Ciao!

I agree with most of your point of views except for the sea. I think Bolivia's drive to the sea will be effective, but I think that Mesa is pulling the chain so abruptly that it can eventually break. I think he has to slow down on public interviews and keep on workin through foreign affair officials.

Miguel,
Here's what I've found on the composition of the groups behind the Bolivian gas deal. The main group for the gas exploration is Pacific LNG, which appears to be a consortium composed of several other companies. This consortium would then supply the gas to the company Sempra Energy Corp--although I guess from your post Sempra appears to have backed off.

SUPPLIER:
Pacific LNG (the main consortium)
1. BG Group (a British company)

2. Pan-American Energy (another consortium controlled by these other companies)
A. BP/British Petroleum (a British company)
B. Bridas (an Argentinean company now merged with BP Amoco Argentina)
C. Repsol-YPF (a Spanish company)

So my question is, what discussion has there been on regulations for the energy industry in Bolivia? It seems to me that such a huge deal requires not only the input of the people, but actual legislation to control such a massive energy pipeline project. For example, what are the procedures when this pipeline leaks into the various communities? Can citizens sue Pacific LNG for health problems? Has Pacific LNG made a deal limiting its liability for pipeline and other industrial accidents? If so, should that deal be reworked or canceled? If the pipeline costs more than the $5 billion Pacific LNG has budgeted, does Bolivia get less than their 18% royalty? Is that royalty contingent on the Bolivian government providing some measure of security for the pipeline? Will Bolivia have to upgrade its infrastructure (roads, airports) to allow the pipeline to be built?

I think much of the concern over the gas deal might be traced to questions like these. From reading your posts and a couple articles here or there it doesn't appear that the Bolivian government has done a good job answering these questions and concerns or even showing a willingness to include the people in the negotiations over this deal.

Actually, those concerns have been answered in various ways. Let's see if I can tackle them in some semblance of order:

Yes, the gas & oil industry in Bolivia is very, very heavily regulated. Especially for issues of health and ecological concerns. For example, for every tree that's cut down by the petroleras, they're required to plant three others. I've an uncle that's worked in Tarija for some of the gas companies (he's a civil engineer) and he's been nothing but impressed (blown away, actually) by the safety measures employed on the job sites and the concern the companies have shown for health & environmental issues.

As to the revenues gathered by the Bolivian state. Goni, and now Mesa, did all they could to give proper information. People just don't listen. The state collects up to 50% for "old" wells (dug prior to the existing contracts) and 18% for "new" wells. On top of that, the government taxes the petroleras as if they were any other business. The government can't re-negotiate the regalías (the 18-50% for the immediate revenue), but is currently re-negotiating the amount the petroleras will pay in taxes (increasing them).

Also, the gas & oil industry in Bolivia isn't privatized, it's capitalized. What this means is that the state-owned YPFB nominally owns 50% of the gas & oil industry in the country. The foreign corporations are supposed to provide all the investment capital (and incur all the risk!) in exchange for operational control. This means that if a foreign corporation invests $100 million and the project goes sour, it loses all that money, the Bolivian state loses nothing.

Now, the way gas & oil is explored is extremely expensive. My uncle described the process rather simply: A line is marked on the terrain, w/ dynamite placed are specific intervals. Upon detonation, seismic indicators demonstrate where gas might be. At that point, a well project is started. That means millions in building roads, infrastructure, and the actual drilling itself. In the end, the dig might be fruitless. It might contain gas, or it might contain water or just air pockets. Or it might contain gas, but not w/ enough pressure to pump. My uncle worked on a project that cost hundreds of millions of dollars and ended up being an air pocket. Pacific LNG bit the entire loss.

Daniel:

Well, I guess we'll always disagree about the sea. And you can call me a Chilean traitor, if you like. ;-)

But I'm beginning to think Mesa's using the sea business as a smokescreen or a scapegoat for his own problems. Now if only Goni had been wise enough to wave the anti-Chilean flag ... he might still be in office.

You stole all my thunder with your post on Pacific LNG- I've seen their work from a more "home office" (as opposed to your Uncle's "in the field") perspective, but agree with his assessment of PLNG.