25 October 2007

BRAZIL ANNOUNCES NEW OIL EXPLORATION IN AMAZON

This week Brazil announced it is seeking approval to explore for new oil and gas reserves near the Jurua River in the Amazonian state of Acre. The government will set aside US$35.5 million for the National Petroleum Agency (ANP) to begin exploration, while the Acre State Industrial Federation has promised to raise US$15 million. Officials cited the economic benefits the project will bring to a neglected part of the country but raised concerns among local and international environmental groups who worry that the exploration will damage sensitive ecosystems.

Commenting on the proposed project, Environmental Ministry Executive Secretary, Joao Paulo Capobianco, is reported as saying, "It's necessary to examine how this will be done, on what scale and in what areas. In theory, there are methodologies and technologies that allow this activity without environmental damage."

For his part, Acre Congressman Marcelo Serafim said that, "development brings damage, it destroyed the Atlantic forest, it ruined much of the Pantanal (wetlands), and that's not what we want or defend." But, he added, "If the Brazilian government and the world want the Amazon preserved, the world has to give us conditions to preserve the Amazon. And it hasn't."

The ongoing debate over resource extraction in the Amazon Rainforest is controversial. Governments and citizens have a number of conflicting interests between increased energy demands necessary to fuel development and their desire to protect the rainforest. Current and expected energy shortages complicate matters.

For example, Chile and Argentina are in the middle of an energy crisis while Brazil is expected to face shortages by 2010. The lack of reliable sources of natural gas forced Chileans to burn more diesel and coal this winter causing dangerously high pollution levels in the capitol city of Santiago. In a broader context, energy shortages threaten to limit development potential during a period of fast economic growth caused by soaring prices for regional export.

On the other hand, the Amazon rainforest is a one of a kind global air filter, pulling carbon emissions out of the air and producing enormous quantities of oxygen. It is home to an unknown quantity of plant and animal species with untold potential that scientists are just beginning to understand, including new pharmaceuticals like the now common chemotherapy treatment ABVD made from medicinal plants found only rainforests.

Balancing these two interests has been difficult in the past. As Congressman Serafim pointed out, Brazil has a poor track record for environmental stewardship, but conscientious planning that takes into account latest technologies and techniques can drastically decrease the environmental impact from extraction.

According to Jared Diamond, professor of geography and physiology at UCLA and World Wildlife Federation (WWF) consultant, Chevron Corporation's oilfields in the Papua New Guinea rainforest are an example of such responsible extraction. Tight environmental controls imposed by the company there were so effective at minimizing environmental impact that he actually recorded an increase bird and mammal species in the territory after operations began.

Looking at the bigger picture, news of this nature will only increase in the coming years as the region continues to grow. In 2002 the Presidents of South America began work on a regional infrastructure integration plan, called IIRSA, designed to facilitate the energy, transport, and telecommunication connectivity between the region's population centers.

The IIRSA plan identified four strategic continental corridors: Peru-Brazil-Bolivia, Venezuela-Brazil-Guyana-Surinam, Porto Alegre-Asuncion-Jujuy-Antofogasta, and an Amazon Hub. Governments have already identified 32 anchor projects necessary for the creation of these corridors and a further 318 waiting to begin.

Finally, governments are now coordinating national infrastructure projects with the long-term goals of IIRSA, moving the regional agenda forward little by little. Small national projects, like the one announced in Acre State, are just the beginning of a whole network of new projects that will bring roads and energy pipelines across the rainforest.

The greatest challenge so far has been lack of capital, but with the launching of the new Banco del Sur on Nov. 3, new funding for some of these development projects is expected to be announced, bringing increased pressure on environmentalists to work with governments to articulate responsible implementation of current development plans.

As Congressman Serafim pointed out, the issue is of international importance. Locals need viable options if they are to share in the benefits of development without damaging their environment. In the absence of alternative solutions, governments find it difficult to ask underdeveloped areas to postpone immediate economic benefits for the long term good of the planet.