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FOREST CONSERVATION NEWS TODAY

Ecuador Gives Green Light to Oil Pipeline at Expense of Rainforests

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Forest Networking a Project of Forests.org, Inc.

http://forests.org/ -- Forest Conservation Portal

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06/08/01

OVERVIEW & COMMENTARY by Forests.org

Chock up another win for big oil, as Ecuador has approved the

environmental license for the controversial oil pipeline that will

devastate many of its rainforests. Together we generated tens of

thousands of protest emails, and our opposition did not go unnoticed

- slowing down and nearly scuttling the project licensing. Thank you

to all that participated in efforts to have this atrocious project

terminated. This is not the end of the matter.

g.b.

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RELAYED TEXT STARTS HERE:

Title: Ecuador gives pipeline green light with permit

Source: Copyright 2001 Reuters

Date: June 7, 2001

Byline: Isabel Proano

QUITO, Ecuador, June 7 (Reuters) - Ecuador approved an environmental

license on Thursday for a $1.1 billion crude oil pipeline, the last

major step before construction can start on a project slated to buoy

the national economy.

``This is irrefutable proof of Ecuador's will to attract, bring and

accept foreign investments, when they comply with sustainable

development for our country and all environmental norms,'' Ecuador's

President Gustavo Noboa told reporters.

International consortium OCP Ecuador SA has 25 months to build the

pipeline, which will have a maximum capacity of 450,000 barrels per

day.

Environmental groups' opposition to the pipeline's route through a

protected forest near Quito had put the license at risk. The pipeline

project has been postponed for about a decade, mostly due to

political conflicts.

Environment Minister Lourdes Luque said this route has the least

environmental impact as she signed off on the study.

The approval paves the way for OCP to start construction and get the

additional permits needed from municipalities in the path of the

pipeline and from state oil company Petroecuador.

``Once these steps have been taken, which we hope will be in a few

days, we will sign the final contract with (construction firm)

Techint and proceed to start the construction phase of the project,''

Hernan Lara, OCP's president, told reporters. He said building could

begin in August.

OCP is comprised of Alberta Energy Co. Ltd., Agip Petroleum, Kerr-

McGee Corp., Occidental Petroleum Corp., Spain's Repsol-YPF and

Argentina's Perez Companc and construction firm Techint.

The contract, signed in February, provides a $50 million guarantee to

cover any environmental damage incurred during construction or

operation of the pipeline.

A coalition of environmental groups said on Thursday they were

surprised by the ``sped up'' approval and would prepare new actions

against the project.

Ecuador currently has only one crude oil pipeline which transports

both state-owned and private crude production. Oil, this South

American country's biggest export, accounts for 40 percent of state

income.

Ecuadorean authorities consider the pipeline as key to reactivating

the local economy, still struggling to recover from a crisis that saw

gross domestic product shrink 7.3 percent in 1999.

Energy Minister Pablo Teran said the pipeline will bring about $2.6

billion in oil sector investments during the next three to five

years.

He said Occidental had approved $1 billion in spending on its blocks

while Repsol-YPF committed $711 million and Perez Companc $900

million in investments in Ecuador.

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