Environmental organizations, indigenous groups, community members, scientists and business owners have organized to fight the prospect of offshore oil drilling along its Caribbean coast being approved by the Costa Rican government. Seismic tests to locate offshore oil reserves were conducted in November of last year, not far from the port city of Limón, in areas frequented by mating and migrating turtles during the nesting season. An environmental impact assessment is underway, and, if approved, drilling could begin as early as October of this year. The groups opposing oil development in Costa Rica are concerned about the disastrous environmental and social impacts that could occur with every step of the oil exploration, drilling and transport process. They feel that oil development is incompatible with the small scale and community-based tourism, recreation and fishing industries that support most families along the Caribbean coast.
Poor quality oil reserves lie off both coasts of Central America but until now, they have remained untouched. New drilling and refining techniques are now making it economically viable to tap these sources, and several Central American nations are inviting foreign companies to explore their territories for oil, often in the most remote and environmentally-sensitive areas.
The Caribbean coastal plain of Costa Rica is a sedimentary basin of early Tertiary age. The basin extends for several kilometers offshore before reaching the continental shelf where the seabed drops steeply into the Caribbean basin. The chance of finding oil is greatest in sedimentary basins, therefore, deposits are apt to be along coastal zones and in the nearshore regions.
Costa Rica awarded four concessions for exploration off its Atlantic coast in April 1999 to MKJ Xplorations (owned by Harken Energy Inc., a U.S.-based company with operations in the USA and Colombia). MKJ began exploring for oil this past November, just off the Atlantic port of Moín near Limón. The other three concessions are (1) in a marine area adjacent to the Gandoca-Manzanillo National Wildlife Refuge, (2) next to the protected marine portion of Cahuita National Park, and (3) a terrestrial plot in the Cabecar Indigenous Reserve.
The entire Caribbean coast provides an important migratory pathway for at least three species of marine turtles: green (Chelonia mydas), leatherback (Dermochelys coriacea) and hawksbill turtles (Eretmochelys imbricata). The populations of these endangered species are regionally (hawksbill and leatherback) and globally (green turtle) important. Loggerhead turtles (Caretta caretta) may also be present in low numbers in these areas at least for part of the year.
The importance of nature-based tourism along the Caribbean coasts is considerable. Tourism is Costa Rica's main source of foreign currency. Visitors to the Caribbean coast come mainly to visit national parks and wildlife refuges. Turtle watching is an important source of income for villagers in Tortuguero with 20,885 tourists being given permits to watch nesting turtles in 1999 alone. An oil spill as a result of drilling activities would have a disastrous effect on the tourism industry in the area, and would have economic effects along the whole coast.
The potential effects of test drilling and oil exploitation on the marine and coastal zone and its associated fauna may be severe. The predominant currents in the concession in question flow in a southwest direction. A spill would therefore affect coastal areas in southeastern Costa Rica and northwestern Panama. Any sea turtles migrating through these areas would also be affected. The potential of future exploratory work north of Tortuguero National Park, the specter of which has also been raised, would be even more disturbing.
Several international, national and local organizations have expressed their concern with the process by which the Costa Rican government granted the concessions. The organization "Justicia para la Naturaleza" (Justice for Nature) has prepared a legal action for the Constitutional Court of Costa Rica (Sala IV) that has been signed by at least 17 organizations active mainly in the Talamanca region of southeastern Costa Rica. There is considerable resistance to oil exploration among tourism operators and local communities of Costa Rica's Caribbean coast.
An environmental impact assessment prepared for the exploratory phase of the project referred only to the seismic studies and did not address the impacts of drilling. Nor did it address any potential impacts on sea turtles. Monitoring of commercially important fisheries indicated that catches were decreased during the seismic reflection studies but this was explained away by the pro-oil interests as seasonal variation in the abundance of lobster.
Given the uncertainty of potential impacts from oil exploration and exploitation activities, the legal uncertainties of the concession process, the potential for future exploration north of Tortuguero National Park, the local resistance to oil exploitation, the importance of nature-based tourism in the area, the global importance of the area's sea turtle populations and the economic importance of fish and lobster stocks to local people, CCC is:
Beginning in July, CCC will be satellite tracking the migration of green turtles leaving the nesting beach in Tortuguero as they travel through potential oil fields to distant feeding and breeding areas, such as the Miskito Cays off Nicaragua. The migration maps of the turtles are available on the CCC web site.
Coalition opposing coastal drilling in Costa Rica; approval for test drilling on hold
The U.S.-based Harken Energy Corporation, in hopes of obtaining the Costa Rican government's approval to test for oil offshore near the Limón port of Moín, submitted its Environmental Impact Study (EIS) for review on July 7, 2000. Costa Rican authorities initially meant to announce their decision on August 7, 2000, but have now postponed their pronouncement indefinitely, apparently awaiting ministerial review of concerns raised by the general public, fishing and tourism sectors, scientists, conservationists, indigenous groups, and environmental NGOs including the CCC. CCC has submitted technical evaluations noting the deficiencies of the project's EIS to the Costa Rican government.
In 1999, Costa Rica's Ministry of Environment and Energy (MINAE) awarded four concessions for the exploration of oil off its Atlantic coast to MKJ Xplorations, Inc., a small Louisiana-based company. MKJ was the only oil company to bid on the concessions. Since then, Harken Energy Corporation has acquired control of 80% of the concession originally obtained by MKJ.
MKJ conducted seismic tests in November of last year and Harken claims that analysis of the geological data from the testing suggests that there may be more significant reserves in the Moín prospect than initially thought. Harken has noted that there may be potential for oil extraction from the Moín block similar to that from a productive area they control in Colombia, thus their interest in test drilling at Moín as soon as possible.
Harken explores for and develops oil reserves, primarily in the U.S. in the Gulf Coast states, and in Colombia. Harken's stocks haven't been worth more than two dollars per share in over a year. Despite its lackluster finances, the Houston-based operation is bolstered by its potential political connections. U.S. presidential candidate George W. Bush is a former stockholder, board member, and paid consultant to Harken.
In May, CCC prepared and distributed a position paper about the potential impacts of offshore oil exploration on sea turtles in Costa Rica. Minister of the Environment and Energy, Elizabeth Odio, then asked the National Technical Environmental Secretariat (SETENA), the branch of MINAE that handles environmental impact studies, to have CCC review Harken's EIS.
With assistance from coral reef/sea grass bed expert Ana Fonseca, M.Sc., and environmental policy expert Javier Mateo-Vega, M.A., CCC prepared two evaluations. The first evaluation referred to technical shortcomings of the EIS and the potential impacts of the proposed test drilling on the area's marine turtle populations, coral reefs and sea grass beds. The second evaluation focused on procedural shortcomings and the failure of the EIS to address many aspects of the terms of reference of the EIS, set by SETENA. Both evaluations have been submitted to the General Secretary of SETENA, the Minister and Vice Minister of the Environment and Energy, several Costa Rican legislators, and to various organizations and individuals opposed to the proposed oil exploration.
SETENA's decision on Harken's proposed test drilling project was initially expected on August 7, 2000, later postponed to August 17, 2000, and at this writing, has been postponed indefinitely. In the meantime, it appears that Harken has been given extra time to address concerns raised in the review of their EIS. Still stinging from large-scale and sometimes violent protests against its plan to reform and privatize the national telecommunications and energy industries, the Costa Rican government may be sensitive to issues that will cause further public outrage. Many feel the government is stalling in order to gauge public opinion on oil exploration.
Since the first exploration concessions were authorized, many stakeholder groups have been organizing and expressing their opposition to oil development along their coasts. Many remember the problems left from previous attempts to prospect for oil in their region in the 1970s, problems they feel have yet to be resolved. Local and national organizations opposing offshore oil exploration have become more active, and meetings have been held in the Talamanca region, Limón and San José. Numerous presentations and forums have been held recently, to inform the citizenry about the proposed drilling project and its impacts, and to plan more activities in opposition to the proposal. Many of the groups participating in the anti-oil drilling coalition have agreed to a joint public declaration that will first be made public at a meeting of the Central American Water Tribunal. The document details the reasons for opposing oil exploration and exploitation in Costa Rica and is based on concerns about the negative economic, social, legal and environmental impacts. On September 27, 2000, the declaration will be presented at an open meeting.
Traveling the main road from Limón to the Panamanian border, one can see many signs opposing the oil industry posted along the way, primarily in front of lodges and other coastal tourism establishments. Given the unpopularity of oil development, there may also be increasing opposition among politicians representing Limón and the minority political parties. With national elections coming up in 2002, more politicians may side with the opposition.
In early 2000, the environmental law organization Justicia para la Naturaleza prepared a lawsuit representing 17 Caribbean organizations, businesses and individuals requesting the nullification of the concessions. The lawsuit asserts that the oil concession granted by MINAE violates Costa Rica's laws, its Constitution and various international treaties or conventions to which the nation is party. The co-plaintiffs in the lawsuit allege that that the concession process was not carried out in accordance with Costa Rican law. Neither before nor during the concession bidding process were the municipalities and communities of the region informed about or consulted for their views on the possible consequences that oil exploration and future exploitation would have on their region and their livelihoods. CCC joined the lawsuit as a co-plaintiff and has provided documents detailing the potential impacts that oil exploration may have on marine flora and fauna as well as the inadequacy of the Harken EIS in addressing those impacts. The lawsuit is still pending in the Constitutional Court with no indication on when there might be a ruling.
While awaiting SETENA's decision regarding Harken's proposal, the opposition is mounting. If SETENA approves the project, the lawsuit pending before the Constitutional Court may succeed in stopping further oil exploration. But if SETENA rejects the project as this point, the future of other oil development projects along the Caribbean coast of Costa Rica may be sealed. Costa Rica has already granted six more terrestrial blocks in northeast Costa Rica, near Tortuguero National Park and Barra del Colorado National Wildlife Refuge, to Denver-based Mallon Oil Company. Mallon has not yet initiated exploration activities in the region.
It is important that public pressure against the project be kept up while awaiting Harken's revisions of the EIS. SETENA and other officials are probably trying to size up the degree of public opposition to the project before making their final decision. CCC, together with qualified professionals, is prepared to review any revised EIS submitted by Harken. CCC will continue to oppose oil exploration along Costa Rica's Caribbean coast on biological grounds and disseminate the relevant information at public meetings, to litigants and policy-makers.
Costa Rican oil exploration concession annulled
On September 8, 2000, the Constitutional Chamber of the Costa Rica's Supreme Court voted to overturn a concession allowing for oil exploration along the Caribbean coast. More than 30 communities, indigenous and environmental organizations filed an injunction with the court last January, on the grounds that the indigenous communities that would be affected by oil development activities in the region were never consulted by the government prior to offering the concessions for public bid. The verdict effectively annuls the contract that was granted in April 1998 to Louisiana-based MKJ Xplorations, Inc. to explore four blocks totaling 1.4 million acres of land and sea near the Atlantic port city of Limón.
Since receiving the contract, MKJ Xplorations sold 80 percent of its contractual rights for exploration to the Houston-based Harken Energy Corporation. Harken has announced its intentions to protect its interests in the contract and has already filed a motion for relief with the court for not having been given notice of the deliberations and not having had opportunity to make a legal argument in the case. Harken representatives have also initiated public relations activities in Limon to garner support for their project.
Harken has come under fire in the U.S. media recently for having been slow to clean up gasoline and petroleum leaks from some six storage tanks in Florida in the 1980s. The leaks threatened drinking water supplies and ocean waters of the Florida Keys. Presidential candidate George W. Bush is a former consultant and director for Harken, which bought up his nearly bankrupt oil and gas exploration business. A company spokesman said that tanks were drained when spills were discovered, but Florida's Department of Environmental records show that clean-ups were slow, in some cases did not occur until more than a decade later when the state (and the taxpayers) had to taken on the responsibility. For several of the leaks, Harken did nothing to clean up the mess.
The Costa Rican government supports the continuation of oil exploration activities in Limón, despite the Constitutional Court's decision. It is expected that the Ministry of the Environment and Energy will now conduct consultations in the region to comply with court's decision and the laws governing exploration for hydrocarbons in Costa Rica. The opposition movement, spearheaded by Oilwatch and the environmental law organizations Justicia para la Naturaleza, CEDARENA and Fundación AMBIO, is also preparing to counter efforts that would allow oil exploration to continue. CCC is opposing oil exploration along Costa Rica's Caribbean coast because of potential impacts to sea turtles. CCC is providing technical advice to the opposition groups, the government, and stakeholders.
Costa Rican court modifies decision; offshore drilling could be imminent
The Constitutional Chamber of the Costa Rican Supreme Court declared that the Texas-based Harken Energy Corporation could resume its oil exploration activities in two marine blocks near the port of Limón on the Caribbean coast. The court's previous decision, announced September 8th, annulled the concessions allowing oil exploration in southeastern Costa Rica. That ruling was in response to an injunction filed by more than 30 indigenous, environmental and tourism groups on the grounds that the indigenous communities that would be affected by oil development activities in the region were never consulted by the government prior to its offering the concessions for public bid. The state is obligated by law to consult indigenous communities about economic projects that might affect them.
The November 14th decision clarified that the September 8th decision affects only those inland blocks in areas where indigenous reserves exist. The new court finding follows a clarification by the Ministry of the Environment and Energy (MINAE) which claimed that MINAE was not required to consult indigenous groups prior to conducting petroleum exploration activities in the maritime zone off Limón because those blocks do not contain any indigenous territories. MINAE's explanation strikes many oil oppositionists as insincere, given that the indigenous groups were not consulted prior to seismic testing in the two blocks where they do have territory, and that Harken's only drilling objective now that the testing is complete happens to be an offshore one—the Moín Prospect.
Harken hopes to install a temporary platform and drill a test well as soon as possible. They submitted their environmental impact study (EIS) on July 6th, 2000, which was reviewed and criticized by several technical experts and organizations, including the Caribbean Conservation Corporation (CCC). On January 16th, the National Technical Environmental Secretariat (SETENA), the branch of MINAE responsible for environmental impact assessment of development projects in Costa Rica, issued a resolution regarding the test drilling project and announced it would soon hold a public on an as yet undisclosed date. The resolution requires Harken to clarify and amplify information presented in their July EIS and details the numerous legal, technical and editorial deficiencies that were found in the original study by the groups that reviewed it. Apparently, Harken has been conducting additional studies since late last year to address those deficiencies and has probably already completed an annex to its prior EIS to address SETENA's demands.
If SETENA finds Harken's clarification adequate, it is expected to approve Harken's project, thereby eliminating the last legal and regulatory obstacles. Considering the company has invested nearly $6 million in oil prospecting in Costa Rica to date, the government's failure to approve the project could provoke litigation from Harken. The company has indicated it would prefer to resolve any problems so it can proceed with oil exploration and production, but the possibility of a lawsuit is not inconceivable.
Government approval of the Harken test drilling project is expected. However, unless it comes immediately, another obstacle, a biological one this time, could delay the project until much later in the year. CCC's criticisms of the Harken EIS have made the company aware of the reproductive cycle of the sea turtle resources using the area. Harken realizes it will probably have to postpone drilling until the nesting season is complete and the hatchlings have dispersed.
Meanwhile, the opposition groups continue their efforts against the oil industry in Costa Rica. For them, the new court finding fails to take into account the numerous economic and environmental arguments against oil industry development. The nationwide anti-petroleum campaign is sure to continue and become increasingly politicized in the coming months. CCC will continue to review environmental impacts of the project and provide technical advice to the opposition movement.
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