Natural Gas Sales Lead To Social Crisis in Bolivia – The fight over hydrocarbons heats up

Its not just OIL. Every form of hydrocarbon will become  flash points as part of the world abandons the carbon economy while others rush to it as a salvation.

Fight Over Natural Gas Has Bolivia on Brink of Collapse 

 Written by Levi Novey

Published on September 16th, 2008

Posted in Bolivia

Having gained confidence after handily winning a recall election with 67% of the vote last month, Bolvia’s President Evo Morales has proposed some controversial changes to Bolivia’s Constitution. He wants to redistribute wealth obtained from the sale of Bolivia’s abundant natural gas resources in a more equitable way to help the poor. He also wants to change the constitution so that he can run for a second term. These proposals have lead to violent protests in the country’s eastern provinces, that contain the bulk of Bolivia’s natural gas reserves. These regions are now threatening to break away. Tension is high and a civil war might soon emerge.Some of Morales’ opponents claim that he is trying to obtain dictatorial powers. They subsequently have blockaded roads, and temporarily shut down natural gas pipeline flow to Brazil (which gets 50% of its gas from Bolivia). Martial law has been declared in one province and the details of one particularly violent incident are still sketchy. It is unclear if Bolivia’s military is entirely behind Morales. At least 30 people have died so far during the conflict, and countless others have been injured.

Last week Morales also accused the United States of helping to fan the flames of the conflict, framing it as a coup d’etat to remove him as president. He expelled the American ambassador to Bolivia to send out his message of disapproval. The U.S.’s ambassador has denied the claims made against him.


But this has happened before:

Bolivia’s Mesa Offers to Step Down as Protests Mount, by Andrew J. Barden in Mexico City for Bloomberg [2005 March 7]

“Bolivian President Carlos Mesa offered his resignation to Congress almost 17 months after taking office, amid stepped up protests against the government’s energy policies…”It’s a highly dangerous moment for Bolivia,” Mesa said in a letter to Congress, read aloud by Cabinet Chief Jose Galindo and broadcast on CNN’s Spanish network. “These movements are leading the country to a point that is unsustainable. I can’t continue to govern under these circumstances,” the letter said.

“Mesa’s resignation would throw the South American country back into a political crisis less than two years after former President Gonzalo Sanchez de Lozada was forced from office following deadly riots in opposition to his plans to export natural gas to the U.S. and Mexico.”

“Evo Morales, leader of the second-largest party in Congress, the Movement Toward Socialism, is leading protests to demand a new hydrocarbon law that raises royalties for foreign companies in Bolivia such as Spain’s Repsol YPF and Total SA of France. Bolivia has 28.7 trillion cubic feet of natural gas, Latin America’s second-largest reserves after Venezuela, according to BP Plc’s statistical review of world energy.”

Gonzalo Sanchez de Lozada, the former President of Bolivia:
Our country’s long-term energy needs are dwarfed by its vast supplies.”

What does vast mean in Bolivia today?

“”According to the Oil and Gas Journal, Bolivia’s proven natural gas reserves were 24 trillion cubic feet (Tcf), as of January 2003. A study by U.S.-based consulting firm DeGolyer & MacNaughton in April 2003, however, certified Bolivia’s natural gas reserves at 54.9 Tcf, giving Bolivia the second-largest reserves in South America after Venezuela. The graph to the right reflects the large increases in reserve estimates since 1997.” From USA’s Energy Information Agency

Comparing Bolivia’s Natural Gas reserves with Global consumption of 90 TCF of natural gas per year, giving the benefit of the doubt that reserves are “certified” indeed at 54.9 TCF, Bolivia would be able to meet humanity’s Natural gas needs for 223 days. Is that a vast amount?

Peasants in Bolivia organized in September 2003 to revolt against “selling” [giving away?] their energy inheritance to the USA, where the average person consumes 40 times more natural gas, 15 times more electricity and 15 times more oil. To characterize this transfer of natural wealth as necessary for the economic well-being of their country is to completely misconstrue the inherent value of this resource in the long term as a mechanism for internal economic development. Furthermore, it could only come from ignorance of realistic global oil and natural gas reserves and prospects, or because Sanchez is deliberately ignoring these facts to support a political agenda


And you know what this always leads to? When will they ever learn that standing in the road of social justice is foolish at best and disruptive at worse. People that have nothing have nothing to lose:

Even the Chinese know that.

Bolivia crisis cuts natural gas supply to Brazil by half

 RIO DE JANEIRO, September 11 (Xinhua) — The political crisis in Bolivia led to a 55-percent reduction in the country’s natural gas supply to its biggest customer Brazil, Transierra pipeline company said in a statement on Thursday,    The reduction was due to malfunction of a pipeline in southeastern Bolivia. It remains unclear if it was a technical problem or an act of sabotage.

    It is the second incident with Bolivia’s pipelines in less than24 hours. A pipeline in the Yacuiba region exploded on Wednesday, leading to a 10-percent reduction in the natural gas exports to Brazil.

    Brazil needs about 60 million cubic meters of natural gas everyday, and half of the supplies comes from Bolivia.

    Edison Lobao, Brazil’s Minister of Mines and Energy, has met with technical personnel and experts from the country’s state-owned oil and gas company Petrobras to work out a contingency plan to deal with the supply reduction.

    Sao Paulo city, which depends on Bolivia for 60 percent of its natural gas supply, has already launched a contingency plan. Sao Paulo state’s Basic Sanitation and Energy Secretary Dilma Pena said that the industrial sector will face the biggest reduction in gas supplies.

    She added, however, that residential and commercial clients, as well as hospitals, will be spared from the supply reduction.

    Protests, which broke out two weeks ago against Morales’ plans to amend the constitution and reallocate gas revenues, turned violent this week in southeastern Bolivia. Anti-government protesters blocked the road, stormed official buildings and clashed with supporters of the president.

    The borders to Brazil, Argentina and Paraguay have been closed and Bolivia’s ambassador to Brazil, Rene Mauricio Dorfler, said his government is considering declaring a state of emergency in the country.


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