Bush, the rainforest and a gas pipeline to enrich his friend

The Independent (UK)
July 30, 2003

Bush, the rainforest and a gas pipeline to enrich his
friends

By Andrew Gumbel in Los Angeles

President George Bush is seeking funds for a
controversial project to drive gas pipelines from
pristine rainforests in the Peruvian Amazon to the
coast.

The plan will enrich some of Mr Bush’s closest corporate
campaign contributors while risking the destruction of
rainforest, threatening its indigenous peoples and
endangering rare species on the coast.

Among the beneficiaries would be two Texas energy
companies with close ties to the White House, Hunt Oil
and Kellogg Brown & Root (KBR), a subsidiary of Vice-
President Dick Cheney’s old company, Haliburton, which
is rebuilding Iraq’s oil infrastructure.

The pipeline slices through some of the most
biologically diverse places on earth. Their remoteness
has preserved an extraordinarily rich ecosystem in the
coastal Paracas reserve, which is home to such rare
species as Humboldt penguins, sea lions and green sea
turtles.

The Camisea natural gas project - with reserves of
13,000 billion cubic feet of gas - has already scared
off two big investors, Citigroup and the Overseas
Private Investment Corporation. According to an internal
report by the US Export Import Bank, obtained by the
lobby group Amazon Watch, proposals to mitigate the
environmental impact of the project are "woefully
inadequate" and will lead to mudslides, destroy habitats
and spread diseases among indigenous peoples.

Friends of the Earth describes one threatened area as
"one of the world’s most pristine tropical rainforests",
home to the Nahua, Kirineri, Nanti, Machiguenga and Yine
indigenous groups. Past contact between indigenous
peoples and loggers has proven disastrous - 42 per cent
of the Nahua died from diseases contracted from
outsiders in the 1980s.

Already, the project, which is 60 per cent complete, has
run into difficulties, including the kidnapping of 60
pipeline workers last week. They were freed later by the
Peruvian military.

Nevertheless, the Bush administration plans to approve
financial support for the project, possibly as early as
this week, via both the US Export Import Bank and the
Inter-American Development Bank (IDB). The two
institutions, which are due to make their own final
decisions in the next couple of weeks, are expected to
put up about $300m (£185m) in loans and guarantees,
which would in turn pave the way for financing the rest
of the $1.6bn project.

Ray Hunt, chairman of Hunt Oil, was a so-called
"pioneer" who raised more than $100,000 for Mr Bush in
2000. He and his wife recently gave the maximum personal
contribution to Mr Bush’s re-election campaign.

Kellogg Brown & Root would not be involved in the
pipeline but are well placed to build a $1bn natural gas
plant on the Peruvian coast if it goes ahead. The ties
linking KBR to Mr Cheney have prompted the same charges
of favouritism that surrounded the choice of Haliburton
to oversee Iraq’s oil fields. The president of the
Export Import Bank, Philip Merrill, is a close associate
of Mr Cheney. And the chief US representative at the
IDB, Jose Fourquet, is also a Bush "pioneer" who helped
mobilise Hispanic support in 2000.

The Camisea project has raised eyebrows in Washington as
well as among campaigners in the Amazon, not least
because banks and governments usually consider
environmental impacts very carefully before approving
such ventures.

The US Agency for International Development is against
the project and several senior congressional leaders
have urged the US Treasury to delay a final decision
until further reviews have taken place.

The Export Impact Bank’s report conceded that key
decisions were made for economic reasons, that massive
erosion had already occurred on the pipeline route and
that unique biodiversity faced "significant, long-term
and largely irreversible" deterioration. Three lobby
groups - Amazon Watch, Amazon Alliance and Environmental
Defence - said last week that the project was causing
food shortages and disease in the Urubamba valley.

The Bush administration is reticent about its plans but
is keen to exploit new sources of energy to reduce
dependence on Middle Eastern oil. Its ambition to open
up the Alaskan reserve proved controversial, and has so
far been blocked by the US Congress.

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