World News‎ > ‎

Correa Says Ecuador Will Open Amazon's Yasuni Basin To Oil Drilling

posted 16 Aug 2013, 09:52 by Sam Mbale   [ updated 16 Aug 2013, 09:53 ]

Ecuador's President Rafael Correa announces that Ecuador will open up part of the Amazon rainforest to oil drilling after rich nations failed to back a conservation plan that would have paid the country not to explore in the area.

YASUNIECUADOR (REUTERS) -  Ecuador will open up part of the Amazon rainforest to oil drilling after rich nations failed to back a conservation plan that would have paid the country not to explore in the area, President Rafael Correa said on Thursday (August 15).

Correa launched the initiative in 2007 to protect the Yasuni area of the Amazon basin, which boasts some of the planet's most diverse wildlife, but said he had now scrapped it after it attracted only a small fraction of the sum it aimed to raise.

"We have to say that the world has failed us," Correa said in a televised address. "Let no one be fooled. The fundamental reason for the failure is that the world is a great hypocrisy and the logic that prevails is not of justice but a logic of power."

"I have signed the executive decree for the liquidation of the Yasuni-ITT trust fund and through it, end the initiative," he said. ITT refers to three untapped oil blocks known collectively as Ishpingo-Tambococha-Tiputini.

Ecuador, OPEC's smallest member, had planned to forgo opening the Yasunibasin, its more than 800 million barrels of crude and $7.2 billion in income from beneath the jungle floor as part of the conservation plan.

It was aimed at protecting wildlife - a single hectare (2.47 acres) of the Yasuninational park contains more tree species than in all of North America - and the livelihoods of indigenous peoples who fear oil drilling would damage their ancestral homeland.

In return, the government had hoped to receive some $3.6 billion from the international community over 12 years, or about half the value of the oil it would be leaving in the ground, through the fund administered by the United Nations.

In five years, however, only about $336 million had been pledged, mostly from European countries and various environmental groups, the campaign's manager,Ivonne Baki, said in April.

Correa said the plan had only actually received $13.3 million, less than half a percent of its goal.

Last month, Correa set up a commission to evaluate the plan's progress which concluded that "the economic results were not what the state had been hoping for," according to a statement published this week by the vice president's office.

Correa said he had now commissioned technical, economic and legal studies on the basis of which he would seek the backing of the national assembly for drilling in the region, a step required by the country's constitution.

Correa played down the potential impact of oil drilling in the area, saying it would affect only 0.01 percent of the Yasuni basin while his spokesman, Fernando Alvarado, said on Twitter that exploration could be carried out safely in the region.

Correa, a U.S.-trained economist, has won broad popular support amongEcuador's low-income majority with heavy spending on welfare, health, education and infrastructure projects.

He says it is essential for the country to expand its oil reserves in order to direct more state spending toward the poor.

Ecuador's oil output has stagnated at about 500,000 barrels per day (bpd) since 2010 when the government asked oil investors to sign less-profitable service contracts or leave the country.

Since then, oil companies have not invested in exploration.