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THE WORLD | SUNDAY REPORT

The Hunt for Black Gold Leaves a Stain in Ecuador

As ChevronTexaco faces a major lawsuit, evidence portrays a company and a nation that for years showed little concern for the environment.

November 30, 2003|T. Christian Miller | Times Staff Writer

LAGO AGRIO, Ecuador — When Texaco contractors showed up at Monica Torres' wood shack in the jungle, they said they had come to clean up the mess the company had left behind.

A pool of black oil sludge sat like a tar pit in her backyard, dumped by the company years earlier while drilling nearby. Company contractors trundled in a bulldozer, covered the pit with dirt and told her that it was clean.

But today, nearly a decade later, black gunk still oozes from the weed-covered mound when it rains. Water from the family's main source, a nearby stream laced with paisley rainbows of petroleum residue, makes her children vomit. Torres suffers from severe headaches.

"The crude is still there, alive," said Torres, 40, as one of her sons pushed a stick a few inches into the pit to reveal black ooze beneath the dirt. "They just covered it up and left."

Torres is one of thousands of Ecuadoreans who stand to benefit from a multibillion-dollar lawsuit alleging that Texaco's operations between 1972 and 1992 destroyed land, sickened residents and contributed to the demise of indigenous tribes. Oil company officials deny the charges, saying the operations had minimal impact.

The trial, begun this year in Ecuador, has resulted in the release of thousands of pages of previously confidential memos, studies and internal documents that reveal the inner workings of Texaco and its majority partner, the Ecuadorean state oil company, Petroecuador.

With U.S. and international oil companies now pushing deeper into Ecuador's virgin rain forest, a review of the documents, new studies, and interviews with current and former Texaco executives and Ecuadorean officials provide a portrait of how the search for oil can wreak havoc on a remote place and its people.

According to the interviews and documents:

Texaco dumped waste water directly into streams and jungle instead of using disposal methods safer for the environment and public health that became common in the United States during the 1970s and 1980s. Oil company officials regarded those methods as too expensive to be cost-effective in Ecuador.

The Ecuadorean government showed little concern about the environmental impact of Texaco's drilling operations, regularly cutting the budget for environmental programs.

Texaco issued favorable loans and work contracts, and occasionally withheld oil payments during its volatile and often contentious relationship with the government that was supposed to regulate its operations.

During the 20-year period, Texaco pumped 1.5 billion barrels of oil from Ecuador -- most of it bound for California markets. By the time the company pulled out, environmentalists estimated that Texaco had dumped more than 19 billion gallons of waste and spilled 16.8 million gallons of crude oil, 1 1/2 times the amount spilled by the oil tanker Exxon Valdez.

"Texaco took out the best and left its trash behind," said Mario Melo, who tracks the oil industry for the Center for Economic and Social Rights, a left-leaning think tank with an office in Quito, Ecuador's capital.

Officials with San Ramon, Calif.-based ChevronTexaco Corp., the product of a merger between Chevron and Texaco in 2001, maintained that their waste disposal techniques at the time were consistent with oil industry practices in other tropical countries such as Colombia, Niger and Brazil.

Moreover, they said that because they were the minority partner, all their operations were controlled and approved by the Ecuadorean government. They dismissed the health claims as unsubstantiated. And they pointed to a $40-million cleanup effort, completed in 1998 and approved by the government.

"The bottom line is that when we ceased to be the operator, there was minimal impact," said Ricardo Veiga, ChevronTexaco's vice president for Latin American Products.

Current and former Ecuadorean government officials acknowledged that they exercised little control over Texaco or its operations.

Texaco "should have followed the same standards they were following in the United States, but the authorities here were not demanding it," said Pedro Espin, president of Petroecuador and a former Texaco worker. "Texaco did what the authorities asked, the minimum required. Back then, nobody talked about the environment."

The issues are taking on new importance because Ecuador, once again desperate for oil income, appears to be on the verge of a new boom. Companies such as Los Angeles-based Occidental Petroleum and Spanish energy giant Repsol YPF are taking advantage of a newly opened oil pipeline to drill in untouched sections of the Amazon.

The new ventures face greater scrutiny and tighter regulations than Texaco did. But even the most careful drilling will affect the environment. Roads and pipelines must be built. Oil spills are inevitable. "You can minimize the effect. But there's no human activity that can be done without impacting the environment," said Carlos D'Arlach, Oxy's regional vice president of community relations. "None."

Striking It Rich

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