Gas pipeline deal smells
As the United States faces a severe shortage of natural gas, critics claim President Bush is quietly scrambling to implement a move to grab a foreign supply and further enrich individuals close to the Bush administration at the same time.
The president is actively looking for money to finance construction of a gas pipeline through pristine rain forests of the Peruvian Amazon to the coast, according to the British newspaper, The Independent.
This project risks destroying much of the rainforest, threatens its indigenous people and its rare species.
Among the beneficiaries are Hunt Oil and Kellogg Brown & Root, a subsidiary of Vice-President Dick Cheneys former company, Haliburton. Both have close ties to the White House.
Ray Hunt, chairman of Hunt Oil, raised more than $100,000 for Bush in 2000. He and his wife have given the maximum amount allowed to Bushs re-election campaign.
This pipeline slices right through some of the most biologically diverse sites on this planet. An extraordinaryily rich ecosystem in the coastal Paracas reserve also will be affected. It is home to species such as Humboldt penguins, sea lions and green sea turtles.
The effort is known as the Camisea natural gas project. It has reserves of 13,000 billion cubic feet of gas. Two major investors already have backed off because of the environmental aspects.
Citigroup and the Overseas Private Investment Corporation fear there are not adequate safeguards for the environment involved.
An internal report by the U.S. Export Import Bank says proposals to lessen the environmental impact of the project are woefully inadequate and will result in mudslides, destruction of habitat and the spread of disease among the native people.
One threatened area is home to the Nahua, Kirineri, Nanti, Machiguenga and Yine Indians. In the past, contact between these groups and loggers proved disastrous. Some 42 percent of the Nahua died of diseases contracted from outsiders in the 1980s.
Despite all this, the project is 60 percent complete, but is encountering trouble. Sixty pipeline workers recently were kidnapped. They later were freed by Peruvian troops.
Still, the Bush administration plans on approving financial backing via the U.S. Export Import Bank and the Inter-American Development Bank. The two are expected to put up about $300 million in loans and guarantees to pave the way for financing the remainder of the $1.6 billion program.
Expected to be waiting on the coast is Kellogg Brown & Root. While not directly involved in the pipeline, they will be in a very good position to build the $1 billion natural gas plant on the Peruvian coast, if the plan is carried out.
Connections between KBR and Cheney have given rise to charges of favoritism. The president of the Export Import Bank, Philip Merrill, is a close friend of Cheney. And the chief representative of the development bank, Jose Fourquet, is a Bush pioneer who helped to rouse Hispanic support for the president in 2000.
The U.S. Agency for International Development (AID) opposes the Camisea project and several senior members of Congress have asked the federal treasury to delay a final decision until there are additional reviews of the plan.
A report from the Export Import Bank admits massive erosion already has taken place on the pipeline route and the unique biodiversity in that area faces significant, long-term and largely irreversible deterioration. Three environmental groups said the project is causing food shortages in the Urubamba valley.
At the end of last month, under heavy pressure from environmental and human rights groups, the Inter-American Development Bank, through its directors, delayed a vote on financing the project.
Nine Senators and House Democratic Leader Nancy Pelosi (D-Calif.) sent letters to the Secretary of the Treasury and the head of the U.S. Export Import Bank, opposing financing of the Camisea pipeline.