[The Reaper]

Interesting spin on things.

TR

Los Angeles Times
May 16, 2004
Pg. 1

Riding Shotgun On A Pipeline

Going beyond the war on drugs, the U.S. backs Colombian troops in a campaign against rebels that protects an oil company's operations.

By T. Christian Miller, Times Staff Writer

Last fall, the United States and Colombia launched an extraordinary military operation that sent thousands of troops into Arauca, a remote region of this South American country plagued by warring rebel factions and the cocaine trade.

By outward appearances, Operation Red Moon opened a new front in the two countries' long war on drugs.

This time, however, the fight also was over oil.

U.S.-trained Colombian troops, backed by U.S. intelligence and private contractors, unleashed the offensive to stop rebel attacks on a pipeline that Los Angeles-based Occidental Petroleum Corp. depends on to transport oil. They also had another goal, company officials said: secure an area deep in the heart of rebel territory so Occidental could explore a new field believed to hold 20 million barrels of oil.

The three-month campaign was carried out under a little-noticed shift in U.S. policy in Colombia after the Sept. 11 attacks.

The United States had previously confined its role in Colombia to battling drugs. But with the Bush administration urging a global war on terrorism, Congress lifted restrictions on counterinsurgency aid to allow the U.S. to help Colombia fight its leftist groups, who are listed by the State Department as terrorist organizations.

Arauca and its oil were the first big test of the new policy. The U.S.
regarded the hundreds of millions of dollars in royalties Colombia received from Oxy's oil operations as vital to shoring up its ally.

Colombia's stability, in turn, was seen as crucial to a region that had become one of the most important and reliable sources of U.S. oil imports.

Latin America - including Mexico - long ago surpassed the volatile Middle East as the No. 1 supplier of oil to its northern neighbor.

Colombia and two of its neighbors - Ecuador and Venezuela - were among the top 15 oil suppliers to the United States in 2002, according to the Energy Department. If Colombia collapsed under the weight of civil war and the drug trade, the trouble could easily spread to those two countries. Venezuela, the biggest supplier of the three, poses a particularly acute problem for Washington. The U.S. has been tangling regularly with Venezuelan President Hugo Chavez, a fiery leftist.

"If the Colombian state can't assert itself and take care of its territory, then regional security is undermined," said a State Department official, who spoke on condition of anonymity. "A variety of U.S. goals in the region are compromised, and the overall security of the U.S. is undermined."

But human rights groups say the new U.S. policy in Colombia repeats a common error in Washington's dealings with Latin America: To protect its own interests, the U.S. is taking sides in an internal conflict and embracing a government with a spotty human rights record - echoes of its close alliance with former military regimes in El Salvador and Chile.

The groups acknowledged that the U.S.-backed crackdown in Arauca had resulted in fewer attacks on the pipeline, but at the expense of basic democratic freedoms.

Mass arrests of politicians and union leaders have become common. Refugees fleeing combat have streamed into local cities. And killings have soared as right-wing paramilitaries have targeted left-wing critics.

"Everyone here is terrified," said Martin Sandoval, a left-wing activist and former provincial assembly member. "There is no freedom of expression, no freedom of assembly, no freedom of anything."

Mixing Oil and War

At a military post here one day last fall, a U.S. Special Forces trainer barked an order to a Colombian soldier. The air exploded as Colombian trainees opened fire. Machine guns rattled. Bullets slammed into a target 100 yards away. The base throbbed with sound.

At the same time, in a nearby region thick with Colombia's leftist guerrillas, Oxy contractors drilled toward a lake of oil 8,700 feet beneath the surface.

The pipeline links the two scenes.

Oxy pumps nearly 100,000 barrels of oil per day through it, a black stream worth about $3 million a day on the world market.
Colombia says the money from the pipeline is crucial to helping defeat insurgents. Through its revenue-sharing arrangement with Oxy, Colombia gets about $500 million a year for its treasury, about 5% of the country's annual budget.

But the Colombian government isn't the only beneficiary. Rebels siphon off some of the oil money that is returned to local governments, and also extort millions of dollars in cash each year from local companies. They use the money to finance their war effort.

U.S. military and State Department officials say that protecting the
pipeline serves two purposes: It shores up Colombia's fighting capability, and it deprives rebels of cash.

The oil is not of major importance to the United States, they say, because Occidental's daily production - about 20% of Colombia's output - amounts to only a fraction of U.S. demand.

"This isn't about corporate welfare, it's not about protecting Oxy," the State Department official said. "It's a security argument, not a U.S. economic interests argument."

Although Oxy has benefited, it neither pushed for the pipeline protection nor helped in the planning, company officials said.

"The Colombian government was far and away the primary beneficiary," said Larry Meriage, the company's chief spokesman. "But there's no question that better conditions in Arauca would be better for us."

The perception among many in Colombia is that Washington stepped in to benefit a U.S. company, and that has raised cries of Yankee imperialism.

Critics of the program question why the State Department recommended funding to protect only Oxy's pipeline - not a pipeline carrying oil from British-owned BP or pipelines controlled by Colombia's state-run oil company, Ecopetrol. State Department officials respond that BP's pipeline is not attacked frequently, and that Ecopetrol's pipeline generates only a fraction of the revenue that the Oxy pipeline does.

"The cost doesn't matter, whether it's blood or money," said Oscar Garcia, a local union leader for Oxy workers. "The U.S. is not going to allow a shortage of oil."

The Rebels That Oil Built

Arauca's natural beauty is stunning. The Andes soar to the west, a saw blade of black and purple in the equatorial sunlight. The province unfolds to the east as a swampy grassland dotted with villages and towns.

A land of cattle, prairie and not much else, the province was long forgotten by the national government in Bogota, high in the Andes. There were no roads, no electricity and few bridges across the many rivers that laced the plains.

Then came the oil.

In 1983, Occidental discovered one of the world's biggest oil fields, Caño Limon, which held about 1.3 billion barrels of high-value medium crude.

Money generated by the oil field flows not only to Oxy and the Colombian government, but also back to Arauca. The province received $60 million to $80 million a year in royalties, suddenly making one of the country's poorest provinces into the wealthiest per capita.

Not much wound up in the hands of locals. But those riches became a treasure chest for the ELN rebel group, an organization whose Spanish initials stand for the National Liberation Army.

The ELN, a small army of about 3,000 fighters created in 1964, was inspired by Fidel Castro's revolution in Cuba a few years earlier. But by the early 1980s, the Colombian army had almost wiped it out.

Then Occidental and the pipeline contractor began funneling money, jobs and food to the group to buy its cooperation, according to Colombian law enforcement and locals who participated in some of the deals. It is estimated, all told, that millions flowed to the ELN in the early years of operations.

The rebels used the money to gain new recruits and weaponry. In effect, Occidental rescued the group that later turned against it. Oxy today denies acceding to any extortion demands.

Arauca became a haven for the ELN. There were ELN mayors, ELN journalists - even ELN priests. The rebels extorted money from local merchants. They skimmed government contracts. And they bombed the pipeline, taking a cut from the crews that went in to repair it.

Average citizens of Arauca usually cooperated with the rebels, out of either sympathy or fear of being killed.

"They were like kings," said one man, who was summoned to a meeting with the guerrillas after receiving a government contract to print a newsletter.

"They would sit there and receive people one by one."

The ELN is not Colombia's only rebel group. In the late 1990s, the largest rebel army, also founded in 1964 and known as the FARC - the Spanish initials for Revolutionary Armed Forces of Colombia - also waded into the local mix. Funded by the exploding cocaine market, it expanded into Arauca, taking over the countryside while the ELN held on to the cities.

As the two groups clashed, the FARC stepped up attacks on the pipeline in 2001. Each time it bombed the pipeline, it shut down the ELN's main funding source and weakened the rival rebel group.

The ELN's attacks had rarely stopped production. Oxy continued pumping, storing the oil in tanks until the pipeline was repaired.

But the FARC's fierce onslaught, with a bombing on average about every two days, forced Oxy to halt production for 240 days in 2001.

TBC