In Ecuador, striking it rich by keeping oil in the ground

Biologist Kelly Swing strides down a windy path in the daytime twilight of Ecuador’s Yasuni National Park. Only a few thin shafts of sunlight make it through the multiple layers of vegetation in this rain forest reserve the size of Puerto Rico in the eastern foothills of the Andes Mountains.

Swing directs the Tiputini Biodiversity Station, run by Ecuador’s Universidad San Francisco. He heads up the steel stairway of an observation tower, climbs more than 130 feet through the trees, and finally steps through the canopy’s leafy cap to behold a breath-taking sight.

“You can look out across the forest in every direction,” Swing says. “All intact forest. There is no gap anywhere around.”

The forest here in the Yasuni Park is among the most biologically rich places on Earth. More than 650 tree species and 100,000 insect species live in an average hectare, the size of two football fields. The park is also home to 130 species of frogs and 600 species of birds.

But recently Yasuni has been getting attention as much for what is below ground as above. Eighty kilometers to the east of here, beneath a patch of forest known as the ITT block, are three oil fields—Ishpingo, Tiputini, and Tambococha—that contain about a billion barrels of oil.

All told, 20% of Ecuador’s crude is located mostly inside the park. Visitors, roads and logging are strictly controlled here, but Ecuadoran law permits oil drilling, and if history is any guide, extracting the oil could seriously damage the forest.

But Swing hopes that a proposal to forego drilling here will keep the park and its wildlife safe.

It would be a radical departure. Ecuador is South America’s second biggest petroleum producer, and its economy has virtually run on petroleum for 40 years.

Economist and former energy minister Alberto Acosta says Ecuadorans were hopeful when the wells first started pumping. Leaders of this poor, small country promised that oil would usher in an era of prosperity, but Acosta says the pronouncements were overly optimistic.

The poor stayed poor and the rich got richer, Acosta says, and the environment and human health suffered.

Oil drilling led to deforestation and erosion, and pollution of the air, water and soil, as oil companies dumped billions of gallons of toxic waste in unlined pits at hundreds of sites. Who will pay to clean up the polluted land and water, and compensate people harmed by the chemicals, is the subject of a 17-year-long lawsuit against the oil giant Chevron, which took over the operations here of the company that did most of the drilling, Texaco.

It was against that backdrop in 2007, during his stint at the energy ministry, that Acosta made a radical proposal. Have the world pay Ecuador not to develop the ITT bloc’s oil—keep the oil underground and keep the Yasuni forest untouched.

Former Quito Mayor Roque Sevilla was appointed to sign up donors.

“Receive the compensation by the developed world,” Sevilla says. “Put all that money back in a trust fund. Invest the totality of that fund in environmental friendly energy systems, hydro, solar, wind.”

The cost to donor countries would be about $3.5 billion, roughly half of what Ecuador would otherwise earn from the oil. The plan would not only protect the forest but also reduce carbon dioxide emissions by nearly a billion tons, something that the rest of the world is very keen to do in the fight against global warming.

Sevilla says that’s why other countries will want to get involved.

“It’s an example that everybody must follow and we can use that example to polish it, do it better. And everybody follow the leader,” Sevilla says.

Of course some Ecuadorans think it’s foolish to leave valuable resources out of bounds. They say if developed countries want to cut greenhouse emissions and slow global warming, they should just burn less fuel. Opponents of the plan also say modern drilling techniques similar to those used on ocean drilling rigs can keep the forest safe.

But the plan is moving forward.  Ecuador just completed an agreement for a U.N. agency to hold donations to the Yasuni project in trust, and the country’s president is scheduled to sign the document later this summer. That leaves only the question of whether other countries will step up to support the plan.

Biologist Kelly Swing says it should be a simple call.

“If we can’t justify saving a place that has more species per square kilometer than any other place on the planet,” Swing asks, “what are we going to decide to keep?”

Germany has pledged $750 million to the fund. Backers say France, Belgium, Spain and Italy have also offered unspecified amounts. Supporters expect some private companies, perhaps even oil companies, to pitch in as well.

This report was supported by the Pulitzer Center on Crisis Reporting and the Whole Systems Foundation.