In a telephone press conference today, Kerry Kennedy accused the Chevron Corporation of causing an ecological disaster in Ecuador. According to Chevron, Kennedy is incorrectly blaming Chevron subsidiary Texaco for problems caused by PetroEcuador, the oil company owned and run by the Ecuadoran government.
Chevron Spokesman Kent Robertson told The Minority Report Blog that Chevron itself has never actually operated in Ecuador. From 1972 to 1992, Texaco held 37.5% equity in a joint venture with PetroEcuador, producing oil in the Oriente region of Ecuador. According to Robertson, “Texaco was a minority partner in the consortium. It was governed and regulated by the government of Ecuador.” Chevron acquired Texaco in 2001.
“During the time of production, there were 321 oil wells drilled in the region. Many of those remain in operation today, ” Robertson said. “PetroEcuador has been the exclusive operator of these oil fields since 1990. They have doubled the number of wells, drilling over 400 new wells. And they continue to expand their operation.”
Robertson explains the purpose of the “Olympic swimming pool-sized pits” [Kennedy found] next to the oil wells. When an oil well is first drilled, a “reserve pit” is dug next to it to hold the initial debris, mud, and any oil discovered at the well. During the life of the well, a period that can last decades, the pit is used to hold inferior oil pumped during maintenance periods.
Oil in the reserve pits is reclaimed, because retrieving the oil is the purpose of drilling for it. During the cleanup process in the 1990’s, Robertson says, Texaco reclaimed over 25,000 barrels of oil from the pits near its 321 wells in the region. At $40/bbl, that means over $1 million in recoverable oil. Texaco cleaned up all of the sites for which it was responsible, Robertson notes, with PetroEcuador agreeing to take responsiblity for any further cleanup and for wells that continue to operate.
[Note: oil was priced at about $20/bbl between 1995 and 1998.]
As part of the Texaco withdrawal from the consortium, Robertson says, “one of the things that was examined was environmental liability. This is consistent with how the oil industry operates anywhere on the planet. A remediation program to address the impacts of 20 years of oil operations was proposed and outlined. PetroEcuador chose not to participate in it at the time. That decision was understandable, in as much as they continued operate the oil fields, and they continue to do so to this day.”
“Texaco,” continues Robertson, “was unwilling to simply walk away.” Rather than waiting for oil operations to end, by agreement Texaco between 1995 and 1998 remediated 37.5% of the oil fields in question, ending Texaco’s portion of the cleanup.
“What has been notable about PetroEcuador’s time as in operator has been its environmental neglect.” Robertson cites press accounts finding that since 1990, when Texaco began drawing out of Ecuador, there have been approximately 3.4 million gallons of oil spilled. “Since 2000, they have had more than 1400 oil spills,” he says. Industry practice in the United States is to count any measurable amount of oil released into the environment as a spill. “When someone is going to Ecuador today and sees fresh crude, it is clearly the result of PetroEcuador’s sloppy practices.”
In a prepared statement, Kennedy recalled holding a dragonfly covered in oil, relaying stories of sick children and farm animals. Robertson agrees that conditions are poor, “as they are throughout Central and South America in the developing regions of the world.” In the region at issue, he says, there are no facilities to produce potable water.
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