(Chuck from Ashville running the Lower Jondachi. When Chuck wasn't being a "Candy-Ass" (I think this term was coined on the trip) he was out ripping it up on Ecuador's rivers and creeks).
Larry's Group, AKA Intro to Creeking also had an amazing week of running Ecuador's whitewater. This crew was focusing on fine-tuning their creeking skills to go home ammped and ready for the 2011 spring and summer kayaking season.
(Anne, when she wasn't busy calling Chuck a "Candy Ass" was getting her boof on! Her she is styling the line at "Free Willy" on the Lower Cosanga)
After reading last week's blog, I'm sure you are all wondering, "Darcy, you say Shell pulled out of Ecuador in 1947 saying they only found unviable results, what was up with that?" Well, don't worry, here's a little lowdown on the global oil situation between the 1920's and 2000.
The Oriente’s (Ecuador's eastern half--where we go kayaking) physical transformation was not solely the result of the Ecuadorian government’s policies, Texaco-Gulf’s technology, or Ecuador’s landless population; circumstances in the global oil situation we just right in the late 1960s to push multi-national oil corporations to stretch the limits of their operations and move into a remote region of Ecuador.
(Chrystal showing that you can indeed live in Ohio and be a bad ass kayaker!)
Texaco-Gulf never would have been in the NorOriente if petroleum situations around the world had not conspired to make it a worthwhile investment. Multi-national corporations began oil explorations in Ecuador’s Oriente in the 1920s, but no wells came online until Texaco-Gulf opened their first well and pumped the first crude out of the Oriente in 1972. In the half century between the initial explorations and production, it was not necessarily lack of petroleum deposits, technology or money holding back the industry; rather the world oil climate was not right for bringing more wells (especially expensive wells in remote regions of the world) into production.
Petroleum was crucial to the victors in World War I, and the end of this war saw a huge boom of oil consumption. The rapidly rising popularity of automobiles, combined with petroleum’s functions as a pesticide and fertilizer, caused American consumption of oil to skyrocket in the 1920s. At the same time, the US was facing a shortage in oil from their own fields.
The high oil prices that this potential shortage commanded, combined with some early successes by individual oil seekers in what would become the East Texas Oil Fields, sent people into a mad frenzy searching for oil. Individual fortune seekers looked to Texas for this oil, while bigger companies looked abroad. In the early 1920s, at the same time that Standard Oil and Shell were exploring in Ecuador’s Southern Oriente, Walter C. Teagle, then president of Standard Oil, was conducting explorations of his own in Iraq. In 1927, Standard Oil discovered their first Iraqi “gusher.” By 1928, these Iraqi oil fields, combined with overly successful East Texas fields, created a worldwide oil glut.
With this glut and these new overseas explorations, we entered into what historian Daniel Yergin calls the “age of oil, without which American civilization as we know it could not exist."
It makes sense, therefore, that Standard and Shell did not declare any early successes in their oil fields in Ecuador. It is far easier and cheaper, after all, to build roads and oil infrastructure in a wide-open desert (Iraq), than in a dense rainforest (Ecuador).
(Tom on the Rio Oyacachi. Tom and Chuck were the only 2 guys on their trip, and he was stoked to be paddling with such a cool group of ladies! Everyone was a little reserved at first, keeping to themselves; but a party bus ride to Tena on day 3 put a quick end to that!)
Then, the 1939 discovery of oil in Saudi Arabia sealed the fate of Ecuador’s Oriente for the next thirty years. With Saudi Arabia oil, “the single greatest prize in all of history,” there was absolutely no need for Ecuadorian oil, and Shell (by then Standard was already out) declared their long years of exploration fruitless, claiming there was no oil in the southern Oriente. Today, Maxus (after having bought Conoco’s concession) is producing oil from this region (the region that Shell earlier declared devoid of oil), and their wells have proven so lucrative as to make it worthwhile for them to fight the government to open more land (land that is protected by national parks and reserves) for oil production.
(The Gang scouting some complicated drops on the Lower Cosanga)
Conoco fought for years to open Block 16, which is inside Yasuni National Park. In April of 1990, the Ecuadorian government redrew the boundaries of the park to exclude block 16 and there are now full-scale operations there. Just as conditions in the 1920s and 1930s made it worthwhile for Shell not to drill in the Southern Oriente, a different set of conditions in the late 1960s made it worthwhile for Texaco-Gulf to drill in the Northern Oriente—arguably a more remote part of the region.
(Trying to listen to Larry, but too distracted by the amazing jungle scenery)
In 1956, Egypt’s leader, Gamal Abdel Nasser, nationalized the Suez Canal Company, provoking action from the United Kingdom, France, and Israel who used the canal, among other reasons, to transport their oil from the Middle East to its markets. Europe was transporting two thirds of their oil through the Suez Canal, which gave them motivation to keep control over access and tariffs. Their campaign against Egypt to win back control over the canal was unsuccessful, marking an unprecedented victory for Egypt. Nasser’s triumph with the Suez Canal “was a warning to the oil-consuming West,” and gave rise to nationalism and anti-colonialism throughout the world.
(Heidi, after a little extra encouragement, ponied up and ran this stout drop on the Rio Oyacachi. Nice work Heidi!)
Then, in 1960, Venezuela, Iraq, Iran, Saudi Arabia, and Kuwait formed the Organization of Petroleum Exporting Countries (OPEC) at the instigation of Juan Pablo Perez Alfonso of Venezuela.
A combination of OPEC’s objective of restricting oil production, and the sky rocketing use of petroleum products were bringing the world oil glut to an end, and visions of shortages were on the horizon. In the same year that OPEC formed, Dr. Armand Hammer’s Occidental Petroleum (OXY) discovered oil in Libya and was negotiating terms of extraction with Colonel Muammar al-Qaddafi.
Although Dr. Armand Hammer did eventually strike a deal and begin oil operations in Libya, the contract was not on his terms. This negotiation marked the first time in foreign oil dealings that the producing country had dictated the terms with an oil company, and as Yergin points out, “the heyday of the majors was over.”
(Chrystal and Heidi on the way to the Oyacachi)
In the mid-1960s Texaco began searching for oil once again in Ecuador. With the world old glut depleted and control of a good portion of the oil industry in the hands of "non-Corporate America," desperate measures had to be taken. And so Texaco airlifted vehicles, wells, road and pipeline building supplies and workers into what is now Lago Agrio to begin their Ecuadorian oil legacy.
(Karen of Ashville running the last rapid on the Oyacachi River. Karen didn't get enough paddling in her 7 day trip with us, so she came back for 4 more! Way to get after it Karen)
Tune in next week to learn more about Texaco's operations here in Ecuador...