Oil over Environment, Ecuador makes Difficult Choice

A novel idea to leave the country’s vast oil reserves in the ground fizzled for lack of international support. Now, struggling under painful debt, the government wants to expand drilling in the rainforest.

In a swath of lush Amazon rainforest here, near some of the last Indigenous people on Earth living in isolation, workers recently finished building a new oil platform carved out of the wilderness.

Teams are drilling in one of the most environmentally important ecosystems on the planet, one that stores vast amounts of planet-warming carbon. They’re moving gradually closer to an off-limits zone meant to shield the Indigenous groups. It turns out that some of the country’s largest oil reserves are found here, too.

Ecuador is cash-strapped and struggling with debt. The government sees drilling as its best way out. The story of this place, Yasuní National Park, offers a case study on how global financial forces continue to trap developing countries into depleting some of the most biodiverse places on the planet.

Countries like Ecuador are “against the wall,” said María Fernanda Espinosa, an Ecuadorean diplomat and a former president of the United Nations General Assembly.

Drilling in this part of the rainforest wasn’t Ecuador’s first choice. In 2007, Rafael Correa, the president at the time, proposed a novel alternative that would have kept the oil reserves in a parcel here designated as Block 43, estimated then at around a billion barrels, in the ground.

Under that plan, countries would have created a fund of $3.6 billion, half of the oil’s estimated value, to compensate Ecuador for leaving its reserves untouched. Supporters of the idea said it would have been a win for the climate, for biodiversity and for Indigenous rights. And, they said, it would have been a precedent-setting moral victory: A small, developing nation would have been paid for giving up a resource that helped make places like the United States and Europe so wealthy.

But, after early fanfare, only a pittance in contributions trickled in. Ecuador turned to China for loans, around $8 billion over the course of the Correa administration, some to be repaid in oil.

“Now that the global trend is to abandon fossil fuels, the time has come to extract every last drop of benefit from our oil, so that it can serve the poorest while respecting the environment,” the current president, Guillermo Lasso, said last year.

Other nations are also looking to new oil development, even though the International Energy Agency has said countries must stop new projects to avoid catastrophic climate change. Developing nations say they should be allowed to keep using fossil fuels, since, historically, they’re least to blame for climate change. But these countries are often home to the very ecosystems that are most valuable in helping to stave off global warming and biodiversity collapse. The Democratic Republic of Congo, for example, has put up for auction oil blocks that include rainforest, peatlands and parts of a sanctuary for rare mountain gorillas.

In Ecuador, the oil industry insists that drilling can occur with little damage, but scientists say that even the best cases so far have led to deforestation and other pressures.

More oil extraction couldn’t come at a worse time for the world’s forests. With the Amazon weakened by deforestation and climate change, scientists warn that the forest is approaching a threshold beyond which it could degrade into grassland. Some areas are already emitting more carbon than they store, a ticking time bomb of greenhouse gases.

“Ecuador’s greatest wealth is its biodiversity,” said Carlos Larrea, a professor at Simón Bolivar Andean University in Quito, the capital, who helped to design the failed fund. The destruction of Yasuní, he said, “is suicide.”

Yasuní brims with life. It trills, squawks and hoots. The world’s tiniest monkeys, called pygmy marmosets, scamper over branches, and the world’s largest rodents, capybaras, loll along riverbanks.

In one parcel of just 25 hectares, or about 60 acres, scientists have documented roughly 1,000 species of native trees, around the same number that exist in the entire United States.

No region of land on Earth is more rich in biodiversity than this one, where the Amazon climbs into the foothills of the Andes, according to scientists. The genetic diversity is a vast, untapped resource that could unlock cures for diseases and open doors to technological innovations. But the fragmentation here has already started.

“Nature always loses,” said Renato Valencia, a forest ecologist at Pontifical Catholic University of Ecuador who has studied this area for decades. “When it comes to economic matters, that’s the rule.”

Even under the industry’s best practices, the ecosystem has suffered.

In the 1990s, as oil production began near those 25 hectares, executives went out of their way to protect nature, scientists said. They strove to keep deforestation to a minimum and hired scientists to study the local biodiversity.

“We kept hoping that this would be an example whereby oil development could coexist with a wild forest and its biota,” said Robert S. Ridgely, an ornithologist who led the study on birds. “But it just didn’t turn out that way.”

The worst environmental damage came not from oil contamination, the scientists said, but from the company’s road. Despite strict controls, it attracted new Indigenous Ecuadoreans to the area, who cut down trees to grow crops. Local hunters started killing more animals to sell, including threatened species. Illegal logging is a problem.

The New York Times reached out to authors of the company-funded studies. Six of seven responded, each expressing grave concern about the new drilling in Block 43.

“It is going to be another complete disaster,” said Morley Read, a zoologist who conducted the study on reptiles and amphibians.

People are at risk, too. In Yasuní, an unknown number of men, women and children live in what’s known as voluntary isolation, rejecting contact with the outside world. They are called the Tagaeri and the Taromenane.

Their reserve and a related buffer zone are off-limits to drilling, but government officials have discussed shrinking the protective zone to reach more oil.

“That’s where nature put it,” said Fernando Santos, the Ecuadorean energy minister, in an interview in November. “And that’s where we need to get it from, albeit very carefully.”

A Nation ‘Dependent on Oil’

Oil has been flowing out of Ecuador’s Amazon for half a century, ever since American companies discovered it there. In 1972, a symbolic first barrel was paraded through the streets of Quito by the military. “The people cannot contain their excitement,” said the narrator of a newsreel filmed that day.

Per capita gross domestic product almost doubled in the following fifty years, a slightly faster pace than Latin America as a whole. Many credit oil.

“There has been a change from a very backward Ecuador to an Ecuador that has progressed not to the first world but to the middle — a breakthrough,” Mr. Santos, the energy minister, said.

But as oil revenues grew, global markets allowed the government to borrow more heavily.

“The thing that you see in Ecuador is that whenever Ecuador has experienced the oil booms, that’s when the debt of Ecuador has skyrocketed,” said Julián P. Díaz, a professor of economics at Loyola University Chicago.

Economists say poorer countries get easily caught in this kind of debt trap because they have less robust economies to begin with and typically borrow at elevated interest rates, since they’re considered riskier.

“Obviously we are in monstrous debt,” Mr. Santos said. But, while he recognizes that oil played a role in creating the problem, he also sees oil as the solution. With more drilling and mining development, he said, “the country will be able to get out of debt.”

However, economic gains have barely trickled down to communities that have lived close to oil development for decades. More than half the people who live in the Ecuadorean Amazon, where the vast majority of the country’s oil comes from, are poor.