Bolivia’s oil, gas and mining under the spotlight in Thomson Reuters Foundation programme

Bolivia’s oil, gas and mining under the spotlight in Thomson Reuters Foundation programme

by Derek Thorne

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Four investigations by Bolivian journalists have shed new light on the country’s extractives sector – looking at issues including unregulated gold mining and the environmental impact of oil wells in the rainforest.

The stories were produced as part of a Thomson Reuters Foundation programme, run in collaboration with the Bolivian organisation Fundación para el Periodismo.

Natalia Seas Yelma, reporting for El Pais, reported on oil and gas exploration in the Aguaragüe nature reserve, which has been exploited since the 1920s. She found that, according to local indigenous communities, there were around 200 “environmental liabilities” in the region. She also heard concerns that the situation could get worse.

She writes: “The indigenous tribes have grown more suspicious since the Bolivian government passed Supreme Decree 2366 in May 2015. This opens up Natural Parks, protected areas like Aguaragüe, to oil and gas exploration. Previously these had been protected under the Constitution, although 11 of Bolivia’s 22 national park reserves are overlapped by existing gas and oil concessions.”

You can read Natalia’s full story here (Spanish).

Melissa Revollo Pastor reported on one of Bolivia’s biggest ever investments – a giant chemical processing plant that will produce urea and ammonia for eventual use in fertilisers. The plant, which will cost an estimated $876 million, is being built in the oil district of Tropico, Cochabamba. Melissa found that, while local people have seen few benefits from oil production to date, they are optimistic about the new development.

Her piece on begins: “For the population of the oil district of Tropico, Cochabamba, in central Bolivia, being the country’s top oil producing area has had few benefits. Construction is under way on one of the country’s biggest ever investments — a giant petrochemicals complex. The inhabitants are pinning their faith on better times ahead with the urea and ammonia plant in Bulo Bulo.”

Read Melissa’s piece here (Spanish).

Ernesto Estremadoiro, writing in Energy Press, visited Santa Cruz, in the east of Bolivia, where the majority of the population live off mining – primarily for gold. Despite a significant increase in the amount of gold exported from Bolivia in the last decade, he could find few benefits from this booming industry.

He writes: “According to the National Statistics Institute, in the last nine years exports of gold from Bolivia grew 11 times in value and 4 times in volume, from $127 million in 2006 to around $1,400 million in 2014. Although it is a multimillion dollar business, neither the producing areas nor the Bolivian tax office has seen much of this wealth.”

His piece also looked at small-scale illicit miners who were, in the words of a former mining minister, “out of control”. Read his story here (Spanish).

A piece by Luis Fernando Cantoral, writing in Agencia de Noticias Fides, looked at where Bolivia’s gas revenues go. He writes that Bolivia “sells 75% of the gas it produces to Brazil and Argentina, but little is known about how efficiently its assets are managed, and if they are not monitored, this could drastically affect social assistance projects for those who need it most, analysts say.”

He found one area of uncertainty to be how much foreign oil companies receive from the government. He writes: “The lack of transparency highlights the uncertainty over whether the government prioritizes covering the expenses incurred by foreign energy firms to the detriment of its own revenues. Ultimately, this uncertainty is putting pressure on social projects.”

This story can be found here (Spanish).

These news only reinforces the inability, the incapacity of current Bolivian government to implement sustainable development projects.

The mind of the coca grower who functions as head of state, remains in the early years of last century were state-owned projects were the thing to do by the populist of that time.

Environmental Economics discipline tells us that the world must enforce this principle: “to internalize the externalities,” meaning simply to incorporate all the costs of extracting something from our territory. However, that proved to be more difficult, if not impossible, for demagogues as this one!

Published by Bolivian Thoughts

Senior managerial experience on sustainable development projects.

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