Texaco’s Ecological Terrorism of the
Ecuadorian Amazon

From 1972 until 1992, the U.S.-based Texaco Corporation spearheaded oil production activities in the Ecuadorian Amazon. They guided exploration activities, built roads and a trans-Ecuadorian pipeline, which runs from the oil town of Lago Agrio to the port city of Esmeraldas. These two decades of oil extraction and production have resulted in levels of environmental contamination and destruction which are shocking even to a generation accustomed to hearing about the acts of atrocity and imperialism committed by U.S. and multinational corporations throughout the world. After exploiting the majority of Ecuador’s oil reserves, Texaco intentionally left behind an environment contaminated by over three hundred unlined oil pits, which are full of toxic and carcinogenic wastes. These pits-and the commonplace occurrence of oil spills-were led to contaminate rivers, streams, and ground water. They also left an entire population ridden with chronic and acute illnesses, including cancer, in a population where it was previously nonexistent, and children born with genetic deformities. For all of this, Texaco has refused to claim any responsibility.

The Ecuadorian Amazon is a sparsely populated region that comprises roughly half of all Ecuadorian territory. The people who live there are almost entirely indigenous and colonos-colonists who moved to the Oriente during the oil boom. Colonos form a universally poor and formerly landless population that has come from other regions of Ecuador. Following the failed land reform attempts of 1964, the first attempt to reform Ecuador’s feudal land-labor relations, colonos were granted tracts of land in exchange for colonization, in a policy similar to the American Homestead Act of 1861. The Ecuadorian government’s motives for doing this lay in colonizing the land by civilizing or pushing the indigenous groups who lived there deeper into the forest thereby providing a labor supply for the oil industry and, in general, making the area safe for oil extraction activities.

Until the oil boom years of the early 1970s, the Ecuadorian Amazon was virtually impenetrable. Tropical indigenous groups, such as the Cofan, Siona-Secoya, Shuar-Jivaro, and Huaorani, had successfully defended their territories against the incursions of the Inca and Spanish Empires, as well as attempts by the Ecuadorian government throughout the l9th century to colonize the region. The first sustained foreign presence in the region occurred at the turn of the 20th century during the rubber boom. At that time, rubber barons brought Quechua peoples down from the mountains to work as slaves, indentured laborers, and to serve the encomienda system. The largest indigenous population of the Ecuadorian Amazon are now the lowland Quechua.

The first oil company to go to Ecuador in search of oil reserves was Royal Dutch Shell during the 1930s. Being unsuccessful in the Amazon and having discovered oil in St. Elena, they moved to the coast to exploit oil resources there. The largest foreign oil presence to date, therefore, has been Texaco-or as it likes to refer to its phantom subsidiary, “Texpet.” Oil is the primary natural resource extracted from the Oriente, and it was Texaco’s oil production activities that changed the landscape and demographics of the region.

Texaco came to dominate the oil production industry by taking a hard line against the nationalist and populist military regime of General Rodriguez Lara. The Rodriguez Lara regime seized control of the generally unstable Ecuadorian government in 1972 in order to pursue oil production from a national populist and anti-imperialist position, and to ensure that the fruits of the oil boom would be properly invested in the national infrastructure of schools, roads, and hospitals. CEPE (Coporacion Estatal de Petrolera Ecuadoria) was established in order to negotiate with and learn the tools of the trade from Texaco, and to build an Ecuadorian professional class of oil experts.

The optimistic sentiments of this nationalist regime did not last long under Texaco pressure. The strong nationalist stance of the Rodriguez Lara regime had created conditions, which smaller corporations could not meet, leaving Texaco in a dominant position. Texaco consolidated its position of power and influence over the terms of production by enforcing an oil embargo in 1975, pushing the Ecuadorian economy into a severe financial crisis and its first period of heavy borrowing. CEPE subsequently bought out the shares of Texaco-Gulf (the other major competitor) leaving CEPE as a majority shareholder, but still in a subordinate position vis-a-vis Texaco, and Texaco as the foreign oil company to monopolize the industry. In this way, Texaco forced the Ecuadorian government to conform to its standards as the only oil producer in the nation, and squelched nationalist ambitions in a matter of a few short years. Although since the early 1970s CEPE held a nominal majority shareholder position (Petroecuador is the main oil company now, having assumed all of Texaco’s holdings in 1992 as per contract), it was widely recognized that control of the oil industry in Ecuador rested in Texaco’s hands, both because of their powerful position as a global corporation-Ecuador was in need of foreign investment-and because only Texaco had the knowledge, expertise and technology to pursue oil production.

While it is true that the Ecuadorian government shares blame with Texaco for the environmental contamination in the Oriente region, clearly Texaco made the decisions of where and how to drill and what technology to use. The Ecuadorian government played their part by considering these lands (which were inhabited by indigenous peoples) as “vacant,” by dismissing as dispensable the lives of both the indigenous peoples who had already lived there and the newly relocated migrant group, and by using the Ecuadorian military to make inhospitable areas safe for oil production.

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Texaco’s Ecological Terrorism of the Ecuadorian Amazon
Making the area safe for oil extraction
by Suzanne Simon

In These Times magazine, October 2000