Crudos Pesados Oil Pipeline

From Global Energy Monitor
This article is part of the Global Fossil Infrastructure Tracker, a project of Global Energy Monitor.
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Crudos Pesados Oil Pipeline, known locally as Oleoducto de Crudos Pesados or by its Spanish initials OCP, is an oil pipeline in Ecuador.[1]

Location

The pipeline runs from the Oriente Region oil fields to the Balao Oil Terminal, Ecuador. The Oleoducto de Crudos Pesados Oil Pipeline (OCP) has four pumping stations and two pressure reduction stations: Amazonas Terminal and Cayagama Station, located in the Province of Sucumbíos; Sardinas Station, in the Province of Napo; Páramo Station, located between the provinces of Napo and Pichincha; and the stations of Puerto Quito and Chiquilpe, in the Province de Pichincha[2] The pipeline crosses the Amazon Jungle, the Andes, numerous natural reserves, and ends on the Pacific Coast.[3]

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Project Details

  • Operator: OCP Ecuador S.A.
  • Current capacity: 450,000 barrels per day
  • Proposed capacity:
  • Length: 475 km / 295 mi
  • Status: Operating
  • Start Year: 2003[4]

Background

The pipeline carries oil from the Amazon region fields to the Balao oil terminal on the Pacific coast. The 300-mile, 450,000 bbl/d OCP mostly parallels the route of the SOTE Oil Pipeline. The OCP was commissioned in 2003. In 2005, EnCana sold its stake to the Andes Petroleum Company (Petroecuador).[1] The OCP crude oil pipeline is the second largest pipeline in the country and transports around 30% of Ecuador's oil production.[5]

Controversy

Geological & Environmental

The OCP pipeline has faced heavy criticism since its inception by civil society groups inside and outside the country.[6] The pipeline snakes its way through an extremely sensitive ecosystem inhabited by various indigenous groups while also traversing geologically unstable landscapes. The pipeline's route passes 94 fault lines, six volcanoes, multiple waterways, and rain forests.[7] The volcanoes passed are Reventador, Antisana, the volcanic complex of Chacama, Guagua Pichincha and Pululahua. The Guagua Pichincha is of particular concern given that it erupted in 1999. A more violent eruption could mean that the pipeline would be exposed to ashes, landslides and lava flows.[8]

Environmental groups worried about a number of ecological problems which the pipeline might exacerbate. Soil erosion, landslides, and negative effects on soil fertility were of great concern; equally concerning were the companies' efforts to ameliorate the negative effects to the soil, which were insufficient according to environmentalist and other concerned groups. Another negative aspect from the pipeline would be its deleterious effect on water sources. During its construction, already 157 ponds, springs, and drinking water sources had been contaminated. Some farmers had complained that wells on their land had been contaminated or that their water supply had been blocked by construction upstream.[9] Rivers which would be affected by potential spills from the pipeline are: the Cinto River (with tributaries Cristal, Verde, and Saloya), the Mindo River (with tributaries Nambillo and Canchupi), and the Blanco River where the Mindo and Cinto meet, which in turn flows to the Guayllabamba and Emeraldas Rivers.[10]

The biodiversity of the region was also impacted by the pipeline construction. Large proportions of vegetation of the areas surveyed in the environmental report by Amazon Watch were damaged or destroyed by soil erosion and improper removal of soil for the pipeline's construction. Animals near pipeline construction suffered in a variety of ways. Thousands of insects and some large animals had been harmed or even killed by the from factors relating to infrastructure construction and the use of nocturnal reflectors at the stations. Birds and other animals had to flee their normal habitat due to the noise from the pipeline's construction.[9] The area of the pipeline's path is home to as many as 450 bird species, 46 of which are endangered.[10]

Financing

The pipeline project, which cost $1.3 billion, was large and complex, taking 30 months for the financial structure to be properly organized.[7] In 2000, the IMF approved a $300 million loan to Ecuador, which subsequently lead to $425 million from the World Bank and $625 million from the Inter-American Development Bank. Ecuador, which was saddled with $15.7 million in debt, could only receive the loan if they met conditions set by the IMF and other international financial institutions.[11][12] Another precondition in the agreement took the form of the Economic Transformation Law, which was passed by the Ecuadorian Congress. The portion of this law allowed private companies to build and operate pipelines in Ecuador, facilitating the construction of the OCP pipeline. The preconditions of the loan for the capital strapped and debt-ridden nation paved the way for rapid construction of the oil pipeline and privatization of the parts of the oil sector, which would threaten Ecuador's portion of the Amazon rain forest.[12] In 2003, another loan was approved by the the IMF in the amount of $205 million.[13] As part of this conditional loan, the Ecuadorian congress passed the Fiscal Responsibility and Transparency Law, which stipulated that allocated 70 percent of OCP revenue to paying off the country’s debt and 20 percent into a fund that will be used for spending (including debt payback) in case of a sharp drop in oil prices or natural disaster. 10% would be used for social spending.[12]

Spills

2003

In April of 2003, machinery being used to construct the OCP pipeline created a rupture to the neighboring SOTE pipeline. The incident caused a oil to spill into the Cayambe Coca Reserve. The spill reached the Papallacta lagoon and covered almost half its surface. The Papallacta lagoon supplies up to 60% of Quito's drinking water.[14] The spill reportedly dumped up to 10,000 barrels of oil.[15]

2009

In February 2009, a rupture occurred in Santa Rosa, Ecuador, spilling 14,000 barrels of oil. The spill contaminated the Santa Rosa River, not only potentially harming wildlife and the surrounding environment, but also drinking water for nearby residents.[16]

2013

In April 2013, a leak occurred in Esmeraldas, spilling over 5,500 gallons of oil contaminating the Winchele estuary.[17]

2020

In April 2020, a landslide in the Ecuadorian Amazon ruptured the pipeline, requiring construction of a new 1.7 km section to detour around the slide. Ecuador was forced to suspend oil exports as crews worked around the clock to clean up the spill and restore service by early May.[18]

Opposition

Up until the pipeline's operations commenced, there was both local and global opposition to the project. In Mindo, Ecuador residents, students, and ecologists occupied an area in the Los Guarumos area at the entrance of the Mindo Nambillo Protected Forest. Activists installe[19]d themselves in the most fragile section of the forest to block the construction crews of the OCP Heavy Crude Pipeline from entering the protected area. Protesters built tree houses and tied themselves to trees in order to facilitate the blockade.[20]

In February 2002 residents and striking OCP construction workers in the Northern Amazon were attacked by government forces after during a protest demanding fair and just compensation for the serious impacts of the pipeline and pumping station and much needed funds for roads, hospitals, reliable electricity service and clean running water. Demonstrators erected roadblocks and occupied over 60 oil wells and 5 refineries, halting all construction on the pipeline and bringing oil production in the region to a near standstill. There were reports of fatalities caused by the violent crackdown.[21]

Environmentalists cite the landslide-induced April 2020 rupture of the OCP pipeline and the neighboring SOTE oil pipeline as evidence of the ecological risks posed by energy projects in such a seismically active area.


Articles and resources

References

  1. 1.0 1.1 Oleoducto de Crudos Pesados Oil Pipeline (Ecuador), A Barrel Full, accessed September 2017
  2. OCP Ecuador S.A., BNamericas, accessed October 2017
  3. OCP-Heavy Crude Oil Pipeline, Ecuador, Environmental Justice Atlas, accessed October 2017
  4. "Historia | OCP Ecuador". OCP Ecuador. Retrieved 2020-07-01.
  5. Country Analysis Brief: Ecuador, U.S. Energy Information Administration, accessed October 5, 2017
  6. Juan Forero, "Oil Pipeline Forges Ahead in Ecuador," The New York Times, October 30, 2002
  7. 7.0 7.1 Jan Willem van Gelder, [www.profundo.nl/files/download/Urgewald0301uk.pdf The financing of the OCP pipeline in Ecuador,] Urgewald and Environmental Defense, January 2003
  8. Help save Ecuador’s last remaining Amazon jungles, Friends of the Earth International, May 22, 2001
  9. 9.0 9.1 Environmental Impacts of OCP Pipeline Construction, Amazon Watch, July 23, 2002
  10. 10.0 10.1 The New Heavy Crude Pipeline in Ecuador, Amazon Watch Mega-Project Alert, June 2001
  11. Ecuador: New Oil Pipeline Threatens Fragile Ecosystems and Communities from Amazon Rainforest to Pacific Coast, Amazon Watch, January 2003
  12. 12.0 12.1 12.2 Matt Finer and Leda Huta, Yasuní Blues: The IMF, Ecuador and Coerced Oil Exploration, Multinational Monitor, 2005
  13. IMF Approves US$205 Million Stand-By Arrangement for Ecuador, IMF Press Release NO. 03/39, March 21, 2003
  14. Petroleum In Ecuador 2003, Oil Watch, accessed 2017
  15. Extreme Oil, PBS, accessed 2017
  16. Alonso Soto, Ecuador oil spill pollutes river in Amazon, Reuters, February 26, 2009
  17. Heather Libby, 13 Oil Spills in the last 30 Days, Huffpost, April 12, 2013
  18. "OCP construye variante de oleoducto tras una rotura en la Amazonía". El Comercio. April 13, 2020.
  19. "Ecuador: la rotura del oleoducto OCP revela el impacto de construir en zonas de alto riesgo La rotura del OCP en Ecuador: ¿un riesgo mal calculado?". Mongabay Latam. May 4, 2020.
  20. Mindo Residents Continue Tree-Sit in Opposition to OCP Pipeline in Ecuador, Amazon Watch, January 7, 2002
  21. Ecuadorian Military Attacks OCP Pipeline Demonstrators At Least Two Reported Dead, Dozens Wounded, Amazon Watch, March 1, 2002

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