Bolivian Bill to Nationalize Gas Feared by Foreign Interests

The subhead of the December 20 Miami Herald article "Bolivia approves natural gas law" is enough to know that the proposed law is a victory, of sorts, for the social movements: "Law may stop investment in the sector, cause massive lawsuits."

In November, Herald reporter Tyler Bridges wrote, the House gave preliminary approval to a Movement Toward Socialism measure to have the state unilaterally seize control of the natural gas reserves and impose an immediate and much higher tax than President Carlos Mesa proposed. As Alex Contreras Baspineiro reported for Narco News on July 19, new hydrocarbons legislation was inevitable after more than ninety percent of participants in Mesa's referendum voted for the government to reclaim all hydrocarbons "at the mouth of the well."

As hoped by many of those voting and also those abstaining, Mesa lost control of his referendum proposal.  The often vague language, instead of being used by Mesa to nationalize in name but not in fact, is being interpreted by the Bolivian Congress in accordance with the population's wishes.  One of Mesa's questions approved by voters called for nationalizing the gas reserves.

Bridges wrote:

Mesa said it really meant giving the state greater control over the reserves while keeping them under foreign control.

But with polls showing that most voters thought it did actually mean nationalization, Movement Toward Socialism and the more moderate and conservative political parties used that to rewrite Mesa's proposal.

The president and his top aides hope that the moderates and conservatives will have a change of heart and produce a bill acceptable to the foreign community.

An Economic Bluff by Foreign Interests?

U.S., Mexican, and other expected buyers of the oil are reported as no longer interested due to political instability, Bridges wrote.

This purportedly cold-facts approach, which claims that regardless of the justice of their demands the Bolivians are hurting themselves, ignores the reality of the market and the demands of social movement leaders on at least three counts.  First, most exported gas would probably be bought by neighboring countries in any case, according to many activists.  Second, a coveted product will be bought if produced at market price.  Third, the demand of social leaders is that the gas converted to higher-value consumer gases and fertilizers in Bolivia itself.  People voted, in the words of the referendum itself, for a policy that has "Bolivia exporting gas in a way that covers local consumption [and] promotes the industrialization of the gas within the country."

The Bolivian people and their representatives in Congress do not look likely to back down.  Wrote Bridges:

"The gas reserves belong to the Bolivian people," Evo Morales, head of the Movement Toward Socialism party, a member of Congress and a leading contender for president in 2007, said in an interview.  "The gas shouldn't be in private hands.  The petroleum companies can be partners, just not owners."

Morales' constituents – and perhaps most Bolivians – doubt whether the foreign-controlled gas will put money in their pockets given the long history of foreign companies exploiting the country's natural resources with little benefit for average Bolivians.

Morales predicted that the full Congress will approve the measure early next year.

The traditional main parties lost devestatingly in local elections this month, and the largest winner is Movement Toward Socialism.

Foreign Elite Opposition

Wealthy foreign companies, who will have to pay much more for Bolivia's gas and lose control over its development, oppose the bill.  Already Bolivia they are putting pressure on Bolivia through their agents and the institutions of neo-colonialism, customarily known as "the international community" in establishment press reports such as Bridges':

Foreign companies and their allies in the international community have said the law would amount to the forced nationalization of the reserves.

This would prompt lawsuits by the foreign companies and would likely prompt a reduction in aid by the United States, the World Bank, the International Monetary Fund and the Inter-American Development Bank, sources in the international community said.

The Brazilian government has also pointedly warned leaders of Congress against passing the bill since the Brazilian petroleum company, Petrobras, is the largest investor in Bolivia.

Whose Gas?

Thus, even undoing what then-president Gonzalo Sánchez de Lozada did in 1996 appears to be out of the question for the foreign companies and their representatives.

"Congress' current plan is on a collision course with Mesa, Bolivia's foreign lenders and the foreign petroleum companies that found and currently control the gas reserves," Bridges wrote.

The claim that foreign oil companies found the gas reserves, quietly inserted as fact into Bridges article, is repeated by ex-president Sánchez de Lozada, who may soon face trial for the massacres his government committed before he resigned in 2003.

An October 28 article by Amber Howard and Natalia Viana in the Narco News Bulletin, to the contrary, reports that the government of Bolivia freely gave to interested foreign companies all the information about the oil and gas fields— their locations, depths, and capacities.  These known fields were worth $100 billion when the 1996 April Hydrocarbons Law was signed.  Such data is not easy to get, Howard and Viana wrote.  "The government spent many years and $1 billion dollars in public funds on the research."

The Giveaway

"Since 1985 we have been victims of confiscation of natural resources, of violence, and [violation of] our rights as persons," said Oscar Olivera, director of the Federation of Factory Workers of Cochabamba and spokesperson for the Co-ordination for the Defense and Recuperation of Gas.  (The 1985 date refers to the privatization of Bolivia's mines, costing 400,000 miners their jobs and sending many to take up coca farming.)  Olivera spoke to students and professors of the School of Authentic Journalism on 2004 August 4 outside of Cochabamba, Bolivia.

"The economic sector has been transformed so it serves the interests of only two sectors: oil and banks.  I will give some figures to show these changes."  In the past, Olivera said, all the state companies — communication, radio, mines, and predominately oil — contributed up to 70 percent of the state's income.  Today these companies only contribute 7 percent.  "Their contribution is down to ten percent of what it used to be," Olivera said.

The workers and the people contributed 12 percent of the state's income with their taxes.  "Today that contribution via their taxes is up to 48 percent."

Clearly, even if foreign oil companies seemingly paid for some of the studies, Bolivian taxpayers have really footed the bill.

Yet with the questionable claim that multinationals helped find gas underground, Sánchez de Lozada covered up a giveaway of the Bolivian people's last great geological resource.  In 2003 October the International Catholic Union of the Press (UCIP) issued "A call to the international public opinion" denouncing Sánchez de Lozada's hydrocabon law and charging him with unconstitutional theft.

"President Sánchez de Lozada had integrally changed the Hydrocarbons Law in April 1996," wrote the anonymous and apparently Bolivian UCIP member.  As a result, "more than 95% of the hydrocarbon fields in Bolivia have been illegally declared 'new fields', and the businesses that exploit those fields, only pay a small tax to the state of 18% over the value of crude extraction (a duty tax that is among the world's lowest)."  The UCIP journalist wrote:

Also, just prior to his departure from the presidential office in 1997, he imposed Supreme Decree 24806 which placed control of hydrocarbon ownership into the hands of the State.  This violates the State's Political Constitution, which inalienably recognises hydrocarbon ownership as belonging to the people of Bolivia.

Without possession of the natural gas and control of its revenues by the people, Olivera told the journalism school, "I think then we will lose the possibility to change Bolivia so it is not a poor country for the next 40 years."

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