Oil Refinery in Peruvian Amazon

By: Jillian Solomon, SFSU, 2017

The Iquitos Refinery is 14km from Iquitos City, Peru, in the Loreto Region, capital of the Peruvian Amazon [1]. A city deep within the jungle, inaccessible by road, with approximately 437,620 inhabitants [2]. It is a small refinery situated in a resource rich region, located on the left bank of the Amazon river with a capacity of 10,500 barrels per day [3]. Equipped with a rusty four-decade old pipeline used to transport extracted crude oil, making oil spills inevitable [4]. These spills stain the land that many indigenous communities in Iquitos depend on for their survival. This analysis will show the energy injustices at this site, and how they arose, through the theory of the resource curse.

https://www.flickr.com/photos/70118259@N00/801507014
Map of Iquitos, Peru

Industrial Processing:
  • crude oil
  • engine gasoline
  • turbo A-1 for airplanes & helicopters
  • diesel
  • industrial oil [5]

Who owns the refinery?

PETROPERU is a state owned oil firm [6]. The Peruvian government passed a law that allows PETROPERU to have private investors, limited to no more than 49% of its share capital [7]. This allows the state company to attract investors that can finance upgrades to refineries in Peru [8]. PETROPERU has already exceeded its spending with almost $3.5 billion being spent on the Talara refinery upgrade, since Congress passed Law No 30130 in 2013 [9]. This declared that “the modernization of the Talara refinery is a priority of national and public interest to preserve the air quality and public health of the country” [10]. Current PETROPERU refineries have a low processing capacity to produce low sulfur fuel needed to meet fuel quality standards [11].

Environmental Emergency

Oil Spills Impact Indigenous Communities

Three oil spills have occurred in 2016 from this pipeline transporting light oil from the Amazonian jungle to the pacific port which PETROPERU was responsible for [12]. In several northern jungle districts the Peruvian jungle has protested its disapproval of the lack of response to the spill, and although the company claimed clean-up , there has yet to be any restoration of the areas effected [13]. Combined, these accidents contaminated approximately 30 kilometers of the Chiriaco river, exposing neighboring communities to toxic waste chemicals such as hydrocarbons and metals [14]. This region is also very diverse putting ecosystems at risk, and biological impacts are hard to access because systems are very complex [15]. Refineries are prone to accidents and in this case it has contaminated water supplies that locals depend on and impacted the health of many indigenous communities [16]. These spills happen frequently and do not easily disappear.

The spills contaminated: The Inayo, Chiriaco and Marañon Amazonian rivers, streams, lakes, lagoons, soils, gardens, game, fish, crops [17].

Indigenous communities affected include: The Achuar, Kichwa, Kukama, Quechua, Urarina, Suashapea, Pakunt, Chiriaco, Nuevo Progreso, Nazareth and Nuevo Horizonte [18].

“There are “true lakes of oil, [river] banks abandoned to crude, clots of oil in the water, black roots and sediments, toxic hydrocarbon emissions, and surface water iridescent with oil. The shadow of irresponsible and unpunished oil operations hangs over the entire area.” [19] – PUINAMUDT, “a collective of indigenous federations in Peru’s northern Amazon”

Health problems impacting indigenous peoples in this region:
  • miscarriages
  • skin diseases
  • diarrhea
  • deaths [20]
https://commons.wikimedia.org/wiki/File:Gente_en_Iquitos.JPG
A large group of Iquitos people at a social event

Energy Injustice in The Amazon

The resource curse, political scientists and economists argue, is a country rich in natural resources such as gas, oil, or minerals with unstable economies [21]. Countries rich in these resources tend to have unique social, political, and economical challenges compared to countries without these resources [22]. Dependence on natural resources gives political clout to extractive companies because the government is not reliant on citizen taxation, and therefore less likely to be held under scrutiny from the public [23].

Resource curse: paradoxically rich in resources yet economically poor.

Natural resources can provoke internal conflict between extractive companies and communities, exacerbating social and environmental problems within communities. Extractive projects and oil exploration expand the governments profits, while human rights are not considered. Protestors are criminalized and indigenous peoples requests for land titles are denied [24]. Ecosystems, waters and sacred sites are invaded and destroyed but no one is cleaning up the mess, despite remediation commitments made by the Energy Ministry [25].

“The problem is that petrol companies think they can go to the jungle, act how they like, cover up any spills with mud, and be pretty sure that no one’s ever going to find out what happened – and that no one really cares enough about the people that live there to invest some money and do something about it.” [26] – Gregor MacLennan, co-founder of Shinai, an NGO that works with indigenous people in Peru.

When will PETROPERU clean up their mess?

https://commons.wikimedia.org/wiki/File:Amazonas_floating_village,_Iquitos,_Photo_by_Sascha_Grabow.jpg
Floating village on the amazonian River in Iquitos

Reference

[1] Galarza, S., Malins, C. (2016). Case study: Adoption of low-sulfur fuel standards in Peru. Retrieved from: http://www.theicct.org/sites/default/files/publications/Case_study_lowsulfur_fuel_Peru.pdf

[2] World Population Review. (2017). Population of Cities in Peru. Retrieved from: http://worldpopulationreview.com/countries/peru-population/cities/

 [3] Galarza, Malins. (2016).

[4] Post, C. (2016). Oil spills contaminate major river in Peru’s Amazon. Peru Reports. Retrieved from: https://perureports.com/2016/02/13/oil-spills-contaminate-major-river-in-perus-amazon/

[5] Post, C. (2016). State firm confirms another oil spill in Peru’s Amazon. Peru Reports. Retrieved from: https://perureports.com/2016/06/26/state-firm-confirms-another-oil-spill-in-perus-amazon/

[6] Galarza, Malins. (2016)

[7] Galarza, Malins. (2016).

[8] Galarza, Malins. (2016).

[9] Galarza, Malins. (2016).

[10] Galarza, Malins. (2016).

[11] Galarza, Malins. (2016).

[12] Mega, R. E. (2016). Oil Spills Stain Peruvian Jungle. Scientific American. Retrieved from: https://www.scientificamerican.com/article/oil-spills-stain-peruvian-amazon/

[13] Collyns, D. (2006). Rumble in the jungle. The Guardian. Retrieved from: https://www.theguardian.com/society/2006/nov/22/guardiansocietysupplement.pollution

[14] Mega, (2016).

[15] Mega, (2016).

[16] Mega, (2016).

[17] Eleconomista. (2016). Peru declares water quality emergency in oil spill-hit Amazon districts. Retrieved from: http://www.eleconomistaamerica.com/medio-ambiente-eAm/noticias/7361674/02/16/Peru-declares-water-quality-emergency-in-oil-spillhit-Amazon-districts.html

[18] Eleconomista. (2016).

[19] Hill, D. (2016). Look at the oil spilled in the world’s 2nd ‘Best Place for Wildlife’. The Guardian. Retrieved from: https://www.theguardian.com/environment/andes-to-the-amazon/2016/jan/14/look-at-the-oil-spilled-in-the-worlds-2nd-best-place-for-wildlife

[20] Hill, D. (2017). $1bn to clean up the oil in Peru’s northern Amazon. The Guardian. Retrieved from: https://www.theguardian.com/environment/andes-to-the-amazon/2017/aug/03/us1-billion-oil-perus-amazon

[21] Natural Resource Governance Institute. (2015). The Resource Curse: The Political and Economic Challenges of Natural Resource Wealth. NRGI ReaderRetrieved from: https://resourcegovernance.org/sites/default/files/nrgi_Resource-Curse.pdf

[22] Natural Resource Governance Institute. (2015).

[23] Natural Resource Governance Institute. (2015).

[24] Hill, (2017).

[25] Hill, (2017).

[26] Collyns, (2006).

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