September 9, 2018
by David Lincoln
It is practically impossible to discuss oil industry impacts in Ecuador without first dealing with the lawsuits by the native peoples against the oil companies.
As a result of exploration and production activities in Ecuador between 1972 and 1992, TEXACO/TEXPET [now CHEVRON] has faced several lawsuits stemming from alleged environmental damages. During that period, Texaco produced an average of more than 8 million gallons per day of oil from the Oriente region of the Amazon in Northeastern Ecuador.
Reportedly, the first lawsuit against Texaco was filed on behalf of a half-million Ecuadorians soon after Texaco disposed of its oil interests in Ecuador in 1992. The suit was apparently dismissed in January 1994. In November 1993, a $1-billion lawsuit was filed against Texaco for about 30,000 Quechua Indians, who claimed that the oil company had caused irreparable damage to the Oriente rain forest. This suit was reportedly dismissed in November 1996 by the New York federal court. In July 1994, the municipality of Lago Agrio, a small town in the Amazon oil-producing region of northeastern Ecuador filed a $2 billion lawsuit for alleged environmental damages. Texaco is said to have settled this suit in September 1996 for far less money -- about $1 million -- without any admission of liability.
There is also an Ecuador lawsuit, originally filed in 1993 in New York, which alleges that Chevron dumped 18 billion gallons of toxic waste in Ecuador's rainforest from 1964 to 1992. According to the suit, this threatened multiple indigenous groups with extinction and caused skyrocketing rates of cancer.
The EIA states that in May 1995, Texaco signed an agreement with Ecuador's government to undertake cleanup activities in northeastern Ecuador in return for releasing the company from future responsibility related to its former oil operations. Under the deal, Texaco was to treat polluted water, clean and reforest production sites, build schools and medical centers at three sites, and provide riverboats and an airplane to local communities. Texaco also agreed to negotiate with several regional municipalities, including Lago Agrio, which had raised its own claims against the company. In late 1996, Ecuador's Attorney General Leonidas Plaza reportedly attempted to annul this deal, but this attempt failed after President Buckram’s government was removed from power.
This lawsuit which was just dismissed on September 8, 2018, by the International Tribunal at the Hague in the Netherlands. According to the BBC, Chevron wins Ecuador rainforest 'oil dumping' case, “the oil giant now stands to be awarded hundreds of millions of dollars in costs by the Hague's Permanent Court of Arbitration.” (https://www.bbc.co.uk/news/world-latin-america-45455984)
It is possible that had the courts allowed testimony of oil field experts (not working with TEXACO/CHEVRON), the Native Tribes (who were the victims in this case) might have been more successful in their claim.
The ruling this month states that Texaco had hired a contractor to clean-up the contaminated area. In truth, the consulting companies sampled less than half of the pits. Many that were partially remediated were completed in only a few weeks.
The chart above shows the Produced Water (millions of bbls/month)
from the TexPet concession between 1972 and 1992.
This shows that TexPet alone discharged over 375 million bbls (more than 15 billion gallons) of Produced Water during the period they operated. Note the shutdown in 1987 was due to the major earthquake in 1987.
When I worked for Texaco in 1974, they paraded their successes in Ecuador for all the employees and stockholders and they were particularly pleased with the contracts they negotiated with the Corporacion Estatal Petrolera Ecuatoriana (CEPE), a predecessor of PetroEcuador. At the time, it was one of their most profitable ventures.
The full impacts on the Oriente people and the environment from oil and Produced Water discharged at these fields have never fully been revealed. This understanding is made even more difficult because of Chevron/Texaco defers to consultant reports rather than releasing its own original data. Simultaneously, they challenge the integrity of every lawyer who dares to attach his reputation to the case and they challenge every piece of evidence even it was produced by their own company.
Despite these obstacles, a few details have emerged which can shed some light on these controversies. Texaco certainly constructed more than 600 pits for the separation and disposal of oily Produced Water. The area receives between 2000 mm and 4000 mm (6.5 feet to 13 feet) of rainfall per year, so when these pits flood or overflow, the hydrocarbons are released directly into the river and streams. The geography and ecology of the Lago Agrio region also contribute primarily to the intensity of the environmental damage. The water table in the Amazonian basin is very high, this means that the average depth at which drinking water is found underground is significantly less than that of other nations and ecological regions. As a result, seepage of wastewaters and discharged oil results in the direct contamination of regional drinking water, rivers, and wells. Contaminated water and oil can permeate the aquifers through fractures or through the underground beds of sand, gravel, or porous rock that store water.
Court documents have claimed that the risk of excess cancers for people who chronically drank from and bathed in oil-contaminated waters ranged from 12-1000 cases per million persons.
A Texaco Audit of Practices between 1964-1990 produced by the consultant Fugro-McClelland in 1992 (which examined only half of the wells and about 30 miles of the pipeline) found that approximately half of the well pits contained crude oil in them. Various degrees of crude oil contamination existed on many of the sites audited. Hydrocarbon contamination was also observed at the production facilities of the two largest fields Sacha and Shushufindi.
Another Environmental Audit and Assessment produced by consultants HGT AGRA in 1993 found wellsite spills had occurred at more than 150 of the 163 assessed sites. Thirty-nine of produced fluid spills originated along a flowline. Thirteen of these spills had migrated off-site. In addition, more than 125 open or closed well site pits contained oily waste. The oily waste was apparently confined within about 50 of the pits, while evidence of seepage was noted at nearly 70 of the pits. Four facilities at Sacha Field (Sacha Central, Sacha Sur, Sacha Norte 1 and Sacha Norte 2) all but Sacha Norte 2 had large accumulations of crude oil (Greater than 95%) in their final stage pits [Pits that discharge directly to a surface water feature].
Gas is burned off at a separation station outside the town of Shushufindi.
Photo by Lou Dematteis, courtesy of Amazon Watch
At Shushufindi, the largest pit measured over 10,000 sq. ft and even after passing through two separation pits the final stage pit still had over half-covered with oil. Produced water flow diagrams show that of the 15 pits used at the four production facilities, 13 had 100% oil covering the surface when audited.
Undoubtedly, hydrocarbons in soils represent a potentially long-term exposure to hydrocarbons. During the original audits, contamination of soil and water was seen throughout the concession. It was observed at well sites, production stations, flowlines, and secondary pipelines and along roadways.
So, the evidence is clear that Chevron/Texaco polluted the Amazon rainforest with obsolete equipment and methods. It doesn’t matter if the government oil company continued to pollute using the poorly designed system that Chevron/Texaco left behind.
Their best defense then proved to be the Racketeer Influenced and Corrupt Organizations Act (RICO) designed to punish racketeering. This may be the first time that a multi-national corporation sued a country for racketeering and go away with it.
Full Disclosure: I was employed as a Geologist by Texaco in New Orleans from 1974 to 1976. I was also deposed as a witness for the plaintiffs by Chevron in 2007. My testimony related to this litigation, but it was determined that the statute of limitations had expired.