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2. Illegal Gold That Undermines Forests and Lives in the Amazon: An Overview of Irregular Mining and its Impacts on Indigenous Populations
- Author:
- Melina Risso, Julia Sekula, Lycia Brasil, Peter Schmidt, and Maria Eduarda Pessoa de Assis
- Publication Date:
- 04-2021
- Content Type:
- Special Report
- Institution:
- Igarapé Institute
- Abstract:
- The Brazilian Amazon is rife with illegal gold mining operations, with 321 identified points of illegal, active and inactive mines arranged in the 9 states that comprise the Brazilian Amazon Basin. This devastation has a price — according to Brazil’s Federal Public Prosecutors Office, 1kg of gold represents roughly R$1.7m in environmental damages, culminating in an environmental cost roughly 10 times greater than the current price of gold. The Amazon is nearing its critical ‘tipping point’, beyond which both the Amazon biome and our global climate will suffer irreversible damages. As such, discussions on illegal mining in the Brazilian Amazon present two interrelated challenges: combating deforestation and protecting the distinct cultures of indigenous populations, who constitute the forests’ principal environmental defenders. Considering the urgency of the discussion, the Igarapé Institute launches the publication Illegal Gold That Undermines Forests and Lives in the Amazon: An Overview of Irregular Mining and its Impacts on Indigenous Populations. The article presents urgent recommendations, in the short and long term, to avoid an irreversible climatic collapse, in which the preservation of the Amazon rainforest plays a fundamental role.
- Topic:
- Climate Change, Environment, Natural Resources, Culture, Mining, Indigenous, and Ecology
- Political Geography:
- Brazil and Latin America
3. Both hard and soft corporate practices construct and secure industrial mining operations: The case of Colombia
- Author:
- Line Jespersgaard Jakobsen
- Publication Date:
- 01-2021
- Content Type:
- Working Paper
- Institution:
- Danish Institute for International Studies (DIIS)
- Abstract:
- This DIIS Working Paper elaborates how local consent to a huge industrial mining complex, including a port and a 150 km railway built in the 1980’s on indigenous arid lands, were created. Showing how both ‘hard’ and ‘soft’ security technologies were effective in preparing the complex, constructing the necessary infrastructure and securing the operation, the paper at the same time illustrates how corporate security practices have changed over time in the northern part of Colombia. The paper is based on extended ethnographic fieldwork in La Guajira, Colombia, carried out through 2018 and 2019 as well as historical written documents.
- Topic:
- Security, Environment, Oil, Poverty, Natural Resources, Non State Actors, Gas, Capitalism, Inequality, Economy, Conflict, Ethnography, Violence, Investment, Justice, Land Rights, and Minerals
- Political Geography:
- Colombia, South America, and Latin America
4. National Oil Companies and the Energy Transition: Ecopetrol's Acquisition of an Electric Transmission Company
- Author:
- Mauricio Cardenas and Luisa Palacios
- Publication Date:
- 08-2021
- Content Type:
- Commentary and Analysis
- Institution:
- Center on Global Energy Policy (CGEP), Columbia University
- Abstract:
- The energy transition strategies of international oil companies have come under increased scrutiny from investors and the media as countries across the globe grapple with targets to reduce greenhouse gas emissions.[1] It is unclear if national oil companies (NOCs) are going to feel the same pressure given their government-majority ownership and, if so, how they will adjust their business models. This commentary explores recent moves by Colombian national oil company Ecopetrol to adapt to the energy transition, especially its bid to acquire a majority stake in Interconexión Eléctrica SA (ISA), an electricity transmission company, for 14.2 trillion Colombian pesos (equal to about $3.6 billion).[2] The proposed acquisition was met with mixed reactions, with some critics suggesting it was an opportunistic move on the part of the Colombian government (which has a majority interest in both companies) to book some revenues and reduce the ballooning fiscal deficit. But rather than analyzing its fiscal merits, this piece analyzes the potential transaction from the viewpoint of Ecopetrol and whether there are lessons from the deal for other NOCs navigating the energy transition. This commentary begins with a brief background on both companies and the potential benefits for Ecopetrol in pursuing a path that is different relative to what some other oil companies are doing in order to adjust their business models. Ecopetrol faces specific as well as regional challenges that make transition strategies used by the European oil companies less attractive. The piece then discusses how, if part of the goal of the acquisition is to accelerate Ecopetrol’s energy transition and to add shareholder value, a number of complementary actions should be taken to help with the governance aspect of this acquisition while at the same time strengthening Ecopetrol’s pledge to become net zero by 2050. For example, in arranging financing, Ecopetrol could explore issuing an environmental, social, and governance (ESG) bond where the proceeds are earmarked for the purchase of ISA, which is already a net-zero company. In addition, the coupon rate could be linked to specific emissions reductions on Ecopetrol’s oil and gas activities. Tying these targets to the coupon rate could be seen as a credible mechanism to ensure that the company will comply with its ambitious climate goals. In addition, we propose that Ecopetrol maintain ISA’s current governance structure unmodified and preserve its operational independence. This would allow ISA to benefit from its investment grade status (which Ecopetrol does not enjoy) and continue to deploy its capital expenditures (CapEx) plan geared toward investing in Latin America’s electricity sector without interference. To conclude, this transaction by itself does not guarantee a successful energy transition for Ecopetrol’s core business. If Ecopetrol’s goal is to diversify its portfolio of activities and reduce its carbon footprint, then it should ensure the sum of the two companies results in synergies that reduce emissions beyond what each one of them can achieve individually. This is not a guaranteed outcome but one that will depend on how ISA performs under Ecopetrol’s ownership, the extent to which this transaction brings new opportunities in the renewable energy space, and how the revenues derived from this acquisition help to finance the decarbonization of Ecopetrol.
- Topic:
- Energy Policy, Oil, Regional Cooperation, Natural Resources, and Renewable Energy
- Political Geography:
- Colombia, South America, and Latin America
5. Colombia’s shale resource potential
- Author:
- John D. Padilla
- Publication Date:
- 10-2020
- Content Type:
- Special Report
- Institution:
- Atlantic Council
- Abstract:
- Oil and gas production is a significant driver of Colombia’s economic growth. With decreased conventional hydrocarbon production in recent years, unconventional shale resources could provide additional revenues from the sector and stimulate growth as the country recovers from COVID-19. But care must be taken to ensure that shale production is environmentally sound and that royalties reach local communities. As the Iván Duque administration prepares to award investigative pilot projects (PPIIs) for shale development in November 2020, the Atlantic Council’s Adrienne Arsht Latin America Center and Global Energy Center launched on October 29 the report “Colombia’s Shale Resource Potential,” the second in the Global Energy Center’s Future of Shale series. In the report, John D. Padilla explores the necessary conditions for successful shale development in Colombia. He analyzes key global and local factors that will determine whether the country’s abundant shale resources can be developed safely and sustainably. The new report argues that the most important factors that will support sustainable shale development are political will, legal certainty, and a robust, yet flexible, regulatory framework for PPIIs.
- Topic:
- Environment, Oil, Natural Resources, Economic Growth, and Energy
- Political Geography:
- Colombia, South America, and Latin America
6. Turmoil in South America and the Impact on Energy Markets
- Author:
- Lisa Viscidi
- Publication Date:
- 12-2019
- Content Type:
- Working Paper
- Institution:
- Istituto Affari Internazionali
- Abstract:
- 2019 has been marked by widespread uprisings throughout Latin America. In the last few months, protests have erupted in Bolivia, Ecuador, and Colombia, while Argentina elected a new leader, Bolivia’s president resigned following growing tensions with his political opponents and the military, and Peru’s leader is facing a political crisis. Largely fuelled by anger over graft, economic disparity, and the rising cost of living, the resulting social unrest has led to uncertainty over the energy sector outlook. Continued political and social turbulence will likely contribute to stagnant oil and gas production growth in these countries. Conversely, Brazil and Guyana are on track to become the region’s largest oil producers. In Brazil, pre-salt reserves have been attracting foreign investment, although further market-friendly reforms will need to be made to sustain development. Guyana, for its part, is in line to become the region’s newest petrostate and will see explosive economic growth in the coming years. Despite its large reserves, Venezuela is excluded from this study because the country’s political and economic turmoil, coupled with US sanctions, make any increase in investment highly unlikely in the short term. Paper prepared in the framework of the IAI-Eni Strategic Partnership, December 2019.
- Topic:
- Climate Change, Energy Policy, Oil, Natural Resources, Gas, and Domestic Politics
- Political Geography:
- South America and Latin America
7. Climate and Security in Latin America and the Caribbean
- Author:
- Adriana Erthal Abdenur, Giovanna Kuele, and Alice Amorim
- Publication Date:
- 12-2019
- Content Type:
- Special Report
- Institution:
- Igarapé Institute
- Abstract:
- The connections between climate change and security are complex. The interaction with other factors and the speed and type of social change vary across different contexts. Climate change rarely, if ever, causes insecurity directly; intervening variables – most of them related to governance, development and resource management – mediate this relationship. The articles in this volume explore how climate contributes to insecurity in the LAC region. They resulted from a partnership between the Igarapé Institute and the Instituto Clima e Sociedade (iCS), both in Rio de Janeiro, Brazil, with the support of the German Embassy in Brasília. This partnership yielded a workshop, held in July 2019, that brought together the twelve researchers and practitioners from across the region to discuss how climate and security are linked in LAC.
- Topic:
- Security, Climate Change, Development, International Security, Natural Resources, and Governance
- Political Geography:
- Latin America and Caribbean
8. Women’s Struggles Against Extractivism in Latin America and the Caribbean
- Author:
- Enara Echart Muñoz and Maria del Carmen Villarreal
- Publication Date:
- 08-2019
- Content Type:
- Journal Article
- Journal:
- Contexto Internacional
- Institution:
- Institute of International Relations, Pontifical Catholic University of Rio de Janeiro
- Abstract:
- Since Cynthia Enloe asked, ‘Where are the women?’ in 1989, studies about the place of women in International Relations have increased. However, most of the analyses since then have focused on the participation of women in international organisations, events and institutional spaces, making invisible other practices and places occupied by black or indigenous women from the South. This article aims to highlight the role of women at the international level, analysing their performance in disputes over the meanings of development in Latin America and the Caribbean, based on struggles against extractivism. In addition to denouncing the impacts of this development model, these struggles seek to construct alternatives that, although they could be essentially local, have been multiplied and articulated throughout the Latin American and the Caribbean territory, as part of a broader resistance to the dominant extractivism in the region. These struggles will be mapped using a database of 259 conflicts around mining activities, developed by the Research Group on International Relations and Global South (GRISUL).
- Topic:
- Gender Issues, Race, Natural Resources, Women, Global South, and Indigenous
- Political Geography:
- Latin America, Caribbean, and Global Focus
9. Natural gas pricing GSA Bolivia: Brazil using virtual hub and expected monetary value instruments
- Author:
- Sergio M. Medinaceli and Jorge L. Gumucio
- Publication Date:
- 11-2019
- Content Type:
- Working Paper
- Institution:
- Institute for Advanced Development Studies (INESAD)
- Abstract:
- The purpose of this paper is to show the shortcomings of incentive policies, specifically competitiveness, if they are designed without considering fundamentals of market development such as, level of demand, level of investment, and availability of alternative sources of supply. We focus on the analysis of the main market, financial, and economic variables in the Bolivia-Brazil Gas Supply Agreement, their relationship, development and dynamics through time and the current situation before the contract is renegotiated in 2019. Our analysis centers on the effective negotiation margin that Bolivia has calculated from the overall production costs of Bolivian gas (using EMV) vis a vis the opportunity cost of Brazil importing LNG. Using 10%-15% as discount rates and WTI prices between $50 and $60/bbl, the natural gas price result of EMV is between $ 4.96 and $ 7.99/MMbtu. Using the Bolivian tax incentive gas price should be between $2.29 and $5.16/MMbtu. Under the assumptions that WTI levels would be around $ 60/bbl, investors use a 15% discount rate to invest in Bolivia, incentive policy is in place, and the price of LNG is around $ 6.84/MMbtu; the opportunity cost of Brazil importing gas from Bolivia is $ -0.55/MMbtu. The same case without incentive policy will yield a $ -3.38/MMbtu. On the other hand, if the transport tariff is reduced the margin becomes positive under the assumption that the incentive policy is still in place. Therefore, as the price of LNG becomes more competitive through increase in supply (worldwide), Brazil will set its negotiation position around the price that they could import LNG on the short to medium term.
- Topic:
- Markets, Regional Cooperation, Natural Resources, Monetary Policy, Gas, Macroeconomics, and Economic Development
- Political Geography:
- Brazil, Latin America, and Bolivia
10. Hybrid Institutions: Institutionalizing Practices in the Context of Extractive Expansion
- Publication Date:
- 01-2019
- Content Type:
- Working Paper
- Institution:
- Postgraduate Program on Sustainable Development and Social Inequalities in the Andean Region (trAndeS)
- Abstract:
- States face the challenge of developing institutions to govern the activities of social actors when an area under their control becomes the target of increased extractive activities. National and local public regulations safeguarding the environment, the assignment of extractive rights to individuals or companies, and handling of ensuing conflicts are developed in an institutional gray zone. This paper analyzes how informal institutions developed in early period become hybrid institutional entanglements that depend largely on configurations of power. It does so by looking at two cases in Peru: Water extraction in Ica, mostly by large companies and gold mining in Madre de Dios, mostly by small scale miners. Taken together, these cases show the institutions resulting from state governance of extractive activities depends heavily on the agency and political leverage of the state but also of other social actors.
- Topic:
- Development, Economics, Environment, Natural Resources, Water, Institutions, and Ecology
- Political Geography:
- Latin America and Peru