Continuation of the Camisea Natural Gas Project in the Peruvian Amazon is contingent upon approval from the Inter-American Development Bank for US $75 million in funding. The oil consortium Transportadora de Gas del Peru (TGP), composed of Tecgas (Argentina), Pluspetrol (Argentina), Hunt Oil (USA), SK Corporation (Korea), Sonatrach (Algeria) and Grana y Montero (Peru), has requested the loan from the IDB. The date, previously set for early July has now been pushed back to early August. Further development of the Transportation portion of the project, projected to cost US $800 million, depends on the approval of financing.
The Camisea Project is Peru’s first large scale oil extraction initiative and, according to a report by Amazon Watch, the most damaging project in the Amazon Basin. The Urubamba Valley, the project’s location, represents one of the most ecologically important rainforests in the world, and is home to a number of indigenous tribes. In total, the project entails the building of wells, construction of a processing plant and two pipelines running across the region. The gas concession, referred to as Block 88, covers territory legally recognized as the land of indigenous peoples living in voluntary isolation. These tribes have recently been contacted by project staff, and are now experiencing significant social and environmental impacts throughout their communities.
The are three main parts to the Camisea Project, all of which take place across the Lower Urubamba Valley: a natural gas field (“Upstream Project”); two pipelines to transport natural and liquid natural gas (“Transportation Project”); and networks in Lima and Callao to distribute the natural gas (“Distribution Project”). Construction on this $2.6 billion project commenced in March 2002, and is currently 35-60% complete.
Due to the high cost of the project, as well as the small size and inexperience of the gas companies involved, the Camisea Project depends upon IDB and private sector financing. Although the project goes against the lending policies of both EX-IM and IDB, Hunt and Halliburton oil companies have close connections to President Bush and the Republican Party, which may prove beneficial not only for funding, but also for a leniency from Washington regarding the project’s flaws. In addition to being appointed to the Foreign Intelligence Advisory Board by longtime friend George W. Bush, Hunt also donated $460,000 to Republican state campaigns. And, according to Hunt Oil’s website, vice president of Hunt Oil, Hunter Hunt was Bush’s “Primary Policy Advisor responsible for energy issues.”
The Camisea Project projects to provide natural gas for both the Peruvian import and export market. In terms of exports, the United States expects to receive a large portion of the gas. Investors hope to export natural gas to the West Coast, using a terminal in Baja California. While the Camisea natural gas will provide a great amount of energy, environmentalists believe that the availability of cheap fossil fuels will undermine the state’s current renewable energy plans.
From environmental damages to violations of the rights of indigenous peoples, the Camisea Project threatens the Peruvian Amazon and the tribes within. The Southwestern Amazon, including the Lower Urubamba Valley represents one of World Wildlife Fund’s “Global 200” eco-regions, recognized as one of the most important places on earth for high biodiversity and valuable ecological functions. The exploration, extraction, and transport components of the Camisea Project have already begun, and will continue, to degrade and destroy this tropical forest ecosystem as long as the project continues. Independent reviews conducted on behalf of project developers have recorded problems including fuel spills, unauthorized pipeline route diversions, and destructive erosion and landslides.
Further, the project continues to impact over 7,000 indigenous peoples, including the Machiguenga, Yine, Nahua (Yora), Kirineri and Nanti (Kugapakori) peoples who live in the Nahua Kugapakori Reserve in the Camisea region. The reserve was established to protect the Nanti and Nahua peoples from the outside world, to allow them to live in voluntary isolation. The tribes are dependent on the forest for survival, and the Camisea project violates the basic rights of these peoples as it destroys the resources of the forest, including the fish supply, game stocks, flora, and drinking water. Increased access to the region, from development of roads and influx of workers on the project, will worsen the effects of colonization and deforestation, while causing further destruction to the forest ecosystem, exacerbating health hazards, and contributing to the loss of cultural integrity and heightened social conflict.
In addition, the consortium involved in the project has violated indigenous peoples’ right to self-determination by forcing contact with people living in voluntary isolation with the goal of gaining company entry into the Reserve. Contact with workers has subsequently caused the spread of epidemics throughout the tribes as the indigenous peoples are exposed to bacteria and sickness that they have no immunity for. According to a recent study conducted by the London School of Tropical Medicine and the Peruvian Ministry of Health, the entire Nanti population living along the Camisea River is currently suffering from acute respiratory diseases.
Despite the rampant destruction upsetting the ways of life of the indigenous tribes of the Lower Urubamba region, little has been done to provide these peoples with any sort of compensation. While Pluspetrol projects annual revenue of $3 billion by 2005, companies have developed no plans to invest in local communities. The refusal to give back to the tribes puts the oil companies in violation of the World Bank standards which require companies engaged in development work to finance an indigenous peoples’ development program.
Efforts in the fight to stop the Camisea project have shown cumbersome. Throughout Peru strong fear exists of opposing government policy since no concessions are in place that supports public outcry. The government of Peru sees Camisea as an important way to strengthen the country. President Alejandro Toledo recently called the gas project “vital” to the financial rehabilitation of Peru, which is plagued by over $30 billion in foreign debt. The government itself will receive 36% of the profits from the sale of gas from Camisea. Promoters of Camisea say it will minimize energy costs, provide an alternative to dirtier fuels, open up the job market, and increase tax revenue.
