Ecuadorian Oil

Battle Rages With Ecuador Indians Over Jungle Oil In the northern Amazon, Indians are suing a U.S. oil company over environmental damage they say ruined their land and made people sick. Further south, indigenous demonstrators have led violent protests to keep firms off their property. ... Analysts say it could be tough for Ecuador to attract investment unless tensions are eased with indigenous communities, who make up nearly half the people in the Amazon and are backed by a powerful national left-wing Indian movement.

They talk about scaring off oil investment like it's a bad thing. The environmental problems that surround most oil production, and the consequent problems for the humans who depend most directly on that environment, are enough to make me very skeptical of further drilling (though some companies, like BP, have been demonstrating that environmentally benign oil production is not impossible -- the question is how to create incentives for using this kind of best practice). But I would also be very concerned about overdependence of an economy on one industry, especially one that has links to local prosperity only through government appropriation and redistribution/spending of profits. Rather than pinning its hopes on a black gold windfall, Ecuador ought to be diversifying, and Indian activism out of environmental self-interest may have an unintended consequence of keeping the country from taking the easy, but ultimately unfulfilling, way out.

At the end of the article, we hear this:

"All the oil and gold that's in the earth should be exploited," said [Santiago] Alomoto, who is not Indian but a long-time jungle dweller. "But the wealth should stay right here."

My first reaction was to sympathize with Alomoto's perspective. Many of the problems of oil-based development stem from the fact that it's carried out by outside capital. This leads to an export of profits, as well as an easy indifference to environmental impacts on the part of those calling the shots -- after all, the sludge isn't being dumped in their backyards. My second response was skepticism. How could Amazonians put together the funds and knowledge to effectively exploit their oil reserves, especially if they were committed to a presumably high-tech standard of environmental best practice.

Then it occurred to me that, in the case of natural resource exploitation, it's not entirely clear who owns the "means of production," so to speak, and who is just a hireling. The dominant setup is for owners of oil resources to essentially sell themselves to the oil companies, just like owners of labor-power sell themselves to a company they want to work for. But what if they reversed the situation and the owners of oil production technology and equipment sold themselves to oil owners? Texaco or whoever would be hired to drill for the Amazonians. This would also go along with a changed property system, in which ownership of the oil would be shifted from the state to the local people. This kind of shift could undermine the power of the oil owners, since presumably the state is in a better position to get its way in negotiations with an oil company than a group of Indians would be. But this may be mitigated in a condition of oil scarcity -- the less oil there is to be had around the world, the stronger the position of the people who do have some.