Tuesday, November 22, 2011

While Chevron Faces Fine in Brazil, U.S. Congress Challenges Cuban Oil Exploration

Brazil’s environmental agency is set to fine Chevron as much as $28 million for the oil spill off the Rio de Janeiro coast, with the possibility of another fine pending based on state laws, reports the AP. To put the fine in perspective, Chevron CEO John Watson earned $16.3 million in compensation in 2010. According to Estadao, the fine represents about 0.014% of the oil company’s total revenues. Chevron could be hit with another fee if Brazilian oil officials decide the company withheld information during the investigation into the oil disaster.

Oil regulators in Brazil also maintain that Chevron was unprepared to carry out their emergency response plan in case of a spill, a claim which Chevron representatives deny, reports the Wall Street Journal.

Brazil authorities now say that 3,000 barrels leaked during an eight-day period, an estimate that is 600 barrels higher than the numbers released by Chevron. The AP provides some important historical perspective on just how serious the spill is:

“Brazil has had bigger oil spills. In 2000, crude spewed from a broken pipeline at the Reduc refinery in Rio de Janeiro's scenic Guanabara Bay, dumping at least 344,400 gallons (1.3 million liters) into the water. Just a few months later, more than 1 million gallons (3.8 million liters) of crude burst from a pipeline operated by state-controlled oil company Petrobras into a river in southern Brazil.

“Brazil's worst oil disaster was in 1975, when an oil tanker from Iraq dumped more than 8 million gallons of crude into the bay and caused Rio's famous beaches to be closed for nearly three weeks.”

Reuters examines some of the political and economic costs for Brazil’s oil industry, predicting that the sale of new concessions may be further delayed. The ongoing environmental disaster may also raise questions about the ties between national oil company Petrobas and its foreign partners, and how much responsibility the Brazilian company bears for when things go wrong in the field.

Likely to raise additional debate over how to hold energy companies responsible for oil spills is a bill just introduced in U.S. Congress. According to the Miami Herald, the proposed legislation would allow U.S. interest parties to sue the companies responsible for any potential oil spills that would affect U.S. territory.

The bill is meant to address concerns that Spanish company Repsol, set to begin offshore drilling in Cuban waters just 50 miles from Florida, could one day see a major oil disaster. U.S. oil industry officials say that Cuba is unprepared to handle such a scenario. Additionally, in the event of a spill, the trade embargo would make cooperation between the U.S. and Cuba extremely difficult.

News Briefs
  • The U.S. is financing a $2 million naval base on an island about 70 kilometers off the coast of Honduras, reports Honduras Weekly. This is the second naval base U.S. forces have established in cooperation with Honduras in the past two years, intended to combat drug trafficking. The latest security effort in Honduras, a police and military surge dubbed “Operation Lightning,” dramatically lowered violence rates by as much as 90 percent in the national capital, according to President Porfirio Lopez.
  • Two weeks after the U.S. and Bolivia agreed to restore diplomatic ties, Bolivia affirmed again that the government will not allow Drug Enforcement Administration (DEA) agents back into the country, reports Reuters. NACLA has some good analysis on why this new agreement represents a “political victory” for Bolivia. The Evo Morales administration also stepped back from signing a trilateral agreement with Brazil and the U.S., which would have outlined new measures for monitoring the Andean nation’s coca production. According to the AP, this is the fifth time the agreement has been delayed since March.
  • After a jailed Venezuelan newspaper editor staged a two-week hunger strike and had to be hospitalized, authorities now say he will be released, says the AP. Leocenis Garcia turned himself in to authorities on August 30 after he was charged with “insulting public officials and instigating hatred.” The arrest warrant for Garcia was issued after his periodical, Sexto Poder, printed a feature entitled“Powerful Women of the Revolution,” which included photos of Supreme Court President Luisa Estella Morales in a revealing outfit.
  • The New York Times looks at the history of a catchphrase long used to dismiss Brazil’s potential to be the region’s greatest economic power: “Brazil is the country of the future, and always will be.” The article gives a biographical sketch of the man behind the much-cited slogan, Viennese writer Stefan Zwieg.
  • The LA Times has a feature on Indian trackers, employed by U.S. Immigration and Customs Enforcement (ICE), who search for drug smugglers that pass through indigenous land in Arizona. According to the ICE, an estimated $2 billion worth of drugs has passed through one U.S. reservation in the past five years.
  • Reuters summarizes recent activity by Paraguay’s elusive guerrillas, the Paraguayan People’s Army (EPP). Even though the group is thought to number no more than 20, President Fernando Lugo has made the campaign to hunt down EPP leaders his top security priority. Reuters notes that this has made him politically vulnerable during an uneasy time of his presidency.
  • The AP reports on the trial of 13 police officers accused of brutality during a prison riot just after Haiti’s devastating 2010 earthquake. The country just received a temporary parliament building, built with about $2 million from USAID.
  • Following the liberalization of the housing market, Cuba will soon see another reform, this time in agriculture. Communist Party newspaper Granma reports that starting December 1, farmers will be able to sell their produce directly to tourist facilities without having to go through a state agency first. A more readable version of the story is available at the BBC.
  • IPS examines efforts by Southern Cone countries to preserve the Rio de la Plata river basin, the second largest in South America and one of the world’s most important fresh water reserves.
  • An Al Jazeera video reports on Bolivian children growing up with incarcerated parents.
  • The Knight Center for Journalism in the Americas interviews Fernado Rodrigues, a journalist who was also one the of the key backers of Brazil’s recently passed media transparency law. The law is similar to the Freedom of Information Act in the U.S., and makes it easier for interest parties to request and receive information from government bodies. While this should eventually allow Brazilian media to access government records, even those once deemed classified, Rodrigues notes that Brazil now faces the real challenge of putting the law from paper into practice.
  • Finally, a lighter piece from Reuters examines bureaucratic hassles in Brazil, where long lines, red tape and a powerful lobby of notaries, who make millions from handling state paperwork fees, make life difficult for both residents and expats.