Chevron in Ecuador

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Chevron Texaco Benefitted from Dumping Oil in Ecuador Beyond Saving Money

A study of the Chevron Texaco oil dumping case in Ecuador reveals that oil companies have an incentive to pollute that goes beyond saving money from oil dumping, explains Lindsay Ofrias, the study's author

By Gregory Wilpert, Real News Network
5 September 2017

GREGORY WILPERT: Welcome to the Real News Network. I'm Gregory Wilpert coming to you from Quito, Ecuador. Most people probably don't realize this, but Ecuador's home to the largest oil spill in history. Between 1964 and 1992 the oil company Texaco, now owned by Chevron, admitted to having dumped 16 billion gallons of oil in Ecuador's Amazon region of Lago Agrio. This is 80 times more of the oil than BP's Deepwater Horizon oil spill in the Gulf of Mexico in 2010. Following a favorable judgment for the affected communities in Ecuador, the case is still being litigated in courts in Canada, Argentina, and Brazil.

But how did it come to this enormous amount of oil dumping? The explanation is usually relatively simple. Oil companies and similar corporations save money by contaminating the environment. A recent study though, conducted in the context of the Texaco Chevron case, adds a new twist to this explanation. The argument is that oil companies have an incentive to contaminate the environment that goes beyond saving money. That is, it allows them to make even more money.

Joining me, here in person, is the author of this study, Lindsay Ofrias. Lindsay is a PHD candidate in anthropology at Princeton University, her research focuses on environmental justice, petropolitics, and social movements. Her article Invisible Harms, Invisible Profits, a Theory of the Incentive to Contaminate came out in the August issue of Culture, Theory, and Critique. Thanks for being here, Lindsay.

LINDSAY OFRIAS: Oh thank you, it's a pleasure.

GREGORY WILPERT: Let's take a look at the moment at the specific case that you examined, the Texaco Chevron oil dumping case in Lago Agrio. First of all, how has this oil dump affected the communities there?

LINDSAY OFRIAS: What's interesting about this case, what's different from most of their oil spills is that it wasn't a spill, it wasn't that technology failed. It was that the corporation decided that it could save money by not following the proper protocol on what to do with the wastes. So, instead of re-injecting the production waste back into the ground, which was standard, they left it in these big open pits. Not even lined. Because these contaminants are in these big pits, they leak into the water and into the soil and this affects everything that people are consuming. So you can imagine that if you're consuming petro chemicals and all kinds of heavy metals like lead and mercury, these are associated with cancer, Leukemia, skin disease, birth defects.

There's really no way to escape it. I've spoken with the doctor in the local area, he's seen everything, and he says that it's very disheartening for him as a doctor cause there's so little he can do. He says if somebody is sick from smoking cigarettes and has lung cancer you can at least say, "Well please, maybe you shouldn't smoke right now." But he can't really say anything to people who he works with because what is he going to say, "Don't eat your food, don't drink this water."

GREGORY WILPERT: What specifically did Texaco gain from dumping so much oil in Ecuador?

LINDSAY OFRIAS: Well, what's very interesting is that the judge in Ecuador that ruled against the corporations said that the company saved about three dollars per barrel of oil by not using the proper technologies of disposing of the oil waste. There was a lot of third party expert studies that made these calculations, and that's particularly what I find very fascinating though. The intention of the company was to save money, not to harm the local people. And that's where I find the gap to be very important to point out, is that the people who are actually experiencing the contamination, they experience it as a violence that has some intention behind it, to cause harm. Because when there is some foresight that this could potentially cause harm then how can it not be considered in some way intentional? At least that's what it feels like, subjectively, to be experiencing that.

The Ecuadorian lawyers asked the international criminal court to look at the CEO's and the executives behaviors of Chevron as committing a crime against humanity. And we often don't think in terms of criminality when we deal with toxic cases like this because the idea is to take the burden off of the affected people. And to say it doesn't matter if a corporation or state acted or intended to cause harm, what matters is that they've sickened these communities. But, while that does help take a burden of proof off of the affected communities, it also forecloses asking questions about criminality. And it forecloses questions such as, what makes this kind of petere violence different from chemical warfare?

GREGORY WILPERT: What was the advantage that Texaco had? Aside from the fact that they saved three dollars, was there any other advantage they had from dumping this oil?

LINDSAY OFRIAS: Well, what I'm looking at in my studies to do a longer term study. Because the way that toxicity develops over time, the harms of that toxicity as well as the profits that it procures for the oil industry as a whole, not necessarily one corporation, but the oil enterprise. That becomes very difficult to see because of the way it happens over time. So by there being contamination in this area, it creates a certain dependency on the local community on the oil enterprise. So I would meet so many people who had been living in the area, fishing, farming, basic subsistence based living. And they can no longer live off the land that way. And so what happens, they end up working for the very same industry that they believe destroyed their way of life. Not necessarily out of choice but because there's literally no other way to survive. So by there being so much contamination in this area, it makes it so much easier for the oil industry to expand its power.

And so what you'll see is people who were very against oil development, I mean fierce activists that say, "We do not want any oil development is this area." They're now conceding to expansion of the oil frontier because they can no longer live off the land like they did in the past.

GREGORY WILPERT: Let's start into the heart of your argument, like you mentioned, the oil company saves money by polluting basically. In economic jargon we usually refer to this as the externalization of costs because other peoples will take care of the cleanup or the damage, and they don't need to clean up themselves. How is your argument about the incentive to contaminate different from this usual explanation?

LINDSAY OFRIAS: There's a few different ways of explaining to pervasiveness of the problem. And you've mentioned most of them, and I'll just resummarize. Which is that it's cheaper to clean up a spill than prevent it, at least it looks that way on the surface. And that is shaped by us not having very good environmental regulations or great enforcement of the regulations that do exist. And also, that it's easier to get away with taking those kinds of risks among marginalized communities such as in the Ecuadorian Amazon, or in the Gulf of Mexico. And then the fourth explanation, these are all tied together, but a more radical Marxist critique would say that even if you as a corporation or a corporate actor, or even a state actor, wanted to be ethical and wanted to treat the community in which you worked with respect, you actually have very little opportunity because profit really depends on destroying the environmental conditions.

So most political economists, including Marxist political economists, treat contamination like collateral damage. None of us really intend to create damage, it just kind of happens when we're trying to pursue profit. This creates a really big problem or challenge, I would say, for dealing with environmental crimes on the international scale. Because the only international body to deal with environmental crimes or any kind of international crime is the international criminal court, and they only have historically dealt with environmental crimes in the war time context. And so to think of something as a war, there needs to be an intention to cause harm. And since we're seeing contamination as collateral damage and not as an intention to cause harm, there's actually no international legal framework in which to deal with a case like the Chevron case.

So what I'm proposing from my work, I'm not necessarily, while there might be enough evidence to say that there is intention behind these kinds of contamination disasters. I want to put more attention to the productive work that contamination does for consolidating oil industry power. So one of the arguments that the Ecuadorian lawyers have been making to the international criminal court is saying that Chevron's refusal to clean this up represents a crime against humanity, almost like an indirect attack on a population like apartheid in South Africa. But they haven't been successful in making this case. So now there's a move to create a new legal framework under the category of ecocide. Where you don't necessarily have to prove intention, but to prove just that the effects are almost like chemical warfare.

GREGORY WILPERT: But how does that then relate to this incentive to contaminate? What is the incentive there? Like I said before, about the saving money.

LINDSAY OFRIAS: Whether or not people are consciously acting on this incentive, there is an incentive scheme in place. Which is that when there is contamination you have more control over a population that is already resistant to your activity. So most of these corporations and state actors look at people in these areas as being in the way of extractive activity. So in the northern Ecuadorian Amazon and also in the southern Ecuadorian Amazon there's a very, very strong political movement that's against oil development, almost whole-heartedly. Once there is this contamination it demobilizes that resistance, because now people depend on the petrodollar to survive. And it also can concentrate people, make them leave particular areas in order to look for cleaner water, cleaner air, and cleaner land.

GREGORY WILPERT: In your article you also mentioned, related to fracking and you've done a little bit of work in that area as well. How does this apply to the situation of fracking?

LINDSAY OFRIAS: Yeah, great question because I also wanted to bring up that it's not just about controlling populations but also opening new opportunities for investment, and some people have already written about that, like Naomi Klein has talked a bit about that in terms of the money that can be made through cleanup as its own industry. So the fracking case is fascinating and particularly disturbing because the very same companies that are polluting our water through fracking, they're also buying up the water rights. Because they need a lot of water to be able to frack. It's just part of the production process. But then they're saying, "Don't worry, whatever we do to your water we will remediate it for you." But it costs so much money to remediate it and we are the sole people who have the technology in which to do that. So what used to be a commence and used to not pay that much at all for your water, it was free, almost given to you by your local municipality. Now, you're going to have to be paying 100, 1,000 times more than what you're used to paying for oil because of the high costs of remediating it.

So they're pretending like they are creating some kind of solution but in fact they're enclosing out water and then selling it back to us at a higher price than what we used to pay for it. And that's something that food and water watch has been monitoring very closely.

GREGORY WILPERT: Finally, another case which is perhaps the biggest one that's on a lot of peoples minds obviously, is the situation of climate change. Do you see an incentive to contaminate, or to warm the globe, in this context?

LINDSAY OFRIAS: I absolutely do. And there's been a lot of research showing how the melting of the polar ice caps is opening up new oil fields that companies couldn't have access to in the past. And now there's almost this great excitement of, "Oh finally, we can get this oil." But not just that, also the technological lust to put mirrors in space. There's so much money in that. I remember being very moved, I saw Mod Barlow speak, she was working for the UN on water issues and she had made this point that the technologies that we could use to clean up spills or to prevent them are actually incredibly cheap. And that's partially the problem of why we don't have them right now, is because they're so cheap. And there's just so much desire to make money to use equipment that would be very expensive cause there's so much money to make off of that.

GREGORY WILPERT: Meaning there's so much more money to make off of cleaning up after the fact, after the damage is caused, is that it?

LINDSAY OFRIAS: Yeah and also the kinds of technologies and equipments that we use, so using disbursement which actually costs a lot of money versus maybe using mushrooms for instance, to clean things up.

GREGORY WILPERT: So is there a policy conclusion that you would draw from this idea or this notion that there is an incentive to contaminate? What is there that policy makers or the government could in theory, or social movements, could push for in order to avoid this kind of incentive to contaminate?

LINDSAY OFRIAS: Definitely we don't have any kind of international structure for dealing with environmental violence, the kind that we're seeing in places like Ecuador. Because of the fact that it's not treated as a war crime, even though most of us understand that there are wars over resources and what happened in Ecuador was exactly that. It was the fight over resources. And there's a link between that kind of capital accumulation and conquest of the region and petroviolence. So either we need to change our idea of what constitutes war, or have some kind of international legal framework for almost a strict liability like we have sometimes in the national contexts.

But beyond the legal realm, I also believe that we need to change our ideas about what we can even remediate. Because there's this idea that we can create all this destruction and have a Chernobyl in the Amazon and clean it up after the fact. Same with fracking, that we can pollute the water and then get this beautiful technology that will help clean water. So that also shapes how we build our policies around contamination.

GREGORY WILPERT: Well, I was speaking with Lindsay Ofrias, the PHD candidate in Anthropology at Princeton University and the author of the article Invisible Harms, Invisible Profits, a Theory of the Incentive to Contaminate, published in the August issue of Culture, Theory, and Critique. Thanks, Lindsay, for having joined me.


GREGORY WILPERT: And thank you for watching the Real News Network.