Gas War (Bolivia)

Painted alusive to gas statization on a Uyuni street.

The Gas War is the name given to the social conflict that occurred in Bolivia in 2003. The conflict focused on the exploitation of natural gas reserves that were discovered in the department de Tarija, in the mid-1990s and jointly listed as the second largest deposit in South America.

The main conflict arises from the decision of the government of Gonzalo Sánchez de Lozada and Carlos Mesa to export natural gas through Chile. The main demands of the gas war were the non-export of natural gas until there was a policy to supply the domestic market, in the same way due to the low prices at which gas was intended to be exported, which were less than a dollar. the thousand BTU. The second demand was a Constituent Assembly, that is, to create a new social pact towards a new State of consensus.

Background

Government of Quiroga

Marches of October 2003 against Gonzalo Sánchez de Lozada.

The conflict began in 2002, when the administration of President Jorge Quiroga proposed building a gas pipeline through Bolivian and Chilean territory, to the port of Mejillones in Chile, the most direct route to the Pacific Ocean. However, antagonism towards Chile runs deep in Bolivia due to the loss of access to the sea in the War of the Pacific (1879 - 1884). Various Bolivian sectors began to vociferate and campaign against the Chilean port option, demanding alternatives such as a Peruvian port through which to transport the gas, but with the difficulty of being far away. According to Chilean estimates, the Mejillones option would be 600 million dollars cheaper. In Peru, a difference of no more than 300 million was indicated. Some indigenous political associations such as the Indigenous Revolutionary Clandestine Committee - Dignity Movement called the Bolivian indigenous population "those who have always been marginalized by the oligarchic system"

Shortly before the presidential elections in July 2002, the government of Jorge Quiroga postponed the execution of the gas pipeline, leaving the execution in the hands of his successor, alleging that he did not want to compromise his chances of being elected president in the hypothetical 2007 elections., taking into account the unpopularity of exporting gas through the Chilean port.

Government of Sánchez de Lozada and Carlos Mesa export plans

Gonzalo Sánchez de Lozada, together with his vice president Carlos Mesa, who won the 2002 presidential elections, indicated their preference for the option of the port of Mejillones. But Sánchez de Lozada also avoided adopting an official statement to build the pipeline. During 2003, a period of social and political crisis was revived, resulting in protests demanding the nationalization of hydrocarbons. The protests were led by representatives of the peasantry and mining from different regions of the country.

Pacific LNG, British Petroleum and Repsol YPF and Total S.A. had forecast an investment of three billion dollars in Chilean territory, the sale price of gas was less than a dollar per thousand BTUs and the approximate profits were billion dollars of which the Bolivian state only received 18%, that is, 180 million dollars per year.

The plans included exporting gas through Chile, and selling gas to California and Mexico at a low cost. Given absolute certainty, Gonzalo Sánchez de Lozada ratified his decision publicly and did not intend to give in to the opposition's claims.

Conflict

Republic Plan

"The Republic Plan", which was prepared by the Intelligence departments of the three Armed Forces months in advance of possible social mobilizations or armed insurgency, which did not was necessarily known to the civilian population, due to its classification as "State Secret", resulted in the military taking to the streets on September 16, 2003.

On September 11, 2003, a "red alert" implementing the "Republic Plan". The troops took strategic positions before the events that were occurring in Warisata, Sorata and later in El Alto and in the city of La Paz. General Arnez, testifies that the regiments: Calama, Boquerón, Vidaurre, Ranger, Aroma, Independencia, were housed in the Ingavi Regiment and in other military dependencies from October 8 to 10, in execution -it is understood-, "of the Republic Plan".

He emphasizes that he received orders to guard Senkata on October 9, at 11, and that on October 10 he received orders to escort the tankers from Senkata, sending several armored vehicles. He states that on October 11, the first convoy transporting liquefied gas (LPG) for consumption by the population arrived in El Alto and the city of La Paz, plus a tanker for eventualities.

Warisata

Shortly before Decree 09/27/03 was issued, which authorized the intervention of the Armed Forces, on September 2, 2003, the military carried out maneuvers against the town of Warisata due to conflicts, blockades and confrontations caused by the peasants and community members of the place, an action that left six dead, of whom five were peasants and one soldier. Faced with this result, the peasants challenged the government, this being the beginning of the insurrection against the government of Gonzalo Sánchez de Lozada.

The High

The city of El Alto, which had declared a civic strike on October 9. On October 13, the government decides to take a convoy with gasoline and food for some families in the city of La Paz. In the area of La Portada, soldiers with weapons of war and large machine guns begin to shoot at the population, armed with sticks and stones; the helicopters begin to shoot against the roofs of the houses and the constant media denunciations of the US advisers in Bolivia grow.

During the conflict, a five-year-old boy died after he had gone out onto the balcony of his house and was shot by the soldiers sheltering on the La Ceja bridge in El Alto. Around 65 people died and the leaders of the organizations and communities called for the resignation of Sánchez de Lozada, before which other organizations such as the Permanent Assembly of Human Rights, the Ombudsman, Bolivian residents abroad, etc., joined. who sought the pacification of the country. The marches against Sánchez de Lozada spread throughout the national territory. This episode in which the army fired on the population in El Alto is known as the October Massacre.

Resignation of Sánchez de Lozada

Given the hostile climate and the president's decision to use the army against the population, pressure to resign is growing. On October 17, Gonzalo Sánchez de Lozada decided to flee the country, leaving his resignation in Congress.

Carlos Mesa

After the resignation and flight of Sánchez de Lozada, his vice president Carlos Mesa assumes the presidency, who issues Supreme Decree No. 27237 granting amnesty to all the actors of October 2003. The Decree is later amended to specify that the amnesty does not apply to former members of the Government, but only to the social movements involved.

In June 2005, President Mesa proposed constituting a Constituent Assembly and calling a consultative referendum to resolve the natural gas issue: one option was to allow greater tax collection ^{[citation needed ]}and royalties from the State to transnational companies established in the country. Businessmen strongly opposed this possibility, considering it too burdensome. The other option was for complete nationalization, as demanded by the unions led by Evo Morales and Felipe Quispe.

Nationalization of the gas industry

The elections were postponed by the Electoral Court, after a legal claim for seats by the department of Santa Cruz. Finally, the date for the Bolivian general elections was set for December 18, 2005.

In 2005, Evo Morales won the national elections with a historic 54%, (for the first time a candidate in Bolivia obtained the majority of the votes). This meant that post-electoral alliances were not necessary. Among the main promises of the current president were the nationalization of hydrocarbons and the Constituent Assembly. On May 1, 2006, the main gas fields in Bolivia woke up militarized with the order that from that day on they became the property of the country, after negotiations with the Transnational Companies (who had never ratified their contracts with the national parliament).) new contracts are signed. As of the nationalization, income from gas exploitation increases; firstly by the Law approved after the gas referendum that established that 50% should be paid in royalties for the State and 18% in taxes. The State goes on to gain from 51% approved in the 2004 Referendum in the government of Carlos Mesa to 82% of the gas business.

Finally, on May 1, 2006, he signed a decree indicating that all gas reserves should be state-owned. The announcement was made to coincide with Labor Day, May 1. Ordering the YPFB military and engineers to occupy and secure the gas facilities during the signing. Morales gave foreign companies a six-month “transition period” to renegotiate contracts, or else they would be expelled from the country. However, President Morales indicated that the nationalization would not take the form of expropriations or seizures. Vice President Álvaro García Linera said in the main square of La Paz, that the government's gas profits would reach $780 million the following year, growing almost six times compared to 2002, mainly because now Bolivia would receive more than 82% of the income from the exploitation of hydrocarbons and 18% would be taken by foreign corporations, additionally the increase in the price of hydrocarbons was encouraging. Among the 53 facilities affected by the measure are Petrobras do Brasil, one of Bolivia's largest investors, which controls 14% of the country's gas reserves. Brazil's energy minister, Rondeau de Silas, reacted, considering the move "unsympathetic" and contrary to the historical understanding between his country and Bolivia. Petrobras, Repsol YPF, British PLC from the group of oil and gas producer BG, Repsol and France's Total are the main gas companies present in the country. According to Reuters, “the echo of the actions of Bolivia, where Venezuelan President Hugo Chávez, an ally of Evo Morales, the fifth largest oil exporter in the world with forced migrations and retroactive tax hikes, made commanders accept great part of the contract conditions. YPFB would pay foreign companies for their services, offering about 50% of the value of production, although the decree indicated that companies in the country's largest gas fields would get just 18%.

The negotiation and approval of contracts by the legislature (which were carried out for the first time; that is to say that previously no capitalized company in Bolivia complied with all the formalities of the law), ran into opposition that was not willing to discuss the approval of the contracts that through popular pressure are able to constitutionalize in oil contracts.

Traded for a period of 6 months; Said negotiation had been difficult, especially with the Brazilian company Petrobras. Petrobras rejected the increases or reduction to a service provider. As a result Andrés Soliz Rada, the Bolivian energy minister, bogged down in negotiations, ended up resigning in October and was replaced by Carlos Villegas. "They force us to live with Brazil in a union without divorce, because we both need each other," said Evo Morales at the contract signing ceremony, which underscores the mutual dependence of Brazil and Bolivia in the production of Bolivian gas.

The nationalization does not end with the producing companies, today Transredes, the gas transporter that was in charge of maintaining and building the gas pipelines, was also nationalized. The nationalization of Bolivian hydrocarbons contributes to the sovereign decision in the energy integration of the South American region. So far, the agreements made between Argentina, Bolivia, Brazil, and Venezuela, demonstrated a process of South American energy integration.

Negotiations between the Bolivian government and the foreign companies intensified during the week leading up to the deadline ending October 28, 2006. An agreement was reached with two of the companies (including Total) the day before and the Saturday before of the term with the rest of the ten remaining companies (Petrobras and Repsol YPF, among them) the operation in Bolivia had also arisen from an agreement. Full details of the new contracts had not been released, but the government's target of raising yields from the two main fields to 82% from 60% appeared to have been achieved. The share of the revenue for the government in the minor fields was set at 60%.