In this portion of the interview, Mr. Moshiri and I discuss what’s going on 6,000 miles south of the U.S., offshore Brazil. There, over the past couple of years, we’ve learned about gigantic oil resources, buried many miles under the deepwater seabed.

To date, the most prolific oil-bearing locales offshore Brazil are in the “pre-salt” zones of the Campos and Santos Basins. Looking forward, there are many more basins left to explore along the Brazilian coastline.

In short, the future for energy development is bright down in Brazil. Here’s more of my discussion with Mr. Moshiri.

BWK: There’s news coming out of Brazil almost every week, from Petrobras and other companies that are working down there. Chevron has a large presence in Brazil. Where do you see things going now that Brazil is coming towards the end of rewriting its offshore oil laws, creating a pre-salt development entity? What do you see happening down there?

AM: First of all, the Santos and Campos Basins of Brazil are very attractive. Geologically, (these are) fantastic basins. Petrobras has done a marvelous job of handling this, in the fashion that should be an example for others.

BWK: How is Petrobras setting an example?

AM: Even as a pioneer in the deepwater, Petrobras invited IOCs (international oil companies) in a very systematic manner, starting around 1996 — and I’ve been involved with that for about 15 years. It’s (a model for) how to get IOCs involved, how to work with them closely, how to expand the relationship. We (at Chevron) have a relationship with Petrobras not just in Brazil, but outside of Brazil, where we are partners in West Africa as well. So from Brazil’s point of view, I think they’re taking the right steps since the late 1990s.

BWK: What about the new laws concerning development of the pre-salt oil resources?

AM: Regarding the pre-salt itself, and the new terms and conditions that they’ve put forward (i.e., the government of Brazil), there is a change from what it was before. But at the moment, (the pre-salt) is still an exploration play. There are going to be good surprises. There are going to be not so good surprises. To be honest, that’s exactly what happened in the U.S. Gulf of Mexico (GOM).

Until we understand the geology better, until we know what it is, (then) I think we, Petrobras and others can move ahead.

What we know today is that the petroleum system is there. The right parameters are there. Some of them probably, in some areas, will be higher or lower from the reservoir characters’ sake.

It’s a carbonate, deepwater. You can drill one well, and the next well may not be as good as the last one you drilled.

Until we assess that? Whether or not Petrobras is going to do it, or we are going to do it, is … a decision that will be up to the government of Brazil. But nonetheless, those are the two basins (Santos and Campos) that have been our focus.

BWK: Can you discuss Chevron’s major efforts in Brazil?

AM: As you know, we have Project Frade on the street.

BWK Note: Mr. Moshiri didn’t go into details in our recorded discussion. But according to Chevron’s web-site, Chevron holds a 51.7% interest in the Frade deepwater oil development project, which it also operates. The oil field lies in water depths of approximately 3,700 feet, 230 miles northeast of Río de Janeiro in the Campos Basin. Frade is a subsea development with wells tied back to a floating production, storage and offloading vessel (FPSO) — see image below. The project has an estimated price tag of $2.8 billion. Development is ongoing. The estimated output should be 68,000 barrels of crude oil and 25 million cubic feet of natural gas per day, starting in 2011.

BWK: And other large projects?

AM: (In addition to Frade), we are committed to another project called Papa Terra, which just went through E&D (engineering and design) earlier this year.

BWK Note: Chevron holds a 37.5% interest in Papa Terra, with Petrobras as the operator. Papa Terra has a planned capacity of 140,000 barrels per day of oil from a field that lies under about 3,900 feet of water.

AM: And the other thing we value a lot is our relationship (with Petrobras), and how Petrobras complements what we know and what they know to get the best out of every development and every activity.

We are hoping that the sub-salt selection activity (after the new oil law goes into effect), and to be able to work with the terms and conditions that put forward, will help get where we are for the post-salt. The same attitudes will be there, that help to collaborate on the post-salt.

BWK Note: When Mr. Moshiri references “post-salt,” he means the shallower projects, above the massive salt zone, where Chevron was working before the pre-salt discoveries of the past three years. Here’s a seismic illustration of the layers.

BWK Note (cont.): These earlier, post-salt projects — seen above in representative seismic cross-section — will remain subject to Brazil’s previous oil development law.

AM: What I mentioned about Mexico (earlier in the interview), versus Brazil, is that Brazil is very focused on production and capital efficiency. And it’s very unique.

I know that Mr. Gabrielli (Sergio Gabrielli, CEO of Petrobras) probably doesn’t want me to call his oil company a national oil company, which it’s not.

Petrobras is very focused on (capital efficiency), and it’s very much in line with what we think. If Petrobras knows that something is not working, or it’s too much, or whatever? I think they do build flexibility into the system to make sure they do the right thing. Therefore I’m optimistic about Brazil.

I feel like it’s not totally petro-politics (in Brazil). In some other countries, it is totally petro-politics. (In Brazil), it is petro-economics. If economics doesn’t drive them where they want to go, they would bring in other companies. They’ll create flexibility. I’ve seen that for 15 years.

BWK: So you believe Chevron has a solid relation with Petrobras?

AM: For us, we (Chevron) operate Frade. Papa Terra, our new development, will be operated by Petrobras. I have full confidence in Petrobras, that the project will be delivered and operated. Therefore we are complementing each other. That’s the reason that development in Brazil gets handled at a much faster pace than what we’ve seen in other places in the world.

BWK: One last point about Brazil. Last year, about July 2009, a senior member of the National Petroleum Agency (ANP) of Brazil said that “there’s no risk in the pre-salt.” Do you agree or differ with that assessment?

AM: As a geologist, you know that Mother Nature will always give us a surprise. Even in mature basins, we’ll always get some surprises. We hope always for the better. But I think his comment was aligned with knowing the basins. His comment was misunderstood in the form of ‘no risk.’

BWK: A lot of people use the word risk, but don’t really understand its meaning in the world of oil exploration.

AM: (The) comment goes back a few years ago. None of us knew that (the pre-salt) basin was existing there. We drilled a couple wells below the salt, but everybody’s focus was post-salt. But a couple discoveries? And continuing exploration? Petrobras and others? We are finding out that yes, this could be a significant basin.

It wasn’t a matter of drilling the well. It’s a matter of knowing the basin. Like with the Wilcox in the GOM.

BWK Note: Wilcox is a highly productive, oil-bearing formation, covering a vast area, that’s a target for many shallow, deep and ultra-deep wells in the U.S. part of the GOM.

AM: One of the things we focus on is understanding the prospectivity of a basin. I think he (the ANP man last year) was referring to that. Yes, there are several prospects in here. If you do your homework, your geology, your technical work, probably your risk is extremely reduced.

No doubt about it, (offshore Brazil) pre-salt is a basin. A basin (with) carbonate reservoirs that can perform very well. You need to find where the oil is, and where the productivity is going to come from.

Therefore I put it (the comment of the ANP man) in the framework of yes, we identify a basin, and the more work we do, the more risk will come down.

This last comment pretty much sums up Chevron’s approach to energy development. Do the work. Then do even more work. Don’t be afraid to spend money and apply technology to obtain the data you need. And the more work you do, the more the risk comes down. It’s what makes Chevron a successful oil finder.

Great Opportunities Offshore Brazil

The bottom line is that there are phenomenal opportunities for future energy exploration and development offshore Brazil. Developing Brazil’s pre-salt energy resources will require hundreds of billions of dollars of capital. Brazil will need hundreds of modern drilling ships and related service vessels. The long-term effort will require world-class exploration and development technology. And it all has to be operated by superb and skilled people.

Chevron is one of the world’s best-run independent oil companies. It has a solid record, over the past century, of successful exploration and development. Chevron has great financial strength, and a deep pool of technical competence. Chevron’s success — certainly in deepwater development — is built upon its highly skilled and talented people.

I expect that, as things unfold, Chevron will be right in the thick of things offshore Brazil, working closely with the Brazilian government, Petrobras and other partners.

Until we meet again,
Byron King
Whiskey & Gunpowder

September 8, 2010

Still Profiting from Deepwater Drilling was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

In our talk, Mr. Moshiri and I looked at the future of offshore oil and gas exploration and development. Here’s part of what we discussed, with more to come in future articles.

BWK: Mr. Moshiri, you run a division of Chevron that includes Africa and Latin America. How much oil and gas do you pull out of the ground every day?

AM: For Africa and Latin America, on a gross basis, Chevron is producing somewhere around 840,000 barrels per day.

BWK: That’s about 1% of all the oil that the world uses every day, at 85 million barrels per day. Can you say some more about what’s happening in the areas with which you deal?

AM: (My area is ) the Atlantic Basin. … If you look down at the southern part of the Americas and Africa, people are ignoring the contribution it’s making worldwide.

The basins in this area are different. It’s not necessarily like the Middle East, that they are huge fields. But there are many accumulations. On the aggregate, they’re significant. Not only to the Chevron portfolio, but overall to the supply of oil to the market.

If you look at this area, they’ll always be a net exporter. They’ll always produce more than they can consume. My personal view is that if they continue their level of economic growth, that they assume is going to be above global, they’ll still be an exporter.

It creates an environment for industry to include them as part of the energy equation. The barrels can move to other locations where they don’t have that balance.

BWK: Are you only looking for oil? What’s the larger hydrocarbon picture?

AM: The (Atlantic) basins have similarity, but at the same time the basins have both oil and gas. It’s not just oil. At the moment, the focus has been tremendously towards oil. I believe that both basins in West Africa as well as in Latin America have tremendous potential for gas for the future. But because of lack of infrastructure, they haven’t got to the point similar to Asia Pacific of the Middle East yet.

But if you look ahead 15 years, they’ll get to the point of contributing natural gas, through LNG (liquefied natural gas) or pipeline. … That’s the next phase. Today it’s very much focused on the oil side.

BWK: In the Middle East, you’re looking at a mature, 60-70 year old concept of exploration. Also, culturally, you’ve got similarities of climate, ethnicity to some extent, religion too. Not that everybody’s the same. But by comparison, if you’re moving from the Caribbean Basin to West Africa to Brazil to Angola, you’re going to see a lot of different people and different governments and different cultures that you’re going to have to work with. Can you comment?

AM: Absolutely. If you look at the Chevron operations, we deal with ten different countries. Three of them are in OPEC. Two of them are observers in OPEC. Therefore five of them are very much within the framework of the OPEC community. That shows that each of them have (their) oil policy and different view compared to when you look at places like the US, Australia, UK and Europe.

For that matter, you have to deal with each country separately. You have to understand, first of all, the geology, the technical aspects of it. And also the policies. The policies vary.

I’m not saying it’s good or bad, whether it’s in the hands of the government or the private sector. That’s what we deal with in this area. Not only do we have to worry not just about the technical side, but about the fiscal, commercial aspects of it as well.

BWK: Can you comment about what you’ve seen over the past 20 years, with the rise of the national oil companies (NOCs) in these regions, and how you’ve had to adapt from the way you used to do business to the way you have to do business now in the NOC environment?

AM: The reality is that with the truly conventional aspects of oil and gas, the technology is there. The know-how is there. Whether or not we have it, or a service company has it. It’s there. So the view of the NOC is that they have more than one option on just the conventional (development).

For example, (what) if you discover an oil field on land, say light oil? Then building it, developing it, putting it into the market is relatively conventional. So what we would focus on is increasing the recovery factor. We focus on getting more out of the ground.

The next phase is what I’d say depends on technology. You get into deepwater. The technology is different. The incremental cost is significant. Room for efficiency becomes a greater part of how we develop things. Yes, everybody (says that they) can develop deepwater. But how you manage expensive wells that you’ve got to drill? How do you test the basin? How do you commit to the investment? Those are significant.

As you see in the market today, it’s almost becoming like there are a lot of people who can explore. But there are not a lot of people who can develop deep water.

BWK: I had a chance to visit a Chevron operation in the Gulf of Mexico (GOM) in March. Chevron had the Transocean vessel, Discoverer Inspiration, drilling in over 6,700 feet of water, about 200 miles off the Louisiana coastline. The target depth was over 30,000 feet. It was quite an operation.

AM: I’m glad you took a visit to some of our operations. (You should see) some of the other remote places like offshore, deepwater off Nigeria. You can see how those places are highly technically driven.

And for as much as we’ve gone so far into developing these (deepwater) fields, the technology is not there to work over the wells when there are problems. The technology is not there to create efficiency for working over some of these wells. For example, if a well goes off production in West Africa, and it’s in the swamp, or in Block Zero, off Angola, in shallow water, we move a rig in and we know how work over the well.

But if a well goes off production and it comes to a work-over, if it’s in deepwater, in say 8,000 feet of water, then you almost have to spend as much to work over a well, as you spent to drill the well. Therefore we are looking for the technology, and expanding our expertise, how to go back and do some of that work. To work those kinds of wells over.

BWK: Can you describe how Chevron’s relationships are changing over time, with the NOCs?

AM: Yes, our relationship with the NOCs is changing, moving to a different direction. The next phase goes several years down the road, gets into the non-conventional hydrocarbons. Like tight sands and shale gas. I always use the U.S. as the base, where we started.

I’ve been in this business 32 years with Chevron. I remember when 500 feet of water was deep water. But now 500 feet of water is a conventional development, or work-over, with high recovery factor. And I think we need to expand that one all the way.

In some of the other regions, especially my region, we are not to that point yet. Again, it’s because some of these basins have not matured yet.

BWK: Can you elaborate on that concept of maturity? How are things different between, say the U.S. and further south in the Atlantic Basin?

AM: (The U.S.) Gulf of Mexico shelf is mature. But if you look at it south, from Mexico down to Argentina, or West Africa or sub Sahara or East Africa, we are still at the first phase of understanding the basins, understanding the potential, developing the technology around it, and being able to transport it.

Some of the discoveries (that) some of the companies have, in sub Sahara Africa, the transportation is going to be the issue. That region is going through a different phase. The transportation is about one phase behind where we are in the U.S.

According to Chevron’s Mr. Moshiri, there’s great potential for future energy development in the Atlantic Basin. The hydrocarbon resource is there — both oil and natural gas — and development is at an early stage.

The future will see more exploration and development, moving from oil into gas. The local markets will doubtless expand, but there’s still quite a bit available for export. But to accomplish this, the transportation infrastructure needs to expand. In short, there’s much left to accomplish in an immense swath of the world.

The Future Challenge of Energy Development

There are great opportunities for future exploration and energy development in Latin America and Africa. This will require trillions of dollars of capital over many years. That, plus world-class technology, superb and skilled people, as well as close coordination between developers and the national host governments.

Chevron, the subject of this article, is one of the world’s best independent oil companies. From its roots in the California oil patch of more than a century past, Chevron has a solid record of successful exploration and development. Chevron has great financial strength, and a deep pool of technical competence. Chevron’s success — certainly in deepwater development — is built upon its highly skilled and talented people such as Mr. Moshiri and the many members of his extensive team.

Other Energy Opportunities

There are many other companies working on deepwater oil exploration and development projects across the world. They range from very big to not very big, from independent to nationally-owned and operated.

If you’re interested in learning about another aspect of deepwater development, I can tell you about a small, Canadian company that is developing a remarkable play offshore Africa. Just follow this link for more information on this investment idea.

Until we meet again,
Byron W. King
Whiskey & Gunpowder

August 4, 2010

Africa, Latin America and Energy Development in the Atlantic Basin was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

The ADC uses its position as an Ecuadorian Non-Governmental Organization (NGO) to raise funds as a not-for-profit in the United States. With these funds, it pays for a widespread publicity network (including a Washington, D.C. public relations firm) that would never exist in the absence of well-meaning donors. This network publicizes over and over that Chevron is liable for damages of $27.3 billion.  But the claims have no basis in fact.

How could this situation arise?

It seems to me that the Ecuador suit may have begun with good legal intentions, but has gone badly off course. One possible scenario:

Texaco operated in Ecuador until the early 1990s.  By 1992, Texaco turned over all its operations to Petroecuador.  Then Texaco paid for and oversaw a cleanup of many of the oil pits, pursuant to its agreement with Petroecuador and the national government.

In 1993 Texaco got sued in US court over the Ecuador matter.  The ADC was formed at about the same time, probably not by coincidence.  To be accurate, in 1993 there were a lot of unremediated pits related to oil production in Ecuador.  There were many local concerns about what the long-term health issues would be.

Case Dismissed?  Not So Fast…

But in 1995-1998, Texaco cleaned up its share of the pits, pursuant to an agreement with Petroecuador and the Ecuadorean government.  The cleanup was good enough that new vegetation started to grow on these sites. Eventually, after a lot of legal haggling, the US court case was dismissed on grounds of forum non conveniens.  So what happened?  Plaintiffs filed a new case in Ecuador in 2003.

Then with the new case in Ecuador, the plaintiffs started learning some unpleasant truths—Texaco had done a pretty decent job of cleaning up the pits. There wasn’t any evidence linking Texaco-remediated sites to higher cancer rates, and tests for soil and water pollution kept coming up negative.

So what were the plaintiffs’ lawyers to do? Drop the case?  No way. They had the big troop of ADC folks, whom they had convinced of a huge problem. These ADC folks volunteered their time and contributed money to the cause.

Also by that time, the suit was in Ecuador where the court system was much looser (and has become more so over time).  Almost any allegation can be made in a lawsuit, no matter how scandalous.

When current President of Ecuador, Rafael Correa was elected in 2006, he made it clear that he was on the side of ADC.  Correa made it even easier for the plaintiffs to paint the story however they wanted, and to get the court to support them so that results came out as they wanted.  In his weekly radio program, Correa has talked about his support for the ADC and his solidarity with the Ecuadorian lawyers in this case.

The US trial lawyers in the case, and their Ecuadorean co-counsel, started embroidering on the truth, and found they could get away with it.

Instead of just trying to get back to where they would have been if the pits hadn’t been remediated, the lawyers decided to make a huge suit out of it — $27.3 billion instead of the original $1 billion. To get to such a large suit, a lot of embroidering on the truth was needed—including accusations that had little to do with the underlying facts.

Complicated Case

The nature of the case was so complicated that only a very few at the top of ADC understood how misstatements were being made. The rank and file of ADC, let alone the local citizens near the Ecuadorean oil operations, never knew the difference.

Most of the well-intentioned people who had volunteered their time and money to the ADC never figured out where the paths diverged. It seemed like such a “good cause,” and as the allegations increased, ADC donors became more and more convinced they were doing the right thing.

US Press Takes Sides – Against the Oil Company (Surprise!)

Almost all of the US press assumed that if an NGO was making the allegations, there must be some substance behind them. Certainly, an oil company can’t be believed in this day and age.

Once the story got started – including the catchy (but totally false) notion that Chevron caused an “Amazon Chernobyl” — it was easy to propagate.  More and more media were unwittingly drawn into what was pretty close to a multi-billion dollar scam.

The fact that the suit was in a foreign country and much of the evidence was in Spanish made it even easier to issue accusations as if there were substance behind them, and to pass off problems caused by the state-run oil company, Petroecuador, as problems caused by Chevron.

Examples of Baseless Allegations and Questionable Claims

1. Pits recently in use by Petroecuador are being passed off as showing damage caused by Texaco Petroleum prior to 1992.

Newspapers and magazines are peppered with photos such as this one from the Economist:

Looks terrible, huh?  Except that it’s not a Texaco pit.  It’s a pit from Petroecuador operations.  Whoops.  Wrong oil company.

When the ADC shows reporters pits at issue in the suit, it shows pits such as the one above with liquid oil in them. Any pit that still has liquid petroleum in it clearly has been in recent use (by Petroecuador), because the more volatile elements quickly evaporate in the heat of the Amazon, leaving a substance similar to asphalt.

Texaco has been completely out of the country since 1992.  So that means the pit shown in the photo is one that Petroecuador has been using. Trying to pass it off as Texaco’s responsibility is just plain fraudulent.

Texaco remediated 161 pits back in the 1990s.  These were Texaco’s responsibility under its agreement with Petroecuador and the government of Ecuador.  These old, remediated pits are undetectable to someone now looking at the sites, based on the ones I saw during a recent visit.

2. Water pollution that is either non-existent, or that is caused by current Petroecuador operations, is being passed off as the responsibility of Chevron.

The example of Texaco-caused water pollution that is now being offered to the press is that of “Mr. Salinas’ well.”  In the movie Crude and in a recent segment on the CBS News show, 60 Minutes,  Mr. Salinas indicates his well is polluted with petrochemicals, and that this has caused health problems.

One problem with this allegation is that if it is true, it could not possibly be the fault of Texaco. Mr. Salinas’ well was tested in 2005, as part of the official, court-sanctioned “Judicial Inspection” phase of the Ecuadorian trial. When it was tested in 2005, there was no petrochemical contamination as determined in tests performed by the plaintiffs and the defendants. So if there is petrochemical contamination of the well, it must have occurred after 2005 – and long after Texaco left Ecuador.

A May 11, 2009 article  in Terra Magazine talks about pollution of the well near Mr. Salinas’ house caused by a recent Petroecuador accident. If there was a problem with pollution at the time of the filming in early 2009, this recent Petroecuador accident would seem to be the likely cause.

La Nueva Casa de Senor Salinas

One thing that is strange about the whole story is that Mr. Salinas recently received a new house, as part of a program sponsored by ADC and the Ecuadorian government. As a condition of the grant, the house near the polluted well was to be torn down, because of the pollution.

Yet I had a chance to visit Mr. Salinas’ old house when I visited Ecuador in early June. Mr. Salinas has moved (presumably to his new house), but his old house has not been torn down. Instead, his daughter and her children were living in the house near the well. We could detect no sign of hydrocarbons in the well. In fact, Mr. Salinas’ daughter seemed to be washing clothes with the water, as shown in this photo I took. One wonders whether the extra house was some sort of bribe or payment, in return for testimony.

3. The truth is being stretched when it comes to health issues of people affected by petroleum pollution.

If there were huge numbers of individuals suffering from cancer as the result of petroleum pollution, it’s likely we would find them, and they’d be plaintiffs in this or other law suits. Yet when attorney Cristóbal Bonifaz (the lawyer who filed the initial suit in 1993) filed a suit in San Francisco in 2006 on behalf of nine Ecuadorian plaintiffs supposedly having cancer, three of the plaintiffs didn’t have cancer.  A US federal district court dismissed the case and sanctioned and fined Bonifaz.

The suit in Ecuador against Chevron also does not include the names of any individuals with cancer. Since the Ecuador suit doesn’t claim the particular individuals named in the suit have cancer, it isn’t necessary that any of the 48 named individuals have cancer.  But the lack of individuals with cancer is somewhat strange. When one looks at government statistics regarding cancer in Ecuador, cancer rates are lower in the area with oil extraction than they are in the nation’s capital of Quito.

A second approach to stretching the truth is a peer-reviewed paper whose data appears to have been doctored. The 2008 paper “Monitoring of DNA Damage in Individuals Exposed to Petroleum Hydrocarbons in Ecuador” by Cesar Paz-y-Mino et al. purports to show injuries from hydrocarbons. Yet, another paper with the same lead author from 2004 called “Chromosome and DNA damage analysis in individuals occupationally exposed to pesticides with relation to genetic polymorphism for CYP 1A1gene in Ecuador” has identical summary exhibits.

The likelihood of identical results in two supposedly “different” cohort  studies is virtually nil, especially since there were different numbers of subjects in the two studies. One can only conclude that results of the second study (the one regarding hydrocarbons) are incorrect—the second study really reflects the results of the earlier study on pesticides, but it was tossed into the pileup onto Chevron.

A third approach to stretching the truth is determining the incidence of illness by asking residents their recollections of illnesses of types that may or may not have anything to hydrocarbon pollution. Sewage water in the area is not treated prior to discharge into rivers, so there are a large number of illnesses related to bacterial contamination. Yet no attempt is made to distinguish between illnesses cause by bacterial contamination and illnesses caused by hydrocarbon exposure.

A fourth approach to overstating health issues is repeated mention of the possibility of benzene contamination (for example, here).  Benzene is known to cause cancer.  But in the lawsuit against Chevron, none of the test results submitted to the court show evidence of benzene contamination.

I could go on and on with many other baseless allegations and questionable claims. Some of these are given in a post I wrote earlier for The Oil Drum.

Why Am I Writing This Post?

The primary reason I am writing this post is that I am appalled at the level of journalistic investigation in the US. It is ridiculous that a case such as this one against Chevron can have so many baseless allegations repeated endlessly, without any attempt to discern the truth.

The fact is that I’m an energy-oriented blogger.  I work for nothing (or often, less than nothing).  Yet I’m the one investigating these issues, involving multi-billion dollar international claims that appear to be riddled with fraud.  It’s bizarre.

A second reason I am writing this is that I believe that current press treatment is manifestly unfair to Chevron.   There seems to be a belief today that oil companies are somehow “bad,” so it’s OK to treat them differently.

As far as I am concerned, with world oil shortages ahead, US oil companies will be ever more important to the US mix of energy needs. We are still far from the point where we can expect renewable energy systems suddenly to appear on the horizon and save the day, even if many people would like immediate salvation from them.

I’ll come right out and say that Chevron paid most (only most) of the cost of my trip to Ecuador to see the oil extraction sites.  But Chevron buying me an airline ticket, hotel lodging and a few meals has not influenced my independence of thinking. I’m just following the facts as I see them.

Actually, I came out financially behind on the trip to Ecuador, and risked physical harm, both from yellow fever (for which no vaccine was available) and from the people of the area—we were accompanied by armed guards on the trip.

Meanwhile, I do not own any shares of any oil company or any renewable energy company.  I have no opinion about the future financial prospects of Chevron, although I happen to believe that a company like Chevron is vital to the world’s future energy prospects.

I did not get any answers when I twice attempted to get information from the ADC. I do not see this as a huge disadvantage. The “ADC story” – supported by a slick, Washington, D.C. public relations firm — is told endlessly on the Internet and in much of the mainstream media.

But based on what I saw when I visited the site of the so-called “Amazon Chernobyl,” the ADC story is baseless.  The lawsuit is nothing but a world-class shakedown of Chevron.

Regards,
Gail Tverberg

July 15, 2009

A Baseless Lawsuit Against Chevron in Ecuador was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.