Bolivia. According to Chilean estimates, the Mejillones option would be $600 million cheaper. Peru, however, claimed the difference in cost would be no more than $300 million. Bolivian proponents of the Peruvian option say it would also benefit the economy of the northern region of Bolivia through which the pipeline would pass.
Supporters of the Chile pipeline argued that U.S. financiers would be unlikely to develop processing facilities within Bolivia.
Meanwhile, the
President Jorge Quiroga postponed the decision shortly before leaving office in July 2002 and left this highly contentious issue to his successor. It was thought Quiroga did not want to jeopardize his chances of re-election as president in the 2007 elections.
After winning the 2002 presidential election Gonzalo Sánchez de Lozada expressed his preference for the Mejillones option but made no "official" decision. The Gas War led to his resignation in October 2003.
Escalation
The social conflict escalated in September 2003 with protests and road blockages paralyzing large parts of the country, leading to increasingly violent confrontations with the Bolivian armed forces. The insurrection was spearheaded by Bolivia's indigenous majority, who accused Sánchez de Lozada of pandering to the US government's "
In response to the shootings,
As the protests continued, protesters in
Martial law in El Alto
On October 12, 2003, the government imposed martial law in El Alto after sixteen people were shot by the police and several dozen wounded in violent clashes which erupted when a caravan of oil trucks escorted by police and soldiers deploying tanks and heavy-caliber machine guns tried to breach a barricade.
On October 13, the administration of Sánchez de Lozada suspended the gas project "until consultations have been conducted [with the Bolivian people]." However, Vice President Carlos Mesa deplored what he referred to as the "excessive force" used in El Alto (80 dead) and withdrew his support for Sánchez de Lozada. The Minister of Economic Development, Jorge Torrez, of the MIR party, also resigned.
The United States Department of State issued a statement on October 13 declaring its support for Sánchez de Lozada, calling for "Bolivia's political leaders [to] publicly express their support for democratic and constitutional order. The international community and the United States will not tolerate any interruption of constitutional order and will not support any regime that results from undemocratic means".[16]
On October 18, Sánchez de Lozada's governing coalition was fatally weakened when the New Republic Force party withdrew its support. He was forced to resign and was replaced by his vice president, Carlos Mesa, a former journalist. The strikes and roadblocks were lifted. Mesa promised that no civilians would be killed by police or army forces during his presidency. Despite dramatic unrest during his time in office, he respected this promise.
Among his first actions as president, Mesa promised a referendum on the gas issue and appointed several indigenous people to cabinet posts. On July 18, 2004, Mesa put the issue of gas nationalization to
The 2005 Hydrocarbons Law
On May 6, 2005, the long-awaited Hydrocarbons Law was finally approved by the Bolivian Congress. On May 17 Mesa again refused to either sign or veto the controversial law, thus constitutionally requiring Senate President Hormando Vaca Díez to sign the measure and put it into effect.
The new law returned legal ownership to the state of all hydrocarbons and natural resources, maintained royalties at 18 percent, but increased taxes from 16 to 32 percent. It gave the government control of the commercialization of the resources and allowed for continuous government control with annual audits. It also ordered companies to consult with indigenous groups who live on land containing gas deposits. The law stated that the 76 contracts signed by foreign firms must be renegotiated before 180 days. Protesters argued that the new law did not go far enough to protect the natural resources from exploitation by foreign corporations, demanding a complete nationalization of the gas and process in Bolivia.
Due to the uncertainty over renegotiation of contracts, foreign firms have practically stopped investing in the gas sector.[17] Foreign investment virtually came to a standstill in the second half of 2005. Shortages in supply – very similar to those observed in Argentina after the 2001 price-fixing – are deepening in diesel, LPG, and begin to be apparent in natural gas. The May–June social unrest affected the supply of hydrocarbons products to the internal market, principally LPG and natural gas to the occidental region. Brazil implemented a contingency plan – led by the Energy and Mines Minister – to mitigate any potential impact from gas export curtailment. Although the supply was never curtailed, the social unrest in Bolivia created a strong sensation that security of supply could not be guaranteed. Occasional social action has continued to affect the continuity of supply, especially valve-closing actions.
Carlos Mesa's June 2005 resignation
The protests
Over 80,000 people participated in the May 2005 protests. Tens of thousands of people each day walked from El Alto to the capital
May 24, 2005 More than 10,000 Aymara peasant farmers from the twenty highland provinces came down from El Alto's Ceja neighborhood into La Paz to protest.
On May 31, 2005, residents of El Alto and the Aymara peasant farmers returned to La Paz. More than 50,000 people covered an area of nearly 100 square kilometers. The next day, the first regiment of the National Police decided, by consensus, not to repress the protests and were internally reprimanded by the government.
On June 2, as the protests raged on, President Mesa announced two measures, designed to placate the indigenous protesters on the one hand and the Santa Cruz autonomy movement on the other: elections for a new constitutional assembly and a referendum on regional autonomy, both set for October 16. However, both sides rejected Mesa's call: the Pro-Santa Cruz Civic Committee declared its own referendum on autonomy for August 12, while in El Alto protesters began to cut off gasoline to La Paz.
Approximately half a million people mobilized in the streets of La Paz, on June 6, and President Mesa subsequently offered his resignation. Riot police used tear gas as miners amongst the demonstrators traditionally set off dynamite in clashes near the presidential palace, while a strike brought traffic to a standstill. However, Congress failed to meet for several days owing to the "insecurity" of meeting as protests raged nearby. Many members of Congress found themselves unable to physically attend the sessions. Senate President Hormando Vaca Díez decided to move the sessions to Bolivia's capital, Sucre, in an attempt to avoid the protesters. Radical farmers occupied oil wells owned by transnational companies, and blockaded border crossings. Mesa ordered the military to airlift food to La Paz, which remained totally blockaded.
Vaca Diez and House of Delegates president,
Caretaker President Rodríguez proceeded to implement the Hydrocarbons Law. The new tax IDH has been levied from the companies that are paying 'under reserve'. A number of upstream gas companies have invoked Bilateral Investment Protection Treaties and entered the conciliation phase with the state of Bolivia. The treaties are a step towards a court hearing before the International Centre for Settlement of Investment Disputes (ICSID), dependent of the World Bank, which could force Bolivia to pay indemnities to the companies.
Concerns of possible US intervention
A military training agreement with
Later reports indicated that 400 US troops would be deployed in Paraguay over 18 months for training and humanitarian missions consisting of 13 detachments numbering less than 50 personnel each.[20] The Paraguayan administration as well as Bush's administration denied that the airport would be used as a US military base, or that there would be any other US base in Paraguay.[21][22][23][24]
Other countries
The social conflicts paralyzed Bolivia's political life for a time. The unpopularity of the neoliberal
In the meantime, Chile promptly started to build several coastal terminals to receive shipments of
Other South American countries are contemplating other ways to secure gas supplies: one project aims at linking the
Another 8,000 km gas pipeline (Gran Gasoducto del Sur) has been proposed that would link Venezuela to Argentina via Brazil. Its cost is estimated between $8 and $12 billion.
While Argentina and Chile are large consumers of gas (50 percent and 25 percent respectively), other South American countries are a lot less dependent.[8]
Nationalization of natural gas industry
On May 1, 2006, president Evo Morales signed a decree stating that all gas reserves were to be nationalized: "the state recovers ownership, possession and total and absolute control" of hydrocarbons. He thus fulfilled his electoral promises, declaring that "We are not a government of mere promises: we follow through on what we propose and what the people demand". The announcement was timed to coincide with Labor Day on May 1. Ordering the military and engineers of
Negotiations between the Bolivian government and the foreign companies intensified during the week leading up to the deadline of Saturday October 28, 2006. On Friday an agreement was reached with two of the companies (including
During the six month negotiation period talks with the Brazilian company Petrobras had proven especially difficult. Petrobras had refused raises or reduction to a mere service provider. As a result of stalled talks Bolivian energy minister Andres Soliz Rada resigned in October and was replaced by Carlos Villegas.[29] "We are obligated to live with Brazil in a marriage without divorce, because we both need each other", said Evo Morales in the contract signing ceremony underlining the mutual dependency of Brazil on Bolivian gas and of Bolivia on Petrobras in gas production.[30]
Reaction
On December 15, 2007, the regions of Santa Cruz, Tarija, Beni, and Pando declared autonomy from the central government. They also moved to achieve full independence from Bolivia's new constitution.[31]
The Protesters
Miners
Miners from the Bolivian trade union
Coca farmers
Shortly after the law passed,
Protesters in Cochabamba
Oscar Olivera was a prominent leader in the 2001 protests in Cochabamba against the privatization of water in Bolivia and has also become a leading figure. Specifically the protesters in Cochabamba, Bolivia's fourth largest city, have cut off the main roads in the city and are calling for a new Constituent Assembly as well as nationalization.
Indigenous and peasant groups in Santa Cruz
Indigenous people in the eastern lowland department of Santa Cruz have also become active in the recent disputes over nationalization of the gas and oil industry. They are composed of indigenous groups such as the
Felipe Quispe and peasant farmers
See also
- Cochabamba anti-privatization protests
- Geology of Bolivia
- Bolivian gas referendum, 2004
References
- Znet. May 4, 2006. Archived from the originalon June 30, 2006. Retrieved 2006-05-24.
- ^ a b "Bolivia's military takes control of gas fields". Reuters. May 2, 2006. Retrieved October 3, 2010.
- ^ a b "U.S. Energy Information Administration (EIA)". www.eia.gov. Archived from the original on August 21, 2008.
- ^ "This story no longer exists - BusinessWeek". www.bloomberg.com. Archived from the original on May 22, 2011.
- ^ Luiz Rodolfo Landim Machado (October 2002). "Facing Market Risks in Brazil: the experience of the Bolivia – Brazil Gas Pipeline" (PDF). In IEA – OLADE Latin American Conference on Cross-Border Gas Trade. Archived from the original (PDF) on 2006-05-24. Retrieved 2006-05-02.
- ^ NYMEX Gas Futures
- ^ "Globe and Mail". The Globe and Mail.
- ^ a b c d e "Evo Morales et l'arme du gaz" (in French). Le Monde. January 25, 2006. Retrieved 2006-01-25.[permanent dead link]
- ^ US DOE, gasandoil.com Archived 2007-09-27 at the Wayback Machine
- ^ "Bolivia gas move sparks hope and unease". May 5, 2006 – via news.bbc.co.uk.
- ^ "Bolivia sees anti-reform protests". September 9, 2006 – via news.bbc.co.uk.
- ^ "Bolivia 'close' to split after violence, eastern strike". The Washington Times.
- ^ https://web.archive.org/web/20080213184514/http://www.elmundo.com.bo/Secundarianew.asp?edicion=29%2F01%2F2005&Tipo=Comunidad&Cod=2510 El Mundo - Prensa Mayor
- ^ "Dispute puts Bolivia vote on hold". September 23, 2005 – via news.bbc.co.uk.
- ^ "Left-Indigenous Struggles in Bolivia: Searching for Revolutionary Democracy", by Jeffery R. Webber, Monthly Review September 2005
- ^ "Call for Respect for Constitutional Order in Bolivia". United States Department of State. October 13, 2003. Retrieved April 24, 2006.
- ^ "South America :: Bolivia — The World Factbook - Central Intelligence Agency". www.cia.gov. 17 May 2022.
- ^ "U.S. Military Moves in Paraguay Rattle Regional Relations". International Relations Center. December 14, 2005. Archived from the original on 2007-06-12. Retrieved April 24, 2006.
- ^ a b US Marines put a foot in Paraguay Archived 2009-03-27 at the Wayback Machine, El Clarín, September 9, 2005 (in Spanish)
- ^ "Brazzilmag.com". www.brazzilmag.com. Archived from the original on December 3, 2006.
- ^ "link UltimaHora". Archived from the original on May 19, 2006.
- ^ The President of Paraguay similar statements link Mexico
- ^ Further clarifications were made by US Embassy in Paraguay in July 2005 link US-Embassy-Paraguay Archived 2005-12-26 at the Wayback Machine, and repeated by other sources "Generally between 10 to 20 people, will train with their Paraguayan military colleagues during periods of two to six weeks....The American soldiers will not be deployed for extensive periods of time, and there will never be but a few dozen soldiers in Paraguay for no more than 45 days...The exercises will end by December 2006."
- ^ "The Story Behind 'Alice's Restaurant' - the 50-Year-Old Song that Is Forever Young". Alternet.org. November 27, 2015. Archived from the original on June 12, 2007.
- ^ Mundo Marítimo (2008-01-23). "Terminal de gas y combustibles listo para operar" (in Spanish). Retrieved 2008-03-12.
Terminal de gas y combustibles listo para operar
- ^ "Bolivia gas under state control". BBC News. May 2, 2006. Retrieved 2006-05-02.
- Folha de Sao Paulo. May 2, 2006. Retrieved 2006-05-02.
- ^ "Morales' Gas Nationalization Complete". London: Guardian. October 29, 2006. Retrieved 2006-10-31.[dead link]
- ^ "Bolivia agrees new energy deals". BBC News. London. October 29, 2006. Retrieved 2006-10-31.[dead link]
- ^ "Morales' Gas Nationalization Complete". The Guardian. London. October 29, 2006. Retrieved 2006-10-31.[dead link]
- ^ "Four Bolivian regions declare autonomy from government - CNN.com". www.cnn.com.
External links
- Democracy in Crisis in Latin America. Bolivia and Venezuela Test the International Community's Democratic Commitment, SWP-Comments 26/2005 (June 2005)
- Bolivia's top Court chief takes Presidency AP (Yahoo news)
- Main Protest Groups in Bolivia
- Turning Gas into Development in Bolivia from Dollars & Sense magazine
- Bolivia Information Forum Information on oil and gas in Bolivia
- The Distribution of Bolivia’s Most Important Natural Resources and the Autonomy Conflicts Center for Economic and Policy Research
- Black October Archived 2014-12-21 at the Wayback Machine, Miami New Times
- Dignity and Defiance: Stories from Bolivia’s Challenge to Globalization – video report on Democracy Now!
- โบลิเวียโมเดล กับ การปฎิรูปพลังงานไทย สร้างความมั่นคงทางพลังงานให้กับประเทศจริงหรือ? - in Thai Pantip