Inter Press Service » Integration and Development Brazilian-style http://www.ipsnews.net Turning the World Downside Up Thu, 27 Nov 2014 18:02:20 +0000 en-US hourly 1 http://wordpress.org/?v=3.9.3 Shale Oil Threatens the High Prices Enjoyed by OPEChttp://www.ipsnews.net/2014/11/shale-oil-threatens-the-high-prices-enjoyed-by-opec/?utm_source=rss&utm_medium=rss&utm_campaign=shale-oil-threatens-the-high-prices-enjoyed-by-opec http://www.ipsnews.net/2014/11/shale-oil-threatens-the-high-prices-enjoyed-by-opec/#comments Wed, 26 Nov 2014 21:10:05 +0000 Humberto Marquez http://www.ipsnews.net/?p=137983 Ranking of recoverable shale oil and gas reserves, which have revolutionised the global map of fossil fuels. Credit: ProfesionalMovil

Ranking of recoverable shale oil and gas reserves, which have revolutionised the global map of fossil fuels. Credit: ProfesionalMovil

By Humberto Márquez
CARACAS, Nov 26 2014 (IPS)

Shale fever and the political chess among major oil producers and consumers have put OPEC in one of the most difficult junctures in its 54 years of history.

“OPEC was spoiled for several years by high prices of around 100 dollars a barrel,” Elie Habalián, a former Venezuelan OPEC (Organisation of the Petroleum Exporting Countries) governor, told IPS. “If it had had the foresight to keep prices down to around 70 dollars a barrel, shale oil would not have begun to pose such stiff competition.”

The 12-member group – made up of Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela – may agree to cut output, which would entail sacrificing markets, during its Nov. 27 ministerial meeting in Vienna – the 166th held since the organisation was founded in September 1960.

Oil prices, which climbed after 2003 to over 140 dollars a barrel in 2008, plunged as a result of the global financial crisis that broke out that year, but recovered this decade and have remained at around 100 dollars a barrel.

In the meantime, the production of unconventional oil and gas began to expand in the United States. Shale, a common type of sedimentary rock made up largely of compacted silt and clay, is an unconventional source of natural gas and oil, which is trapped in shale formations and recovered by hydraulic fracturing or “fracking”.

“Fracking” involves pumping water, chemicals and sand at high pressure into the well, a technique that opens and extends fractures in the shale rock to release the natural gas and oil on a massive scale.

With the technology and capital available in the 20th century, these unconventional resources were not recoverable.

Habalián pointed out that after the 1973 Arab oil embargo, “the West and Japan adopted a strategy to achieve a stable market under their control rather than under that of the exporting countries.”

That strategy has run into surprises. For example, 40 years ago no one foresaw that China, along with India and other emerging powers, would become a fast-growing economy with a voracious appetite for fossil fuels, which gave a boost to producers of oil and gas.

“But with the high prices, while the exporters financed geopolitical campaigns, like the conflicts in the Middle East or the influence of Venezuela in Latin America under the presidency of Hugo Chávez (1999-2013), the big corporations were investing in technology and new areas of business,” said Habalián.

The shale boom “has merely accelerated the results of that permanent strategy by the West. Shale oil is here to stay, the price will drop as the technology advances, and that will bring down the prices of, and set a cap on, OPEC’s oil,” the expert said.

Map of proven global reserves of conventional oil, where new actors have also reduced OPEC’s grip. Credit: Fastcompany.com

Map of proven global reserves of conventional oil, where new actors have also reduced OPEC’s grip. Credit: Fastcompany.com

Fracking is a costly procedure that requires high crude prices to make it profitable. It is also criticised for its environmental effects, as it involves consumption of enormous amounts of water and the creation of cracks in the rocks deep below the surface, with consequences that have yet to be determined.

Shale oil is already a major actor in the global energy market, with daily output of 3.5 million barrels, mainly in the United States, which recently overtook Saudi Arabia and Russia to become the world’s largest oil producer, with more than nine million barrels a day.

For decades Saudi Arabia was the biggest producer and the de facto leader of OPEC, because to its production of nearly 10 million barrels a day is added a spare production capacity of two million barrels which has enabled it to increase or reduce output in periods of market scarcity or abundance.

The market, of some 91 million barrels consumed daily, of which OPEC contributes one-third, is showing signs of being oversupplied because of the rising offer of shale oil, Europe’s fragile economic recovery, and the slowdown of emerging economies, from China to Brazil.

Crude oil is about 30 percent cheaper than one year ago. The European benchmark North Sea Brent stands at 80 dollars a barrel, compared to 110 dollars a barrel at the close of 2013. The U.S. benchmark West Texas Intermediate is trading at 75 dollars a barrel, and Venezuela’s dense cocktail at less than 70 dollars a barrel, down from a high of more than 100 dollars a barrel.

Saudi Arabia “appears determined to respond aggressively in defence of its market share, even if that means lower prices for a few years,” Kenneth Ramírez, a professor of geopolitics and oil at the Central University of Venezuela, told IPS.

The Saudis are thus apparently facing off with Iran, their rival in the Islamic world – and which, like Venezuela, Russia or Nigeria, needs the biggest possible influx of revenue in the short term – and would discourage, with flows of low-cost conventional oil, the development of its big future rival: shale oil.

In addition, according to analyses like those of Habalián and Ramírez, low prices and a market with a greater supply of crude would “punish” nations like Syria or its big supporter, Russia, which is clashing with the West over the conflict centred in Ukraine.

In the immediate future, OPEC could opt for the Saudi proposal of maintaining the status quo and letting oil prices slide to 70 dollars a barrel or lower, with the aim of slowing down the development of shale oil while waiting for a recovery of Europe or China and other emerging economies.

Venezuela has tried to push another option, with an intense tour by Foreign Minister Rafael Ramírez to the capitals of oil producing countries, from Mexico City to Moscow through Tehran, but conspicuously avoiding Riyadh. The idea is to cut production to shore up prices, betting that the capacity to extract shale oil will decline in a few years.

One component that contributes to a move in that direction, said Habalián, is the pressure from environmentalists, especially in the United States and Canada, who oppose the extraction of shale oil and gas because of its impact on water sources, the injection of chemicals and the fracturing of rock deep underground.

A third option, said Ramírez, would be to ratify OPEC’s production ceiling of 30 million barrels a day, which would remove a small portion of the partners’ current excess supply “and although it would have a small impact on prices, it would send a signal that the organisation is not on the ropes.”

But in the medium to long term, Habalián observed, a new energy architecture in line with the market stability sought by the West continues to be bolstered, in the face of an OPEC strained by political and budgetary urgencies.

Editedo by Estrella Gutiérrez/Translated by Stephanie Wildes

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Shale Oil Fuels Indigenous Conflict in Argentinahttp://www.ipsnews.net/2014/11/shale-oil-fuels-indigenous-conflict-in-argentina/?utm_source=rss&utm_medium=rss&utm_campaign=shale-oil-fuels-indigenous-conflict-in-argentina http://www.ipsnews.net/2014/11/shale-oil-fuels-indigenous-conflict-in-argentina/#comments Tue, 18 Nov 2014 16:57:06 +0000 Fabiana Frayssinet http://www.ipsnews.net/?p=137811 Jorge Nahuel, a spokesman for the Mapuche Confederation of Neuquén, in Argentina’s southern Patagonia region, complains that local indigenous communities were not consulted about the production of unconventional oil in their ancestral territories. Credit: Fabiana Frayssinet/IPS

Jorge Nahuel, a spokesman for the Mapuche Confederation of Neuquén, in Argentina’s southern Patagonia region, complains that local indigenous communities were not consulted about the production of unconventional oil in their ancestral territories. Credit: Fabiana Frayssinet/IPS

By Fabiana Frayssinet
CAMPO MARIPE, Argentina, Nov 18 2014 (IPS)

The boom in unconventional fossil fuels has revived indigenous conflicts in southwest Argentina. Twenty-two Mapuche communities who live on top of Vaca Muerta, the geological formation where the reserves are located, complain that they were not consulted about the use of their ancestral lands, both “above and below ground.”

Albino Campo, ”logko” or chief of the Campo Maripe Mapuche community, is critical of the term “superficiary” – one to whom a right of surface occupation is granted – which was used in the oil contracts to describe the people living on the land, with whom the oil companies are negotiating.

“We are the owners of the surface, and of what is above and below as well. That is the ‘mapu’ (earth). It’s not hollow below ground; there is another people below,” he told IPS.

Nor is it hollow for the oil companies, although the two conceptions are very different.

Three thousand metres below Campo Maripe lies one of the world’s biggest reserves of shale gas and oil.

The land that the community used for grazing is now part of the Loma Campana oilfield, operated by the state-run YPF oil company in partnership with U.S. oil giant Chevron.

“More or less 160 wells have been drilled here,” Campo said. “When they reach 500 wells, we won’t have any land for our animals. They stole what is ours.”“The company should respect our constitutionally recognised right to participate in the management of natural resources. Those rights have been completely violated by the oil company’s arrival.” – Mapuche leader Jorge Nahuel

Because of the urgent need to boost production, YPF started a year ago to make roads and drill wells in the Campo Campana oilfield in the southern Patagonian province of Neuquén.

The Mapuche chief and his sister Mabel Campo showed IPS what their lands had turned into, with the intense noise and dust from the trucks continuously going back and forth to and from the oilfield.

They carry machinery, drill pipes and the products used in hydraulic fracturing or fracking, a highly criticised technique in which water, sand and chemicals are injected into the rock at high pressure to fracture the shale and release natural gas and oil trapped in the underground rocks.

“They say fracking and everything aboveground doesn’t pollute…maybe it’ll be a while but we’ll start seeing cancer, skin cancer, because of all the pollution, and we’ll also die of thirst because there won’t be any water to drink,” said Mabel Campo.

YPF argues that it negotiated with the provincial government to open up the oilfield, because it is the government that holds title to the land.

However, “we try to have the best possible relations with any superficiary or pseudo superficiary or occupant, in the areas where we work, Mapuches or not,” YPF-Neuquén’s manager of institutional relations, Federico Calífano, told IPS.

The families of Campo Maripe have not obtained title to their land yet, but they did score one major victory.

After protests that included chaining themselves to oil derricks, they got the provincial government to recognise them legally as a community in October.

“Registration as a legal entity leaves behind the official stance of denying the Mapuche indigenous identity, and now the consultation process will have to be carried out for any activity that affects the territory,” Micaela Gomiz, with the Observatory of Human Rights of the Indigenous Peoples of Patagonia (ODHPI), stated in a communiqué released by that organisation.

According to ODHIP, as of 2013 there were 347 Mapuche people charged with “usurpation” and trespassing on land, including 80 lawsuits filed in Neuquén and 60 cases in the neighbouring province of Río Negro.

In the case of Vaca Muerta, Jorge Nahuel, spokesman for the Mapuche Confederation of Neuquén, told IPS that the local indigenous communities were not consulted, as required by International Labour Organisation (ILO) Convention 169 concerning Indigenous and Tribal Peoples, which Argentina ratified 25 years ago.

Convention 169 requires prior consultation of local indigenous communities before any project is authorised on their land.

“What the state should do before granting concessions to land is to reach an agreement with the community over whether or not it is willing to accept such an enormous change of lifestyle,” he said.

Furthermore, said Nahuel, “the company should respect our constitutionally recognised right to participate in the management of natural resources. Those rights have been completely violated by the oil company’s arrival.”

The Mapuche leader said similar violations are committed in the soy and mining industries. “Indigenous people are seen as just another element of nature and as such they are trampled on,” he complained.

In this South American country of 42 million, nearly one million people identified themselves as indigenous in the last census, carried out in 2010. Most of them belong to the Mapuche and Colla communities, and live in Neuquén and two other provinces.

Nahuel noted that of nearly 70 Neuquén indigenous communities, only 10 percent hold legal title to their land.

“The logic followed by the state is that the weaker the documentation of land tenure, the greater the legal security enjoyed by the company,” he said. “It’s a perverse logic because what they basically believe is that by keeping us without land titles for decades, it will be easier for the companies to invade our territory.”

Some have cast doubt on the real interests of the Mapuche.

Luis Sapag, a lawmaker of the Neuquén Popular Movement, triggered the controversy last year when he remarked that “some of them have been doing good business…YPF didn’t go to the Mapuches’ land to set up shop….some Mapuches went to put their houses where YPF was operating, to get this movement started.”

“Until Loma Campana was developed, there were never any demands or complaints from a Mapuche community,” said YPF Neuquén’s manager of unconventional resources, Pablo Bizzotto, during a visit by IPS and correspondents from other international news outlets to the oilfield in the southwestern province of Neuquén.

Nahuel compared that reasoning to “the arguments used by the state when it invaded Mapuche territory, saying this was a desert, we got here, and then indigenous people showed up making demands and claims.

“They’re using the same logic here – first they raze a territory, and then they say: ‘But what is it that you’re demanding? We hadn’t even seen you people before’,” he said.

Nahuel said the production of shale gas and oil, an industry in which Argentina is becoming a global leader, poses “a much greater threat” than the production of conventional fossil fuels, which he said “already left pollution way down in the soil, and among all of the Mapuche families in the area.”

“It is an industry that has a major environmental and social – and even worse for us, cultural – impact, because it breaks down community life and destroys the collective relationship that we have with this territory, and has turned us into ‘superficiaries’ for the industry,” Nahuel said.

He added that as the drilling moves ahead, the conflicts will increase.

He said the country’s new law on fossil fuels, in effect since Oct. 31, will aggravate the problems because “it serves the corporations by ensuring them the right to produce for 50 years.”

The logko, Campo, said: “When YPF pulls out there will be no future left for the Mapuche people. What they are leaving us here is only pollution and death.”

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

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More Economic Equality Brings Greater Political Polarisation in Brazilhttp://www.ipsnews.net/2014/11/more-economic-equality-brings-greater-political-polarisation-in-brazil/?utm_source=rss&utm_medium=rss&utm_campaign=more-economic-equality-brings-greater-political-polarisation-in-brazil http://www.ipsnews.net/2014/11/more-economic-equality-brings-greater-political-polarisation-in-brazil/#comments Sat, 08 Nov 2014 05:54:33 +0000 Mario Osava http://www.ipsnews.net/?p=137654 The Sauce port industrial complex in the state of Pernambuco in northeast Brazil, where some 200 companies from different sectors will operate. Credit: Mario Osava/IPS

The Sauce port industrial complex in the state of Pernambuco in northeast Brazil, where some 200 companies from different sectors will operate. Credit: Mario Osava/IPS

By Mario Osava
RIO DE JANEIRO, Nov 8 2014 (IPS)

“If I had to choose today I would stay back home, I wouldn’t come to look for work here,” said Josefa Gomes, who 30 years ago moved from Serra Redonda, a small town in Brazil’s semiarid northeast, to the city of Rio de Janeiro, 2,400 km away.

She reached that conclusion as a result of the changes she has seen in her hometown, population 7,000, during visits to her family in recent years. “Everything has changed, now people have electricity, there’s work in the flour mills, shoe factories, or farming cooperatives,” she told IPS.

Besides, thanks to paved roads and buses that pass frequently, it only takes 40 minutes to reach Campina Grande, a city of around 400,000, from her town. “It used to take over an hour,” she said.

The economy of the northeast, Brazil’s poorest region, has been growing since the past decade at a pace much higher than the national average, which has been nearly stagnant since 2012, due to the slowdown in the traditional motor of the economy: the south.The northeast is enjoying strong economic growth that has reduced the gap with the most developed part of the country, the south and southeast. The progress made and the expectations of further advances strengthened regional support for Rousseff.

The southern state of São Paulo is in recession. Its industrial output accounted for over 31 percent of the national total in 2011, compared to 38 percent 10 years earlier, according to an Oct. 6 study by the National Industrial Confederation.

The 7.7 percentage points lost were distributed among other states, including the nine states of the northeast.

That trend has been exacerbated since last year by an industrial crisis whose epicentre is São Paulo. Brazil’s industrial production fell 2.9 percent in the first nine months of this year, compared to the same period in 2013.

The country’s industrial decentralisation, added to other factors, has reduced the economic inequality between Brazil’s regions, at the expense of the traditional industrial centres of this Latin American powerhouse of 200 million people.

The dichotomy in the economic geography fuelled the opposite behavior of voters in Brazil’s recent elections. President Dilma Rousseff was reelected with 71.7 percent of the vote in the northeast in the Oct. 27 runoff.

But her triumph was threatened by a broad opposition majority in São Paulo, where 64.3 percent of voters backed her rival, the pro-business Aécio Neves.

The electoral divide in Brazil tends to be attributed to the government’s social programmes, especially Bolsa Familia, which have pulled some 36 million Brazilians out of poverty during the governments of the left-wing Workers Party led by Luiz Inácio Lula da Silva since 2003 and Rousseff since 2011.

A rural settlement in the state of Pernambuco, in the northeast of Brazil, with tanks to collect and store rainwater and make it potable, which form part of the small community infrastructure projects that have mushroomed in the region. Credit: Mario Osava/IPS

A rural settlement in the state of Pernambuco, in the northeast of Brazil, with tanks to collect and store rainwater and make it potable, which form part of the small community infrastructure projects that have mushroomed in the region. Credit: Mario Osava/IPS

The northeast is enjoying strong economic growth that has reduced the gap with the most developed part of the country, the south and southeast. The progress made and the expectations of further advances strengthened regional support for Rousseff.

Bolsa Familia funnels some 440 million dollars a month to the northeast, where the monthly cash transfer is received by 6.5 million families – nearly half of the programme’s recipients nationwide.

But that is only one-sixth of what is received by the 8.8 million retirees and pensioners of the region, from the social security system, economist Cícero Péricles de Carvalho told IPS.

Moreover, of Brazil’s five geographic regions, the northeast generated the most formal sector jobs in the past few years. There are currently nearly nine million workers with contracts in the region – double the number at the start of the 21st century, he said.

“The number of formal sector jobs in the construction industry alone increased from 195,000 in 2003 to 650,000 today,” Carvalho said.

The greater number of formal sector jobs means better wages, which also rose thanks to the policy of increasing the minimum wage adopted by Lula and Rousseff, besides improved access to bank loans – all of which has driven up buying power and consumption.

“The additional income, also from scholarships and pensions, which doubled between 2003 and 2014, and the new jobs have fuelled demand tremendously, because the beneficiaries don’t save, they spend everything on consumption,” said Carvalho, a professor at the Federal University of Alagoas, a small state in the northeast.

The rise in consumption bolstered commerce, which has in turned driven the expansion of networks of supermarkets and new industries to meet the growing demand, like factories of construction materials, clothing and food.

Another reason for the expansion was the Growth Acceleration Programme, implemented since 2007 and consisting of a set of economic policies and investment and infrastructure projects ranging from small community endeavours to giant megaprojects like the diversion of the São Francisco river, which includes the construction of 700 km of channels and tunnels to carry water to 12 million people.

“That unexpected dynamic has generated economic development as well as social inclusion, with social gains that aren’t limited to income,” such as the increase in access to electricity through the programme “Light for all” or the expansion in health and education coverage, Carvalho said.

Nevertheless, living standards in the northeast are still far below the national average, and the difference has only been reduced slowly, also because the region’s economic growth has been concentrated in the coastal areas, he added.

Deindustrialisation

Brazil’s process of deindustrialisation has also affected the northeast, but to a lesser degree than in São Paulo and with better prospects for the future, another local economist, João Policarpo Lima of the Federal University of Pernambuco, told IPS.

There are large-scale projects that will accelerate industrial expansion when they come fully onstream, he said. They include a refinery, a petrochemical plant and the world’s biggest Fiat assembly plant, being built in the northeast state of Pernambuco, which has grown the most in the past few years.

Large companies have set up shop in two port-industrial complexes: Suape in Pernambuco, and Pecém in the neighbouring state of Ceará. Suape also attracted more than 100 companies, including a major shipyard and the biggest flour mill in Latin America, besides the refinery and petrochemical plant.

Meanwhile, in São Paulo the strong opposition vote and the vehement rejection of the Workers’ Party, Lula and Rousseff were connected to the economic losses.

In protests in the city of São Paulo before and after the elections, demonstrators chanted increasingly hate-filled slogans against the “nordestinos” for “selling” their vote in exchange for Bolsa Familia, which provides an average monthly stipend of 70 dollars.

The industrial setback was especially felt in the sugarcane industry, which produces sugar and ethanol and represents 80 percent of the agricultural economy of São Paulo, said businessman Maurilio Biagi Filho of Ribeirão Preto, a city known as the “sugarcane capital”.

“The sector is caught up in a serious crisis that has given rise to a sense of desperation and will take many years to overcome, even if measures are adopted to bring about a recovery,” he told IPS.

The business community and analysts blame the crisis on gasoline price controls implemented by Rousseff to curb inflation. Ethanol, the cost of which is rising, has been unable to compete with the subsidised fossil fuel prices.

The situation was aggravated with the drop in sugar prices since 2010 and this year’s drought, which led to water rationing in more than 130 towns and cities in the state of São Paulo.

Dozens of sugar mills went under or suspended production in the past few years, while many others accepted legal accords to avoid insolvency proceedings or were purchased by foreign corporations. An estimated 300,000 jobs were lost.

The magnitude of the crisis and the perception that it is largely due to the government “influenced voters (in São Paulo), especially in the interior,” Biagi concluded.

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

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“Yeil” – The New Energy Buzzword in Argentinahttp://www.ipsnews.net/2014/10/yeil-the-new-energy-buzzword-in-argentina/?utm_source=rss&utm_medium=rss&utm_campaign=yeil-the-new-energy-buzzword-in-argentina http://www.ipsnews.net/2014/10/yeil-the-new-energy-buzzword-in-argentina/#comments Mon, 27 Oct 2014 15:53:00 +0000 Fabiana Frayssinet http://www.ipsnews.net/?p=137400 Technicians discuss their work near two drill rigs at the Vaca Muerta oil field in Loma Campana, in southern Argentina. Credit: Fabiana Frayssinet/IPS

Technicians discuss their work near two drill rigs at the Vaca Muerta oil field in Loma Campana, in southern Argentina. Credit: Fabiana Frayssinet/IPS

By Fabiana Frayssinet
NEUQUÉN, Argentina, Oct 27 2014 (IPS)

In Argentina they call it “yeil”, the hispanicised version of “shale”. But while these unconventional gas and oil reserves are seen by many as offering a means to development and a route towards energy self-sufficiency, others believe the term should fall into disuse because the global trend is towards clean, renewable sources of energy.

Wearing an oil-soaked uniform, the drilling supervisor in the state oil company YPF, Claudio Rueda, feels like he is playing a part in an important story that is unfolding in southern Argentina.

“Availability of energy is key in our country,” he told IPS. “It’s an essential element in Argentina’s development and future, and we are part of that process.”

The first chapter of the story is being written in the Vaca Muerta shale oil and gas field in Loma Campana in the province of Neuquén, which forms part of Argentina’s southern Patagonia region, where rich unconventional reserves of gas and oil are hidden in rocky structures 2,500 to 3,000 metres below the surface.

According to YPF, reserves of 802 trillion cubic feet of reserves put Argentina second in the world in shale gas deposits, after China, with 1,115 trillion cubic feet.

And in shale oil reserves, Argentina is now in fourth place, with 27 billion barrels, after Russia, the United States and China.“Staking our bets on fracking means reinforcing the current energy mix based on fossil fuels, and as a result, it spells out a major setback in terms of alternative scenarios or the transition to clean, renewable energy sources.” -- Maristella Svampa

According to projections, Argentina’s conventional oil and gas reserves will run out in eight or 10 years and production is declining, so the government considers the development of Vaca Muerta, a 30,000-sq-km geological formation, strategic.

“Nearly 30 percent of the country’s energy is imported, in different ways – a huge drain on the country’s hard currency reserves,” Rubén Etcheverry, coauthor of the book “Yeil, las nuevas reservas” (Yeil, the new reserves) and former Neuquén provincial energy secretary, said in an interview with IPS.

“We have been in intensive therapy for the last five years, with respect to the trade balance and the energy balance,” he said in Neuquén, the provincial capital.

“We went from exporting nearly five billion dollars a year in fuel, 10 years ago, to spending 15 billion dollars on imports; in other words, the balance has shifted by 20 billion dollars a year – an enormous change for any economy of this size,” Etcheverry said.

Imports include electricity and liquefied gas, natural gas and other fuels.

Diego Pérez Santiesteban, president of Argentina’s Chamber of Importers, said that at the start of the year, energy purchases represented 15 percent of all imports, compared to just five percent a year earlier.

Since 2009, accumulated imported energy has surpassed the Central Bank’s foreign reserves of 28.4 billion dollars.

Etcheverry sees Vaca Muerta as key to turning that tendency around, because the reserves found deep under the surface would be “enough to make us self-sufficient, and would even allow us to export.”

According to the expert, Argentina could follow in the footsteps of the United States, which thanks to its shale deposits “could become the world’s leading producer of gas and oil in less than 10 years.”

Shale gas and oil are extracted by means of a process known as hydraulic fracturing or fracking, which involves pumping water, chemicals and sand at high pressure into the well, and opening and extending fractures deep under the surface in the shale rock to release the fossil fuels.

But there is a growing outcry around the world against the pollution caused by fracking in the water table and other environmental impacts in wide areas around the deposits.

And in Argentina many voices have also been raised against the energy mix that has been chosen.

“This is an environmental point of view that goes beyond Vaca Muerta. The option that they are trying to impose in Argentina, as a solution to the energy crisis…has no future prospects,” said ecologist Silvia Leanza of the Ecosur Foundation.

“We’re basing all of our economic expansion on one asset here – but how many years will it last?” she asked.

Fossil fuels make up nearly 90 percent of Argentina’s energy mix. The rest is based on nuclear and hydroelectric sources, and just one percent renewable.

The Intergovernmental Panel on Climate Change (IPCC) has concluded that the burning of fossil fuels to generate energy is the main cause of climate change.

“This situation, along with the greater availability of renewable sources, indicates the end of the era of dirty energy sources,” Mauro Fernández, head of Greenpeace Argentina’s energy campaign, said in a report.

This country’s dependence on fossil fuels has made carbon dioxide emissions per capita among the highest in the region: 4.4 tons in 2009, according to the World Bank.

Fernández said unconventional fossil fuels are not only risky because of fracking, but are also “a bad alternative from a climate and energy point of view.”

“Unconventional deposits look like a new frontier for doing more of the same, fueling the motor of climate change,” he complained.

Argentina has set a target for at least eight percent of the country’s electricity to come from renewable sources by 2016.

“Staking our bets on fracking means reinforcing the current energy mix based on fossil fuels, and as a result, it spells out a major setback in terms of alternative scenarios or the transition to clean, renewable energy sources,” said sociologist Maristella Svampa, an independent researcher with the National Scientific and Technical Research Council.

“In the last decade, fracking has certainly transformed the energy outlook in the United States, making it less dependent on imports. But it has also made it the place where the real impacts can be seen: pollution of groundwater, damage to the health of people and animals, earthquakes, greater emissions of methane gas, among others,” she said.

Carolina García with the Multisectoral Group against Hydraulic Fracturing said that because of its rich natural resources, Argentina has other alternatives that should be tapped before exploiting fossil fuels “to the last drop.”

“We finish extracting everything in the Neuquén basin and what do we have left?” she commented to IPS.

Etcheverry mentioned the possibility of using solar energy in the north, wind energy in Patagonia and along the Atlantic shoreline, geothermic energy in the Andes, and tidal and wave energy along the coast.

But the author said that for now the costs were “much higher” than those of fossil fuels, because of technological reasons, transportation aspects and energy intensity.

He also said oil and gas are still necessary as energy sources and raw materials for everyday products.

For that reason, Etcheverry said, the transition from the fossil fuels era “is not simple.” First it is necessary to improve energy savings and efficiency, in order to later shift to less polluting fossil fuels, he added.

“In the first stage it would be a question of moving from the most polluting fossil fuels like coal and oil towards others that are less polluting, like natural gas. And from there, creating incentives for everything that has to do with clean or renewable energies,” he said.

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

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Añelo, from Forgotten Town to Capital of Argentina’s Shale Fuel Boomhttp://www.ipsnews.net/2014/10/anelo-from-forgotten-town-to-capital-of-argentinas-shale-fuel-boom/?utm_source=rss&utm_medium=rss&utm_campaign=anelo-from-forgotten-town-to-capital-of-argentinas-shale-fuel-boom http://www.ipsnews.net/2014/10/anelo-from-forgotten-town-to-capital-of-argentinas-shale-fuel-boom/#comments Thu, 23 Oct 2014 16:01:56 +0000 Fabiana Frayssinet http://www.ipsnews.net/?p=137341 The main street of Añelo, a remote town in Argentina’s southern Patagonia region which is set to become the country’s shale oil capital. In 15 years the population will have climbed to 25,000, 10 times what it was just two years ago. Credit: Fabiana Frayssinet/IPS

The main street of Añelo, a remote town in Argentina’s southern Patagonia region which is set to become the country’s shale oil capital. In 15 years the population will have climbed to 25,000, 10 times what it was just two years ago. Credit: Fabiana Frayssinet/IPS

By Fabiana Frayssinet
AÑELO, Argentina, Oct 23 2014 (IPS)

This small town in southern Argentina is nearly a century old, but the unconventional fossil fuel boom is forcing it to basically start over, from scratch. The wave of outsiders drawn by the shale fuel fever has pushed the town to its limits, while the plan to turn it into a “sustainable city of the future” is still only on paper.

The motto of this small town in the province of Neuquén is upbeat and premonitory: “The future found its place.”

But for now the town’s roads, most of which are unpaved and throw up clouds of dust from the heavy traffic of trucks and luxury cars driven by oil company executives, contradict that slogan.

“Many eyes around the world are on Añelo, but unfortunately we don’t have a good showcase, to put us on display,” the director of the town’s health centre, Rubén Bautista, told IPS.

“We are living on top of black gold, they take riches out of our soil, but they leave practically nothing to the local population,” added the doctor who, along with three other colleagues, covers the health needs of a population that doubled, from 2,500 to 5,000, in just two years.According to conservative projections, Añelo will have a population of 25,000 in 15 years, including people directly employed by the oil industry, indirect workers, and their families, who have begun to pour into the new mecca for Argentina’s energy self-sufficiency plans.

Añelo, a bleak town on the banks of the Neuquén river surrounded by fruit trees, goats and vineyards, is the town closest to the Loma Campana shale oil field, which is being worked by Argentina’s state oil company YPF and the U.S.-based Chevron.

It is only eight km from the oil field, which is part of new riches that hold out the biggest promise for revenue to fuel the country’s development: Vaca Muerta, a 30,000-sq km geological reserve that is rich in shale oil and gas and has made this country the second in the world after the United States in production of unconventional fossil fuels.

But the black gold is not shining yet in Añelo – which means forgotten place in the Mapuche indigenous language – located some 100 km north of Neuquén, the provincial capital.

The health centre, which refers serious cases to hospitals in the provincial capital, has just two ambulances, while 117 companies from across the planet are setting up shop in and around the town.

According to conservative projections, Añelo will have a population of 25,000 in 15 years, including people directly employed by the oil industry, indirect workers, and their families, who have begun to pour into the new mecca for Argentina’s energy self-sufficiency plans.

“They are people who come to Añelo with the idea of finding a better future…thinking about what unconventional fossil fuels could mean in their lives,” YPF Neuquén’s communications manager, Federico Calífano, told IPS.

YPF alone has 720 employees in the area. The workers come from nearby towns as well as other provinces, and from abroad, brought in by international companies in the construction, chemistry, hotel, transportation and services industries.

The town’s only hotel is full, and camps spring up on any flat area, with containers turned into comfortable temporary lodgings for the workers. Rent for a small apartment is five times what people pay in the most expensive neighbourhoods in Buenos Aires.

“We are building a city from scratch,” Añelo Mayor Darío Díaz told IPS, although he pointed out that even before the shale boom the town was “a strategic waypoint.”

YPF has been exploiting unconventional fossil fuels in the region since the 1980s, but “when their work was done they would leave,” Díaz explained. “This is much more intensive; there will be a lot of work over the next 30 years.”

“The town has infrastructure for around 2,500 inhabitants. It is too small now given the new demand for basic services like water, electricity, roads, and dust emission,” the province’s environment secretary, Ricardo Esquivel, told IPS.

The sound of hammering and pounding is constant. Two workers, who make the 120-km commute back and forth every day from Cipolletti, in the neighbouring province of Río Negro, are working on a new sidewalk. “It’s spectacular.There’s a lot of work here for everyone. More people are needed. The problem is housing,” construction worker Esteban Aries told IPS.

The YPF Foundation carried out an “urban footprint” study which gave rise to the Añelo Local Development Plan. The plan has the support of the Inter-American Development Bank (IDB) and its Emerging Sustainable Cities Initiative.

Carried out together with the local and provincial governments, the plan outlines different growth scenarios with the aim of assessing the risks and vulnerabilities of the area.

It addresses, among other aspects, “what surface area the city should have, how the urban planning process should start, what the diagram should look like, what services are needed – what Añelo is going to need today and in two, three, or five years,” Calífano said.

YPF reported that the work had already begun, including an expansion of the sanitation system, construction of homes for doctors, and a vocational training centre, linked to the needs of the oil industry. Primary healthcare clinics were set up in two trailer trucks – although Dr. Bautista said that’s not enough.

The economic growth has brought heavy traffic. The government is planning a two-lane highway to Vaca Muerta, on the so-called “oil route”, to keep the trucks out of the town.

“The steadily growing number of accidents is overwhelming,” Bautista said. The average has increased from 10 traffic and work-related accidents a month two years ago to 17 today.

“You have to keep in mind that most of the activity has been going on for a year,” said Pablo Bizzotto, YPF’s regional manager of unconventional fuels in Loma Campana, where some 20 wells are drilled every month, which has driven production up from 3,000 to 21,000 barrels per day of oil.

“There are things that we will obviously work out together with the authorities, as we go. This is all very new,” he said.

Agricultural engineer Eduardo Tomada left everything behind in Buenos Aires and invested his savings to open up a restaurant in Añelo, which is now packed with workers.

His cook, local resident Norma Olate, said she was happy because she’s earning more. But she nostalgically remembers when her town was “practically a sand dune.”

Development has brought work, “but also bad things,” the 60-year-old Olate told IPS. “There have been armed robberies, which we didn’t see here before.”

Olate, who has young, single daughters, said she is also worried about “the invasion of men.”

“So many men!” she said, laughing. “I’m not interested anymore, but the girls…there are guys who come and deceive them, a lot of them end up pregnant….that’s bad for the town too.”

Provincial lawmaker Raúl Dobrusín of the opposition Popular Unity party denounced the rise in prostitution, drug trafficking and use, alcoholism and corruption.

“We say the only things modernised in Añelo were the casino and the brothel,” he said ironically.

Dobrusín complained about the government’s lack of “planning” and “control” over these and other problems, such as real estate speculation and prices that are now unaffordable for many people in the town.

Nevertheless, for Mayor Díaz the balance is positive. “We have to take advantage of this opportunity for Añelo to develop as a town and improve the living standards of our people. What worries me is whether we will make the necessary investments quickly enough,” he said.

The province is preparing a “strategic development plan” for Añelo, along with nearby “oil micro-cities”, which will include the construction of an industrial park, schools, hospitals, roads and housing, and increased security.

“We’re not going to build an oil camp in Añelo without a city,” the mayor summed up.

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

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Fracking Fractures Argentina’s Energy Developmenthttp://www.ipsnews.net/2014/10/fracking-fractures-argentinas-energy-development/?utm_source=rss&utm_medium=rss&utm_campaign=fracking-fractures-argentinas-energy-development http://www.ipsnews.net/2014/10/fracking-fractures-argentinas-energy-development/#comments Wed, 08 Oct 2014 22:19:22 +0000 Fabiana Frayssinet http://www.ipsnews.net/?p=137074 Pear trees in bloom on a farm in Allen, in the Argentine province of Río Negro, across from a “tight gas” deposit. Pear growers are worried about their future, now that the production of unconventional fossil fuels is expanding in the area. Credit: Fabiana Frayssinet/IPS

Pear trees in bloom on a farm in Allen, in the Argentine province of Río Negro, across from a “tight gas” deposit. Pear growers are worried about their future, now that the production of unconventional fossil fuels is expanding in the area. Credit: Fabiana Frayssinet/IPS

By Fabiana Frayssinet
AÑELO, Argentina, Oct 8 2014 (IPS)

Unconventional oil and gas reserves in Vaca Muerta in southwest Argentina hold out the promise of energy self-sufficiency and development for the country. But the fracking technique used to extract this treasure from underground rocks could be used at a huge cost.

The landscape begins to change when you get about 100 km from Neuquén, the capital of the province of the same name, in southwest Argentina. In this area, dubbed “the Saudi Arabia of Patagonia”, fruit trees are in bloom and vineyards stretch out green towards the horizon, in the early southern hemisphere springtime.

But along the roads, where there is intense traffic of trucks hauling water, sand, chemicals and metallic structures, oil derricks and pump stations have begun to replace the neat rows of poplars which form windbreaks protecting crops in the southern region of Patagonia.

“Now there’s money, there’s work – we’re better off,” truck driver Jorge Maldonado told Tierramérica. On a daily basis he transports drill pipes to Loma Campana, the shale oil and gas field that has become the second-largest producer in Argentina in just three years.“That water is not left in the same condition as it was when it was removed from the rivers; the hydrologic cycle is changed. They are minimising a problem that requires a more in-depth analysis.” -- Carolina García

It is located in Vaca Muerta, a geological formation in the Neuquén basin which is spread out over the provinces of Neuquén, Río Negro and Mendoza. Of the 30,000 sq km area, the state-run YPF oil company has been assigned 12,000 sq km in concession, including some 300 sq km operated together with U.S. oil giant Chevron.

Vaca Muerta has some of the world’s biggest reserves of shale oil and gas, found at depths of up to 3,000 metres.

A new well is drilled here every three days, and the demand for labour power, equipment, inputs, transportation and services is growing fast, changing life in the surrounding towns, the closest of which is Añelo, eight km away.

“Now I can provide better for my children, and pay for my wife’s studies,” said forklift operator Walter Troncoso.

According to YPF, Vaca Muerta increased Argentina’s oil reserves ten-fold and its gas reserves forty-fold, which means this country will become a net exporter of fossil fuels.

But tapping into unconventional shale oil and gas deposits requires the use of a technique known as hydraulic fracturing or “fracking” – which YPF prefers to refer to as “hydraulic stimulation”.

According to the company, the technique involves the high-pressure injection of a mix of water, sand and “a small quantity of additives” into the parent-rock formations at a depth of over 2,000 metres, in order to release the trapped oil and gas which flows up to the surface through pipes.

The extraction of unconventional fossil fuels at the YPF deposit in Loma Campana has already begun to irrevocably affect life in the surrounding areas. Credit: Fabiana Frayssinet/IPS

The extraction of unconventional fossil fuels at the YPF deposit in Loma Campana has already begun to irrevocably affect life in the surrounding areas. Credit: Fabiana Frayssinet/IPS

Víctor Bravo, an engineer, says in a study published by the Third Millennium Patagonia Foundation, that some 15 fractures are made in each well, with 20,000 cubic metres of water and some 400 tons of diluted chemicals.

The formula is a trade secret, but the estimate is that it involves “some 500 chemical substances, 17 of which are toxic to aquatic organisms, 38 of which have acute toxic effects, and eight of which are proven to be carcinogenic,” he writes. He adds that fracking fluids and the gas itself can contaminate aquifers.

Neuquén province lawmaker Raúl Dobrusin of the opposition Popular Union bloc told Tierrámerica: “The effect of this contamination won’t be seen now, but in 15 or 20 years.”

During Tierramérica’s visit to Loma Campana, Pablo Bizzotto, YPF’s regional manager of unconventional resources, played down these fears, saying the parent-rock formations are 3,000 metres below the surface while the groundwater is 200 to 300 metres down.

“The water would have to leak thousands of metres up. It can’t do that,” he said.

Besides, the “flowback water”, which is separated from the oil or gas, is reused in further “hydraulic stimulation” operations, while the rest is dumped into “perfectly isolated sink wells,” he argued. “The aquifers do not run any risk at all,” he said.

But Dobrusin asked “What will they do with the water once the well is full? No one mentions that.”

According to Bizzotto, the seismic intensity of the hydraulic stimulation does not compromise the aquifers either, because the fissures are produced deep down in the earth. Furthermore, he said, the wells are layered with several coatings of cement and steel.

“We want to draw investment, generate work, but while safeguarding nature at the same time,” Neuquén’s secretary of the environment, Ricardo Esquivel, told Tierramérica.

In his view, “there are many myths” surrounding fracking, such as the claim that so much water is needed that water levels in the rivers would go down.

Neuquén, he said, uses five percent of the water in its rivers for irrigation, human consumption and industry, while the rest flows to the sea. Even if 500 wells a year were drilled, only one percent more of the water would be used, he maintained.

But activist Carolina García with the Multisectorial contra el Fracking group told Tierrámerica: “That water is not left in the same condition as it was when it was removed from the rivers; the hydrologic cycle is changed. They are minimising a problem that requires a more in-depth analysis.”

She pointed out that fracking is questioned in the European Union and that in August Germany adopted an eight-year moratorium on fracking for shale gas while it studies the risks posed by the technique.

YPF argues that these concerns do not apply to Vaca Muerta because it is a relatively uninhabited area.

“The theory that this is a desert and can be sacrificed because no one’s here is false,” said Silvia Leanza with the Ecosur Foundation.

“There are people, the water runs, and there is air flowing here,” she commented to Tierramérica. “The emissions of gases and suspended dust particles can reach up to 200 km away.”

Nor does the “desert theory” ring true for Allen, a town of 25,000 people in the neighbouring province of Río Negro, which is suffering the effects of the extraction of another form of unconventional gas, tight gas sands, which refers to low permeability sandstone reservoirs that produce primarily dry natural gas.

In that fruit-growing area, 20 km from the provincial capital, the fruit harvest is shrinking as the number of gas wells grows, drilled by the U.S.-based oil company Apache, whose local operations in Argentina were acquired by YPF in March.

Apache leases farms to drill on, the Permanent Comahue Assembly for Water (APCA) complained.

“Going around the farms it’s easy to see how the wells are occupying what was fruit-growing land until just a few years ago. Allen is known as the ‘pear capital’, but now it is losing that status,” lamented Gabriela Sepúlveda, of APCA Allen-Neuquén.

A well exploded in March, shaking the nearby houses. It wasn’t the first time, and it’s not the only problem the locals have had, Rubén Ibáñez, who takes care of a greenhouse next to the well, told Tierramérica. “Since the wells were drilled, people started feeling dizzy and having sore throats, stomach aches, breathing problems, and nausea,” he said.

“They periodically drill wells, a process that lasts around a month, and then they do open-air flaring. I’m no expert, but I feel sick,” he said. “I wouldn’t drink this water even if I was dying of thirst….when I used it to water the plants in the greenhouse they would die.”

The provincial government says there are constant inspections of the gas and oil deposits.

“In 300 wells we did not find any environmental impact that had created a reason for sanctions,” environment secretary Esquivel said.

“We have a clear objective: for Loma Campana, as the first place that unconventional fossil fuels are being developed in Argentina, to be the model to imitate, not only in terms of cost, production and technique, but in environmental questions as well,” Bizzotto said.

“All technology has uncertain consequences,” Leanza said. “Why deny it? Let’s put it up for debate.”

This story was originally published by Latin American newspapers that are part of the Tierramérica network.

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

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Panama, a Country and a Canal with Development at Two Speedshttp://www.ipsnews.net/2014/10/panama-a-country-and-a-canal-with-development-at-two-speeds/?utm_source=rss&utm_medium=rss&utm_campaign=panama-a-country-and-a-canal-with-development-at-two-speeds http://www.ipsnews.net/2014/10/panama-a-country-and-a-canal-with-development-at-two-speeds/#comments Fri, 03 Oct 2014 22:29:11 +0000 Fabiola Ortiz http://www.ipsnews.net/?p=136997 Thanks to the expansion, the Panama Canal will be able to accommodate ships that carry up to 14,000 containers, instead of the current 5,000. Credit: Fabíola Ortiz/IPS

Thanks to the expansion, the Panama Canal will be able to accommodate ships that carry up to 14,000 containers, instead of the current 5,000. Credit: Fabíola Ortiz/IPS

By Fabiola Ortiz
PANAMA CITY, Oct 3 2014 (IPS)

With the expansion of the canal, Panama hopes to see its share of global maritime trade rise threefold. And many Panamanians hope the mega-engineering project will reduce social inequalities in a country where development is moving ahead at two different speeds.

The expansion is happening one hundred years after the inauguration of the canal that links the Pacific and Atlantic oceans. At the heart of the project is a third set of locks, larger than the current two, which will accommodate ships with a maximum length of 400 metres, a maximum width of 52 metres and a draught of 15 metres.

Currently the 12,000 ships going through the canal every year have a maximum length of 294 metres, a maximum width of 32 metres and a draught of 12 metres, which means the canal handles only about five percent of global seaborne trade.

The expansion of the canal - in numbers

Work on the expansion of the Panama Canal began in 2007 after the project was approved by 77 percent of voters in a referendum the year before. The initial completion date was this month - October 2014.

But the Grupo Unidos por el Canal SA, which is carrying out the expansion, suffered several delays because of labour strikes and the suspension of the construction work due to disputes over the cost of the project, which have now been worked out. The consortium is headed by the construction companies Sacyr from Spain and Impregilo from Italy, which each hold a 48 percent share.

The huge Post-Panamax ships, which will be able to pass through the canal after it has been expanded, will carry up to 14,000 containers, compared to the current maximum of 5,000 carried by Panamax vessels.

In addition, it will take only two and a half hours to go through the canal, instead of the current eight to ten, and the cost will be reduced by at least 12 percent.

Some 7,000 people are working on the canal expansion, 90 percent of whom are from Panama. The project has also generated around 35,000 indirect jobs, according to the Panama Canal Authority.

The construction work, which began in 2007 and is to be completed in December 2015, is 80 percent done, Ilya de Marotta, the engineer in charge of the expansion works in the Panama Canal Authority (ACP), the government agency responsible for the management of the canal, told IPS.

The aim of the expansion is to boost the canal’s share of global shipping traffic to 15 percent, Olmedo García, director of the University of Panama’s Canal Institute, explained in an interview with IPS.

The 5.2-billion-dollar project will mean the 79-km canal will be able to handle larger vessels capable of carrying nearly three times as many containers.

“The canal now contributes 1.1 billion dollars a year to the national budget. Gross revenues are 2.3 billion dollars, but operating the canal absorbs 1.2 billion,” the academic explained.

“As soon as we finish the expansion, we have to think of building a fourth set of locks, which would cost 12 billion dollars,” said García, because the canal “is and will be the country’s main economic and commercial activity.”

De Marotta said “the expansion was indispensable because the canal was reaching the maximum capacity of boats that could go through. The demand for bigger ships is a global tendency, for bulk carriers and liquefied natural gas carriers – a client we don’t have because they are bigger vessels.”

“This is a good business that we’ll be able to attract now,” she said. “The idea is to avoid falling behind in global trade; with the new locks a container ship could carry 12,000 to 14,000 containers,” the engineer said.

According to projections, the country’s canal revenue will have climbed to 2.5 billion dollars by 2019 and to six billion by 2025, García said.

“The big advantage is that we not only have the Panama Canal, but also the logistics centre; together they represent 40 percent of our GDP. We have the best logistics connectivity in Latin America, with ports on each ocean, railways and the free trade zone,” he said.

“We can create multimodal trade with the merchandise distribution ports,” he added.

The neglect of the historic centre of Colón near the Caribbean Sea entrance to the Panama Canal and next to the city’s Free Trade Zone reflects the contrast between the pace of economic growth and social development in this Central American country. Credit: Fabíola Ortiz/IPS

The neglect of the historic centre of Colón near the Caribbean Sea entrance to the Panama Canal and next to the city’s Free Trade Zone reflects the contrast between the pace of economic growth and social development in this Central American country. Credit: Fabíola Ortiz/IPS

Social development at another level

But Panama’s priorities must change in order for the promising economic prospects engendered by the expansion of the canal to translate into benefits for the poorest segments of the population.

Despite annual GDP growth of around seven percent, because of the high levels of inequality, 27.6 percent of the population is poor according to figures from Sept. 28, although García and other academic sources told IPS the poverty rate is actually nine percentage points higher.

In rural areas of this country of 3.8 million people poverty stands at 49.4 percent, compared to 12 percent in urban areas. Worst off are the country’s small indigenous minority, who suffer from a poverty rate of 70 to 90 percent.

And according to official figures from August, 38.6 percent of the economically active population is engaged in the informal sector of the economy.

Thousands of families lack piped water and services such as health care and transportation.

Alfredo Herazo, 29, lives in the capital but takes a bus every day to the city of Colón, where he works in a soldering workshop that he and his father set up. “I don’t like this life but I don’t have any other options,” he told IPS at the end of a long day of work, as he got ready for the 79-km commute back to Panama City.

Colón, the second largest city in Panama, is a port near the Caribbean Sea entrance to the canal and is surrounded by the area that was the Panama Canal Zone when it was under U.S. control.

The canal was fully handed over to Panama on Jan. 1, 2000, as stipulated by the “Torrijos- Carter” treaties signed by the two countries in 1977.

The 450-hectare Colón Free Trade Zone is the world’s second largest free trade area after Hong Kong, with 2,500 companies that import and re-export with a total annual business volume of 30 billion dollars – although business dipped in 2013 because of disputes with Colombia and Venezuela, its biggest clients.

The Colón Free Trade Zone receives 250,000 visitors a year from all over the world.

“Like any Panamanian, I would like to work on the canal or in the duty free zone, because of the salaries paid there. The canal is our pride and joy. If I get the chance, I would be a solderer there,” Herazo said.

The young man said “the problem with the canal, from the point of view of the ordinary citizen, is that we don’t see the profits, which aren’t distributed among the population.”

The neglect of the rundown historic buildings in Colón contrasts sharply with the modern free trade zone, illustrating the gap between the vibrant growth of the canal and the country’s financial and trade centres and the desperation of those included from the boom.

Cesar Santos, 32, has been living in Colón for seven years, making a living selling fruit and vegetables in the Municipal Market in the city centre. He sets up his stand early every morning across from the Municipal Park.

“With this I only have enough to live as a poor man. Life in Colón isn’t good,” he told IPS.

He lists the problems in the city, stressing the lack of sanitation and decent drainage systems. “When it rains, everything floods, the streets are impassable, the city is paralysed. After a downpour, everything is flooded,” he said.

Besides the lack of urban infrastructure, what bothers him the most is the living conditions of most of the people living in the city.

“People here are really poor,” he said. “People live in condemned houses. Besides all the assaults and thefts, this is a city that has been forgotten by the governments; good thing we have the free trade zone, otherwise there would be even worse poverty,” Santos said, while three customers nodded their heads in agreement.

García, in Panama City, said “The financial centres have to transfer part of their wealth. There is a serious social fracture. The canal can’t just be a channel for trade, communication and world peace. Panamanians need the social debts to be repaid, and part of the wealth should be transferred to the people.”

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

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Vaca Muerta, Argentina’s New Development Frontierhttp://www.ipsnews.net/2014/10/vaca-muerta-the-new-frontier-of-development-in-argentina/?utm_source=rss&utm_medium=rss&utm_campaign=vaca-muerta-the-new-frontier-of-development-in-argentina http://www.ipsnews.net/2014/10/vaca-muerta-the-new-frontier-of-development-in-argentina/#comments Wed, 01 Oct 2014 14:53:45 +0000 Fabiana Frayssinet http://www.ipsnews.net/?p=136949 A YPF driling derrick at the Vaca Muerta shale oil and gas field in Loma Campana in the Neuquén basin in southwest Argentina. Credit: Fabiana Frayssinet/IPS

A YPF driling derrick at the Vaca Muerta shale oil and gas field in Loma Campana in the Neuquén basin in southwest Argentina. Credit: Fabiana Frayssinet/IPS

By Fabiana Frayssinet
LOMA CAMPANA, Argentina , Oct 1 2014 (IPS)

Production here has skyrocketed so fast that for now the installations of the YPF oil company at the Loma Campana deposit in southwest Argentina are a jumble of interconnected shipping containers.

Argentina is staking its bets on unconventional oil and gas resources, and the race to achieve energy self-sufficiency and surplus fuel for export can’t wait for the comfort of a real office.

“The camp here is our temporary offices,” Pablo Bizzotto, regional manager of unconventional resources of the state-run YPF, told a group of foreign correspondents during a visit to this oilfield in the southwestern province of Neuquén. “I apologise. But this is what we were able to set up quickly when we began the operations.”

Since last year, Loma Campana, some 100 km from the city of Neuquén, has been the Argentine oil company’s operating base, where 15 to 20 wells are drilled every month in the Vaca Muerta shale oil and gas field in the Neuquén basin.

There are currently more than 300 wells producing unconventional gas and oil here and in other oil camps in this part of Argentina’s southern Patagonia region. Some 250 are operated by YPF and the rest by foreign oil companies.

The final installations, with offices and a control and remote operation room, will be ready by mid-2015. But work at the wells is moving ahead at a different pace.

From January 2013 to mid-2014, daily oil output climbed from 3,000 to 12,000 barrels per day, before jumping to 21,000 in September.

“Loma Campana is the only large-scale commercial development [of shale oil and gas] outside of the United States. The rest are just trials,” said Bizzotto, explaining the magnitude of the operations in Vaca Muerta, which contains shale oil and gas reserves at depths of up to 3,000 metres.

Unlike conventional oil and gas extracted from deposits where they have been trapped for millions of years, shale oil and gas are removed from deep parent-rock formations.

According to YPF, which has been assigned 12,000 sq km of the 30,000 sq km in Vaca Muerta, the recoverable potential is 802 trillion cubic feet of gas and 27 billion barrels of oil.

A worker walking near pipes used to extract shale oil and gas at YPF’s Loma Campana oilfield in the southwest Argentine province of Neuquén. The shipping containers used as temporary offices can be seen in the background. Credit: Fabiana Frayssinet/IPS

A worker walking near pipes used to extract shale oil and gas at YPF’s Loma Campana oilfield in the southwest Argentine province of Neuquén. The shipping containers used as temporary offices can be seen in the background. Credit: Fabiana Frayssinet/IPS

With that potential, the country now has 30 times more unconventional gas and nine times more unconventional oil than traditional reserves. Thanks to recoverable shale resources, Argentina now has the world’s second largest gas reserves, after China, and the fourth largest of oil, after Russia, the United States and China, according to YPF figures.

Bizzotto said that in terms of both quantity and quality, as measured by variables of organic matter, thickness and reservoir pressure, the reserves are comparable to the best wells in the Eagle Ford Shale in the U.S. state of Texas.

Rubén Etcheverry, former president of the Gas y Petróleo de Neuquén, a public company, said the reserves open up “a new possibility for development and self-sufficiency from here to five or ten years from now.”

This is encouraging for a country like Argentina, whose reserves and production had declined to the point where over 15 billion dollars in fuel had to be imported.

“The possibility of converting these resources into reserves means that Argentina could have gas and oil for more than 100 years,” Etcheverry, who is also a former Neuquén energy secretary, told IPS.

But the challenge is just that: turning the shale resources into actual reserves.

Since 2013, YPF has invested some two billion dollars in Vaca Muerta.
But because of the magnitude of the resources and the country’s difficulties in obtaining financing from abroad, Etcheverry said “new actors are needed” in order to achieve the required volumes of investment, which he estimates at 100 billion dollars over the next five or six years.

YPF, which was renationalised in 2012, when it was expropriated from Spain’s Repsol oil company that controlled it since 1999, is now looking for foreign partners – a strategy that some political and social sectors see as undermining national sovereignty.

In Loma Campana, YPF operates one portion with the U.S. oil giant Chevron and is developing another shale gas field with the U.S. Dow Chemical.

Other companies involved in the area are Petronas from Malaysia, France’s Total, the U.S.-based ExxonMobil, the British-Dutch Shell, and Germany’s Wintershall, while negotiations are underway with companies from other countries, including China and Russia.

According to provincial lawmaker Raúl Dobrusín of the opposition Unión Popular party of Neuquén, the oil companies are waiting for the Senate to approve a controversial new law on hydrocarbons.

The legislation would grant 35-year concessions, reduce the tariffs the companies pay for imports, and allow them to transfer 20 percent of the profits abroad, and if they do not do so they would be paid locally at international values and without tax withholding, Dobrusín said.

The development of unconventional fossil fuels has also run into criticism from environmentalists.

Hydraulic fracturing or “fracking” is the technique used for large-scale extraction of unonventional fossil fuels trapped in rocks, like shale gas. To release the natural gas and oil, huge volumes of water containing toxic chemicals are pumped underground at high pressure, fracturing the shale. The process generates large amounts of waste liquids containing dissolved chemicals and other pollutants that require treatment before disposal.

Environmentalists say fracking pollutes aquifers and releases more toxic gases than the extraction of conventional fossil fuels.

“There is no doubt that it causes pollution. Wells are abandoned without being cleaned up. Here in Plottier the water contains heavy metals and isn’t potable in most places, and we blame that on conventional production that has polluted the groundwater,” Darío Torchio, who has a business in Plottier, a city of 32,000 located 15 km from Neuquén, told IPS.

“Oil is a heavy inheritance for our descendants, which ruins everything, while the wealth goes to the companies,” said Torchio, a member of the Permanent Comahue Assembly for Water.

Silvia Leanza, with the environmental Ecosur Foundation, said Argentina is opting for a development model based on “neoextractivism”.

These plans, she told IPS, are “designed in the central countries as part of the neoliberal economic development and globalisation package, where we are suppliers of raw materials.”

“The focus is on the exploitation of a non-renewable resource, fossil fuels, which also has an economic impact, because that money could go towards clean energy sources that could also be developed in Patagonia,” Carolina García, an activist with the Multisectorial contra el Fracking group, told IPS.

“This is an alarm signal,” Etcheverry said. “The timeframe is very short. We had reserves for the next eight or 10 years.”

But the government of Cristina Fernández has no doubts about the model of development being followed.

“When unconventional gas and oil production in Vaca Muerta reaches 1,000 wells, the gross geographical product will tend to grow between 75 and 100 percent in the province of Neuquén. That will have a three to four percent impact on the country’s gross domestic product,” argued the head of the cabinet, Jorge Capitanich.

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

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Cuba’s Sugar Industry to Use Bagasse for Bioenergyhttp://www.ipsnews.net/2014/09/cubas-sugar-industry-to-use-bagasse-for-bienergy/?utm_source=rss&utm_medium=rss&utm_campaign=cubas-sugar-industry-to-use-bagasse-for-bienergy http://www.ipsnews.net/2014/09/cubas-sugar-industry-to-use-bagasse-for-bienergy/#comments Fri, 26 Sep 2014 15:08:45 +0000 Patricia Grogg http://www.ipsnews.net/?p=136902 The 5 de Septiembre sugar mill in the Cuban province of Cienfuegos. A subsidiary of the Brazilian construction giant Odebrecht is taking part in upgrading the plant, which will include construction of a bioenergy plant run on sugarcane bagasse. Credit: Jorge Luis Baños/IPS

The 5 de Septiembre sugar mill in the Cuban province of Cienfuegos. A subsidiary of the Brazilian construction giant Odebrecht is taking part in upgrading the plant, which will include construction of a bioenergy plant run on sugarcane bagasse. Credit: Jorge Luis Baños/IPS

By Patricia Grogg
HAVANA, Sep 26 2014 (IPS)

Cuba’s sugar industry hopes to become the main source of clean energy in the country as part of a programme to develop renewable sources aimed at reducing dependence on imported fossil fuels and protecting the environment.

The project forms part of the plans for upgrading and modernising sugar mills that have been opened up to foreign investment by Azcuba, the government business group that replaced the Sugar Ministry in 2011. Traditionally, sugar mills have generated electricity for their own consumption, using bagasse, the fibrous matter that remains after sugarcane stalks are crushed to extract their juice.

In a conversation with Tierramérica, Azcuba spokesman Liobel Pérez defended the production of energy using bagasse as a cheap, environmentally friendly alternative. “The CO2 [carbon dioxide] produced in the generation of electricity is the same amount that the sugar cane absorbs when it grows, which means there is an environmental balance.”

For now, the production of ethanol as a by-product of sugarcane is not being considered in Cuba, although some experts argue that the biofuel could reduce consumption of gasoline by farm machinery and transportation and thus limit atmospheric emissions.

“That is one of the issues being discussed and analysed by the government commission created to study the development of renewable energies,” said Manuel Díaz, director of the Cuban Institute of Research on Sugar Cane Derivatives. The official did not, however, rule out the possibility in the future.

“Even if it is not the definitive long-term solution to the consumption of automotive fuel, ethanol is an important factor and contributes to reducing fossil fuel use, and if it does not run counter to the use of land for food, it could be, it seems to me, an alternative that each country should analyse depending on its specific characteristics,” Díaz said.

A worker at the Jesús Rabí sugar mill in the Cuban province of Matanzas. The plant’s biomass will help increase electricity production from clean sources of energy in Cuba. Credit: Jorge Luis Baños/IPS

A worker at the Jesús Rabí sugar mill in the Cuban province of Matanzas. The plant’s biomass will help increase electricity production from clean sources of energy in Cuba. Credit: Jorge Luis Baños/IPS

The sugar industry currently accounts for 3.5 percent of electricity generation in this Caribbean island nation. A target of the plan to boost energy efficiency is for around 20 sugar mills to generate a surplus of 755 MW by 2030, to go into the national power grid.

That would raise the proportion of electricity produced by sugarcane biomass to 14 percent by 2030. The overall aim is for 24 percent of energy to come from renewable sources, including wind power (six percent), solar (three percent), and hydropower (one percent).

Currently, renewable energy sources only represent 4.6 percent of electricity generation; the rest comes from fossil fuels.

The gradual installation in the sugar mills of modern bioelectric plants needed to achieve that goal requires an estimated investment of 1.29 billion dollars, which Azcuba hopes to obtain from government loans or foreign investment.

“If we don’t find a loan we will get foreign investment,” said Jorge Lodos, business director for Zerus SA, a subsidiary of Azcuba. The executive told Tierramérica that the first two companies to enter into partnership with Cuba in the sector included the bioelectric plants in their plans, to boost energy efficiency.

The first of the plants that run on sugarcane biomass will begin to produce energy in 2016, Lodos said. It is to be built near the Ciro Redondo sugar mill in the province of Ciego de Ávila, 423 km from Havana, by Biopower, a joint venture established in 2012 by Cuba’s state-run Zerus and the British firm Havana Energy Ltd.

During the December to May harvest season, the plant will use sugarcane bagasse from the nearby sugar mill. The rest of the year it will use stored sugarcane waste and marabú (Dichrostachys cinérea), a woody shrub that has invaded vast areas of farmland in Cuba. The projected investment ranges between 45 and 55 million dollars.

Meanwhile, the Compañía de Obras e Infraestructura (COI), a subsidiary of Brazilian construction giant Odebrecht, reached an agreement with the Empresa Azucarera Cienfuegos, another Azcuba subsidiary, to jointly administer the 5 de Septiembre sugar mill in the province of Cienfuegos, 256 km from the capital, for 13 years.

In this case, the commitment is to bring the productive capacity of the sugar mill back up to 90,000 tons of sugar per harvest, or even higher.
Lodos said investment in the project would surpass 100 million dollars, and would also include the construction of a bioenergy plant.

These two sugar mills and the Jesús Rabí mill in the province of Matanzas, 98 km from Havana, will generate the first 140 MW of electricity in the medium term.

Havana Energy and COI opened the door to foreign capital in Cuba’s sugar industry, just as investment has already been welcomed in other sectors of this country’s centralised economy. “Foreign investment requires mutual trust,” Lodos said.

The socialist government of Raúl Castro estimates that the country needs between two and 2.5 billion dollars a year in foreign capital in order to grow and develop.

Of Cuba’s 56 sugar mills, six of which are now inactive, Azcuba has opened up 20 to foreign investment. The initial priorities are the eight built after the 1959 revolution.

Although ethanol production is not among the plans to be offered to foreign investors, many experts believe prospects for selling the fuel are good.

“It is not expected to be included in the programme,” Lodos said. “None of the minimum conditions required to introduce foreign investment are in place. It would not involve large amounts of capital or technology contribution, and it would not be for export or to replace imports. Today it isn’t on the business menu. But it might be tomorrow.”

Cuba produces alcohol in 11 distilleries, which are also to be upgraded, for pharmaceutical use and the industry that produces rum and other alcohol.

Cuba’s once-powerful sugar industry, which produced harvests of up to eight million tons, hit bottom in the 2009-2010 season when output plunged to 1.1 million tones – the lowest level in 105 years.

The industry currently represents around five percent of the country’s inflow of foreign exchange.

The hope is that the modernisation of factories, machinery, transport equipment and other resources will boost yields and bolster production, along with the increase in the planting of sugarcane. Last year 400,000 hectares were planted and production in the 2013-2014 harvest amounted to over 1.6 million tons.

This story was originally published by Latin American newspapers that are part of the Tierramérica network.

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

 

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A Flood of Energy Projects Clash with Mexican Communitieshttp://www.ipsnews.net/2014/09/a-flood-of-energy-projects-clash-with-mexican-communities/?utm_source=rss&utm_medium=rss&utm_campaign=a-flood-of-energy-projects-clash-with-mexican-communities http://www.ipsnews.net/2014/09/a-flood-of-energy-projects-clash-with-mexican-communities/#comments Mon, 15 Sep 2014 15:22:02 +0000 Emilio Godoy http://www.ipsnews.net/?p=136634 Trees on the bank of the Blanco river that have been felled to make way for a power plant. Hydroelectric projects are threatening biodiversity and the way of life of communities in the state of Veracruz, in southeast Mexico. Credit: Courtesy of Comité de Defensa Libre

Trees on the bank of the Blanco river that have been felled to make way for a power plant. Hydroelectric projects are threatening biodiversity and the way of life of communities in the state of Veracruz, in southeast Mexico. Credit: Courtesy of Comité de Defensa Libre

By Emilio Godoy
MEXICO CITY, Sep 15 2014 (IPS)

Since January, villagers and townspeople near the Los Pescados river in southeast Mexico have been blocking the construction of a dam, part of a multi-purpose project to supply potable water to Xalapa, the capital of the state of Veracruz.

“Our rights to a pollution-free life, to decide where and how we live, to information, to free, prior and informed consultation, are being infringed. We don’t want our territory to just be invaded like this any more,” Gabriela Maciel, an activist with the Pueblos Unidos de la Cuenca Antigua por Ríos Libres (PUCARL – Peoples of La Antigua Basin United For Free Rivers), told IPS.

PUCARL is made up of residents from 43 communities in 12 municipalities within the La Antigua river basin. Together with other organisations, it succeeded in achieving a suspension of work on the dam that was being built near Jalcomulco by Odebrecht, a Brazilian company, and the State of Veracruz Water Commission.

The dam has a planned capacity of 130 million cubic metres, a reservoir surface area of 4.13 square kilometres and a cost of over 400 million dollars. It is one of more than a hundred dams planned by federal and state governments, which are causing conflict with local communities.

Infrastructure building on a vast scale is under way in Mexico as part of the country’s energy reform. The definitive legal framework for this was enacted Aug. 11, opening up electricity generation and sales, as well as oil and gas extraction, refining, distribution and retailing, to participation by the domestic and foreign private sectors.

Nine new laws were created and another 12 were amended, implementing the historic constitutional reform that was promulgated Dec. 20.“Fossil fuels should not be given greater priority than a healthy environment. Zoning should be carried out, where possible, to indicate areas for exploitation and to establish constraints." -- Manuel Llano

The new energy framework is expected to attract dizzying sums in investments from national and international sources to Mexico, the second largest economy in Latin America, during the four-year period 2015-2018, according to official forecasts.

On Aug. 18 the Federal Electricity Commission (CFE) announced 16 investment projects worth 4.9 billion dollars. Of this total, 27 percent is for public projects and 73 percent is earmarked for the private sector.

In the framework of the 2014-2018 National Infrastructure Programme (PNI), the CFE is planning 138 projects for a total of 46 billion dollars, including hydroelectric, wind, solar and geothermal energy generation plants, transmission lines and power distribution networks.

“Environmental and social legislation has been undermined in order to attract investment. Laws guaranteeing peoples’ rights and land rights have been weakened. This heightens the risk of a flare-up of social and environmental conflicts. It is a backward step,” Mariana González, a researcher on transparency and accountability for Centro de Análisis Fundar, an analysis and research centre, told IPS.

State oil company Petróleos Mexicanos (PEMEX) is programmed to carry out 124 projects as part of the PNI, totalling over 253 billion dollars. They include gas pipelines, improvements to refineries, energy efficiency measures at oil installations and oil exploration and extraction projects, among others.

The majority of the planned investments are slated for the southeastern state of Campeche, where 43 billion dollars will be spent on the exploitation and maintenance of four offshore oilfields.

In second place is the adjacent state of Tabasco, with projects amounting to nearly 15 billion dollars for shallow water oilfields and for the construction and remodelling of oil installations.

In Veracruz, PEMEX is planning investments of 11 billion dollars in shallow water offshore reserves and building and modernising oil installations, while in the northeastern state of

Tamaulipas it will spend 6.67 billion dollars on deepwater facilities and infrastructure modernisation.
Hydrocarbons licensing rounds

On Aug. 13, the Energy ministry (SENER) determined Round Zero (R-0) allocations, assigning PEMEX the rights to 120 oilfields, equivalent to 71 percent of national oil production which is to remain under state control.

PEMEX was also awarded 73 percent of gas production in R-0.

PEMEX’s current daily production is 2.39 million barrels of crude and 6.5 billion cubic feet of gas.

For Round One (R-1) concessions, SENER called for tenders from private operators for 109 oil and gas exploration blocks and 60 production blocks.

The government estimates the investment required for these projects at 8.52 billion dollars between 2015 and 2018, for exploration and extraction in deep and shallow waters, land-based oilfields and unconventional fossil fuels like shale gas.

The National Hydrocarbons Commission (CNH), the industry regulator, is preparing the terms for the concessions. Contracts will be assigned between May and September 2015.

Manuel Llano, technical coordinator for Conservación Humana, an NGO, cross-referenced maps of the detailed areas involved in Round Zero and Round One with protected natural areas, indigenous peoples’ and community territories.

He told IPS that the total land area assigned in R-0 is nearly 48,000 square kilometres, distributed in 142 municipalities and 11 states. Most of the assigned area is in Veracruz, followed by Tabasco. R-1 allocations cover 11,000 square kilometres in 68 municipalities and eight states.

The lands affected by R-0 overlap with 1,899 out of the country’s 32,000 farming communities. R-1 areas affect another 671 community territories, representing 4,416 square kilometres of collectively owned land.

Thirteen indigenous peoples living in an area of 2,810 square kilometres are affected by the R-0 allocations. Among the affected groups are the Chontal, Totonac and Popoluca peoples. The R-1 areas involve five indigenous peoples, including the Huastec, Nahuatl and Totonac, and more than 3,200 square kilometres of land.

“It’s hard to say exactly which places will be worst affected. There could be a great deal of damage in a very small area. It depends on the particular situation in each case. I can make reasonable estimates about what might occur in a specific concession area, but not in all of them,” Llano said.

Llano carried out a similar exercise in 2013, when he produced the “Atlas de concesiones mineras, conservación y pueblos indígenas” (Atlas of mining concessions, conservation areas and indigenous peoples). For this he mapped mining concession areas and compared them with protected areas and indigenous territories.

The new Hydrocarbons Law leaves land owners no option but to reach agreement with PEMEX or the private licensed operators over the occupation of their land, or accept a judicial ruling if agreement cannot be reached.

“The institutions have not carried out their work correctly. We know how the government apparatus works to get what it wants. We will oppose the approval of concessions and they will not succeed. We will continue our struggle. We are not alone; other peoples have the same problems,” said Maciel, the PUCARL activist.

Since March, several social organisations have taken collective legal action against government agencies for authorising the dam on La Antigua river and its environmental consequences. Los Pescados river is a tributary of La Antigua.

Between 2009 and 2013, SEMARNAT, the Environment and Natural Resources ministry, gave the green light to 12 hydroelectric and mini-hydropower plants on rivers in Veracruz. Construction has not yet begun on these projects.

Llano intends to compare maps of oil and gas reserves with the concession areas and contracts that are granted, in order to locate the potential resources claimed by the government and identify whether they match the bids at auction.

“Fossil fuels should not be given greater priority than a healthy environment. Zoning should be carried out, where possible, to indicate areas for exploitation and to establish constraints,” he said.
Edited by Estrella Gutiérrez/Translated by Valerie Dee

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Cuba Sees Its Future in Mariel Port, Hand in Hand with Brazilhttp://www.ipsnews.net/2014/08/cuba-sees-its-future-in-mariel-port-hand-in-hand-with-brazil/?utm_source=rss&utm_medium=rss&utm_campaign=cuba-sees-its-future-in-mariel-port-hand-in-hand-with-brazil http://www.ipsnews.net/2014/08/cuba-sees-its-future-in-mariel-port-hand-in-hand-with-brazil/#comments Fri, 22 Aug 2014 13:16:51 +0000 Patricia Grogg http://www.ipsnews.net/?p=136278 The container terminal administrative building in the port of the Mariel special economic development zone in Cuba. Credit: Jorge Luis Baños/IPS

The container terminal administrative building in the port of the Mariel special economic development zone in Cuba. Credit: Jorge Luis Baños/IPS

By Patricia Grogg
HAVANA, Aug 22 2014 (IPS)

The Mariel special economic development zone, the biggest construction project undertaken in decades in Cuba, emerged thanks to financial support from Brazil, which was based on political goodwill, a strategy of integration, and business vision.

“Cuba would not have been able to undertake this project from a technical or economic point of view,” economist Esteban Morales told IPS. He added that the geographic setting makes the development zone strategic in terms of trade, industry and services in Latin America and the Caribbean.

Brazil financed the construction of the container terminal and the remodeling of the port of Mariel, which is equipped with state-of-the-art technology to handle cargo from Post-Panamax container ships that will begin to arrive when the expansion of the Panama Canal is completed in December 2015.

Post-Panamax refers to vessels that do not fit in the current Panama Canal, such as the supertankers and the largest modern container and passenger ships.

The port, 45 km west of Havana, is located along the route of the main maritime transport flows in the Western hemisphere, and experts say it will be the largest industrial port in the Caribbean in terms of both size and volume of activity.

Construction of the terminal, in the heart of the 465 sq km special economic development zone, has included highways connecting the Mariel port with the rest of the country, a railway network, and communication infrastructure, and the port will offer a variety of services.

In the special zone, currently under construction, there will be productive, trade, agricultural, port, logistical, training, recreational, tourist, real estate, and technological development and innovation activities, in installations that include merchandise distribution centres and industrial parks.

The special zone is divided into eight sectors, to be developed in stages. The first involves telecommunications and a modern technology park where pharmaceutical and biotechnology firms will operate – two sectors which will be given priority in Mariel, along with renewable energies, agriculture and food, among others.

The Cuban government is currently studying the approval of 23 projects from Europe, Asia and the Americas for Mariel, in the chemical, construction materials, logistics and equipment rental industries.

The terminal was inaugurated on Jan. 27, and during its first six months of operation it received 57 ships and some 15,000 containers – small numbers compared to the terminal’s warehouse capacity of 822,000 containers. Post-Panamax vessels can carry up to 12,600 containers, three times more than Panamax ships.

Another economist, Pedro Monreal, estimates that the cost per container will be cut in half.

The lower costs, he said, will improve the competitiveness of Brazil’s manufactured goods, to cite one example. Mariel, where a free trade zone will also operate, could become a platform for production and export by the companies, even for supplying Brazil’s domestic market.

Heavy machinery prepares the terrain for a railway that will form part of the new infrastructure linked to the special development zone in the port of Mariel – the biggest project undertaken in Cuba in decades: Credit: Jorge Luis Baños/IPS

Heavy machinery prepares the terrain for a railway that will form part of the new infrastructure linked to the special development zone in the port of Mariel – the biggest project undertaken in Cuba in decades: Credit: Jorge Luis Baños/IPS

Although Decree Law 313, which created the special economic development zone, was passed in September 2013, the remodeling of Mariel began three years ago, led by a joint venture formed in February 2010 by the Compañía de Obras e Infraestructura, a subsidiary of the private Brazilian construction firm Odebrecht, and Quality Cuba SA.

The container terminal is run by Global Ports Management Limited of Singapore, one of the world’s biggest container terminal operators, which has been working with the Cuban firm Almacenes Universales S.A, which is the owner and user of the terminal, and responsible for oversight of its efficient use.

The relationship between Cuba and Brazil is a longstanding one. Former Brazilian president Luiz Inácio Lula da Silva (2003-2010) did not hide his sympathies for the Cuban revolution, and has visited this country a number of times, first as a trade unionist and political party leader, and then as a president and former president.

Two packages of agreements signed in 2008 and 2010 between Lula and Cuban President Raúl Castro marked their interest in strengthening bilateral ties, an effort continued by current Brazilian President Dilma Rousseff.

When she attended the inauguration of the terminal, Rousseff said the project would take 802 million dollars in the first stage, plus 290 million for the second stage. The first of Brazil’s loans was initially to go towards construction of the road, but the local government decided to start with the port.

The credit was granted by Brazil’s National Bank of Economic and Social Development (BNDES). Havana provided 15 percent of the investment needed for the work.

“Cuba is a priority for our government, and Brazil is important to Havana,” the director general of the Brazilian Agency for the Promotion of Exports and Investments (APEX-Brazil), Hipólito Rocha, told IPS.

APEX-Brazil was created by Lula and Castro to promote joint business ventures with Cuba, the rest of the Caribbean and Central America.

Odebrecht is the most important company involved in Mariel, but diplomatic sources told IPS that a total of around 400 Brazilian companies are taking part in the project. “Between our countries there is affinity, political will, an interest in integration, but business matters are also important,” Rocha said.

He added that Cuba strictly lives up to its financial commitments with Brazil, and said bilateral relations “are solid, sustainable and bring benefits to our country as well.”

Analyst Arturo López-Levy said Brazil’s involvement in the Mariel project was decisive not only because of the investment. The political scientist, who lives in the United States, says the Brazilian government is sending a message to Washington and the European Union and other emerging powers that it backs the transformations underway in Cuba.

The presidents of China, Xi Jinping, and Russia, Vladimir Putin, also sent out signals when they visited Cuba in July, indicating their interest in expanding cooperation with Havana.

The two presidents stopped over in Cuba when they travelled to the sixth summit of the BRICS group (Brazil, Russia, India, China and South Africa), held Jul. 14-16 in Brazil.

The strengthening of ties promises greater access to the Chinese and Russian markets, attraction of investment in areas of common interest like the pharmaceutical and energy industries, and cooperation for the modernisation of strategic areas in defence, ports and telecommunications, López-Levy told IPS.

With respect to the possible interest of U.S. businesses in getting a foothold in the special economic development zone, and to an increase in pressure for the lifting of the five-decade U.S. embargo, the analyst said “the Cuban market awakens very limited interest in the United States.”

However, he said it was “clear” that U.S. investors are becoming more interested, especially Cuban-Americans.

“In order for this motivation to turn into political pressure against the embargo, the Cuban economy has to give out clear signs of recovery and of the government’s willingness, in key areas, to adopt a mixed economy with transparent guarantees for investors and export capacity,” he said.

Rocha has a somewhat different opinion.

“The embargo is going to collapse under its own weight,” he said. “Business will knock it down.”

It was seen as symbolic that the first ship that docked in the Mariel port after it began to operate brought food for Cuba from the United States – cash-only imports, which were authorised by the U.S. Congress in 2000.

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

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Chile Taps Solar Thermal Energy with Latin America’s First Planthttp://www.ipsnews.net/2014/08/chile-taps-solar-thermal-energy-with-latin-americas-first-plant/?utm_source=rss&utm_medium=rss&utm_campaign=chile-taps-solar-thermal-energy-with-latin-americas-first-plant http://www.ipsnews.net/2014/08/chile-taps-solar-thermal-energy-with-latin-americas-first-plant/#comments Tue, 05 Aug 2014 18:37:38 +0000 Marianela Jarroud http://www.ipsnews.net/?p=135949 Model of the Concentración Solar de Potencia de Cerro Dominador plant being built in the northern Chilean region of Antofagasta, which will begin to produce solar thermal energy in 2017. Credit: Abengoa Chile

Model of the Concentración Solar de Potencia de Cerro Dominador plant being built in the northern Chilean region of Antofagasta, which will begin to produce solar thermal energy in 2017. Credit: Abengoa Chile

By Marianela Jarroud
SANTIAGO, Aug 5 2014 (IPS)

With the first solar thermal power plant in Latin America, Chile hopes to begin to alleviate its energy crisis, which threatens to further drive up the high cost of electricity and to hinder the growth of investment, especially in the mining industry.

“We have a structural problem, which is that energy in Chile is very costly, and this not only represents a hurdle for economic growth but also hurts the poor,” government spokesman Álvaro Elizalde told Tierramérica.

This means, he added, “that we have to simultaneously increase the energy supply to bring down prices while promoting non-conventional renewable energy (NCRE) sources.”

The Spanish company Abengoa Solar, which has been operating in Chile since 1987, won the public tender in January to develop a solar tower plant with 110 MW capacity and 17.5 hours of thermal energy storage in molten salt.

The Concentración Solar de Potencia de Cerro Dominador plant, which began to be built in May by the company’s local subsidiary, Abengoa Solar Chile, is to come online in 2017 and will have a useful life of 30 years.

The plant will cost one billion dollars to build, and an additional 750 million dollars will go towards the construction of a photovoltaic solar plant that will double the power generated to 210 MW, spokespersons for the company in Chile told Tierramérica.

Abengoa will receive direct subsidies from the Chilean government and the European Union, as well as financing from the Inter-American Development Bank, the German development bank KFW, the Clean Technology Fund and the Canada Fund for Local Initiatives.

The plant is being installed in the municipality of María Elena, in the region of Antofagasta, 1,340 km north of Santiago in the Atacama desert, the most arid part of the planet, where the sun shines year-round.

The first solar thermal power plant in Latin America is being built in the Atacama desert in northern Chile, an area that has one of the highest levels of solar radiation in the world. Credit: Marianela Jarroud/IPS

The first solar thermal power plant in Latin America is being built in the Atacama desert in northern Chile, an area that has one of the highest levels of solar radiation in the world. Credit: Marianela Jarroud/IPS

Instead of solar panels, the plant will use 10,600 huge mirrors – heliostats – that span 140 square metres and follow the sun by means of a dual-axis tracking system that will reflect solar rays and heat to a 243-metre tower which will bear a resemblance to Sauron’s tower in the Lord of the Rings movies.

To achieve continuous on demand 24/7 electricity production, the plant will have a thermal energy system designed and developed by the Spanish firm. The heat will be transferred to molten salt, which is used at night to drive 110-MW steam-powered turbines.

The plant will thus offer clean energy 24 hours a day, which is key in Antofagasta, where the constantly growing mining industry already absorbs 90 percent of the power supply in the production of mainly copper."Thermal solar plants are capable of generating and storing energy, and in practice that means they can operate around the clock for most of the year, solely based on energy from the sun.” -- Professor Roberto Román

The company’s spokespersons also say the plant will prevent the emission of 643,000 tons of carbon dioxide annually, equivalent to the emissions of 357,000 vehicles circulating for one year. It should also fully cover the residential sector’s demand for energy in the region.

University of Chile Professor Roberto Román, an expert in NCRE, told Tierramérica that solar thermal energy has several advantages over other NCRE sources, and over photovoltaic systems.

He said thermal solar plants “are capable of generating and storing energy, and in practice, that means they can operate around the clock for most of the year, solely based on energy from the sun.”

In addition, “the power generation from these plants can be combined with other fuels, such as natural gas, to ensure 100 percent accessibility. That means the electricity needed can be generated according to demand, whenever it is needed,” he said.

“If these plants operate only with solar energy they produce zero emissions,” he added, while pointing out that it is a technology that is still being developed “which means there is space for research, development and innovation.

“This is what Spain has been doing over the last 20 years, and what I dream we will be capable of doing ourselves – harnessing the marvelous sunshine that is so abundant. There is enough sunshine here to supply all of Chile several times over,” Román said.

This South American country of 17.6 million people has 18,278 MW of gross installed capacity. Of that total, 74 percent is in the Sistema Interconectado Central (the central grid), 25 percent in the Sistema Interconectado Norte Grande (the northern grid), and the rest in medium-sized grids in the southern regions of Aysén and Magallanes.

Chile imports 97 percent of the fossil fuels that it needs. Hydropower makes up 40 percent of the energy mix, which is dependent on highly polluting fossil fuels that drive thermal power stations, for the rest.

This country’s shortage of energy sources has made the cost of electricity per megawatt/hour (MWh) in Chile one of the highest in Latin America: over 160 dollars, compared to 55 dollars in Peru, 40 in Colombia and 10 in Argentina.
Since she took office again in March, socialist President Michelle Bachelet has reiterated her commitment to developing NCRE sources: wind, geothermal, solar thermal and solar photovoltaic. The government’s target is for 20 percent of the country’s electricity to come from clean energy sources by 2025.

Solar power would appear to be the main focus of energy development in Chile over the next few years, as outlined in the “energy agenda” announced by the president on May 15.

In May, the government approved 43 projects for NCRE development, with the participation of local and international companies, all of them in northern Chile and most of them involving solar photovoltaic power plants.

They would generate a combined total of 2,261 MW a year, which would increase the country’s gross installed capacity by 12.3 percent, when they all come online.

Román cautioned that, in the case of solar thermal energy, “there are still many things that must be worked out, such as how the materials and elements will behave in the aggressive desert climate and how serious and complicated the question of dust and cleaning of the mirrors will be.”

He said this, added to other problems such as water scarcity in the desert, “drive the investment up to two or four times the cost of installing solar photovoltaic plants.”

But, he stressed, solar thermal plants produce “two or three times as much power, which means the real difference in the cost of the energy is not that big.

“Because of all this, I see it as a fantastic option,” Román said. “We should jump on the bandwagon of research and development in this area, with collaboration from other countries of course, and take our place in the field of technological development.”

This story was originally published by Latin American newspapers that are part of the Tierramérica network.

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

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Nicaragua Pins Hopes for Progress on Grand Canalhttp://www.ipsnews.net/2014/08/nicaragua-pins-hopes-for-progress-on-grand-canal/?utm_source=rss&utm_medium=rss&utm_campaign=nicaragua-pins-hopes-for-progress-on-grand-canal http://www.ipsnews.net/2014/08/nicaragua-pins-hopes-for-progress-on-grand-canal/#comments Fri, 01 Aug 2014 16:25:10 +0000 Jose Adan Silva http://www.ipsnews.net/?p=135875 Three farmers study the route for the interoceanic canal on a map of Nicaragua, which the Chinese firm HKND Group presented in the southern city of Rivas during a meeting with people who will be affected by the mega-project. Credit: José Adán Silva/IPS

Three farmers study the route for the interoceanic canal on a map of Nicaragua, which the Chinese firm HKND Group presented in the southern city of Rivas during a meeting with people who will be affected by the mega-project. Credit: José Adán Silva/IPS

By José Adán Silva
MANAGUA, Aug 1 2014 (IPS)

Víctor Sánchez doesn’t want gold or the comfortable future income he was promised.

He just wants to live the life he has always lived on his farm along the Banks of the Las Lajas river – but the river is slated to become part of the route followed by the Nicaragua Interoceanic Grand Canal.

Sánchez, a 59-year-old small-scale farmer from the southwestern department or state of Rivas, told IPS that he isn’t familiar with the details of the mega-project that the government touts as the ticket for this country to lose its dubious status as the second-poorest in the Western Hemisphere, after Haiti.

He is worried that he will be removed from the land where he has always lived with his extended family, and that he won’t receive compensation for his property.

That’s what he told representatives of the HKND Group at a Jul. 15 meeting in the International University of Agriculture and Livestock in Rivas. HKND is the Hong Kong-based Chinese company that was granted the concession to build the canal.

The Chinese technicians, with the support of interpreters and Nicaraguan officials, provided details of the ambitious project to a local audience in the city of Rivas, the departmental capital, 110 km south of Managua.

The canal will connect the Pacific and Atlantic oceans by means of a 278 km waterway, which includes a 105 km stretch across Lake Cocibolca.

The numbers involved are impressive: the canal will cost 50 billion dollars to build and will be up to 520 metres wide, with a monimum depth of 27.6 metres and a maximum of 30 metres. An estimated 5,100 vessels a year will make the 30-hour crossing through the canal.

Pang Kwok Wai, assistant director of HKND’s department of construction management, explained that the work is set to begin in December in the municipality of Brito, in Rivas, on the Pacific coast.

The department will be split in half by the canal and part of the local population will be relocated.

The project will create a city of 140,000 people on the Pacific side of the country. A 29 sq km duty-free zone will also be established in Rivas, along with four tourist complexes, an international airport with warehouse capacity for thousands of tons of cargo, a deepwater port, giant bridges and other “sub-projects” in the terminology used by HKND.

In June 2013, the government of leftwing President Daniel Ortega granted the concession for HKND Group to build and run the canal for 50 years, extendable by another 50 years.

The government argues that the canal will definitively transform the economy of this Central American nation, where 42.5 percent of the population of 6.1 million lives in poverty and 70 percent of jobs are in the informal economy.

Telémaco Talavera, the president of the National Council of Universities and a member of the Special Commission for the Grand Canal, told IPS that to carry out the work, large industrial companies will be created that will require local labour power: 50,000 direct jobs during the construction phase and 200,000 permanent jobs after 2019, when the canal is to be completed.

HKND also announces the construction of new cement, steel, dynamite, asphalt, fuel and energy plants.

The Nicaraguan government estimates that as a result of the construction work, GDP growth will accelerate from the current four-five percent to 10.8 percent in 2014 and 15 percent in 2015.

The government projects that GDP will climb from 11.2 billion dollars to 24.7 billion dollars in 2018.

HKND Group, led by the mysterious Chinese businessman Wang Jing, has given the world the impression that the project is a sure thing, from its news releases.

But doubts about the company, and especially about the fund created to finance the canal, are far from being cleared up.

The company says it hired the China Railway Construction Corporation to carry out the technical feasibility studies, the U.S. McKinsey & Company for the information analysis and the UK-based Environmental Resources Management consultancy for the social and environmental impact assessments.

HKND technical experts have repeated in public and private meetings in Nicaragua and China that the company invited businesspeople from China, Russia, the UK, the United States, Germany, Belgium and Australia to support the project.

Hopes for the future…and doubts

The canal has raised hopes among thousands of Nicaraguans for a more prosperous future, according to two national surveys.

One of the pollsters, MyR Consultores, found in a July poll that 31.3 percent of respondents thought the canal would bring benefits to a smaller or greater extent.

Another survey, by the Americas Barometer of the Latin American Public Opinion Project at Vanderbilt University in the U.S., presented in Managua this month as well, found that 72.8 percent of those interviewed stressed the generation of jobs by the canal as a potential benefit.

But 43.4 percent of respondents were worried about the environmental effects that the project could have.

That fear is shared by dozens of environmentalists and non-governmental organisations, like the Nicaraguan Foundation for Sustainable Development, which under the leadership of biologist Jaime Incer, environmental adviser to the president of Nicaragua, is opposed to the construction work with the argument that it will irreversibly affect Lake Cocibolca.

The lake is the biggest in Latin America: 8,624 sq km of freshwater. According to the organisation’s estimates, the construction of the canal would affect 400,000 hectares of jungle and wetlands.

Incer told IPS that Nicaragua gave HKND authority over the lake and surrounding areas, which include more than 16 watersheds and 15 protected areas representing 25 percent of the country’s rainforest.

HKND Group has not yet completed its environmental impact studies. Nevertheless, it has already decided on the route to be followed by the canal, as well as the construction of a 400 sq km artificial lake and 41 giant deposits along the route to store the earth that is removed.

Another aspect criticised by opponents is the lack of transparency surrounding the project’s financing. Detractors have not received any response to their questions about who is financing the project and how they operate.

The company and its executives in Nicaragua, as well as the Nicaraguans in charge of the project, have avoided revealing the identity of their sources of financing.

“The fund is guaranteed, but it is confidential; these matters are business secrets, especially because of the companies that trade on the stock market,” said HKND’s Pang.

Talavera, with the Special Commission for the Grand Canal, told IPS that the important thing at this time is to explain to the population the reach of the mega-project and to guarantee that it brings benefits for the country. “The details about the financing will be provided when the time is right, if the financing partners decide on that,” he said.

The country’s refusal to reveal information about the partners and the origin of the funds has given rise to speculation. For example, opposition lawmaker Eliseo Núñez has insinuated that the Chinese government is behind the project – a suspicion that Wang Jing has consistently denied.

Edited by: Estrella Gutiérrez / Translated by: Stephanie Wildes

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Cash Transfers Drive Human Development in Brazilhttp://www.ipsnews.net/2014/07/cash-transfers-drive-human-development-in-brazil/?utm_source=rss&utm_medium=rss&utm_campaign=cash-transfers-drive-human-development-in-brazil http://www.ipsnews.net/2014/07/cash-transfers-drive-human-development-in-brazil/#comments Thu, 31 Jul 2014 13:49:41 +0000 Fabiola Ortiz http://www.ipsnews.net/?p=135850 The Morro de Vidigal favela in Río de Janeiro. Credit: Agência Brasil/EBC

The Morro de Vidigal favela in Río de Janeiro. Credit: Agência Brasil/EBC

By Fabiola Ortiz
RIO DE JANEIRO, Jul 31 2014 (IPS)

Every day, Celina Maria de Souza rises before dawn, and after taking four of her children to the nearby school she climbs down the 180 steps that separate her home on a steep hill from the flat part of this Brazilian city, to go to her job as a domestic. In the evening she makes the long trek back up.

For 25 years, Souza has lived at the top of the Morro Vidigal favela or shantytown, located in the middle of one of the wealthiest neighbourhoods in Rio de Janeiro.

In this favela, home to some 10,000 people, the houses, many built by the families themselves, are squashed between the sea and a mountain.

Originally from Ubaitaba, a town in the northeast state of Bahia1,000 km north of Rio de Janeiro, Souza, 44, left her family when she was just 17 to follow her dream of a better life in the big city.

She was part of the decades-long massive wave of people fleeing drought in the impoverished Northeast to make a living in the more industrialised south.

“I’m tired of living in the favela,” she complained to IPS. “I dream of one day having a house with a room for each of my kids. I tell them to be responsible and to study so they won’t suffer later. I wish I could go back to school, but it’s hard for me to find the time.”

Souza, a mother of six children between the ages of 12 and 23 – the oldest two have moved out – has a monthly income of around 450 dollars a month.“This money helps me a lot. They criticise it, saying it’s charity, but I don’t see it like that. You have to work too. With the Bolsa money, I buy school supplies, food, and clothes and shoes for my children. It doesn’t cover everything, but it’s a huge help.” - Celina Maria de Souza

Nearly half of that comes from Bolsa Familia, a cash transfer programme created by Luiz Inácio Lula da Silva (2003-2010) when he first became president and continued by his successor Dilma Rousseff.

In 2013 Bolsa Familia reached its 10th anniversary as the leading social programme in this country of 200 million people.

It benefits 13.8 million families, equivalent to 50 million individuals – precisely the number of people who have been pulled out of extreme poverty over the last decade.

But 21.1 million Brazilians are still extremely poor, according to the latest official figures, from 2012.

The International Social Security Association (ISSA), based in Switzerland, granted a prize to Bolsa Familia in October for its contribution to the fight against poverty and support for the rights of the most vulnerable.

According to ISSA, it is the world’s largest cash transfer scheme, with a cost of just 0.5 percent of Brazil’s GDP. The programme’s 2013 budget was 10.7 billion dollars, and it is currently part of the Brasil Sem Miséria (Brazil Without Poverty) umbrella programme.

“I had heard of it and they told me it was a subsidy that the government gave kids who were enrolled in school and vaccinated regularly. We were really doing badly, we didn’t even have enough to eat,” Souza said.

For over a decade, her children have benefited from Bolsa Familia. The family initially received a total of just 40 dollars, but the amount has steadily increased. Souza, who has been married twice, has raised her children alone since breaking up with her second husband.

“This money helps me a lot,” she said. “They criticise it, saying it’s charity, but I don’t see it like that. You have to work too. With the Bolsa money, I buy school supplies, food, and clothes and shoes for my children. It doesn’t cover everything, but it’s a huge help.”

Souza hasn’t forgotten the days when she went hungry, or the occasional nights when she had no roof over her head – both she and her two older children, when she separated from her first husband. “I told my children: eat, because just seeing you get some food nourishes me,” she said. Now she and the four children still at home live in a crowded two-room house.

The residents of Rio de Janeiro’s favelas, many of which are built on steep hillsides, climb up and down long stairways every day like this one in the Pavão-Pavãozinho favela. Credit: Fabíola Ortiz/IPS

The residents of Rio de Janeiro’s favelas, many of which are built on steep hillsides, climb up and down long stairways every day like this one in the Pavão-Pavãozinho favela. Credit: Fabíola Ortiz/IPS

Souza, who had very little formal schooling, works mainly in the informal sector, although when she first came to the city she found a job in a women’s accessories factory. She is constantly battling poverty, and hopes that her children will have better opportunities.

She is one of the innumerable examples of Brazilians who are trying to improve the lives of their families, while this country attempts to revert years of neglect and a historical lag in human development.

Thanks to this effort, South America’s giant has moved up on the Human Development Index (HDI).

In the latest HDI report, released by the United Nations Development Programme (UNDP) Jul. 24, Brazil ranked 79 among the 187 countries covered.

But in Latin America, Brazil is behind Chile (41), Cuba (44), Argentina (49), Uruguay (50), Panama (65), Venezuela (67), Costa Rica (68) and Mexico (71).

Andréa Bolzon, coordinator of the Atlas of Human Development in Brazil, told IPS that the country has made significant progress in the last 20 years.

The Atlas draws up Brazil’s contribution to the Human Development Report, which includes the HDI. The theme of this year’s report was Sustaining Human Progress: Reducing Vulnerabilities and Building Resilience.

Underlying the improvement, she said, “are policies that were implemented, like the increase in the minimum salary, affirmative action measures to reduce racial inequality, the boost to employment and Bolsa Familia itself.”

The HDI, created in 1980, is a measure derived from life expectancy, education levels and incomes. In 2013, life expectancy in Brazil averaged 73.9 years, schooling averaged 7.2 years, and gross national income per capita was 14,275 dollars.

Between 1980 and 2013, Brazil’s HDI value increased 36.4 percent. In 1980 life expectancy was 62.7 years, schooling averaged 2.6 years and GNI per capita was 9,154 dollars.

“Brazil is one of the countries whose human development has improved the most over the past 30 years,” said UNDP representative in Brazil Jorge Chediek during the presentation of the data in Brasilia.

But inequality is still a huge problem in Brazil, Bolzon said. “We have to invest in universal quality public systems, especially in health and education, because they have effects on other indicators.”

The increase in the years of schooling among families is precisely one visible change, she said.

“We see it from generation to generation in the same family,” she said. “People who studied very little have children who have more years of schooling; there is a big difference in terms of education.”

Souza and her family fit that pattern: she has a fifth grade education, while her 12-year-old daughter is in sixth grade today.

“I studied very little; I had to drop out when I was 12 to work, because I had to help my parents put food on the table,” said Souza. “I want my kids to have much more than I had – a good education and good jobs.”

Isis, her youngest daughter, knows all about the difficulties her mother has faced and the sacrifices she makes in order for them to have a better life. “I love going to school, and I love math. When I come home, I help my mom and I tidy up the house. My mom tells us to study a lot to have a better futrue. I know what her life has been like, and I do that,” she told IPS with a smile.

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Argentina Once More on the Map, Invited by BRICShttp://www.ipsnews.net/2014/06/argentina-once-more-on-the-map-invited-by-brics/?utm_source=rss&utm_medium=rss&utm_campaign=argentina-once-more-on-the-map-invited-by-brics http://www.ipsnews.net/2014/06/argentina-once-more-on-the-map-invited-by-brics/#comments Wed, 18 Jun 2014 18:55:43 +0000 Fabiana Frayssinet http://www.ipsnews.net/?p=135068 “Family photo” at the fifth BRICS Summit, held in 2013 in Durban, South Africa. Credit: Government of South Africa

“Family photo” at the fifth BRICS Summit, held in 2013 in Durban, South Africa. Credit: Government of South Africa

By Fabiana Frayssinet
BUENOS AIRES, Jun 18 2014 (IPS)

As Argentina starts to mend fences with the international financial markets, the emerging powers that make up the BRICS bloc invited it to their next summit. This could be a step towards this country’s reinsertion in the global map, after its ostracism from the credit markets since the late 2001 debt default.

For now, there is no letter “A” in the BRICS acronym, which stands for Brazil, Russia, India, China and South Africa. But in Buenos Aires speculation is rife about whether it should be called BRICSA, ABRICS or BRICAS, if Argentina is admitted.

The invitation for President Cristina Fernández to participate in the group’s sixth summit, scheduled for Jul. 15 in the northeast Brazilian city of Fortaleza, is seen as another sign that Latin America’s third-largest economy may be incorporated, after India, Brazil and South Africa indicated their interest.

“This is very significant for Argentina,” Fernanda Vallejos, an economist at the University of Buenos Aires (UBA), told IPS.

“It not only points to the recognition by the rest of the members of Argentina’s importance and potential, but also opens a door for our country to gain greater political and economic clout on the international stage.”

Vallejos stressed the key role played by BRICS over the last decade in the growth of the global economy at a time of financial crisis in the industrialised North.

The term BRICS was coined for the world’s major emerging markets in 2001 by economist Jim O’Neill of investment bank Goldman Sachs. Together, these countries represent around one-quarter of global GDP, 43 percent of the planet’s population, and 20 percent of global investment.

In addition, as Argentina’s foreign ministry stressed, the five countries account for 45 percent of the world’s labour force, hold over three trillion dollars in combined foreign reserves, and produce two billion tonnes a year of agricultural products.

Vallejos said that in a world where blocs are playing a bigger and bigger role, BRICS has a growing voice in international forums, where the members are “demanding participation in accordance with the weight of their economies.”

“The proposal set forth by India – with which bilateral trade expanded 30 percent in 2013 – and backed by Brazil and South Africa also puts paid to the opposition’s tired complaint about our country supposedly being isolated from the world,” said Vallejos, who is also a researcher at the Energy, Technology and Infrastructure Observatory for Development (OETEC).

The formal invitation to Fernández was issued by Russia, which also thus confirmed its support.

“I think this shows that Argentina is fully inserted in international relations, not ‘isolated from the world’,” Nicolás Tereschuk, a political scientist at UBA, told IPS. “It simply doesn’t toe the line with the policies of the central countries at just any cost or in any circumstances, as it used to do at other times in its history.”

Argentina’s invitation from BRICS came almost simultaneously with the May 28 announcement of an agreement reached by the Fernández administration and the Paris Club, which this country owed 9.7 billion dollars since the default 13 years ago.

Some political sectors here see the public debt contracted by the 1976-1983 military dictatorship as illegitimate. But the centre-left Fernández administration hopes the agreement with the Paris Club will facilitate the renewed flow of international credit and investment.

Economist Diego Coatz said the agreement and other measures adopted by the government such as “improving” its economic data, whose reliability was questioned by the International Monetary Fund (IMF), point to a “shift” by the authorities aimed at “reintegration in the world in financial terms…and at positioning the country better on the international front.”

Coatz, with the research centre of the Argentine Industrial Union – the country’s leading industrial employer federation – said that if Argentina is admitted to the BRICS bloc, “it will once more be seen as an emerging developing country with great potential.”

In addition, incorporation in the bloc would open a new window for external financing, when Argentina is in need of foreign exchange and investment, he said.

At the Fortaleza summit a formal decision could be reached on creating a regional development bank as an alternative to international financial institutions like the IMF, World Bank or Interamerican Development Bank.

The new bank would have a 50 billion dollar fund for financing infrastructure in the bloc’s member countries. It would also establish a joint foreign exchange reserves pool of 100 billion dollars, “which would serve as insurance against the volatility of the markets,” Vallejos said.

“Argentina could access financing at very beneficial rates compared to the heavy interest rates of other international institutions” in order to finance infrastructure for development, she underscored.

“The strengthening of international trade by the possible admission to BRICS means important possibilities for Argentina to make significant progress towards a more developed industrial sector, with insertion in global production chains, the development of strategic sectors and the industrialisation of the countryside,” Vallejos said.

The interest would appear to be mutual.

“The invitation came after the turmoil in emerging markets early this year, after which the ‘establishment’ international financial press talked about a ‘decline’ of BRICS,” Tereschuk said.

In addition, “growth in China is slowing down, India is at a decisive moment, with the dilemma of faster growth or stagnation, and the Brazilian economy is not really flourishing at this time,” the economist said.

So for them and the rest of the members of the bloc, “joining together with a periphery country that makes up the G20 [Group of 20] would seem to be a decision of interest to the BRICS countries,” he said.

The G20 block of leading industrialised and emerging economies “is in somewhat of a crisis itself, because of the crisis that the central countries are still immersed in.”

For that reason, according to Tereschuk, Argentina would be useful to the BRICS so that the voice of their two South American leaders, Argentina and Brazil, “would be heard in unison in the greatest number of places possible.”

The political scientist said Brazil and Argentina have led a “shift to the left with growth, reduction of poverty and inequality in a framework of democracy and greater political, civilian and social rights for their citizens.

“The other members of BRICS cannot offer all of these characteristics combined,” he said.

Vallejos, for her part, stressed Argentina’s role as a supplier of raw materials. “We are an agricultural powerhouse,” she pointed out.

In addition, “Argentina has the world’s second-largest reserves of lithium, one of the biggest reserves of gold – nearly 10,000 tonnes – 500 million tonnes of copper, and 300,000 tonnes of silver, while we are becoming the third-largest global exporter of potassium,” she said.
“We are sitting on the world’s third- largest platform of unconventional fossil fuels. And to that you have to add our technological development, and the development of nuclear energy for peaceful purposes,” she added.
So would it be “BRICAS”, “ABRICS” or “BRICSA”? At any rate, what is at stake is a bit more than deciding on a new acronym.

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Protests Dampen World Cup Fever in Brazilhttp://www.ipsnews.net/2014/06/protests-dampen-world-cup-fever-in-brazil/?utm_source=rss&utm_medium=rss&utm_campaign=protests-dampen-world-cup-fever-in-brazil http://www.ipsnews.net/2014/06/protests-dampen-world-cup-fever-in-brazil/#comments Fri, 06 Jun 2014 20:27:56 +0000 Mario Osava http://www.ipsnews.net/?p=134839 A football game in Jacarezinho, one of Rio de Janeiro’s favelas. For children from these poor neighbourhoods, the pomp surrounding the World Cup is a distant echo. Credit: Fabiana Frayssinet/IPS

A football game in Jacarezinho, one of Rio de Janeiro’s favelas. For children from these poor neighbourhoods, the pomp surrounding the World Cup is a distant echo. Credit: Fabiana Frayssinet/IPS

By Mario Osava
RIO DE JANEIRO, Jun 6 2014 (IPS)

It seemed like “a good deal” at the time, but then things changed. That description of the 2006 purchase of a U.S. refinery, one of the oil industry scandals hanging over the Brazilian government’s head, could also apply to attitudes towards the FIFA World Cup.

In 2007, the fact that Brazil was chosen to host the 2014 International Federation of Association Football (FIFA) global championship triggered a sense of national euphoria. The mega sporting event would crown the economic ascent of this emerging power, which has won the most World Cups – five out of 18.

But now, instead of planning welcome parties for the Jun. 12-Jul. 13 tournament, Brazilians are taking to the streets in protests that are blocking traffic and bringing cities to a halt, holding strikes to demand wage hikes, and complaining about corruption and rights violations during the public works to prepare for the global event.

The country of football and joy is turning its back on its stereotype.

In Rio de Janeiro, the few streets decorated in green and yellow – the colours of the national team – contrast with the celebrations and sense of anticipation ahead of previous World Cups. The enthusiasm has been dampened just when Brazil is hosting the world’s biggest single-sport event.

The indignation of Brazilians erupted in June 2013, with surprising and often violent protests against the poor performance of the health and education systems, chaotic traffic, corruption, and the enormous amounts being spent on preparations for the World Cup.

Worried about further unrest, the government has ordered the deployment of 157,000 police and military troops to guarantee security during the games that will be held in 12 cities in this enormous country of nearly 200 million people.

But the declining excitement over football “is a tendency that has been seen in the last three World Cups,” said Paulo Santos, who has worked as a barber for 40 years in a lower middle-class Rio de Janeiro neighbourhood and hears the views of hundreds of clients, in a kind of ongoing informal opinion poll.

Hosting the World Cup should have revived the passion of fans.

But “they’re holding the party with other people’s money – ours,” complained Santos, reflecting the widespread sensation that the whole exercise has been marked by corruption, the squandering of public funds and FIFA’s greed.

Surveys reflect this view. In February, only 52 percent of those interviewed by the Datafolha polling institute were in favour of organising the World Cup, down from 79 percent in 2008.

The most recent poll, limited to the southern city of São Paulo, found that 45 percent of respondents were in favour and 43 percent were against, while the rest said they didn’t care. But worse than that was the fact that an overwhelming majority, 76 percent, said they thought the country wasn’t prepared to host the marathon of 64 games among 32 national teams.

Many of the projects planned, especially the urban transport works, were not carried out or were left incomplete. Some of the 12 stadiums were not finished until the last minute, without the finishing touches and without being tested. Half of them lack wireless Internet connection.

Delays in infrastructure works are a tradition in Brazil. The same thing happened in the first World Cup, held in Brazil in 1950. The main stadium, Maracaná in Rio de Janeiro, was inaugurated only a few days before the event, in the midst of a muddy construction site littered with left-over materials.

It was the world’s largest stadium. Designed for 155,250 spectators, it held a crowd of over 200,000 in the final match. Now, remodelled and sumptuous, it holds just under 74,700 people.

But the current megalomania is different. Since the last decade, Brazil has been caught up in a frenzy of building hydropower dams, railways, ports, highways and freeways, in an attempt to overcome the infrastructure deficit accumulated over the preceding two decades.

Most of the major projects are years behind. The main railway, a 4,155-km north-south route, has been under construction for 27 years, with only one-third of the rails installed.

Rio de Janeiro’s Maracana stadium, remodelled for the World Cup. Excessive spending on the installations is one of the complaints being voiced by protesters in Brazil. Credit: Fabiana Frayssinet/IPS

Rio de Janeiro’s Maracana stadium, remodelled for the World Cup. Excessive spending on the installations is one of the complaints being voiced by protesters in Brazil. Credit: Fabiana Frayssinet/IPS

But no delays are possible in the case of the preparations for the World Cup in 12 cities and for the 2016 Olympic Games in Rio de Janeiro.

The looming deadlines may have been a factor in some of the accidents that have caused the deaths of nine workers in the World Cup stadiums, seven of them employed by subcontractors.

The rise in the number of workers concentrated in large construction sites all around the country has empowered construction workers. After a number of strikes, they secured wage hikes and benefits such as more frequent visits home for those who are working in distant regions.

But working conditions are still unsafe and accidents have been frequent, almost always due to lack of protection measures such as safe scaffolding, said Vitor Filgueiras, an economist investigating the phenomenon in his postdoctoral research.

Outsourcing is “a way of transferring risks,” and it makes working conditions even more unsafe and can even give rise to slave-like labour, he argued.

The World Cup has been a common focus for the recent protests and strikes by students, teachers, bus drivers and other groups. But popular support for the street demonstrations and battles has dropped sharply, according to opinion polls – luckily for the government of Dilma Rousseff.

A year ago, 54 percent of those surveyed by the Vox Populi Institute supported the protests, compared to just 18 percent today.

That reduces the risk of massive demonstrations during the World Cup itself. But groups made up of a few dozen activists are now paralysing cities, in a kind of guerrilla warfare benefited by the constant traffic jams.

The October presidential and legislative elections are also politicising football. The World Cup and the government are linked in the public’s mind. A failure for Brazil, in the stadiums or in the organisation of the event, would drive up the number of votes for the opposition.

The president is still the clear front-runner, but football has taken on growing influence in the elections, added to other government initiatives that also sounded like a good idea at the time – but don’t any longer.

For example, the purchase of a refinery in Pasadena, Texas by Brazil’s state-run oil company Petrobras was supposed to boost the firm’s international expansion and enable it to refine heavy crude in the U.S. market.

But it cost three times the initial contract for 360 million dollars, and became less important because Brazil increased its production of light crude oil. The case is under investigation by oversight bodies and amplified other scandals involving Petrobras.

Measures to reduce the cost of electricity in 2012 and benefit both industry and households also turned out to be a disaster. They encouraged consumption at a time when a lengthy drought reduced hydropower generation, unleashing an energy crisis, with the threat of power outages.

The discontent, also fuelled by a high inflation rate and a sluggish economy, infected the World Cup, which was already affected by specific factors of its own. FIFA’s demands for extraordinary terms and conditions created “a state of emergency,” wrote labour judge Lygia Cavalcanti in the magazine published by the Judges for Democracy Association.

Brazil agreed to “a temporary suspension” of certain laws guaranteeing citizens’ freedom of movement and workers’ right to strike in order to hold the World Cup, she said.

In addition, FIFA was given exclusive rights to advertise, sell and distribute products within a two-kilometre radius around the stadiums, local residents were evicted and relocated, and 18,000 volunteers have been organised to work during the World Cup, even though under Brazilian law volunteer work can only be used by non-profit cultural, civic or welfare institutions.

In addition, FIFA was given the right to file and fast-track registration of any trademark it wanted relating to the 2014 World Cup in Brazil’s patent office, including around 200 commonly used words, expressions and symbols such as names using “2014”, like “Brazil 2014” or “Natal 2014”, which can only be used commercially this year if fees are paid to FIFA.

FIFA even charged the Alzirão Recreational and Cultural Association 28,000 reals (12,500 dollars) to organise the popular street party it has held since 1978 in Rio de Janeiro, where the Brazil matches are shown on a giant screen

Alzirão was going to have to pay broadcasting rights, because more than 30,000 people a day watch the games on the big screen.

But Mayor Eduardo Paes managed to convince FIFA to exempt the non-profit event, said Ricardo Ferreira, president of the cultural association.

Ferreira told IPS that the excitement for the World Cup “was lukewarm but is growing.” A triumph by Brazil in the opening game in the São Paulo’s Corinthians stadium could cheer people up and bring back the passion, he added.

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Lagging Urban Transport Works Hinder World Cup Sustainabilityhttp://www.ipsnews.net/2014/05/lagging-urban-transport-works-hinder-world-cup-sustainability/?utm_source=rss&utm_medium=rss&utm_campaign=lagging-urban-transport-works-hinder-world-cup-sustainability http://www.ipsnews.net/2014/05/lagging-urban-transport-works-hinder-world-cup-sustainability/#comments Thu, 15 May 2014 01:28:15 +0000 Fabiola Ortiz http://www.ipsnews.net/?p=134302 Stands in the Arena Dunas in the city of Natal in Northeast Brazil, one of the eight FIFA World Cup stadiums granted a sustainable construction certificate. Credit: Fabíola Ortiz/IPS

Stands in the Arena Dunas in the city of Natal in Northeast Brazil, one of the eight FIFA World Cup stadiums granted a sustainable construction certificate. Credit: Fabíola Ortiz/IPS

By Fabiola Ortiz
NATAL, Brazil, May 15 2014 (IPS)

Brazil’s efforts to promote the image of an environmentally sustainable World Cup have focused on the stadiums built for the tournament. But the 12 cities where the matches will be played are in a race against time to complete the urban transport projects.

Natal, the capital of the state of Rio Grande do Norte in the Brazilian Northeast, is one of the cities that will host the World Cup 2014, and four games will be played here. This city of 800,000 people is known in this country as the “city of the sun” because there are more than 300 days of sunshine a year, enjoyed by visitors to the state’s 400 km of beaches.

This is the city with the cleanest air in South America, according to a study carried out in 1994 by the National Institute for Space Research (INPE) in partnership with the United States National Aeronautics and Space Administration (NASA). Water quality here is also excellent, because the water is “filtered” by the vast dunes surrounding the city.

Natal, which receives 1.5 million tourists a year, is now seeking an image of a sustainable city during the World Cup, which will take place in Brazil Jun. 12-Jul. 13.

The Arena Dunas stadium in Natal was officially inaugurated on Jan. 22, with a capacity for 42,000 spectators. The cost went 30 percent over the 190 million dollar budget, but at least the project is considered environmentally sustainable.

The OAS construction company, which built and is managing the stadium, will harvest rainwater, which will cut water consumption by 40 percent. And nearly 100 percent of the waste generated will be recycled.

In contrast with how early the stadium was finished, the urban transport works in the city run the risk of not being completed by the World Cup kickoff match on Jun. 13 – which could hurt the image of Natal as a sustainable World Cup city.

Unfinished transportation works around the stadium in Natal where the first of the four FIFA World Cup matches to be hosted by this city will take place on Jun. 13. Credit: Fabíola Ortiz/IPS

Unfinished transportation works around the stadium in Natal where the first of the four FIFA World Cup matches to be hosted by this city will take place on Jun. 13. Credit: Fabíola Ortiz/IPS

Of the seven transport projects planned, only one was completed, a year ago. At that time the remaining six were still only on paper, and three ended up being cancelled, after the city government admitted that it was unable to implement them.

The mayor of Natal, Carlos Eduardo Alves of the opposition Democratic Labour Party (PDT), told IPS that the city would be ready to host the World Cup thanks to 250 million dollars in federal funds.

“When Natal was chosen to be one of the host cities, it had 53 months to build the infrastructure and complete the projects. When I took office in January 2013, there were only 18 months to go, and nothing had started yet,” he said.

A total of 1,450 people are employed in shifts, 24/7, on the infrastructure projects.

Organised citizens one, expropriations zero

In 2012, the people of Natal were taken by surprise by the announcement that on Capitão Mor Gouveias avenue, one of the city’s main arteries, the property of 3,000 residents and 200 business owners was to be expropriated to make way for the construction of a road from the new airport to the stadium.

“One morning an official came to my business and handed me a letter informing me that half of the 200 square metres of my shop would be expropriated. He did so in a rude manner, and I was indignant. So we decided to fight the measure,” Jonas Valentim, 73, told IPS.

Valentim’s business has operated there for 30 years, and he was scared. “When we found out that the World Cup would be coming here, we were happy. But it was because we didn’t know it would deal us such a blow.”

He became one of the representatives in Natal of the “association of people affected by the World Cup works” (APAC), created in 2012 He is also a member of the World Cup People’s Committee, which has protested that the infrastructure works are not in line with the needs of the city.

In the case of Capitão Mor Gouveia avenue, the local residents and business owners managed to avoid forced eviction by asking specialists at the regional university to help draw up an alternative project, since the authorities had not consulted experts.

“We made suggestions to use avenues with less traffic, where no expropriations would be necessary,” said Valentim. That is the project currently being implemented – and no one has been evicted.

Alves guaranteed that six tunnels and a viaduct would be finished by May 31. A second viaduct won’t be done on time, but it will nevertheless be open to traffic during the World Cup.

“Natal won’t end after the World Cup,” the mayor said. “It will leave us with the biggest drainage system in the city, which cost 60 million dollars, and which will be 70 percent complete by the start of the World Cup.”

He added that 4,000 trees would be planted around the city.

He also said the big problem facing Brazilian cities today is traffic congestion, which is why tunnels and viaducts are being built, to ease traffic jams.

But the coordinator of transport research in the Civil Energy Department of the Federal University of Rio Grande do Norte, Enilson Medeiros dos Santos, doubts that the six transport construction projects around the stadium will be finished in time for the tournament.

“I don’t think they’ll be completed,” Santos said. “The viaduct of the BR-101 freeway [next to the stadium] was not in the original project and doesn’t stand a chance of being finished – work got started on it really late.”

Santos, a prominent voice in urban planning in Natal, complained that his team was not consulted when the transport plans were drawn up.

“The city that it took the longest for the federal government’s funds to reach was Natal,” he said. “The moment for planning is past; now concrete spending plans are needed.”

Santos also complained about a lack of information. Of the cities that will host the World Cup games, Natal was ranked the lowest on transparency in investment in 2013 by the Ethos Institute.

“No one has access to the executive projects, it’s all a total mystery,” he said.

According to Santos, Natal was the fruit of an accelerated development process and is one of the cities in the Northeast with the highest number of motor vehicles per capita.

The city has one motor vehicle for every four inhabitants, while demand for public transport is falling. There are more than 260,000 vehicles in the city, and since 2000 the number of cars has risen at a rate of 20,000 a year.

“The city does not have chronic congestion, but traffic has gotten worse quickly in the last 10 years. We had already pointed out the problem in 1998, if the city failed to put in place high-quality public transport systems,” Santos said.

In June 2012, during the United Nations Conference on Sustainable Development (Rio+20), FIFA, the international governing body of association football, announced that it would invest 20 million dollars to make the 2014 World Cup the first with a comprehensive sustainability strategy.

The strategy included “green” stadiums, waste management, community support, reducing and offsetting carbon emissions, renewable energy, climate change and capacity development, according to FIFA and the Local Organising Committee.

FIFA also stated that it would give priority to environmentally-friendly suppliers, and that it would carry out studies to assess the environmental impacts on the areas around the stadiums.

In addition, the construction projects had to obtain environmental permits, as a condition for receiving financing from the country’s state-owned development bank, the BNDES.

Another BNDES requisite was for the stadiums and other installations to receive LEED (Leadership in Energy & Environmental Design) certification granted by the U.S. Green Building Council, which is recognised by more than 130 countries.

Eight of the 12 World Cup stadiums followed sustainable construction guidelines, using water and energy saving technologies and recycled materials such as demolition waste.

But what apparently will not be sustainable is the use of the stadium after the World Cup. There is a danger that the Arena Dunas will become a white elephant because football matches in that area do not generally draw more than 6,000 people, OAS business manager Artur Couto acknowledged to IPS.

That means it would take over 3,000 matches just to pay off the construction costs.

But Couto defended the stadium as a multi-use structure. “It was built with the concept of multi-functionality, to be a living cell in the city. There are 40 dates for football games a year, but there are other uses as well, such as concerts and shows.”

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Deforestation in the Andes Triggers Amazon “Tsunami”http://www.ipsnews.net/2014/04/deforestation-andes-triggers-amazon-tsunami/?utm_source=rss&utm_medium=rss&utm_campaign=deforestation-andes-triggers-amazon-tsunami http://www.ipsnews.net/2014/04/deforestation-andes-triggers-amazon-tsunami/#comments Wed, 16 Apr 2014 07:35:00 +0000 Mario Osava http://www.ipsnews.net/?p=133699 The Beni river, a tributary of the Madeira river, when it overflowed its banks in 2011 upstream of Cachuela Esperanza, where the Bolivian government is planning the construction of a hydropower dam. Credit: Mario Osava/IPS

The Beni river, a tributary of the Madeira river, when it overflowed its banks in 2011 upstream of Cachuela Esperanza, where the Bolivian government is planning the construction of a hydropower dam. Credit: Mario Osava/IPS

By Mario Osava
RIO DE JANEIRO, Apr 16 2014 (IPS)

Deforestation, especially in the Andean highlands of Bolivia and Peru, was the main driver of this year’s disastrous flooding in the Madeira river watershed in Bolivia’s Amazon rainforest and the drainage basin across the border, in Brazil.

That is the assessment of Marc Dourojeanni, professor emeritus at the National Agrarian University in Lima, Peru.

His analysis stands in contrast with the views of environmentalists and authorities in Bolivia, who blame the Jirau and Santo Antônio hydroelectric dams built over the border in Brazil for the unprecedented flooding that has plagued the northern Bolivian department or region of Beni.

“That isn’t logical,” Dourojeanni told IPS. Citing the law of gravity and the topography, he pointed out that in this case Brazil would suffer the effects of what happens in Bolivia rather than the other way around – although he did not deny that the dams may have caused many other problems.

The Madeira river (known as the Madera in Bolivia and Peru, which it also runs across) is the biggest tributary of the Amazon river, receiving in its turn water from four large rivers of over 1,000 km in length.

The Madeira river’s watershed covers more than 900,000 square km – similar to the surface area of Venezuela and nearly twice the size of Spain.

In Bolivia, which contains 80 percent of the watershed, two-thirds of the territory receives water that runs into the Madeira from more than 250 rivers, in the form of a funnel that drains into Brazil.

To that vastness is added the steep gradient. Three of the Madeira’s biggest tributaries – the Beni, the Mamoré and the Madre de Dios, which rises in Peru – emerge in the Andes mountains, at 2,800 to 5,500 metres above sea level, and fall to less than 500 metres below sea level in Bolivia’s forested lowlands.

These slopes “were covered by forest 1,000 years ago, but now they’re bare,” largely because of the fires set to clear land for subsistence agriculture, said Dourojeanni, an agronomist and forest engineer who was head of the Inter-American Development Bank’s environment division in the 1990s.

The result: torrential flows of water that flood Bolivia’s lowlands before heading on to Brazil. A large part of the flatlands are floodplains even during times of normal rainfall.

This year, 60 people died and 68,000 families were displaced by the flooding, in a repeat of similar tragedies caused by the El Niño and La Niña climate phenomena before the Brazilian dams were built.

Deforestation on the slopes of the Andes between 500 metres above sea level and 3,800 metres above sea level – the tree line – is a huge problem in Bolivia and Peru. But it is not reflected in the official statistics, complained Dourojeanni, who is also the founder of the Peruvian Foundation for the Conservation of Nature, Pronaturaleza.

When the water does not run into barriers as it flows downhill, what happens is “a tsunami on land,” which in the first quarter of the year flooded six Bolivian departments and the Brazilian border state of Rondônia.

The homes of more than 5,000 Brazilian families were flooded when the Madeira river overflowed its banks, especially in Porto Velho, the capital of Rondônia, the state where the two dams are being completed.

BR-364 is a road across the rainforest that has been impassable since February, cutting off the neighbouring state of Acre by land and causing shortages in food and fuel supplies. Outbreaks of diseases like leptospirosis and cholera also claimed lives.

The dams have been blamed, in Brazil as well. The federal courts ordered the companies building the hydropower plants to provide flood victims with support, such as adequate housing, among other measures.

The companies will also have to carry out new studies on the impact of the dams, which are supposedly responsible for making the rivers overflow their banks more than normal.

Although the capacity of the two hydroelectric plants was increased beyond what was initially planned, no new environmental impact studies were carried out.

The companies and the authorities are trying to convince the angry local population that the flooding was not aggravated by the two dams, whose reservoirs were recently filled.

Such intense rainfall “only happens every 500 years,” and with such an extensive watershed it is only natural for the plains to flood, as also occurred in nearly the entire territory of Bolivia, argued Victor Paranhos, president of the Energia Sustentável do Brasil (ESBR), the consortium that is building the Jirau dam, which is closest to the Bolivian border.

The highest water level recorded in Porto Velho since the flow of the Madeira river started being monitored in 1967 was 17.52 metres in 1997, said Francisco de Assis Barbosa, the head of Brazil’s Geological Service in the state of Rondônia.

But a new record was set in late March: 19.68 metres, in a “totally atypical” year, he told IPS.

The counterpoint to the extremely heavy rainfall in the Madeira river basin was the severe drought in other parts of Brazil, which caused an energy crisis and water shortages in São Paulo.

A mass of hot dry air stationed itself over south-central Brazil between December and March, blocking winds that carry moisture from the Amazon jungle, which meant the precipitation was concentrated in Bolivia and Peru.

These events will tend to occur more frequently as a result of global climate change, according to climatologists.

Deforestation affects the climate and exacerbates its effects. Converting a forest into grassland multiplies by a factor of 26.7 the quantity of water that runs into the rivers and increases soil erosion by a factor of 10.8, according to a 1989 study by Philip Fearnside with the National Institute for Research in the Amazon (INPA).

That means half of the rain that falls on the grasslands goes directly into the rivers, aggravating flooding and sedimentation.

The higher the vegetation and the deeper the roots, the less water runs off into the rivers, according to measurements by Fearnside on land with gradients of 20 percent in Ouro Preto D’Oeste, a municipality in Rondônia.

And clearing land for crops is worse than creating grassland because it bares the soil, eliminating even the grass used to feed livestock that retains at least some water, Dourojeanni said.

But grazing livestock compacts the soil and increases runoff, said Fearnside, a U.S.-born professor who has been researching the Amazon rainforest in Brazil since 1974.

In his view, deforestation “has not contributed much to the flooding in Bolivia, for now, because most of the forest is still standing.”

Bolivian hydrologist Jorge Molina at the Universidad Mayor de San Andrés, a university in La Paz, says the same thing.

But Bolivia is among the 12 countries in the world with the highest deforestation rates, says a study by 15 research centres published by the journal Science in November 2013.

The country lost just under 30,000 sq km of forest cover between 2000 and 2012, according to an analysis of satellite maps.

Cattle ranching, one of the major drivers of deforestation, expanded mainly in Beni, which borders Rondônia. Some 290,000 head of cattle died in January and February, according to the local federation of cattle breeders.

The excess water even threatened the efficient operation of the hydropower plants. The Santo Antônio dam was forced to close down temporarily in February.

That explains Brazil’s interest in building additional dams upstream, “more to regulate the flow of the Madeira river than for the energy,” said Dourojeanni.

Besides a projected Brazilian-Bolivian dam on the border, and the Cachuela Esperanza dam in the Beni lowlands, plans include a hydropower plant in Peru, on the remote Inambari river, a tributary of the Madre de Dios river, he said.

But the plans for the Inambari dam and four other hydroelectric plants in Peru, to be built by Brazilian firms that won the concessions, were suspended in 2011 as a result of widespread protests.

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Brazilian Dams Accused of Aggravating Floods in Boliviahttp://www.ipsnews.net/2014/04/brazilian-dams-accused-aggravating-floods-bolivia/?utm_source=rss&utm_medium=rss&utm_campaign=brazilian-dams-accused-aggravating-floods-bolivia http://www.ipsnews.net/2014/04/brazilian-dams-accused-aggravating-floods-bolivia/#comments Fri, 04 Apr 2014 22:42:11 +0000 Franz Chavez http://www.ipsnews.net/?p=133433 A local resident tries to save some of her belongings during the floods in Bolivia’s Amazon department of Beni. Credit: Courtesy of Diario Opinión

A local resident tries to save some of her belongings during the floods in Bolivia’s Amazon department of Beni. Credit: Courtesy of Diario Opinión

By Franz Chávez
LA PAZ, Apr 4 2014 (IPS)

Unusually heavy rainfall, climate change, deforestation and two dams across the border in Brazil were cited by sources who spoke to IPS as the causes of the heaviest flooding in Bolivia’s Amazon region since records have been kept.

Environmental organisations are discussing the possibility of filing an international legal complaint against the Jirau and Santo Antônio hydroelectric dams built by Brazil, which they blame for the disaster that has already cost 59 lives in Bolivia and material losses of 111 million dollars this year, according to the Fundación Milenio.

Bolivian President Evo Morales himself added his voice on Wednesday Apr. 2 to the choir of those who suspect that the two dams have had to do with the flooding in the Amazon region. “An in-depth investigation is needed to assess whether the Brazilian hydropower plants are playing a role in this,” he said.

The president instructed the foreign ministry to lead the inquiry. “There is a preliminary report that has caused a great deal of concern…and must be verified in a joint effort by the two countries.”

Some 30,000 families living in one-third of Bolivia’s 327 municipalities have experienced unprecedented flooding in the country’s Amazon valleys, lowlands and plains, and the attempt to identify who is responsible has become a diplomatic and political issue.

Environmentalists argue that among those responsible are the dams built in the Brazilian state of Rondônia on the Madeira river, the biggest tributary of the Amazon river, whose watershed is shared by Brazil, Bolivia and Peru.

In Bolivia – where the Madeira (or Madera in Spanish) emerges – some 250 rivers that originate in the Andes highlands and valleys flow into it.

“It was already known that the Jirau and San Antonio [as it is known in Bolivia] dams would turn into a plug stopping up the water of the rivers that are tributaries of the Madera,” independent environmentalist Teresa Flores told IPS.

“Construction of a dam causes water levels to rise over the natural levels and as a consequence slows down the river flow,” the vice president of the Bolivian Forum on Environment and Development (FOBOMADE), Patricia Molina, told IPS.

Her assertion was based on the study “The impact of the Madera river dams in Bolivia”, published by FOBOMADE in 2008.

“The Madera dams will cause flooding; the loss of chestnut forests, native flora and fauna, and fish; the appearance and recurrence of diseases such as yellow fever, malaria, dengue; the displacement of people, increased poverty and the disappearance of entire communities,” the study says.

“Considering all of the information provided by environmental activists in Brazil and Bolivia, by late 2013 everything seemed to indicate that the elements for a major environmental disaster were in place,” Environmental Defence League (LIDEMA) researcher Marco Octavio Ribera wrote in an article published Feb. 22.

But Víctor Paranhos, the head of the Energia Sustentável do Brasil (ESBR) sustainable energy consortium, rejected the allegations.

The dams neither cause nor aggravate flooding in Bolivia “because they are run-of-the-river plants, where water flows in and out quickly, the reservoirs are small, and the dams are many kilometres from the border,” he told IPS.

In his view, “what’s going on here is that it has never rained so much” in the Bolivian region in question. The flow in the Madeira river, which in Jirau reached a maximum of “nearly 46,000 cubic metres per second, has now reached 54,350 cubic metres per second,” he added.

Moreover, the flooding has covered a large part of the national territory in Bolivia, not only near the Madeira river dams, he pointed out.

The ESBR holds the concession for the Jirau hydropower plant, which is located 80 km from the Bolivian border. The group is headed by the French-Belgium utility GDF Suez and includes two public enterprises from Brazil as well as Mizha Energia, a subsidiary of Japan’s Mitsui.

At the Jirau and Santo Antônio plants, which are still under construction, the reservoirs have been completed and roughly 50 turbines are being installed in each dam. When they are fully operative, they will have an installed capacity of over 3,500 MW.

Claudio Maretti, the head of the World Wildlife Fund’s Living Amazon Initiative, said “there is neither evidence nor conclusive studies proving that the dams built on the Madera river are the cause of the floods in the Bolivian-Brazilian Amazon territories in the first few months of 2014 – at least not yet.”

In a statement, Maretti recommended “integrated conservation planning, monitoring of the impacts of infrastructure projects on the connectivity and flow of the rivers, on aquatic biodiversity, on fishing resources and on the capacity of ecosystems to adapt to the major alterations imposed by human beings.”

The intensity of the rainfall was recognised in a study by the Fundación Milenio which compared last year’s rains in the northern department or region of Beni – the most heavily affected – and the highlands in the south of Bolivia, and concluded that “it has rained twice as much as normal.”

Several alerts were issued, such as on Feb. 23 for communities near the Piraí river, which runs south to north across the department of Santa Cruz, just south of Beni.

At that time, an “extraordinary rise” in the water level of the river, the highest in 31 years, reached 7.5 metres, trapped a dozen people on a tiny island, and forced the urgent evacuation of the local population.

The statistics are included in a report by SEARPI (the Water Channeling and. Regularisation Service of the Piraí River) in the city of Santa Cruz, to which IPS had access.

The plentiful waters of the river run into the Beni plains and contributed to the flooding, along with the heavy rain in the country’s Andes highlands and valleys.

The highest water level in the Piraí river was 16 metres in 1983, according to SEARPI records.

Flores, the environmentalist, acknowledged that there has been “extraordinarily excessive” rainfall, which she attributed to the impact of climate change on the departments of La Paz in the northwest, Cochabamba in the centre, and the municipalities of Rurrenabaque, Reyes and San Borja, in Beni.

Molina, the vice president of FOBOMADE, cited “intensified incursions of flows of water from the tropical south Atlantic towards the south of the Amazon basin,” as an explanation for the heavy rainfall.

She and Flores both mentioned deforestation at the headwaters of the Amazon basin as the third major factor that has aggravated the flooding.

In Cochabamba, former senator Gastón Cornejo is leading a push for an international environmental audit and a lawsuit in a United Nations court, in an attempt to ward off catastrophe in Bolivia’s Amazon region.

“The state of Bolivia has been negligent and has maintained an irresponsible silence,” he told IPS.

Molina proposes taking the case to the International Court of Justice in The Hague, to denounce the environmental damage reportedly caused by the Brazilian dams.

With reporting by Mario Osava in Rio de Janeiro.

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Port Development Brings Progress to Brazil – At a Pricehttp://www.ipsnews.net/2014/03/port-development-brings-progress-brazil-price/?utm_source=rss&utm_medium=rss&utm_campaign=port-development-brings-progress-brazil-price http://www.ipsnews.net/2014/03/port-development-brings-progress-brazil-price/#comments Fri, 21 Mar 2014 09:05:39 +0000 Mario Osava http://www.ipsnews.net/?p=133135 View of the port of Ponta da Madeira, in northeast Brazil, where vessels - including Valemax megaships - dock to load iron ore mined in Carajás. Credit: Mario Osava/IPS

View of the port of Ponta da Madeira, in northeast Brazil, where vessels - including Valemax megaships - dock to load iron ore mined in Carajás. Credit: Mario Osava/IPS

By Mario Osava
SÃO LUIS, Brazil, Mar 21 2014 (IPS)

“We are victims of progress,”complained Osmar Santos Coelho, known as Santico. His fishing community has disappeared, displaced to make way for a port complex on São Marcos bay, to the west of São Luis, the capital of the state of Maranhão in Brazil’s northeast.

The Ponta da Madeira maritime terminal, which has been in operation since 1986, has strengthened the influence of its owner, the giant mining company Vale, in São Luis. The terminal currently exports 110 million tonnes a year of iron ore, consolidating a logistical corridor of decisive importance for local economic development.

Ships too big for China



The 23-metre draught in Ponta da Madeira allows Valemax ships to dock in the harbour. They are the largest mineral cargo vessels in the world, with a capacity of 400,000 tonnes, and have been in operation since 2011.


China, the principal customer for Vale’s iron ore, should be the main destination of these megaships, but it banned them from its ports as too large. However, a Chinese shipyard is building 12 of these vessels for Vale. South Korea is building another seven.


Vale’s goal is to have 35 Valemax ships, 16 of which would be chartered. Their size cheapens transport costs and helps the company compete with Australia, a mining power that is closer to the large Asian market. Moreover, the giant ships reduce greenhouse gas emission per tonne of mineral transported by 35 percent, Vale said.

To get its ore to China, Vale, the world’s second largest mining transnational,
uses transfer stations in the Philippines, and will shortly open a distribution centre in Malaysia to transfer goods to smaller ships. Two Brazilan ports and six abroad currently accept Valemax vessels.

Company trains arrive at the port, transporting minerals from Carajás, a huge mining province in the eastern Amazon region that has made Vale the world leader in iron ore production. The port also exports a large proportion of the soya grown in the centre-north of Brazil.

Beside it, a Vale plant converts iron ore to spherical pellets.

These activities create thousands of jobs, especially in Vale’s area of direct influence, Itaqui-Bacanga, an area of 58 poor districts in the southwest of São Luis.

Young people aspire to work there because the pay is good, and Vale’s human resources policies, inherited from its long life as a state company (1942-1997), guarantee job stability. An employee “is only fired if he or she really messes around a lot,” an executive told IPS.

Vale also offers a lot of temporary work for the expansion of the port, and its railroad track, so far one-way, is in the process of being made two-way, with the aim of doubling mining exports from 2018.

Because of these and other local projects, the economy of the surrounding neighbourhoods is booming, said George Pereira, the secretary of the Itaqui-Bacanga Community Association (ACIB). Three plants are planned, for pulp and paper, cement and fertilisers, as well as a coal-fired thermoelectric station, among others.

Some 55 kilometres further south, in the municipality of Bacabeira, the state oil company Petrobras will build the Premium I refinery, which will be the largest in Brazil when it opens in 2018. The project will be put out to tender in April, and at its peak will employ 25,000 workers, the company says.

The employment boom boosts consumption, trade and services, “but this is not the development we want. We have more money in our pockets but no water to drink, because the rivers are polluted,” Pereira said.

Sanitation, drinking water, transport, teachers and doctors are scarce, while there is an excess of violence, drugs and prostitution in the poor districts, where the population is soaring, he said. Close to 200,000 people already live there, and two more housing estates are under construction, he said.

In this context, Vale “does good works, but in isolation, without transformative programmes to develop the entire area,” Pereira criticised. The priorities are education and sanitation, he said.

Ironically, the association that criticises and puts pressure on Vale is its own creature. It arose from the company’s social investment, required by the state National Economic and Social Development Bank (BNDES) as a condition for financing the iron ore pellet plant.

ACIB is governed by representatives of the five divisions that make up Itaqui-Bacanga and was created 10 years ago to mobilise the local population for an urban clean-up project. Its overheads and its headquarters, a two-story building, are funded by Vale, Pereira said.

Among the company’s numerous social action projects, some are outstanding for their effectiveness, such as extensions to the Itaqui-Bacanga Centre for Professional Education, an educational centre belonging to the National Industrial Apprenticeship Service (SENAI).

This year the centre is providing technical education for 10,000 students, twice the enrolment it had in 2013 and five times that of 2010, thanks to 14 new classrooms and five new laboratories.

Three other centres along the corridor between Carajás and São Luis are supported by similar partnerships between Vale and SENAI, Janaina Pinheiro, Vale’s human resources manager, told IPS.

In 2013, SENAI trained 65,000 students in Maranhão, compared to 10,000 a decade ago, state director Marco Moura told IPS.

Industrialisation in São Luis is concentrated around the ports on São Marcos bay. Near Ponta da Madeira is the state port of Itaqui, which has handled cargo of all kinds since the 1970s, and this year will see the addition of a grain terminal to export soya and maize from the new agricultural frontiers in the centre and north of the country.

Some of Brazil’s new ports were created with the goal of becoming industrial hubs, including Suape and Pecém, in the northeastern states of Pernambuco and Ceará. They were planned as industrial-port complexes and have been boosting the local economies for the past decade.

Both these ports have Petrobras refineries, and Suape has a petrochemical plant and eight shipyards, while Pecém has a steelworks and electricity generating plants. Many companies are locating in the enormous industrial zones on the landward side of the two ports.

The São Luis ports were unconnected to that wave of industrialisation because they belong to the poorest Brazilian region, which is backward and neglected compared to other hubs in the northeast.

The bay’s deep water, suitable for large-draught vessels, its location facing the North Atlantic, and the Carajás railway link, were advantages for the Ponta da Madeira terminal.

Osmar Santos Coelho, Santico, outside the shed where he keeps his nets and fishing gear, on a narrow beach that escaped takeover by the port terminal built by the Vale mining company in São Luis, in Brazil’s Northeast. Credit: Mario Osava/IPS

Osmar Santos Coelho, Santico, outside the shed where he keeps his nets and fishing gear, on a narrow beach that escaped takeover by the port terminal built by the Vale mining company in São Luis, in Brazil’s Northeast. Credit: Mario Osava/IPS

But there have been victims, the 73-year-old Santico reminded IPS, for instance “between 80 and 100” artisanal fisherfolk from Boqueirão, who were evicted from their fishing village on the beach and resettled in different districts.

A few years later, many of them have returned to fish in the São Marcos bay, in spite of this being banned, and they have settled on a small stretch of beach not occupied by the port, he said.

“We had no other trade, and we were hungry,” he said. They eventually built eight rough cabins from poles and palm leaves, some for living in and others just for fishing equipment.

Santico has a house in a nearby district and a cabin on the beach for the gear he uses for his sporadic night-time fishing expeditions. “There are hardly any fish left, and only a few prawns,” after new underwater concrete breakers were built to control tidal currents, he said.

As a result, fisherfolk negotiated with Vale and three years ago the company donated food baskets for 52 fisherfolk, worth between 308 and 725 dollars. “That’s how we survive,” Santico said.

Thousands of other families were evicted to make way for docks and port installations. Itaqui was, in fact, the name of a district that disappeared.

More city districts are now threatened by the industrial zone under construction next to the highway. Vila Maranhão fears extinction, squeezed between the railway and the new industrial hub, and only a few kilometres from a coal-fired thermoelectric plant, a large aluminium industry and stockpiled minerals.

“There is no official word yet, but it’s only a matter of time before we are evicted from here,” predicted Lamartine de Moura, a 71-year-old ACIB director who has lived in Vila Maranhão for 23 years. “If we’re not forced out by expropriation, we will be by the pollution,” she told IPS.

A university study found heavy metals in the local stream, and mineral dust in the air stains the houses and spreads respiratory diseases, she said.

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