Drilling for Big Oil's money

Bret Stephens:

Ecuador has a huge environmental problem courtesy of Big Oil. Since 1990, there have been at least 800 recorded oil spills in the country, including 117 in the first nine months of 2006 alone. Their cumulative volume easily exceeds three million gallons. Scores of spills have never been cleaned up, posing severe health risks for the local population. Rainfall in the area is said to smell like car exhaust.

Small wonder, then, that when actress Daryl Hannah ventured into the Ecuadorean Amazon in June to have herself photographed dipping her hand into a lake of black sludge, she characterized the situation as "potentially the biggest environmental case ever." Only one problem: The supposed villain in the plot, Texaco--now merged with Chevron--ceased operations in Ecuador in 1990.

Yet such details are rarely allowed to get in the way of a noble cause--or a multibillion dollar class-action. The source of many, if not all, of the spills mentioned above is state-owned PetroEcuador, described by the Latin Business Chronicle as "widely seen as one of the most inefficient state oil companies in Latin America." In 2006, Miguel Muñoz, Ecuador's Energy Minister, admitted that "for over 30 years, PetroEcuador has done absolutely nothing to remediate those pits under its responsibility." He also acknowledged that the company's obsolete and underfunded pipeline system "is one of the most important causes of spills we face now."

So how come Chevron is in this picture? Plaintiffs lawyer Steven Donziger says it's because Texaco "made all the decisions about technologies and methods" and did "substandard work compared to what they were doing elsewhere." An alternative explanation, as bank robber Willie Sutton might have said, is because Chevron is where the money is.

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There is much more on this search for the litigation lotto. It is interesting that when governments take over businesses they cease being responsible for the consequences of their actions. Once socialism is in place no one is responsible for the mismanagement of the business or the lack of controls on the environmental consequences of the operations.

Why is it that the current owners aren't "where the money is"? Could it be because socialism breeds incompetence? There is another underlying cause for this type of litigation.

On the left and particularly in the environmental movement there is a hatred of the production of energy and desire to inhibit it anyway they can and taking capital form these companies is one want to slow the production of energy.