Can upcoming referendum in Ecuador stop oil drilling in Yasuní National Park?

QUITO, Ecuador — Ecuadorians have been given a chance to vote on whether or not they want oil drilling to continue in Yasuní National Park, deep in the northern Amazon Rainforest. The park has long been considered one of the most biodiverse on the planet, and is home to the country’s last two Indigenous communities in voluntary isolation, the Tagaeri and Taromenane.

But oil income has also been a major driver of economic growth for the country over the past decade, and Yasuní itself has some of the largest reserves in the country providing jobs and income to those living nearby — including to many Indigenous communities.

Despite Ecuador’s dependence on the commodity, environmentalists say the referendum is giving Ecuadorians the chance to question this relationship.

“What is going to happen now, hopefully, is to set a precedent where we have the possibility to question the dependence on oil, and we could also open the space to question other fields as well,” says Melissa Moreano Venegas, professor in the department of environment and sustainability at Simón Bolívar Andean University in Quito and co-editor of the book The Exploitation of Yasuní: In the Midst of the Global Oil Collapse.

Yasuní’s long history with oil

The referendum on Yasuní will take place Aug. 20, the same day as the next presidential elections, which were called after President Guillermo Lasso dissolved government earlier this year during his impeachment trial. So far, the elections have been fraught in the South American country facing a surge in gang violence and crime with presidential candidate Fernando Villavicencio assassinated Wednesday.

The Yasuní vote will apply specifically to the Ishpingo-Tambococha-Tiputini (ITT) oil project, located on the eastern edge of the park, where 12 oil platforms and 225 wells produce 54,800 barrels of oil per day.

The question citizens will face: Do you agree with the Ecuadorian government keeping the ITT, known as Block 43, crude oil indefinitely in the subsoil? In recent weeks, both “Yes” and “No” campaigns have exploded across the country.

The debate to keep oil in the ground in ITT has a long history. In 2007, the administration of President Rafael Correa proposed a plan to leave the ITT oil reserves in the ground if wealthy countries contributed $3.6 billion to offset part of the lost revenue. This plan was abandoned in 2013, however, when it did not receive enough international support.

Environmental groups immediately began collecting signatures to hold a referendum on Yasuní, but the list was denied by electoral authorities who claimed that many of the signatures were invalid. Drilling began in ITT in 2016.

Last year, after nearly a decade of pressure by environmentalists, officials agreed to accept the signatures and approved a referendum. The decision came after President Lasso announced plans to expand oil output in the country to more than double current levels of production to 1 million barrels a day.

The presidential office did not respond to Mongabay’s requests for comment by the time of publication.

Waorani leader Nemonte Nenquimo is one of several Indigenous leaders who have joined the “Yes” campaign, saying Yasuní is the ancestral home of the Waorani people, but she’s seen the oil industry change dynamics in the rainforest over the years.

“I see that if the oil company [remains], for me it is going to be a worse crisis economically in Ecuador because the politicians and people that work [in the oil company] are corrupt,” she says, adding that profits from oil extraction have not benefitted local people who still live in poverty, while continued extraction will destroy their livelihoods in the forest.

“They destroy for having power for having easy money. They are not worried about the Ecuadorian society,” adds Nenquimo.

Environmental Impacts

Yasuní park was created in 1979 and protects nearly 10,000 square kilometers (3,860 square miles) of rainforest. Its unique position along the equator also allows it an outstanding level of biodiversity, containing more than 120 reptile species, 596 species of birds, 200 mammal species and nearly 500 species of fish. One single hectare of Yasuní forest is said to contain at least 100,000 insect species.

The park also overlaps with the Intangible Zone (known by its Spanish acronym ZITT), a special area created to protect the Tagaeri and Taromenane.

Fernando Benalcázar, senior adviser with APD Proyectos, a consultancy firm for Ecuador’s extractive industries, says claims that oil drilling in ITT leaves permanent destruction are made by people who “don’t have any idea what an oil operation in Yasuní is like,” he tells Mongabay.

Benalcázar, who has more than 20 years of experience in the oil industry, says the only direct impact is the half-hectare area of forest that needs to be cleared in order to build an oil platform. The operators in ITT are using advanced technologies to reduce environmental casualties and have rapid response times in attending to oil spills and leaks. Of the only 23 documented oil spills in ITT since 2015, none has ever expanded past the secondary confinement area that lies within the production boundaries, he says.

However, Moreano Venegas contends it’s hard to assess the direct impacts from these operations in ITT, as outside biologists or investigators are not allowed into the highly guarded compounds.

The blasts from seismic testing and the constant noise of the oil operations are enough to have dire impacts on insects, birds and mammals in the park, she says, altering how they communicate with each other and orientate themselves. She also says the newest road and two oil platforms lie “dangerously close” to the ZITT buffer zone, less than 500 meters (1,640 feet) away, putting extra pressure on the Tagaeri and Taromenane people. Studies also show the creation of roads in the rainforest makes it easier for illegal loggers, miners and poachers to enter deeper into the Amazon.

What does oil revenue mean for the economy?

An immediate transition to a new economy won’t be easy for the small South American nation, which has been dependent on crude oil since the 1970s. Today, oil exports account for more than 10% of Ecuador’s GDP.

The ITT fields are the newest in the country, making them some of the more important as they still have ample reserves, says Benalcázar.

In a forum earlier this year, general manager of the state-run oil company Petroecuador, Ramón Correa, and Minister of Economy and Finance Pablo Arosemena, said they expect losses of up to $16.5 billion over the next 20 years if ITT operations are forced to close. This includes not only lost revenue but also the costs of abandoning the fields and blocking the wells, lost investments and lost employment. Many Indigenous communities who live in or near Yasuní have defended the oil industry and the “No” campaign, saying it provides them jobs and income they otherwise won’t have access to in the middle of the rainforest.

President Guillermo Lasso says the lost income will force the government to slash social spending and reduce subsidies that many families depend on, including the 27% of the country that lives under the poverty line.

But many economists say these losses have been exaggerated, sparking a debate about how to calculate expected future revenues, as the price of oil in recent years has been particularly volatile.

Economist Fandor Falconí former education minister and national planning secretary, says it’s true that oil income is important for the country that lacks economic resources. But the losses associated with closing Yasuní don’t take into account external costs like current and future environmental impacts, should ITT stay open, he tells Mongabay.

There are many other ways the next government can create jobs and make up for the lost income, says Falconí, who is also a signatory of a petition of economists rejecting oil extraction in Yasuní. This includes reforming subsidies to apply only to families in need rather than the whole population, cracking down on tax evasion and implementing a system of progressive taxes, he says. One analysis by former Economy Minister Wilma Salgado found that the state could earn an extra $598 million a year if it only eliminated the tax exemptions it currently allows to the richest 10% of the country, for example.

During this week’s Amazon Summit in Brazil, some 300 specialists from 100 South American organizations promoted the idea of a bioeconomy to provide economic alternatives to local peoples in the rainforest. This could include things like offering more sustainable loans, encouraging the production and sale of items from local biodiversity areas and developing regenerative agriculture and productive forests. In the Brazilian state of Pará, which has long been developing its own bioeconomy, officials estimate that earnings could reach $32.9 billion a year by 2040.

Referendums

When Ecuadorians go to the polls in August, they will also vote on a second referendum to decide the future of mining in the Andean Chocó forest. The area was declared a UNESCO Biosphere Reserve in 2018, while there are currently 12 copper, gold and silver mining concessions in the early stages of exploration in the region.

Past referendums have had the power to stop extraction projects, including the most recent in the city of Cuenca in 2021, where 81% of citizens voted against mining activity near water sources. The results effectively halted the operations of two large-scale Chinese and Canadian mining projects.

Benalcázar says environmentalists shouldn’t be allowed to pursue referendums on extraction projects, which have a major impact on the country and dissuade needed international investment.

But Moreano Venegas says voting on extractive projects is a healthy way to exercise democracy. Due to the country’s strong dependency on oil, whoever wins in the next presidential elections, whether from the right or the left, will continue with extraction policies, she says.

“We are going to have to make them comply with the results,” she says, confident that Ecuadorians will chose Yes in the ballots.

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Banner image: A channel-billed toucan in Yasuní National Park. Image by Albert Michaud via Flickr (CC BY-NC-SA 2.0).

Related listening from Mongabay’s podcast: We look at how the Shuar Indigenous community in Ecuador recently won a major victory to protect its ancestral territory of Tiwi Nunka Forest from cattle ranchers, loggers and miners. Listen here:

Oil highway bears down on uncontacted Indigenous groups in Ecuador’s Yasuní

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