Democracy Still Alive and Kicking - Bolivia's Gov't Falls

[Ramo]

The massive protests due to Lozada's policies of welfare for Repsol-YPF, persecution of coca farmers, burdening the poor with taxes, and violence against protestors seem to have been effective in bringing down the gov't. Lozada has resigned, and the new pres, his former VP, agreed to call elections as soon as possible and that the natural gas contract would be put to a referendum.

http://news.bbc.co.uk/2/hi/americas/3204274.stm

[DinoDoc]

Can someone explain to me why selling gas is a bad idea? I can understand protesting shipping it through Chile but the protests about it seemed more broad based than that.

[Ramo]

The revenues from the contract the pres unconstitutionally made isn't proportional to the gas reserves being contracted.

[Sikander]

The news said that the gas deal would have quadrupled the value of exports from Bolivia. The opposition seems to be worried that people who bought the gas might somehow benefit from it. Well they needn't worry about that again, they can now eat their gas because no one in their right mind is going to invest a penny in a country that worries more about a war over 100 years ago and whether the world's largest economy benefits from trade than they do about being the poorest country in South America. I'm sure nationalism will be a real comfort as they starve.

[Static Universe]

Ah, the irony. Plenty of gas to cook with, nothing to eat...

[Drake Tungsten]

Plenty of gas to cook with, nothing to eat...

Yeah for "democracy"!!!

[JCG]

There's also the fact that many Bolivians feel that exporting gas is just another instance of their wealth being taken by foreigners (Potosi silver mines anyone?).

As long as the VP is in place and some degree of legality and moderation continues, it's all OK and I won't complain about that Lozada stooge quitting (he couldn't even speak Spanish well) due to popular action...but still, the situation reamins potentially dangerous if things get out of hand.

[Ramo]

Facts about the gas.

The facts are not easy to come by, and I rely largely on a manifesto from the "consejo universitario" of the Universidad Mayor de San Andres, the main public university of Bolivia, which is dated yesterday and was published in today's edition of La Razon. The proven reserves are now 60 trillion cubic feet (TCF) and likely to reach 150 TCF, a quantity sufficient to supply an industrialized Bolivia for 600 years. When the reserves were contracted to Repsol-YPF some years ago, the sale was on a lump sum basis rather than on the amount of gas extracted, and the lump sum was based on only 2 TCF, the proven reserve at the time but a very small fraction of the true reserve as it is now known. Furthermore Bolivia was to receive only 18% of the proceeds.

The terms of the sale were not based on legislation but on a presidential decree, DS 24806, issued by President Gonzalo Sanchez de Lozada just two days before he left office at the end of his first term in 1997. The manifesto calls this decree unconstitutional and says that its revocation is essential to a solution of the problem about gas.

http://www.counterpunch.org/garver10172003.html

[MichaeltheGreat]

A lump sum fee is rather stupid, but who is actually drilling wells, extracting the gas, storing it, and processing it to LNG?

If the gas developer is doing all that, and paying essentially a royalty for the right to work the field, 18% is a good royalty, once you make it a volumetric charge, not lump sum.

The big question is what level of technical expertise do the Bolivians have for gas drilling, LNG processing, etc? If they could do it in house without total ineptitude, it would be better, but then there's that sticky issue about Chilean port access. Assuming the Bolivians put their twitty little egos aside, the next question is how much would a Bolivian pipeline company get reamed by the Chileans for access rights?