- Costa Rica's Chinchilla Says No to Oil Drilling; Maybe to Natural Gas
Friday, June 17, 2011
Knight Ridder/Tribune Business News
by Adam Williams, The Tico Times, San Jose, Costa Ric
Costa Ricans don't want oil drilling in their country. But extraction of natural gas is on the table, said President Laura Chinchilla.
One month after Chinchilla said "the unstoppable rise of fuel prices could result in the worst energy crisis in human history," talk of oil drilling in Costa Rica made headlines last week when U.S.-based Mallon Oil, a subsidiary of South Dakota-based Black Hills Corporation, announced it plans to pursue through international trade agreements the rights to explore and drill for oil and natural gas in the Central American country (TT, June 10).
While Chinchilla responded by saying that oil drilling is off the table, she said her administration would consider granting the company a contract to explore and drill for natural gas in the Northern Zone's Alajuela province, where the company owns a concession to a large oil and gas block. That decision is expected in two or three months, she said.
"Natural gas is less of a pollutant [than oil] and could prove to be an important alternative fuel," Chinchilla said, while noting that Costa Rica has relied in the past on industries that produce pollution, including mining, to bring economic growth. "We are evaluating the criteria of timeliness and convenience, and the review is being directed toward satisfying public interest and to respecting the principles of environmental protection," she said.
In 2000, Mallon Oil won a 20-year concession for exploration and production of oil and natural gas in northern Costa Rica, but some 200 court appeals filed mostly by environmental groups have until now blocked the project from advancing. Last April, the Constitutional Chamber of the Supreme Court rejected the last of those appeals.
The company has invoked the Central America Free Trade Agreement (CAFTA) to pressure Costa Rica's government into signing a drilling and exploration contract. In the past seven months, company representatives sent letters to Costa Rican officials warning that the country could face "legal, economic and international consequences" if the 11-year-old exploration contract is not honored. The first letter was sent November 2010 to Foreign Trade Minister Anabel Gonzalez, and a second one was sent March 31 to Costa Rica's ambassador in Washington, D.C., Muni Figueres.
Despite Chinchilla's toe-the-line response, when news spread that Costa Rica would consider natural gas or oil exploration, environmental groups quickly organized an anti-oil rally that lasted several hours Saturday at San Jose's Plaza de la Cultura outside the historic National Theater.
Protesters carried signs that said "No to oil exploration" and "Don't destroy our beautiful Costa Rica." Demonstrators dressed in black and covered their faces in funeral veils. Others blocked a major downtown thoroughfare while covering themselves in black paint.
"We can't allow our government to continue to sell our country to [satisfy] the greed of multinational companies," Fabian Pacheco, of the group Oil Watch International, shouted through a megaphone. "We are selling off our most precious resources for the sake of profit. It is our responsibility to stop this corruption and block the government from selling Costa Rica."
A spokesman for Black Hills Corporation did not respond by press time to questions sent by email by The Tico Times.
"[Mallon Oil] has made several requests to government officials and the Environment Ministry [MINAET] to discuss different options in the process," Environment Minister Teofilo de la Torre told The Tico Times this week. "The company has also sent several requests to Costa Rica's ambassador in the U.S. to encourage the Executive Branch to make a decision about the contract."
Mallon Oil spent the last decade trying to obtain the required permits to start oil and gas exploration here. In public bidding in 2000, the company won rights to the northern oil and gas block under then-President Miguel angel Rodriguez (1998-2002).
In 2002, President Abel Pacheco imposed a moratorium on oil exploration, citing the potential environmental consequences it could have on a country that depends on tourism to generate jobs and revenue (TT, June 7, 2002). Three years later, the government revoked a concession it had granted in 1998 to U.S.-based Harken Holdings to exploit oil blocks on the Caribbean coast in Limon province. The company sued the Costa Rican government in Costa Rican courts.
History Repeating Itself?
At last Saturday's rally, Costa Rican lawmakers Jose Maria Villalta, of the Broad Front Party, and Juan Carlos Mendoza, of the Citizen Action Party (PAC), stood alongside Luis Diego Marin, regional coordinator of the environmental group Preserve Planet, and echoed a decade-old mantra: studies on the environmental impact of oil and gas drilling are lacking.
"If you were to go to the Environment Ministry's National Technical Secretariat [SETENA] and request a copy of the environmental impact study for this proposed project, you'd find that there isn't one," Marin said. "It's just another example of our government's hypocrisy. They claim to support the development of renewable energy and then they announce weeks later that they'd support oil and gas exploration."
De la Torre, Chinchilla's environment minister, said that "no environmental impact study has yet been approved" by MINAET or SETENA, and that an "ample study" must be conducted and approved before any exploration process can begin. The study would be used to assure that no wildlife, forests, wetlands, local communities or indigenous groups would be impacted by the project in the San Carlos region.
"I have been hearing for years that the development of projects won't damage anyone's land and will bring prosperity. But as a Maleku, every time there is development in our region, we lose more of our forest and homeland," said Phil alvarez, a member of the northwestern Maleku indigenous tribe that took part in the protest. "The government has already taken over 90 percent of my tribe's land. Let's stop them from taking anymore," he said.
After a series of speeches, protesters marched down Avenida Segunda, a main transit route through the city, blocked traffic and scattered coal across the pavement. Chants of "No to oil" echoed off nearby buildings.
"People always claim oil and natural gas will result in development or progress, but development always comes with destruction of something else," said Inge Kitzing, a rally attendee. "Protests have been used to stop several projects in the past, including the Crucitas gold mine [in the Northern Zone], and we are not going to allow this project to destroy our environment either."
But while the demonstrations unfolded in downtown, some onlookers shook their heads.
"Wasn't it announced that the concession was to explore for natural gas, not oil," asked Paola Villalobos, a middle-aged woman watching as she waited to cross the street. "Why is everyone dressed in black? Those are completely different resources."
Others said they disagreed with the Costa Rican blockade on oil exploration.
"We are such a country of contradictions," said Flora Campos, who stopped at the intersection to watch the protest. "We always say that we want to develop and prosper, but when an opportunity comes along to do so, there are always groups that block you from doing so. One way to become a much wealthier country is to allow for oil."
While Chinchilla ruled out oil exploration, a study to influence the decision whether or not to grant Mallon Oil a gas-drilling contract is expected by the end of the year.
"The Executive Branch has decided that exploration would be used for natural gas, and not for oil," De la Torre said. "Natural gas is more in line with the intentions of the country to develop energies in a more 'green' way."
Copyright (c) 2011, The Tico Times, San Jose, Costa Rica
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