Overview Corporate Involvement International Finance Institution Involvement Financing Environmental and Social Impacts	US tax dollars destroying pristine rainforest Photo credit: Amazon Watch

Overview

The Camisea gas project is located in the remote rainforests of Urubamba Valley in the southeastern Peruvian Amazon. It is the first major gas development in Peru. The concession covers the legally recognized and titled territory of several nomadic, isolated, and uncontacted indigenous peoples. With an estimated cost of US$2.8 billion, Camisea involves the extraction of natural gas from an area known as Block 88--one of the richest areas of biological diversity in the world, according to the Smithsonian Institute. It also entails the construction of transportation infrastructure, wells, flow lines, a processing plant, as well as two pipelines running west through the Andes to Lima and Callao (the capital city and main seaport). The field contains an estimated 11 trillion cubic feet of gas and 600 million barrels of condensate. Half of the extracted gas is slated to go to the United States to supply the West Coast energy markets.

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Corporate Involvement

The project is divided between two consortia--one for gas production upstream, one for gas transportation downstream. The upstream consortium includes Pluspetrol (Argentina), Hunt Oil (U.S.), SK Corporation (South Korea), and Techint. The downstream consortium, Transportadora de Gas del Peru (TGP), is led by Tecgas (a division of Techint) and includes Pluspetrol, Hunt Oil, SK Corporation, Sonatrach (Algiers), Grana y Montero SA (Peru), and Tractebel (Belgium). Major flaws in pipeline construction, resulting in serious environmental damage, have already proved that these companies do not have the technical capacity or experience for a project of this magnitude and complexity.

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International Finance Institution Involvement

Inter-American Development Bank (www.iadb.org)
Export-Import Bank of the United States (www.exim.gov)
SACE, Italian ECA (www.isace.it)
Andean Development Corporation (www.caf.com)
Ducroire, Belgian ECA (www.delcredere.be)
BNDES, Brazilian ECA (www.bndes.gov.br)
BICE, Argentine ECA (www.bice.cl)

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Financing

The bulk of investment in Camisea comes from publicly funded institutions, largely in the US and Europe. Citigroup is the project's financial advisor.

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Environmental and Social Impacts

With the Camisea project located in one of the world's most biologically diverse regions and on territory that is legally recognized and titled as indigenous sanctuary, the environmental and social drawbacks of the concession are significant. The project has a history of problems, with preliminary exploration of the region in the mid-'80s exposing indigenous peoples to whooping cough, small pox, and influenza, killing an estimated 50% of the Nahua population. According to the World Wide Fund for Nature, with the continuation of the project, as many as 15,000 local people would be "severely affected," with such socio-cultural impacts as loss of food resources, contamination of drinking water supplies, diseases, loss or damage to archeological sites, and changes to existing economic activity (Environmental Impact Assessment, Shell Corporation).

The gas pipeline route is also reported to traverse the remote and biodiverse Vilcabamba range, west of the Camisea gas field, which includes two communal reserves and a national park. According to the IUCN, "the Vilcabamba region harbors remarkable tree, bird, insect, and small mammal biodiversity, much of which remains to be documented by science." Furthermore, the total emissions of the Camisea project is expected to reach 133.2 million tons over its lifetime. This single project's emissions are greater than those of all of Central and South America combined (excluding Argentina and Brazil) in the year 2000, and more than the entire African continent combined (excluding South Africa) for the same year, according to the Institute for Policy Studies.

Given the environmental and social disruption that will accompany the project, it is currently the object of activist opposition, with internationally recognized human rights, conservation, and indigenous peoples groups actively monitoring and/or opposing the project (ECA Watch).

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