Bolivian Gas Conflict
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The Bolivian gas conflict was a social confrontation in Bolivia reaching its peak in 2003, centering on the exploitation of the country's vast natural gas reserves. The expression can be extended to refer to the general conflict in Bolivia over the exploitation of gas resources, thus including the 2005 protests and the election of
Evo Morales Juan Evo Morales Ayma (; born 26 October 1959) is a Bolivian politician, trade union organizer, and former cocalero activist who served as the 65th president of Bolivia from 2006 to 2019. Widely regarded as the country's first president to c ...
as president. Before these protests, Bolivia had seen a series of similar earlier protests during the
Cochabamba protests of 2000 The Cochabamba Water War was a series of protests that took place in Cochabamba, Bolivia's fourth largest city, between December 1999 and April 2000 in response to the privatization of the city's municipal water supply company SEMAPA. The wave ...
, which were against the
privatization Privatization (also privatisation in British English) can mean several different things, most commonly referring to moving something from the public sector into the private sector. It is also sometimes used as a synonym for deregulation when ...
of the municipal
water supply Water supply is the provision of water by public utilities, commercial organisations, community endeavors or by individuals, usually via a system of pumps and pipes. Public water supply systems are crucial to properly functioning societies. Thes ...
. The conflict had its roots in grievances over the government's economic policies concerning natural gas, as well as
coca eradication Coca eradication is a strategy promoted by the United States government starting in 1961 as part of its "War on Drugs" to eliminate the cultivation of coca, a plant whose leaves are not only traditionally used by indigenous cultures but also, in m ...
policies, corruption and violent military responses against
strike Strike may refer to: People * Strike (surname) Physical confrontation or removal *Strike (attack), attack with an inanimate object or a part of the human body intended to cause harm *Airstrike, military strike by air forces on either a suspected ...
s. On a larger scale, it can be traced to Bolivia's colonization since the 15th century and the subsequent exploitation of its
natural resources Natural resources are resources that are drawn from nature and used with few modifications. This includes the sources of valued characteristics such as commercial and industrial use, aesthetic value, scientific interest and cultural value. ...
(e.g., the mines of Potosí). The "Bolivian gas war" thus came to a head in October 2003, leading to the resignation of President
Gonzalo Sánchez de Lozada Gonzalo Sánchez de Lozada Sánchez Bustamante (born 1 July 1930), often referred to as Goni, is a Bolivian businessman and politician who served as the 61st president of Bolivia from 1993 to 1997 and from 2002 to 2003. A member of the Revolu ...
(aka "Goni"). Strikes and road blocks mounted by
indigenous Indigenous may refer to: *Indigenous peoples *Indigenous (ecology), presence in a region as the result of only natural processes, with no human intervention *Indigenous (band), an American blues-rock band *Indigenous (horse), a Hong Kong racehorse ...
and labour groups (including the COB trade union) brought the country to a standstill. Violent suppression by the Bolivian armed forces left some 60 people dead in October 2003, mostly inhabitants of
El Alto El Alto (Spanish for "The Heights") is the second-largest city in Bolivia, located adjacent to La Paz in Pedro Domingo Murillo Province on the Altiplano highlands. El Alto is today one of Bolivia's fastest-growing urban centers, with an estimat ...
, located on the ''
Altiplano The Altiplano (Spanish for "high plain"), Collao (Quechua and Aymara: Qullaw, meaning "place of the Qulla") or Andean Plateau, in west-central South America, is the most extensive high plateau on Earth outside Tibet. The plateau is located at the ...
'' above the capital city of La Paz. The governing coalition disintegrated forcing Goni to resign and leave the country on October 18, 2003. He was succeeded by the vice president,
Carlos Mesa Carlos Diego de Mesa Gisbert (; born 12 August 1953) is a Bolivian historian, journalist, and politician who served as the 63rd president of Bolivia from 2003 to 2005. As an independent politician, he previously served as the 37th vice pres ...
, who put the gas issue to a
referendum A referendum (plural: referendums or less commonly referenda) is a direct vote by the electorate on a proposal, law, or political issue. This is in contrast to an issue being voted on by a representative. This may result in the adoption of a ...
on July 18, 2004. In May 2005, under duress from protesters, the Bolivian congress enacted a new hydrocarbons law, increasing the state's royalties from
natural gas Natural gas (also called fossil gas or simply gas) is a naturally occurring mixture of gaseous hydrocarbons consisting primarily of methane in addition to various smaller amounts of other higher alkanes. Low levels of trace gases like carbo ...
exploitation. However, protesters, who included
Evo Morales Juan Evo Morales Ayma (; born 26 October 1959) is a Bolivian politician, trade union organizer, and former cocalero activist who served as the 65th president of Bolivia from 2006 to 2019. Widely regarded as the country's first president to c ...
and
Felipe Quispe Felipe Quispe Huanca " Mallku" (Quechua language: "condor"), (22 August 1942 – 19 January 2021) was a Bolivian historian and political leader. He headed the Pachakuti Indigenous Movement (MIP) and was general secretary of the United Union Co ...
, demanded full nationalization of
hydrocarbon In organic chemistry, a hydrocarbon is an organic compound consisting entirely of hydrogen and carbon. Hydrocarbons are examples of group 14 hydrides. Hydrocarbons are generally colourless and hydrophobic, and their odors are usually weak or ...
resources, and the increased participation of Bolivia's indigenous majority, mainly composed of Aymaras and Quechuas, in the political life of the country. On June 6, 2005, Mesa was forced to resign as tens of thousands of protesters caused daily blockades to La Paz from the rest of the country. Morales' election at the end of 2005 was met with enthusiasm by the social movements, because he was, as the leader of
left-wing Left-wing politics describes the range of political ideologies that support and seek to achieve social equality and egalitarianism, often in opposition to social hierarchy. Left-wing politics typically involve a concern for those in soci ...
MAS, one of the staunchest opponents to the exportation of the gas without corresponding industrialization in Bolivia. On May 1, 2006, President Morales signed a decree stating that all gas reserves were to be nationalized: "the state recovers ownership, possession and total and absolute control" of hydrocarbons. The 2006 announcement was met by applause on La Paz's main plaza, where Vice President Alvaro Garcia told the crowd that the government's energy-related revenue would jump US$320 million to US$780 million in 2007, continuing a trend where revenues had expanded nearly sixfold between 2002 and 2006.


Background


Gas reserves of Bolivia

The central issue was Bolivia's large natural gas reserves and the prospect for their future sale and use. The Bolivian gas reserves are the second largest in
South America South America is a continent entirely in the Western Hemisphere and mostly in the Southern Hemisphere, with a relatively small portion in the Northern Hemisphere at the northern tip of the continent. It can also be described as the sout ...
after
Venezuela Venezuela (; ), officially the Bolivarian Republic of Venezuela ( es, link=no, República Bolivariana de Venezuela), is a country on the northern coast of South America, consisting of a continental landmass and many islands and islets in th ...
, and exploration after the privatization of the national oil company
YPFB Yacimientos Petrolíferos Fiscales Bolivianos (YPFB) is a Bolivian state-owned enterprise dedicated to the exploration, exploitation, refining, industrialization, distribution and commercialization of oil, natural gas and derived products. I ...
showed that proven natural gas reserves were 600% higher than previously known. The cash-poor, state-owned company could not afford the exploration costs. These reserves mainly are located in the southeastern
Tarija Department Tarija () is a department in Bolivia. It is located in south-eastern Bolivia bordering with Argentina to the south and Paraguay to the east. According to the 2012 census, it has a population of 482,196 inhabitants. It has an area of . The city ...
, which contains 85% of gas and petrol reserves. According to the
United States Department of Energy The United States Department of Energy (DOE) is an executive department of the U.S. federal government that oversees U.S. national energy policy and manages the research and development of nuclear power and nuclear weapons in the United Stat ...
, another 10.6% is located within the department of Santa Cruz and 2.5% in the
Cochabamba Department Cochabamba ( ay, Quchapampa Jach'a Suyu, es, Departamento de Cochabamba , qu, Quchapampa Suyu), from Quechua ''qucha'' or ''qhucha'', meaning "lake", ''pampa'' meaning "plain", is one of the nine departments of Bolivia. It is known to be the ...
. After further exploration from 1996 to 2002, the estimated size of the probable gas reserves was calculated to be 12.5 times larger, passing from to . This number has declined somewhat to probable reserves. The proven reserves are . With the declining importance of
tin Tin is a chemical element with the symbol Sn (from la, stannum) and atomic number 50. Tin is a silvery-coloured metal. Tin is soft enough to be cut with little force and a bar of tin can be bent by hand with little effort. When bent, t ...
mines, those reserves accounted for the majority of foreign investment in Bolivia. The price which Bolivia is paid for its natural gas is roughly US to
Brazil Brazil ( pt, Brasil; ), officially the Federative Republic of Brazil (Portuguese: ), is the largest country in both South America and Latin America. At and with over 217 million people, Brazil is the world's fifth-largest country by area ...
and $3.18 per million BTU to
Argentina Argentina (), officially the Argentine Republic ( es, link=no, República Argentina), is a country in the southern half of South America. Argentina covers an area of , making it the second-largest country in South America after Brazil, th ...
. Other sources state that Brazil pays between $3.15 and $3.60 per million BTU, not including $1.50 per million BTU in Petrobras extraction and transportation costs. As a comparison, the price of gas in the US as a whole in 2006 varied between US, although some years earlier the price of natural gas spiked at $14 per million BTU in
California California is a state in the Western United States, located along the Pacific Coast. With nearly 39.2million residents across a total area of approximately , it is the most populous U.S. state and the 3rd largest by area. It is also the m ...
due to lack of pipeline capacity to and within California as well as due to electricity outages. While according to ''
Le Monde ''Le Monde'' (; ) is a French daily afternoon newspaper. It is the main publication of Le Monde Group and reported an average circulation of 323,039 copies per issue in 2009, about 40,000 of which were sold abroad. It has had its own website si ...
'', Brazil and Argentina pay US$2 per thousand cubic meter of gas, which costs from $12 to $15 in California. In 1994, a contract with Brazil was passed, two years before 1996's privatization of the 70-year-old, state-owned ''Yacimientos Petroliferos Fiscales de Bolivia'' (YPFB). The construction of the Bolivia-Brazil gas pipeline cost US$2.2 billion. A consortium called Pacific LNG was formed to exploit the newly discovered reserves. The consortium comprised the
British British may refer to: Peoples, culture, and language * British people, nationals or natives of the United Kingdom, British Overseas Territories, and Crown Dependencies. ** Britishness, the British identity and common culture * British English, ...
companies
BG Group BG Group plc was a British multinational oil and gas company headquartered in Reading, United Kingdom. On 8 April 2015, Royal Dutch Shell announced that it had reached an agreement to acquire BG Group for $70 billion, subject to regulatory and ...
and BP, and
Spain , image_flag = Bandera de España.svg , image_coat = Escudo de España (mazonado).svg , national_motto = ''Plus ultra'' (Latin)(English: "Further Beyond") , national_anthem = (English: "Royal March") , i ...
's Repsol YPF. Repsol is one of three companies that dominate the gas sector in Bolivia, along with Petrobras and
TotalEnergies TotalEnergies SE is a French multinational integrated energy and petroleum company founded in 1924 and one of the seven supermajor oil companies. Its businesses cover the entire oil and gas chain, from crude oil and natural gas exploration and ...
. A plan costing US$6 billion was drawn to build a pipeline to the
Pacific The Pacific Ocean is the largest and deepest of Earth's five oceanic divisions. It extends from the Arctic Ocean in the north to the Southern Ocean (or, depending on definition, to Antarctica) in the south, and is bounded by the contine ...
coast, where the gas would be processed and liquefied before being shipped to
Mexico Mexico (Spanish: México), officially the United Mexican States, is a country in the southern portion of North America. It is bordered to the north by the United States; to the south and west by the Pacific Ocean; to the southeast by Guatema ...
and the
United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territori ...
(
Baja California Baja California (; 'Lower California'), officially the Free and Sovereign State of Baja California ( es, Estado Libre y Soberano de Baja California), is a state in Mexico. It is the northernmost and westernmost of the 32 federal entities of Mex ...
and California), through a Chilean port, for example
Iquique Iquique () is a port city and commune in northern Chile, capital of both the Iquique Province and Tarapacá Region. It lies on the Pacific coast, west of the Pampa del Tamarugal, which is part of the Atacama Desert. It has a population of 191, ...
. The 2003 Lozada deal was opposed heavily by Bolivian society, in part because of nationalism (Bolivia feels resentment after the territorial losses of the
War of the Pacific The War of the Pacific ( es, link=no, Guerra del Pacífico), also known as the Saltpeter War ( es, link=no, Guerra del salitre) and by multiple other names, was a war between Chile and a Bolivian–Peruvian alliance from 1879 to 1884. Fought ...
in the late 19th century, which deprived it of the Litoral province and hence access to the sea). Government ministers hoped to use the gas profits to bolster the sagging Bolivian economy and claimed the money would be invested exclusively in health and education. Opponents argued that under the current law, the exportation of the gas as a raw material would give Bolivia only 18% of the future profits, or US$40 million to US$70 million per year. They further argued that exporting the gas so cheaply would be the latest case of foreign exploitation of Bolivia's natural resources, starting with its silver and gold from the 17th century. They demanded that a plant be built in Bolivia to process the gas and that domestic consumption had to be met before export. As ''
Le Monde ''Le Monde'' (; ) is a French daily afternoon newspaper. It is the main publication of Le Monde Group and reported an average circulation of 323,039 copies per issue in 2009, about 40,000 of which were sold abroad. It has had its own website si ...
'' puts it, "two reasons plead for the industrial exploitation of the gas, which the multinational companies now have the capacities of doing. The first is related to the necessity of satisfying the Bolivians' energy needs. The second demonstrates the interest of exporting a more profitable product rather than selling raw material". According to the French newspaper, only La Paz, El Alto, Sucre, Potosí, Camiri and Santa Cruz are now connected to the gas network; making an interior network which would reach all Bolivians would cost $1.5 billion, notwithstanding a central gas pipeline to link the various regions together. According to Carlos Miranda, an independent expert quoted by ''Le Monde'', the best industrialisation project is the
petrochemical Petrochemicals (sometimes abbreviated as petchems) are the chemical products obtained from petroleum by refining. Some chemical compounds made from petroleum are also obtained from other fossil fuels, such as coal or natural gas, or renewable so ...
complex proposed by the Brazilian
Braskem Braskem is a Brazilian petrochemical company headquartered in São Paulo. The company is the largest petrochemical company in Latin America and has become a major player in the international petrochemical market (8th largest resin producer worldw ...
firm, which would create 40 000 direct or indirect jobs and cost $1.4 billion. This figure is equivalent to the amount so far invested by Repsol, TotalEnergies and Petrobras.


Santa Cruz autonomy movement

The wealthier, eastern departments of Santa Cruz,
Beni is a Japanese R&B singer, who debuted in 2004 under the Avex Trax label. In 2008, Arashiro left Avex Trax and transferred to Universal Music Japan where she started to perform as simply Beni (stylized as BENI). She was initially best known fo ...
,
Tarija Tarija or San Bernardo de la Frontera de Tarixa is a city in southern Bolivia. Founded in 1574, Tarija is the largest city and capital and municipality within the Tarija Department, with an airport ( Capitán Oriel Lea Plaza Airport, (TJA)) off ...
, and Pando recently had been mobilizing in favor of autonomy. Important issues were opposition to the seizure of resources though nationalization, the confiscation of land from local control by outside ethnic groups (mainly the Aymara and
Quechua Quechua may refer to: *Quechua people, several indigenous ethnic groups in South America, especially in Peru *Quechuan languages, a Native South American language family spoken primarily in the Andes, derived from a common ancestral language **So ...
), and a greater share of taxes collected within Santa Cruz to support roads and schools. Community leaders are supported by the Comite Pro Santa Cruz, local co-ops, and by business organizations such as cattle ranchers and farmers. A strike against the new constitution was recently held which was observed in Santa Cruz, Beni, Tarija, and Pando. Tensions have been raised by the cultural and philosophical rift exposed by the push for a new constitution. As a basis for a new constitution, the western,
Altiplano The Altiplano (Spanish for "high plain"), Collao (Quechua and Aymara: Qullaw, meaning "place of the Qulla") or Andean Plateau, in west-central South America, is the most extensive high plateau on Earth outside Tibet. The plateau is located at the ...
-based MAS party envisions a "council of indigenous peoples" along with a curtailment of private ownership, while Santa Cruz looks to
western culture Leonardo da Vinci's ''Vitruvian Man''. Based on the correlations of ideal Body proportions">human proportions with geometry described by the ancient Roman architect Vitruvius in Book III of his treatise ''De architectura''. image:Plato Pio-Cle ...
and
capitalism Capitalism is an economic system based on the private ownership of the means of production and their operation for profit. Central characteristics of capitalism include capital accumulation, competitive markets, price system, priva ...
. Cultural divisions exist because people in eastern Bolivia, called "Cambas" (meaning "friends" in Guarani), are primarily of mestizo descent (mix of European and several native tribes the largest of which are the Guaraní), while the western Altiplano is dominated by a small white elite and a historically oppressed Quechua and Aymara majority. The first signs of the modern autonomy movement occurred in 2005 when a march for autonomy was attended by hundreds of thousands of people. A result of this was the change in law to allow the election of departmental prefects. Another area of tension was the result of ongoing population shifts and the resulting demands for proportionally greater representation in Bolivia's Congress to reflect these shifts by Santa Cruz. A compromise was reached to allow Santa Cruz to receive some of the seats warranted by population growth, and for the highlands to keep seats despite population losses. Left-wing intellectuals Walter Chávez and
Álvaro García Linera Álvaro Marcelo García Linera (; born 19 October 1962) is a Bolivian politician, sociologist, marxist theoretician, and former guerilla who served as the 38th vice president of Bolivia from 2006 to 2019. A member of the Movement for Socia ...
(former Bolivian Vice President and MAS party member) published an article in the '' Monthly Review'' asserting that autonomy has been historically a demand of the Santa Cruz region, "contemporarily imbued with far-right, populist sentiments." They also qualified Santa Cruz autonomy as a "bourgeois ideology" of the "free market, foreign investment, racism, etc.", which pits the "modern", "whiter" Santa Cruz elite against the short, dark-skinned and anti-capitalist Aymara and Quechua peoples of the western region of Bolivia.


Dispute over pipeline route

The dispute arose in early 2002, when the administration of President
Jorge Quiroga Jorge Fernando Quiroga Ramírez (born 5 May 1960), often referred to as Tuto, is a Bolivian industrial engineer and politician who served as the 62nd president of Bolivia from 2001 to 2002. A former member of Nationalist Democratic Action, he ...
proposed building the pipeline through neighboring
Chile Chile, officially the Republic of Chile, is a country in the western part of South America. It is the southernmost country in the world, and the closest to Antarctica, occupying a long and narrow strip of land between the Andes to the east a ...
to the port of
Mejillones Mejillones is a Chilean port city and commune in Antofagasta Province in the Antofagasta Region. Its name is the plural form of the Spanish meaning " mussel", referring to a particularly abundant species and preferred staple food of its indige ...
, the most direct route to the
Pacific Ocean The Pacific Ocean is the largest and deepest of Earth's five oceanic divisions. It extends from the Arctic Ocean in the north to the Southern Ocean (or, depending on definition, to Antarctica) in the south, and is bounded by the contin ...
. However, antagonism towards Chile runs deep in Bolivia because of the loss of Bolivia's Pacific coastline to Chile in the
War of the Pacific The War of the Pacific ( es, link=no, Guerra del Pacífico), also known as the Saltpeter War ( es, link=no, Guerra del salitre) and by multiple other names, was a war between Chile and a Bolivian–Peruvian alliance from 1879 to 1884. Fought ...
(1879–1884). Bolivians began campaigning against the Chilean option, arguing instead that the pipeline should be routed north through the
Peru , image_flag = Flag of Peru.svg , image_coat = Escudo nacional del Perú.svg , other_symbol = Great Seal of the State , other_symbol_type = National seal , national_motto = "Firm and Happy f ...
vian port of Ilo, 260 km further from the gas fields than Mejillones, or, better yet, first industrialized in Bolivia. According to Chilean estimates, the Mejillones option would be $600 million cheaper. Peru, however, claimed the difference in cost would be no more than $300 million. Bolivian proponents of the Peruvian option say it would also benefit the economy of the northern region of Bolivia through which the pipeline would pass. Supporters of the Chile pipeline argued that
U.S. The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territori ...
financiers would be unlikely to develop processing facilities within Bolivia. Meanwhile, the
Peruvian government , border = Central , image = , caption = Logo of the Government of Peru , date = 1990 , state = Peru , address = Government Palace , leader_title = President of PeruWhile there is ...
, eager to promote territorial and economic integration, offered Bolivia a special economic zone for 99 years for exporting the gas at Ilo, the right of free passage, and the concession of a 10 km² area, including a port, that would be exclusively under Bolivian administration. President Jorge Quiroga postponed the decision shortly before leaving office in July 2002 and left this highly contentious issue to his successor. It was thought Quiroga did not want to jeopardize his chances of re-election as president in the 2007 elections. After winning the 2002 presidential election
Gonzalo Sánchez de Lozada Gonzalo Sánchez de Lozada Sánchez Bustamante (born 1 July 1930), often referred to as Goni, is a Bolivian businessman and politician who served as the 61st president of Bolivia from 1993 to 1997 and from 2002 to 2003. A member of the Revolu ...
expressed his preference for the Mejillones option but made no "official" decision. The Gas War led to his resignation in October 2003.


Escalation

] The social conflict escalated in September 2003 with protests and road blockages paralyzing large parts of the country, leading to increasingly violent confrontations with the Bolivian armed forces. The insurrection was spearheaded by Bolivia's indigenous majority, who accused Sánchez de Lozada of pandering to the US government's "
war on drugs The war on drugs is a global campaign, led by the United States federal government, of drug prohibition, military aid, and military intervention, with the aim of reducing the illegal drug trade in the United States.Cockburn and St. Clair, 1 ...
" and blamed him for failing to improve living standards in Bolivia. On September 8, 650 Aymaras started a
hunger strike A hunger strike is a method of non-violent resistance in which participants fast as an act of political protest, or to provoke a feeling of guilt in others, usually with the objective to achieve a specific goal, such as a policy change. Most ...
to protest against the state detention of a villager. The man detained was one of the heads of the village, and was imprisoned for having sentenced to the death penalty two young men in a "community justice" trial. On September 19, the National Coordination for the Defense of Gas mobilized 30,000 people in
Cochabamba Cochabamba ( ay, Quchapampa; qu, Quchapampa) is a city and municipality in central Bolivia in a valley in the Andes mountain range. It is the capital of the Cochabamba Department and the fourth largest city in Bolivia, with a population of 630 ...
and 50,000 in La Paz to demonstrate against the pipeline. The following day six Aymara villagers, including an eight-year-old girl, were killed in a confrontation in the town of Warisata. Government forces used planes and helicopters to circumvent the strikers and evacuate several hundred foreign and Bolivian tourists from Sorata who had been stranded by the road blockades for five days. In response to the shootings, Bolivia's Labor Union (COB) called a general strike on September 29 that paralyzed the country with road closures. Union leaders insisted they would continue until the government backed down on its decision. Poorly armed Aymara community militias drove the army and police out of Warisata and the towns of Sorata and Achacachi, equipped only with traditional Aymara sling shots and guns from the 1952 Bolivian National Revolution. Eugenio Rojas, leader of the regional strike committee, declared that if the government refused to negotiate in Warisata, then the insurgent Aymara communities would surround La Paz and cut it off from the rest of the country — a tactic employed in the Túpaj Katari uprising of 1781.
Felipe Quispe Felipe Quispe Huanca " Mallku" (Quechua language: "condor"), (22 August 1942 – 19 January 2021) was a Bolivian historian and political leader. He headed the Pachakuti Indigenous Movement (MIP) and was general secretary of the United Union Co ...
, leader of the Indigenous Pachakuti Movement (MIP), stated that he would not participate in dialogue with the government until the military withdrew from blockaded areas. The government refused to negotiate with Quispe, claiming that he did not have the authority to represent the '' campesino'' movement. As the protests continued, protesters in
El Alto El Alto (Spanish for "The Heights") is the second-largest city in Bolivia, located adjacent to La Paz in Pedro Domingo Murillo Province on the Altiplano highlands. El Alto is today one of Bolivia's fastest-growing urban centers, with an estimat ...
, a sprawling indigenous city of 750,000 people on the periphery of La Paz, proceeded to block key access routes to the capital causing severe fuel and food shortages. They also demanded the resignation of Sánchez de Lozada and his ministers, Yerko Kukoc, Minister of Government, and Carlos Sánchez de Berzaín, Minister of Defense, who were held responsible for the Warisata massacre. Protesters also voiced their opposition to the
Free Trade Area of the Americas The Free Trade Area of the Americas (FTAA) was a proposed agreement to eliminate or reduce the trade barriers among all countries in the Americas, excluding Cuba. Negotiations to establish the FTAA ended in failure, however, with all parties unab ...
agreement that was at the time under negotiation by the US and
Latin America Latin America or * french: Amérique Latine, link=no * ht, Amerik Latin, link=no * pt, América Latina, link=no, name=a, sometimes referred to as LatAm is a large cultural region in the Americas where Romance languages — languages derived f ...
n countries (since the November 2005 Mar del Plata Summit of the Americas, it has been put on stand-by).


Martial law in El Alto

On October 12, 2003 the government imposed
martial law Martial law is the imposition of direct military control of normal civil functions or suspension of civil law by a government, especially in response to an emergency where civil forces are overwhelmed, or in an occupied territory. Use Marti ...
in El Alto after sixteen people were shot by the police and several dozen wounded in violent clashes which erupted when a caravan of oil trucks escorted by police and soldiers deploying tanks and heavy-caliber machine guns tried to breach a barricade. On October 13, the administration of Sánchez de Lozada suspended the gas project "until consultations have been conducted
ith the Bolivian people The Ith () is a ridge in Germany's Central Uplands which is up to 439 m high. It lies about 40 km southwest of Hanover and, at 22 kilometres, is the longest line of crags in North Germany. Geography Location The Ith is immediatel ...
" However, Vice President Carlos Mesa deplored what he referred to as the "excessive force" used in El Alto (80 dead) and withdrew his support for Sánchez de Lozada. The Minister of Economic Development, Jorge Torrez, of the MIR party, also resigned. The
United States Department of State The United States Department of State (DOS), or State Department, is an United States federal executive departments, executive department of the Federal government of the United States, U.S. federal government responsible for the country's fore ...
issued a statement on October 13 declaring its support for Sánchez de Lozada, calling for "Bolivia's political leaders opublicly express their support for democratic and constitutional order. The international community and the United States will not tolerate any interruption of constitutional order and will not support any regime that results from undemocratic means". On October 18, Sánchez de Lozada's governing coalition was fatally weakened when the ''New Republic Force'' party withdrew its support. He was forced to resign and was replaced by his vice president, Carlos Mesa, a former journalist. The strikes and roadblocks were lifted. Mesa promised that no civilians would be killed by police or army forces during his presidency. Despite dramatic unrest during his time in office, he respected this promise. Among his first actions as president, Mesa promised a referendum on the gas issue and appointed several indigenous people to cabinet posts. On July 18, 2004, Mesa put the issue of gas nationalization to a referendum. On May 6, 2005, the Bolivian Congress passed a new law raising taxes from 18% to 32% on profits made by foreign companies on the extraction of oil and gas. Mesa failed to either sign or veto the law, so by law Senate President Hormando Vaca Diez was required to sign it into law on May 17. Many protesters felt this law was inadequate and demanded full nationalization of the gas and oil industry.


The 2005 Hydrocarbons Law

On May 6, 2005 the long-awaited Hydrocarbons Law was finally approved by the Bolivian Congress. On May 17 Mesa again refused to either sign or veto the controversial law, thus constitutionally requiring Senate President Hormando Vaca Díez to sign the measure and put it into effect. The new law returned legal ownership to the state of all hydrocarbons and natural resources, maintained royalties at 18 percent, but increased taxes from 16 to 32 percent. It gave the government control of the commercialization of the resources and allowed for continuous government control with annual audits. It also ordered companies to consult with indigenous groups who live on land containing gas deposits. The law stated that the 76 contracts signed by foreign firms must be renegotiated before 180 days. Protesters argued that the new law did not go far enough to protect the natural resources from exploitation by foreign corporations, demanding a complete nationalization of the gas and process in Bolivia. Due to the uncertainty over renegotiation of contracts, foreign firms have practically stopped investing in the gas sector. Foreign investment virtually came to a standstill in the second half of 2005. Shortages in supply – very similar to those observed in Argentina after the 2001 price-fixing – are deepening in diesel, LPG, and begin to be apparent in natural gas. The May–June social unrest affected the supply of hydrocarbons products to the internal market, principally LPG and natural gas to the occidental region. Brazil implemented a contingency plan – led by the Energy and Mines Minister – to mitigate any potential impact from gas export curtailment. Although the supply was never curtailed, the social unrest in Bolivia created a strong sensation that security of supply could not be guaranteed. Occasional social action has continued to affect the continuity of supply, especially valve-closing actions.


Carlos Mesa's June 2005 resignation


The protests

Over 80,000 people participated in the May 2005 protests. Tens of thousands of people each day walked from El Alto to the capital La Paz, where protesters effectively shut down the city, bringing transportation to a halt through strikes and blockades, and engaging in street battles with police. The protestors demanded the nationalisation of the gas industry and reforms to give more power to the indigenous majority, who were mainly Aymaras from the impoverished highlands. They were pushed back by the police with
tear gas Tear gas, also known as a lachrymator agent or lachrymator (), sometimes colloquially known as "mace" after the early commercial aerosol, is a chemical weapon that stimulates the nerves of the lacrimal gland in the eye to produce tears. In ...
and
rubber bullet Rubber bullets (also called rubber baton rounds) are a type of baton round. Despite the name, rubber bullets typically have either a metal core with a rubber coating, or are a homogeneous admixture with rubber being a minority component. Alth ...
s, while many of the miners involved in the protests came armed with dynamite. May 24, 2005 More than 10,000 Aymara peasant farmers from the twenty highland provinces came down from ''
El Alto El Alto (Spanish for "The Heights") is the second-largest city in Bolivia, located adjacent to La Paz in Pedro Domingo Murillo Province on the Altiplano highlands. El Alto is today one of Bolivia's fastest-growing urban centers, with an estimat ...
s Ceja neighborhood into La Paz to protest. On May 31, 2005 residents of El Alto and the Aymara peasant farmers returned to La Paz. More than 50,000 people covered an area of nearly 100 square kilometers. The next day, the first regiment of the National Police decided, by consensus, not to repress the protests and were internally reprimanded by the government. On June 2, as the protests raged on, President Mesa announced two measures, designed to placate the indigenous protesters on the one hand and the Santa Cruz autonomy movement on the other: elections for a new constitutional assembly and a referendum on regional autonomy, both set for October 16. However, both sides rejected Mesa's call: the Pro-Santa Cruz Civic Committee declared its own referendum on autonomy for August 12, while in El Alto protesters began to cut off gasoline to La Paz. Approximately half a million people mobilized in the streets of La Paz, on June 6, and President Mesa subsequently offered his resignation. Riot police used tear gas as miners amongst the demonstrators traditionally set off dynamite in clashes near the presidential palace, while a strike brought traffic to a standstill. However, Congress failed to meet for several days owing to the "insecurity" of meeting as protests raged nearby. Many members of Congress found themselves unable to physically attend the sessions. Senate President Hormando Vaca Díez decided to move the sessions to Bolivia's alternate capital, Sucre, in an attempt to avoid the protesters. Radical farmers occupied oil wells owned by transnational companies, and blockaded border crossings. Mesa ordered the military to airlift food to La Paz, which remained totally blockaded. Vaca Diez and House of Delegates president, Mario Cossío, were the two next in the line of succession to become President. However, they were strongly disliked by the protesters, and each declared they would not accept succession to the Presidency, finally promoting Eduardo Rodríguez, Supreme Court Chief Justice, to the Presidency. Considered apolitical and hence trustworthy by most, his administration was a temporary one until
elections An election is a formal group decision-making process by which a population chooses an individual or multiple individuals to hold Public administration, public office. Elections have been the usual mechanism by which modern representative ...
could be held. Protesters quickly disbanded in many areas, and like many times in Bolivia's past, major political upheavals were taken as a normal part of the political process. Caretaker President Rodríguez proceeded to implement the Hydrocarbons Law. The new tax IDH has been levied from the companies that are paying 'under reserve'. A number of upstream gas companies have invoked Bilateral Investment Protection Treaties and entered the conciliation phase with the state of Bolivia. The treaties are a step towards a court hearing before the International Centre for Settlement of Investment Disputes (ICSID), dependent of the
World Bank The World Bank is an international financial institution that provides loans and grants to the governments of low- and middle-income countries for the purpose of pursuing capital projects. The World Bank is the collective name for the Inte ...
, which could force Bolivia to pay indemnities to the companies.


Concerns of possible US intervention

A military training agreement with
Asunción Asunción (, , , Guarani: Paraguay) is the capital and the largest city of Paraguay. The city stands on the eastern bank of the Paraguay River, almost at the confluence of this river with the Pilcomayo River. The Paraguay River and the Bay o ...
(
Paraguay Paraguay (; ), officially the Republic of Paraguay ( es, República del Paraguay, links=no; gn, Tavakuairetã Paraguái, links=si), is a landlocked country in South America. It is bordered by Argentina to the south and southwest, Brazil to th ...
), giving immunity to US soldiers, caused some concern after media reports initially reported that a base housing 20,000 US soldiers was being built at
Mariscal Estigarribia Mariscal Estigarribia () is a town in the Boquerón Department, Paraguay. Strategic importance Mariscal Estigarribia is home to Dr. Luis Maria Argaña International Airport (IATA code: ESG), which some media reports claim is a US military ...
within 200 km of Argentina and Bolivia, and 300 km of Brazil, near an airport which could receive large planes (
B-52 The Boeing B-52 Stratofortress is an American long-range, subsonic, jet-powered strategic bomber. The B-52 was designed and built by Boeing, which has continued to provide support and upgrades. It has been operated by the United States Air ...
, C-130 Hercules, etc.) which the Paraguayan Air Forces do not have.US Marines put a foot in Paraguay
El Clarín, September 9, 2005
According to the '' Clarín'', an Argentinian newspaper, the US military base is strategic because of its location near the '' Triple Frontera'' between Paraguay, Brazil and Argentina; its proximity to the
Guarani aquifer The Guarani Aquifer, located beneath the surface of Argentina, Brazil, Paraguay, and Uruguay, is the second largest known aquifer system in the world and is an important source of fresh water. Named after the Guarani people, it covers , with a v ...
; and, finally, its proximity to Bolivia (less than 200 km) at the same "moment that Washington's magnifying glass goes on the ''
Altiplano The Altiplano (Spanish for "high plain"), Collao (Quechua and Aymara: Qullaw, meaning "place of the Qulla") or Andean Plateau, in west-central South America, is the most extensive high plateau on Earth outside Tibet. The plateau is located at the ...
'' and points toward Venezuelan Hugo Chávez — the regional demon according to Bush's administration — as the instigator of the instability in the region" (''Clarín''). Later reports indicated that 400 US troops would be deployed in Paraguay over 18 months for training and humanitarian missions consisting of 13 detachments numbering less than 50 personnel each. The Paraguayan administration as well as Bush's administration denied that the airport would be used as a US military base, or that there would be any other US base in Paraguay.


Other countries

The social conflicts paralyzed Bolivia's political life for a time. The unpopularity of the neoliberal Washington consensus, a set of economic strategies implemented by Gonzalo de Lozada's administration, set the stage for the 2006 election of president Evo Morales, the country's first indigenous president. In the meantime, Chile promptly started to build several coastal terminals to receive shipments of
liquefied natural gas Liquefied natural gas (LNG) is natural gas (predominantly methane, CH4, with some mixture of ethane, C2H6) that has been cooled down to liquid form for ease and safety of non-pressurized storage or transport. It takes up about 1/600th the vol ...
from
Indonesia Indonesia, officially the Republic of Indonesia, is a country in Southeast Asia and Oceania between the Indian and Pacific oceans. It consists of over 17,000 islands, including Sumatra, Java, Sulawesi, and parts of Borneo and New Guine ...
, Australia and other sources. Other South American countries are contemplating other ways to secure gas supplies: one project aims at linking the Camisea gas reserves in
Peru , image_flag = Flag of Peru.svg , image_coat = Escudo nacional del Perú.svg , other_symbol = Great Seal of the State , other_symbol_type = National seal , national_motto = "Firm and Happy f ...
to Argentina, Brazil, Chile,
Uruguay Uruguay (; ), officially the Oriental Republic of Uruguay ( es, República Oriental del Uruguay), is a country in South America. It shares borders with Argentina to its west and southwest and Brazil to its north and northeast; while bordering ...
and
Paraguay Paraguay (; ), officially the Republic of Paraguay ( es, República del Paraguay, links=no; gn, Tavakuairetã Paraguái, links=si), is a landlocked country in South America. It is bordered by Argentina to the south and southwest, Brazil to th ...
. Linking
Pisco Pisco is a colorless or yellowish-to-amber colored brandy produced in winemaking regions of Peru and Chile. Made by distilling fermented grape juice into a high-proof spirit, it was developed by 16th-century Spanish settlers as an alternative ...
(south of Peru) to
Tocopilla Tocopilla is a city and commune in the Antofagasta Region, in the north of Chile. It is the capital of the province that bears the same name. Every year Tocopilla celebrates its anniversary on 29 September with a big show the day before, which ...
(north of Chile) with a 1200 km pipeline would cost $2 billion. However, experts doubt the Camisea reserves are enough for all the Southern Cone countries. Another 8,000 km gas pipeline ( Gran Gasoducto del Sur) has been proposed that would link
Venezuela Venezuela (; ), officially the Bolivarian Republic of Venezuela ( es, link=no, República Bolivariana de Venezuela), is a country on the northern coast of South America, consisting of a continental landmass and many islands and islets in th ...
to Argentina via Brazil. Its cost is estimated between $8 and $12 billion. While Argentina and Chile are large consumers of gas (50 percent and 25 percent respectively), other South American countries are a lot less dependent.


Nationalization of natural gas industry

On May 1, 2006 president Evo Morales signed a decree stating that all gas reserves were to be nationalized: "the state recovers ownership, possession and total and absolute control" of hydrocarbons. He thus fulfilled his electoral promises, declaring that "We are not a government of mere promises: we follow through on what we propose and what the people demand". The announcement was timed to coincide with Labor Day on May 1. Ordering the military and engineers of
YPFB Yacimientos Petrolíferos Fiscales Bolivianos (YPFB) is a Bolivian state-owned enterprise dedicated to the exploration, exploitation, refining, industrialization, distribution and commercialization of oil, natural gas and derived products. I ...
, the state firm, to occupy and secure energy installations, he gave foreign companies a six-month "transition period" to re-negotiate contracts, or face expulsion. Nevertheless, president Morales stated that the nationalization would not take the form of
expropriation Nationalization (nationalisation in British English) is the process of transforming privately-owned assets into public assets by bringing them under the public ownership of a national government or state. Nationalization usually refers to pri ...
s or
confiscation Confiscation (from the Latin ''confiscatio'' "to consign to the ''fiscus'', i.e. transfer to the treasury") is a legal form of seizure by a government or other public authority. The word is also used, popularly, of spoliation under legal forms, ...
s. Vice President
Álvaro García Linera Álvaro Marcelo García Linera (; born 19 October 1962) is a Bolivian politician, sociologist, marxist theoretician, and former guerilla who served as the 38th vice president of Bolivia from 2006 to 2019. A member of the Movement for Socia ...
said in La Paz's main plaza that the government's energy-related revenue will jump to $780 million next year, expanding nearly sixfold from 2002. Among the 53 installations affected by the measure are those of Brazil's Petrobras, one of Bolivia's largest investors, which controls 14% of the country's gas reserves. Brazil's Energy Minister, Silas Rondeau, reacted by considering the move as "unfriendly" and contrary to previous understandings between his country and Bolivia. Petrobras, Spain's Repsol YPF, UK gas and oil producer
BG Group Plc BG Group plc was a British multinational oil and gas company headquartered in Reading, United Kingdom. On 8 April 2015, Royal Dutch Shell announced that it had reached an agreement to acquire BG Group for $70 billion, subject to regulatory and ...
and France's Total are the main gas companies present in the country. According to
Reuters Reuters ( ) is a news agency owned by Thomson Reuters Corporation. It employs around 2,500 journalists and 600 photojournalists in about 200 locations worldwide. Reuters is one of the largest news agencies in the world. The agency was esta ...
, "Bolivia's actions echo what Venezuelan President Hugo Chávez, a Morales ally, did in the world's fifth-largest oil exporter with forced contract migrations and retroactive tax hikes — conditions that oil majors largely agreed to accept." YPFB would pay foreign companies for their services, offering about 50 percent of the value of production, although the decree indicated that companies at the country's two largest gas fields would get just 18 percent. Negotiations between the Bolivian government and the foreign companies intensified during the week leading up to the deadline of Saturday October 28, 2006. On Friday an agreement was reached with two of the companies (including Total) and by the deadline on Saturday the rest of the ten companies (including Petrobras and Repsol YPF) operating in Bolivia had also come to an agreement. Full details of the new contracts have not been released, but the objective of raising government share of revenues from the two major fields from 60 percent to 82 percent seems to have been achieved. Revenue share for the government from minor fields is set at 60 percent. During the six month negotiation period talks with the Brazilian company Petrobras had proven especially difficult. Petrobras had refused raises or reduction to a mere service provider. As a result of stalled talks Bolivian energy minister Andres Soliz Rada resigned in October and was replaced by
Carlos Villegas Carlos Arturo Villegas Retana (born 3 March 1999) is a Costa Rican footballer who plays as a winger for Municipal Grecia, on loan from Deportivo Saprissa. Club career Deportivo Saprissa Villegas is a product of Deportivo Saprissa and was promo ...
. "We are obligated to live with Brazil in a marriage without divorce, because we both need each other", said
Evo Morales Juan Evo Morales Ayma (; born 26 October 1959) is a Bolivian politician, trade union organizer, and former cocalero activist who served as the 65th president of Bolivia from 2006 to 2019. Widely regarded as the country's first president to c ...
in the contract signing ceremony underlining the mutual dependency of Brazil on Bolivian gas and of Bolivia on Petrobras in gas production.


Reaction

On December 15, 2007 the regions of Santa Cruz, Tarija, Beni, and Pando declared autonomy from the central government. They also moved to achieve full independence from Bolivia's new constitution.


The Protesters


Miners

Miners from the Bolivian trade union '' Central Obrera Boliviana'' (COB) have also been very active in the recent protests. Recently they have been active against propositions to privatize pensions. They have been known for letting off very loud explosions of dynamite in the recent protests.


Coca farmers

Shortly after the law passed,
Evo Morales Juan Evo Morales Ayma (; born 26 October 1959) is a Bolivian politician, trade union organizer, and former cocalero activist who served as the 65th president of Bolivia from 2006 to 2019. Widely regarded as the country's first president to c ...
, an Aymara Indian, ''cocalero'', and leader of the opposition party Movement Towards Socialism (MAS), took a moderate position calling the new law "middle ground". However, as the protests progressed, Morales has come out in favor of nationalization and new elections.


Protesters in Cochabamba

Oscar Olivera Oscar Olivera Foronda (born 1955) was one of the main leaders of the protesters against the water privatization in Bolivia. The result of these protests was an event known as the Cochabamba Water War. Now he is one of the main leaders of the prote ...
was a prominent leader in the 2001 protests in
Cochabamba Cochabamba ( ay, Quchapampa; qu, Quchapampa) is a city and municipality in central Bolivia in a valley in the Andes mountain range. It is the capital of the Cochabamba Department and the fourth largest city in Bolivia, with a population of 630 ...
against the privatization of water in Bolivia and has also become a leading figure. Specifically the protesters in Cochabamba, Bolivia's fourth largest city, have cut off the main roads in the city and are calling for a new Constituent Assembly as well as nationalization.


Indigenous and peasant groups in Santa Cruz

Indians in the eastern lowland department of Santa Cruz have also become active in the recent disputes over nationalization of the gas and oil industry. They are composed of indigenous groups such as the
Guaraní Guarani, Guaraní or Guarany may refer to Ethnography * Guaraní people, an indigenous people from South America's interior (Brazil, Argentina, Paraguay and Bolivia) * Guaraní language, or Paraguayan Guarani, an official language of Paraguay * ...
,
Ayoreo The Ayoreo (Ayoreode, Ayoréo, Ayoréode) are an indigenous people of the Gran Chaco. They live in an area surrounded by the Paraguay, Pilcomayo, Parapetí, and Grande Rivers, spanning both Bolivia and Paraguay. There are approximately 5,600 ...
,
Chiquitano The Chiquitano or Chiquitos are an indigenous people of Bolivia, with a small number also living in Brazil. The Chiquitano primarily live in the Chiquitania tropical savanna of Santa Cruz Department, Bolivia, with a small number also living in ...
and the Guyarayos, as opposed to the highland Indians (Aymara and Quechua). They have been active in recent land disputes and the main organization representing this faction is known as the "Confederacion de pueblos indigenas de Bolivia" (CIDOB). The CIDOB after initially offering support to MAS, the party of Bolivia's new president, have come to believe that they were deceived by the Bolivian government

The MAS, which is based in the highlands, is no more willing to grant them voice than the previous governments whose power was also based from the highlands. Another smaller more radical group called the "Landless Peasant Movement" (MST) which is somewhat similar to the
Landless Workers' Movement Landless Workers' Movement ( pt, Movimento dos Trabalhadores Rurais Sem Terra, MST) is a social movement in Brazil, inspired by Marxism, generally regarded as one of the largest in Latin America with an estimated informal membership of 1.5 millio ...
in Brazil, and is composed mainly of immigrants from the western part of the country. Recently, Guaraní Indians from this group have taken oil fields run by Spain's Repsol YPF and the United Kingdom's BP and have forced them to stop production.


Felipe Quispe and peasant farmers

Felipe Quispe Felipe Quispe Huanca " Mallku" (Quechua language: "condor"), (22 August 1942 – 19 January 2021) was a Bolivian historian and political leader. He headed the Pachakuti Indigenous Movement (MIP) and was general secretary of the United Union Co ...
was a Aymara leader who wished to return control of the country from what he saw as the "white elite" to the indigenous people who make up the majority of the country's population. Therefore, he was in favor of an independent "Aymaran state". Quispe is the leader of the Pachakutik Indigenous Movement, that won six seats in the Congress and the secretary general of the United Peasants Union of Bolivia in the 2002 Bolivian elections.


See also

* Cochabamba anti-privatization protests *
Geology of Bolivia The geology of Bolivia comprises a variety of different lithologies as well as tectonic and sedimentary environments. On a synoptic scale, geological units coincide with topographical units. The country is divided into a mountainous western area a ...
*
Bolivian gas referendum, 2004 A referendum on natural gas reserves was held in Bolivia on 18 July 2004. Nohlen, D (2005) ''Elections in the Americas: A data handbook, Volume II'', p133 Voters were asked five questions on the government's policy on natural gas, with all five ...


References


External links


Democracy in Crisis in Latin America. Bolivia and Venezuela Test the International Community's Democratic Commitment, SWP-Comments 26/2005 (June 2005)

Bolivia's top Court chief takes Presidency
AP (Yahoo news)
Main Protest Groups in Bolivia


from
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magazine
Bolivia Information Forum
Information on oil and gas in Bolivia
The Distribution of Bolivia’s Most Important Natural Resources and the Autonomy Conflicts
Center for Economic and Policy Research
Black October
, ''Miami New Times''
Dignity and Defiance: Stories from Bolivia’s Challenge to Globalization
– video report on ''
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''
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'' {{DEFAULTSORT:Bolivian Gas Conflict 21st-century conflicts Politics of Bolivia Protests in Bolivia Natural gas in Bolivia Evo Morales Bolivia–Chile relations Natural resource conflicts Energy policy 2000s in Bolivia