Hey folks,
In this weeks "From the Energy Front," we are going to look at the legal battle between Chevron and the Government of Ecuador. Why? Because there is far more at stake here than money, and YES, it DOES effect YOU.You see folks;
Texaco Petroleum (Texpet) was minority partner in an exploration and production venture with Petroecuador, Ecuador's state-owned oil company. The production operation took place primarily on government lands and was conducted in compliance with Ecuadorian laws and regulations. Roughly 1.7 million barrels of crude oil were produced, with the Government of Ecuador (GOE) receiving 95 percent of the total financial proceeds.
At the conclusion of the venture's twenty-year concession, the area and facilities of the former consortium were subjected to a government-supervised audit, which, together with other Government data, became the basis for a settlement agreement under which Texpet was required to conduct environmental remediation with respect to sites in proportion to its one third interest in the venture. To that end, Texpet executed a $40 million remediation and public works program under close GOE supervision; Texpet's remediation was fully inspected, certified and approved by the GOE; and the GOE granted Texpet a full and complete release of all further claims, liabilities and obligations associated with Texpet's operations in Ecuador.
The release documents were signed by GOE's Minister of Mines & Energy, the President of Petroecuador, and the General Manager of Petroproducción--the operational division of Petroecuador. Texpet has had no role whatsoever in exploration and production operations in Ecuador since 1992.
Since 1992, the only one operating in Ecuador is the State Run Oil company Petroecuador. Unlike Texaco and or now Chevron, which bought out Texaco in 2001, Petroecuador has a losy enviromental record, and is fully responsible for any harm that has come to the people of Ecuador.
The following Video describes the undeniable facts of this case. It is a little over 13 minutes long but well worth the time.
YouTube - Video
So lets review.
The environmental case pending against Chevron in Ecuador has devolved into a runaway judicial farce, orchestrated by a community of interest made up of U.S.-based contingency-fee lawyers seeking a financial bonanza and the government of Ecuadorian President Rafael Correa, which seeks both a financial and political windfall. Four facts about the case cannot be disputed:
1. At the conclusion of the oil production concession between Texaco Petroleum (“Texpet,” a subsidiary of Texaco, which merged with a Chevron subsidiary in 2001)and the government of Ecuador in 1992, the parties conducted a full environmental audit, and Texpet performed a multi-year, $40 million remediation program proportionate to its minority ownership share of the Consortium. That program was approved by the government of Ecuador, which then granted Texpet and all related entities a full and complete release from any remaining environmental liability associated with the consortium’s operations.
2. When the same U.S. contingency-fee lawyers initially filed the Aguinda case —the precursor to today’s Lago Agrio lawsuit—in U.S. federal court in 1993, the then government of Ecuador formally intervened in the case and advised the court that the government, not private plaintiffs, had the exclusive right to assert claims for environmental impacts to the government-owned lands upon which the oil operations had been conducted, and that the government had resolved those claims through the negotiated remediation program and the related Settlement and Release.
3.By its own admission, the government of Ecuador for years neglected to perform its share of the environmental remediation. Indeed, in sharp contrast, it has systematically starved its wholly-owned oil operations of the funds necessary for reasonable maintenance and responsible oil field operations, preferring instead to divert its billions of dollars in oil proceeds to other purposes.
4. Since the government of Ecuador assumed full ownership of the operation nearly 20 years ago, Petroecuador has compiled a deplorable record of environmental irresponsibility, tallying more than 1,400 oil spills since 2000 alone.
These facts by themselves demonstrate that the government of Ecuador, not Chevron, bears both the legal and moral responsibility for the environmental conditions presently on display in Petroecuador’s production area.
For the U.S.-based contingency-fee lawyers, this case has never been about facts, evidence or law. Instead, it has been a constant campaign of misinformation designed to pressure Chevron into a large financial settlement. Their campaign features the compelling visual images of the environmental neglect at Petroecuador’s production sites and the impoverished conditions of the people residing in the area, but conveniently sidesteps the fact that Texpet cleaned up its portion of the operation and that Petroecuador has been the sole owner and operator of the area for nearly 20 years. There can be no serious question about the motives of the U.S. contingency-fee lawyers conducting this case. Philadelphia lawyer Joe Kohn, the financier behind the litigation, appeared in the recent movie Crude, saying unashamedly that this matter “was not taken as a pro bono case, you know a lot of my motivation is, at the end of the day, is that it will be a lucrative case for the firm.” This blind pursuit of money above all else is demonstrated by the fact that the plaintiffs’ lawyers, in apparent disregard for the supposed interests of their clients, actually asked the government to cease environmental cleanup of Petroecuador sites so as not to interfere with their case.
For the current government of Ecuador, the case offers twin benefits. By publicly demanding a verdict against Chevron and pressuring the judicial system under his control to that end, President Correa burnishes his image as a revolutionary man of the people crusading against foreign economic interests. At the same time, the government of Ecuador diverts blame for the state-owned oil company’s undeniable and well-documented environmental mismanagement and for the government’s failure to provide basic sanitation and healthcare infrastructure in the Oriente region.
Emboldened by the open and public support they have received from the Correa government, the plaintiffs’ lawyers have brazenly transformed the case from a claim for environmental remediation into a demand that Chevron spend billions of dollars to reconstruct the government’s wholly-owned oil production infrastructure and to install water systems and healthcare facilities throughout the former concession area. The plaintiffs also demand that Chevron pay more than $8 billion in compensation for alleged “unjust enrichment,” despite the fact that the government of Ecuador took more than 95 percent of the Consortium’s proceeds when Texpet was participating and has been the 100 percent owner of the oil operation since 1992.
Since the Correa government assumed power and consolidated executive control over the other branches of Ecuadorian government, the lawsuit has lost any semblance of impartiality or basic fairness. Most significantly, the court has abandoned the due process guarantees mandated by Ecuadorian law, eliminated the plaintiffs’ burden of proof, and substituted in its place the work of a patently unqualified mining engineer, Mr. Richard Cabrera. Mr. Cabrera has suggested a wholly illegitimate and unsubstantiated damage and penalty recommendation against Chevron in excess of $27 billion. Mr. Cabrera was not only paid solely by the plaintiffs, but he openly relied on them to staff his effort while seeking to obstruct Chevron’s representatives from even observing his work. In fact, major portions of his submissions to the court are cribbed from the plaintiffs’ own submissions, if not written by them directly. His work product is devoid of scientific content, lacks even the most basic evidentiary support, and assesses monetary relief for alleged environmental damage and health claims he has never even bothered to investigate, inspect or verify.
Early in his administration, President Correa openly campaigned for a verdict against Chevron, at the same time that the government proclaimed that any judge who issued opinions inconsistent with the government’s interests would be subject to dismissal and even possible criminal prosecution. In these sad circumstances, it would be nothing short of professional suicide for the court in Lago Agrio to do anything other than rule against Chevron.
Now I know some of you are sitting back, even after watching the Video, saying, OK. This is interesting, but why should I care? How does any of this effect me? It is going to effect you in ways that you can not even imagine. This is nothing more than attempt, riddled with corruption, to shake down the Chevron Corporation for 27 Billion dollars for something they have no hand in. But that does not matter. They want to put the blame on them and charge them with all these environmental travesties. However, what will this case ACTUALLY do?
A- This will set a prescient that can and will be used in the future to redistribute wealth. An excuse to steal Chevron and other Oil Companies profits. In the name of saving the planet.
B- Will also allow them {The Lawyers, Judges, and Government} more power to control NEW Drilling in different locations. They can then say, "look what happened in Ecuador, we can not have this 'here.'" Wherever here may be.
C- Make the Lawyers and Government a lot of money.
D- Make a take over by the Government even more palatable to the American Sheeple, uh, People. This can be done the same way as the replacement of the Moritoria, and or stopping Drilling already in progress. "look what happened in Ecuador, we can not allow the Oil Companies to do whatever they want and make this insane amount of profit while destroying the Environment, so we will take over the industry, and they will do whatever we tell them to do."
Remember the immortal words of Senator Maxine Waters"And guess what this liberal would be all about? This liberal would be all about socialize -- uh, uh, would be about basically taking over and the government running all of your companies."
Talking about Big Oil. They have been trying to find a way to do this for a while. If they can saddle Chevron with Ecuador, then it will be much easier for them to sell it to the American people. Why? Because if you actually look at the FACTS, the TRUTH, "Big Oil" has one of the cleanest track records in history when it come to the environment. Not to mention, Texaco, or Texpet, was already released and signed off on, and Chevron had nothing to do with Ecuador. They can not use facts and truth.
So this may not seem like it effects you, but I assure you it does. Look at the track record? Obama and crew take over the Financial Institutions, Billions spend, nothing solved. Housing? Same thing. AGI? Same thing. Now Auto companies. GM now stands for Government Motors. They WANT you to be forced to buying the idiotic, "Green Cars." Now if they OWN or Control the Oil Companies, they can ensure no new drilling, no alternatives, unless the Government get's their share of course, and higher gas prices. See the Connection?
Peter
Sources:
Texaco in Ecuador - Chevron in Ecuador
Chevron Corporate Memo {PDF} - Texaco Petroleum, Ecuador and the Lawsuit against Chevron
YouTube - Video
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