palacio's plan

LatinNews Daily reports:

A populist bankrolled by petroleum.

In his television broadcast Palacio congratulated the Ecuadorean people for having finished with the dictatorship, immorality and repression of the past, and said that his first priority was political reform. The government is holding round-table discussions across the country for the next month with swathes of civil society to define the questions that will be put to a referendum on political reform on 11 December. Palacio described his vision as the refounding of the Ecuadorean nation.
...
It appears Palacio intends to realise his plans principally through oil revenues. On 15 June congress amended slightly, and then approved, a government-sponsored bill which cuts the percentage of money spent on debt servicing from the oil stabilisation fund, the Feirep, from 70% to 35%. As for the rest, 30% will be spent on education and health; 20% on stabilisation of oil income; 5% on scientific and technological investment; 5% on the improvement of the country's transport infrastructure and 5% on environmental regeneration.

interesting

Peroleum Economist overview of Ecuador-

Interesting perspective - history, politics, and a brutally economic optic...

the transition towards nationalized petroleum industry. the return of profits to ecuador. and the cost investors will feel.

addendum: national social spending = international bad credit rating

Bloomberg and Forbes report:

Two days after Ecuador adjusted the distribution of the profits from its oil surplus, Standard and Poor has lowered its credit rating from B- to CCC+, the lowest credit rating of any Latin American country.

Adjusting the distribution seems to be a necessity of state politics but a detriment to international economics. Palacio can't legitimate (and perpetuate) his authority without the popular support such a reform gives him. Yet at the same time, such a reform compels international credit agencies to chastise his policies and declare Ecuador a dangerous place for investment.

And where is sovereignty?

ecuador's new president changes energy laws

Much to the chagrin of the IMF and World Bank, new Ecuadorean President Alfredo Palacio revised the legislation that designated capital from surplus oil be used to pay off the nations debt. Previously 70% of funds generated from the surplus oil reserves was earmarked for the national debt. Now only 35% will go towards repayment of the national debt, the remaining funds will be split bewteen social and economic programs.

- President Alfredo Palacio

LA TIMES REPORTS:

Palacio's economy minister, Rafael Correa, expressed satisfaction with Wednesday's vote, saying the oil stabilization fund had long served to help foreign debt holders and investment banks make "obscene profits."

In the future, 35 percent of the money in the fund will be devoted to investment, including debt buybacks. Fifteen percent will be earmarked for education, 15 percent for health services, 20 percent will be kept for possible economic stabilization needs, and the rest will fund spending on roads, technology research and environment related expenses.

PRENSA LATINA REPORTS:

Seventy percent of the 2002 Stabilization Fund, which administers international market sales of surplus crude oil, has been previously used to pay the foreign debt.

The new proposal will mark 35 percent for repaying the debt or reactivating productivity, with 20 percent for the Petroleum Savings Fund and 30 percent to go to improving health, education and the environment.

Additional analysis a ZNet.

Not that President Palacio is some great progressive populist. In late May he declared a state of emergency in the Amazon region of Ecuador to quell indegenous protests over the usurping of their land by the state-run petroleum company, Petroecuador. Palacio suspended individual rights, including the right to assembly, and militarized the oil fields. More at LatinPetroleum.com

cars make us free and oil is in short supply...

..or so says the republican chairman of the senate energy and natural resources committee...

Senator Pete Domenici (R–NM)
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Energy Committee Chairman
(CSPAN – Washington Journal 6.15.05)

SEN DOMENICI (R-NM): "American policy has been pretty wrong-headed with reference to crude oil importation and the use of gasoline. And we have, as a people, been very happy with it. We love cheap gasoline and we like our cars and we like the freedom our cars bring to us. I’m not critical of any of that.

There’s two things that make us free here at home. Owning a house wherever we want. And have cars.

But we didn’t worry about the fact that we were growing more and more dependant. We thought we had more and more oil of our own – it was gushing out of Texas, they were found it in New Mexico, they found it offshore…

We did this to ourselves. Year after year people warned us about it. And we became more and more dependant. The world used more and more of it. We’re in a position today, I hate to say, there might not ultimately be enough supply of oil to meet the demand with China coming in with these great demands and India. Prices may continue up.

Maybe that will force us to come up with alternatives. Alternative engines, alternative ways. And we’re trying to push that wherever we can in that bill, with innovative technologies and alternative fuels that tell the world at least Americas coming to life. We going to have a rebirth of trying to do everything we can to produce alternative supplies in every area while we attempt to save as much as we can in terms of the importation of crude oil. And we’re doing that latter in that bill." (39:04 – 39:45)

bolivian protesters demand nationalized resources

Latin Petroleum Analytics reports:

Bolivia, an Andean nation of 9 million people, is South America's poorest country. Twenty-three years of democracy and free market economic policies have failed to benefit the poor and the majority Indian population, many of them subsistence farmers or coca leaf producers. The most radical protesters want the government to seize existing natural gas concessions held by 12 foreign companies such as Spain's Repsol-YPF and Brazil's Petrobras, with no compensation.



Bolivia's most radical protest leaders threatened the country's new president on Sunday with more massive marches like the ones that toppled his predecessor if he did not immediately pledge to nationalize the country's rich natural gas resources. President Eduardo Rodriguez, an interim president sworn in on Thursday night, met with neighborhood, union, mining and farm leaders in a church auditorium in El Alto, a sprawling poor city outside La Paz and focus of the country's most intense civil disturbances.

The leaders said they were demanding immediate action to nationalize the natural gas industry, and a national assembly to rework the constitution to guarantee more representation for Bolivia's Indian majority.

biggest oil find in Peru in 30 years

Petro-Tech, a Texas based "oil service company" (company website defines this as primarily concerned with inspections and consulting), announced the biggest crude oil discovery in Peru in 30 years last Tuesday. The field is located off the northern coast of Peru. Petro-Tech, after two nationalized oil companies (Argintine's Pluspetrol & Brazil's Petrobras), is Peru's third largest oil producer and currently the only offshore producer.

Latin Petroleum Analytics reports:

U.S. oil company Petro-Tech is weighing a $100 million investment after finding oil off the northern coast of Peru, in what the company said on Tuesday was the biggest crude oil discovery in Peru in the last 30 years."This is a well that has quality light crude and we estimate the area could have between 10 and 50 million barrels of oil," Pedro Alarcon, Petro-Tech Peruana's exploration manager, told Reuters.

oil, taxation, and the american dream

(not the amazon, but i can't help it...)

"Our dependence on foreign oil is like a foreign tax on the American Dream."

GeorgeW pushes for new energy legislation...

HIGHLIGHTS INCLUDE:

• "Here in America, we have become too dependent -- too dependent -- on the increasingly limited supply of foreign oil for our own energy needs."
• "The primary cause of rising gasoline prices is that the global demand for oil is growing faster than global supply." (NOTE: not the reverse nor even the possibility of the reverse... it's not that there is a finite amount of oil only this earth, but merely a matter of those pesky chinese. TANGENT: china in the discourse on the global oil system; what things does it render visible and what things does it render invisible?)
• "...to keep this economy growing, we need an affordable, reliable supply of energy -- and that starts with pursuing policies to make prices reasonable at the pump." (policies like releasing the reserves? or policies that encourage rampant speculation on wall street?)
• "The American people know that an energy bill will not change the price of gas immediately." (No, they didn't know that. But thanks for telling us. Oh how I love the classic beltway spin in the form of a self-fulfilling prophesy...)
• "For the past four years, Americans have been paying the price for delaying a national energy policy. They've been watching their power bills go up. They've seen blackouts. And they're watching the price of gasoline rise at the pump. The energy bill will help us make better use of the energy supplies we now have and will make our supply of energy more affordable and more secure for the future." (notice the placid ways in which the ambitions of iraq are implicitly transitioned into mere domestic policy... bush went beyond the democratic mandate and got what he wanted abroad, now he's just placing the mantle of responsibility on the american people. put another way, he's taking the Klare's logic and constricting its influence to domestic issues. i guess i'm trying to point out the interesting absence of his middle eastern escapades in his present energy agenda - as if iraq had nothing to do with energy.)

not amazon, but...

...interesting nonetheless.

philip a. cooney, straight from the white house's "edited" climate report to a position at exxon-mobil. no science in his resume, but plenty of collusion...

nytimes reports:

Some climate scientists and environmental campaigners said Mr. Cooney's quick shift from the White House to Exxon was evidence of a near-seamless relationship between the Bush administration and the oil industry.

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Chinese Capital on its way to the Amazon Oil Fields

Forbes and ChinaDaily report that that China's emerging oil conglomerate, PetroChina, has aquired a 50% stake in its parent company, the nationalized China National Petroleum Corp. This stake gives control of CNPC's stake in foriegn oil fields to PetroChina. All foriegn assests have of the nationalized CNPC have been bought by the publically traded PetroChina.

Countries affected include Ecuador and Peru.

Drugs & Oil: "White Powder & Black Gold"

Drugs and oil. Two topics that dominate US policy towards Latin America. In this PBS transcript from July 2001 the intersecting and often conflicting US policies towards drugs and oil in Columbia and Ecuador are explored.

Statements from goverments, multinationals, and others.

Pablo Teran (Ecuador's Minister of Energy and Mining): "I think Ecuador's stability depends on oil." Followed by the fact that half of Ecuador's state budget comes from oil revenues.

[Click Here for Article]

history of ATPA & ATPDEA

In 1991, Andean Trade Preference Act (ATPA) created a free-trade zone between the United States, and the andean community of Bolivia, Colombia, Ecuador, and Peru. Certain products, like petroleum and tuna, were exempted and retained nationally specified tariffs. The Act specified 12 factors that each nation had to abide by in order to remain a participant in the pact. These ranged from no communists to respecting US copyright laws to taking an active stance against the cultivation of narcotics.

In 2001, the Andean Trade Preference Act expired. In it's place, the US Congress enacted the Andean Trade Promotion and Drug Eradication Act (ATPDEA). While different is official name, the ATPDEA is usually considered an update of ATPA and referenced as ATPA. However, there are significant distinctions. ATPDEA gave the US President the unregulated and exclusive power to designate certain products fit for tariff-free trade within the former ATPA designated free-trade zone. Certain products like petroleum. And petroleum. And petroleum. Congress also edited the factors that the andean nations had to abide by in order to remain a contestant. These factors were boiled down to taking a militant stance against narcotics and terrorism.

This is interesting because all the prominant discourse surrounding the passing of the bill (from the media, Senators, and the US President) focused on issues of preventing narcotics and terrorism. Nothing was said of petroleum. Yet petroleum consists of 73% of all US imports from Bolivia, Colombia, Ecuador and Bolivia.

The White House: The ATPA is a key component of our efforts to combat the scourge of narcotics in the Andean region and in the United States. There are clear links between drug trafficking and terrorism and it is in our national interest to combat the drug trade and to promote healthy, strong economies and democracies.

U.S. Trade Representative Robert B. Zoellick: ATPA is a vital program for the developing Andean democracies that are on the front line of combating narco-terrorism.

Senator Philip M. Crane: If we fail to renew ATPA, we not only turn our backs on the governments and citizens of Bolivia, Colombia, Ecuador, and Peru, but we turn our backs on our own sons and daughters struggling to stay away from drugs here on our streets and in our neighborhoods.

Senator Kay Bailey Hutchison: As I reviewed the list of criteria we have established, I noticed a glaring omission. We are in the middle of a war on terrorism, yet there is no requirement that a country support our efforts in this battle for freedom. ...We need cooperation like this to defeat this enemy. Therefore, I am offering an amendment to the trade package that establishes a requirement that a country support our efforts in the war on terrorism in order to receive beneficiary status under the Andean Trade Preference Agreement or Generalized System of Preferences.

Did I mention that petroleum consists of 73% of all US imports from Bolivia, Colombia, Ecuador, and Peru? Any yet it was not mentioned (nor debated) when the ATPA was renewed to include petroleum (at the Presidents discretion) as a duty-free product.

Odd, don't you think?