Time Magazine, 18th August

Anyone who ever doubted the centrality of oil and natural gas to the global economy should have been convinced by the political events of the past few months. As petroleum prices have risen to record levels, the spiraling price of gasoline has become issue number one in the American Presidential election. That’s prompted Republican candidate John McCain to make expanded offshore oil drilling a focus of his campaign. For years, offshore drilling has been illegal outside parts of the Gulf of Mexico due to environmental concerns, with public support. But that has reversed in recent months, with even green Californians moving in favor of drilling. Barring a sudden national move to adopt alternative fuels, we can expect that reversal to continue — as oil prices rise, so will pressure to "drill here and drill now," as McCain has put it.

Whatever that means for offshore drilling in the U.S., the real victims of the global thirst for petroleum will be overseas — areas that, until the recent price rise, were too remote and forbidding to be worth drilling. Case in point: the vast, impenetrable western reaches of the Amazon. Touching parts of Bolivia, Peru, Ecuador, Columbia and Brazil, the western Amazon has remained relatively unscathed compared to the eastern stretches of the rainforest, which have been ravaged by logging. With few roads, the western Amazon has remained so undisturbed that there are still new indigenous tribes living somewhere inside the jungle who have never encountered the outside world.

According to a new report by Matt Finer of the green group Save America’s Forests, however, the western Amazon could be on the brink of an energy bonanza — and that could be bad news for the rich array of plants and wildlife the forest supports. Finer points out that there are approximately 180 separate zones of development for oil and gas exploration in the western Pacific, run by at least 35 multinational energy companies. The area covers almost 700,000 sq. km. and it’s growing fast. In 2003 Peru cut oil and gas royalties in an effort to kick start energy investment; that discount, compounded by the rapidly rising price of oil, sparked a mini-boom in energy exploration. Oil and gas zones now cover some 72% of the Peruvian Amazon, up from a little more than 20% a few years back. The story is much the same in neighboring countries. "Ten new projects were approved last year in Peru alone," says Finer. "We can see the land being eaten up." (Hear Finer talk about the ecological implications of the energy rush in this week’s Greencast.)

New oil and gas projects represent a vital source of government revenue for impoverished nations like Peru or Bolivia, but they may come at a high environmental cost. The reason much of the western Amazon remains intact — quite unlike the rainforest to the east — is simply because there are still relatively few roads into the forest. But oil and gas projects will require new roads, and roads destroy forests and damage wildlife habitats. Roads also invite in the most formidable agent of ecological disruption: humans. That means an influx of hunters and loggers, along with the heavy equipment and personnel needed for oil exploration. "Our attention has always been focused on the rainforest in eastern Brazil, because that’s where the road network is," says Finer. "But the roads being put into the western Amazon have the potential to open up the area."

There are ways to extract oil and gas without building an extensive network of roads — in fact, Finer points out that the energy company Petrobras plans to use helicopters to transport all personnel and material to and from a site in Yasuni National Park in Ecuador. That move came at the behest of the Ecuadorian government, and it’s representative of the sort of smart energy policies that South American governments will need to follow if the western Amazon isn’t going to be sacrificed for oil. Just as important are the environmental impact assessments that can accurately gauge just how destructive a new oil or gas project might be, not just to the land that’s being drilled, but also to adjacent areas — in Peru, 20 development zones overlap with protected areas. An accident in one zone could easily contaminate neighboring land.

Ultimately, however, the global demand for oil and gas is so great that it is difficult to see any South American country passing up the potential revenue in favor of keeping the Amazon pristine. It’s also a reminder that, as we fight over a little offshore drilling in the U.S., rising energy prices will impact far more vulnerable ecosystems overseas, from the Amazon in South America to the vast Arctic stretches of Siberia. For now, the best we might be able to expect — until alternative fuels make oil and gas unnecessary — is adherence to the best safety standards for new exploration. After all, keeping the oil and gas in the ground may be better for the environment and the climate, but it seems unlikely. In April 2007 Rafael Correa, the President of Ecuador, made a bold proposal: to permanently forgo excavation of the country’s largest untapped oil reserve, located beneath a national park, if the international community would compensate the country for its lost revenue. No one has taken him up on the offer yet.

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3 Responses to Drilling for Oil Way, Way Offshore

  1. On the home front here in Australia, we should congratulate State Premier, Anna Bligh, for banning Shale-Oil mining near the Great Barrier Reef last month http://www.bloomberg.com/apps/news?pid=20601081&sid=aVDdxLccfuoM
    It is amazing that such mining applications are still being proposed near the Great Barrier Reef, especially when considering the greenhouse gases emissions caused by the shale-oil extraction process. We are so lucky in Australia to have the Great Barrier Reef as an icon that demands protection. However, this begs the question, “How do we promote protection of other reefs and ecosystems that are not World Heritage-listed”.

  2. Richard C says:

    You mentioned the development of a site via helicopter instead of roads, and were suckered into stating that it was smart policy. You fail to understand that development is useless without production, and the concept of extracting crude oil from the amazon via helicopter is ludicrous. Yep, they can drill a well without roads, but once the oil flows, roads and pipelines (which require roads) are the only possibilities. Delaying roads for a few months won’t help. I grant that a few roads to failed sites could be prevented, but the core issue is whether one road sufficient enough to carry tankers and logging trucks is built. Once that is done, trees will fall and the network will expand exponentially.

  3. odie says:

    can you tell me how much it will cost to drill in the US coral reef as opposed to drilling in the middle east? an estimate could suffice. thank you. odie

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