"Not for Sale": S. America Natural Resources Going National

Kelly Hearn
for National Geographic News
October 31, 2006
Foreign energy companies in Bolivia this Saturday bowed to demands that
they give more control and profits to the national government.

It's the latest wrinkle in a rising trend of "resource nationalism" in South America. Governments from Argentina to Venezuela are squeezing out businesses and even environmentalists to exert greater control over Mother Nature's bounty.

Occupying Forces

On May 1 Bolivian President Evo Morales sent troops to occupy privately owned oil and gas facilities.

Since then the Brazilian state oil firm, Petrobras, and Spanish-based oil and gas company Repsol YPF have been in talks with the Bolivian government.

The firms signed deals late on October 28 to avoid a threatened expulsion from the natural gas-rich country (Bolivia map, facts, and photos).

"With these new contracts we want to generate more economic resources to solve the economic and social problems of our country," Morales said at the signing ceremony. "That's our great wish."

That wish is becoming a common sentiment among other Latin American administrations.

Recently Argentina's top army officials announced a plan to move soldiers away from urban areas and closer to natural resources, including oil fields and freshwater aquifers.

"Argentina is a nation with great resources, and it is the army's job to provide security for that," said Col. Gustavo Tamaño, an Argentine Army spokesperson.

The plan would reconfigure the army into divisions covering natural resources hot spots, including water-rich zones in the northeast, oil-flush plateaus in Patagonia, and mining regions in the west (Argentina map).

(Related: "Conspiracists Allege U.S. Seizing Vast South American Reservoir" [August 28, 2006].)

Likewise, in May the Ecuadorian government annulled agreements with Los Angeles, California-based Occidental Petroleum Corporation. And this month Ecuador's leading left-wing presidential candidate, Rafael Correa, pledged to renegotiate contracts and audit oil companies working in the country.

Venezuela—home of the Western Hemisphere's largest oil reserves—has forced foreign companies to pay higher royalties and taxes. At the same time, President Hugo Chavez has given the country's state oil firm, PDVSA, a majority ownership in all petroleum projects.

Emboldened by High Prices

"The resource-nationalism movement in Latin America is a way of restating historic strains," said Larry Birns, director of the nonprofit Council on Hemispheric Affairs in Washington, D.C., which aims to "promote the common interests" of the countries of the Americas.

"High commodities prices are giving these poor governments a political premium to even up the terms of trade," Birns said.

The windfall profits are a key reason officials in Bolivia, Ecuador, and Venezuela have become so bold in their business dealings: changing contracts, increasing taxes, revoking drilling rights—and in Bolivia's case, even taking outright control of facilities.

Bolivia's Morales said recently that his nationalization scheme has generated the equivalent of 150 million U.S. dollars in additional revenues for his government, according to a Dow Jones wire report.

But industry experts say nationalization schemes tend to hurt production.

"Resource nationalism, in most cases, results in slower and less efficient development of natural resources than in a capitalistic system," said James Williams of WTRG Economics, a London, Arkansas-based company that analyzes the energy industry.

Environmentalists at Risk Too

Some environmentalists are also feeling the heat of sovereignty claims.

Since 1991 U.S. conservationist Douglas Tompkins, who co-founded the Esprit clothing company, has bought up 4.7 million acres (1.9 million hectares) of land for preservation in Argentina and Chile. He has since become a focal point of conspiracy allegations in Argentina.

An Argentine government secretary, Luis D'Elía, has lead recent efforts to expropriate Tompkins's holdings and publicly hinted that the environmentalist is working with the U.S. government to exert control over regional water supplies.

In an email Tompkins dismissed d'Elía's critiques, saying he sees the controversy and allegations "as kind of a pathetic joke."

Meanwhile, Catholic Church officials in Argentina issued a report in September that said, "The question of the 'foreign-ization' of land … represents a loss of sovereignty and of natural resources."

Sovereignty also became a rallying cry for Brazil's top environmental official recently.

On October 17 Brazilian officials shot down an idea floated by British Environment Secretary David Miliband to establish a global trust for saving Amazonian trees from deforestation.

"Well-meaning individuals concerned about global warming should dedicate themselves to influencing their own governments," Brazilian Environment Minister Marina Silva said in a letter published by the Folha de S.Paulo newspaper.

Silva and Foreign Minister Celso Amorim wrote that the Amazon belonged to the Brazilian people and was "not for sale."

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