Bolivia: Protests against Chilean Port for Natural-Gas Exports Turn Violent

NotiSur - South American Political and Economic Affairs, September 26, 2003 | Go to article overview
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Bolivia: Protests against Chilean Port for Natural-Gas Exports Turn Violent


Protests have once again convulsed Bolivia, this time against government plans to export liquified natural gas (LNG) to the US, possibly through a port in Chile. The protests turned violent when a confrontation between campesinos and security forces resulted in seven deaths.

The protests began Sept. 16 with a series of strikes and roadblocks across the country to show opposition to the government plans to export LNG. The protesters blocked major roads linking the capital, La Paz, with other towns in Bolivia and also with neighboring Chile and Peru.

Bolivia has 1.5 trillion cubic meters of natural gas, the largest natural-gas reserve in Latin America. The gas deposit is in the southern department of Tarija. Bolivia is currently negotiating sales contracts for the gas with the US and Mexico.

But protesters are demanding that some 250,000 homes in Bolivia be supplied with gas free before any of it is exported. On a television program on Sept. 18, President Gonzalo Sanchez de Lozada said Bolivia had enough gas for "a thousand years."

A poll by the private firm Equipos Mori released Sept. 23 showed that 55% of Bolivians oppose exporting natural gas to the US.

Longstanding animosity with Chile underlies protests

The consortium Pacific LNG, which includes Spain's Repsol YPF, British Gas, and the US Panamerica Gas, wants to pump and transport the gas from the Margarita fields in southern Bolivia to the Pacific Coast for export to Mexico and the US. But the project is stalled because the Bolivian government has not decided whether it will be exported from the Chilean port of Patillos or the Peruvian port of Ilo.

The project means an investment of close to US$6 billion, of which US$2.5 billion would be for the port, where a liquification plant would be built as well. For several reasons, including costs, technical feasibility, and political stability, the Chilean option has the advantage. Chile would also buy part of Bolivia's gas for local consumption.

The possibility of a deal with Chile was the trigger for the latest unrest. Bolivia lost its access to the sea to Chile in the War of the Pacific (1879-1884), the cause, many Bolivians believe, of the extreme poverty that affects 70% of Bolivians. Although the two countries have extensive commercial ties, they do not have diplomatic relations.

On Aug. 15, de Lozada recognized the "historic resistance" that the sale of gas has surfaced. "There is a resistance for historic reasons to a plan in which the gas would leave through a Chilean port. We would like it to leave through Peru, but sometimes reality is what determines what happens."

A final decision on the port--which had been originally set for June 2002--will be made by the end of the year after hearing citizens' concerns, the government said. But since Sanchez de Lozada took office in August 2002, the final decision has been postponed several times.

Chile has said it would grant a 99-year lease on a strip of land extending from Bolivia to the coast, in which Bolivian laws would be in force for labor, tax, and social security issues. But Chile has flatly refused to consider conceding sovereignty over the territory to Bolivia. It has refused to review the Tri-national Treaty of 1904, which established the current borders.

While public opinion in Bolivia is dead-set against an agreement with Chile, Pacific LNG has repeatedly said that if a Chilean port is not chosen, the pipeline project is off. It has flatly ruled out the alternative of a port in Peru. The Bolivian government says it will make the final decision.

Protests paralyze much of the country

The cities most affected by the protests have been La Paz, neighboring El Alto, Cochabamba, and Oruro. The road from La Paz to Lake Titicaca was closed by supporters of the Confederacion Sindical Unica de Trabajadores Campesinos de Bolivia (CSUTCB), as was the road to the Yungas.

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