Colombia oil patch residents await their boom

Weather-beaten rancher Leonardo Bautista brings to mind the character in a Gabriel Garcia Marquez novel who waited years in vain for a pension. Only Bautista is waiting for a new road, or any other benefit to filter down to those who live at ground zero of Colombia’s oil boom.

Every day, 150 crude-laden semitrailer trucks grind over his town’s dirt road, raising dust and spewing oil. Bautista and his neighbors want a paved road to mitigate the noise and environmental damage, and to leave room for other vehicles, which often get muscled off course as the lumbering tankers swerve to avoid potholes.

He says residents have been promised a road since the boom began out here in Colombia’s eastern plains, which just five years ago were a stronghold for leftist rebels, paramilitary militias and other armed groups.

The region has had a surge in economic activity not seen since the rubber craze a century ago.

“We hear about a so-called oil bonanza, but all we see are the negatives: the higher cost of food, the abandonment of ranches by owners who go to work at the wells, and this heavy truck traffic,” said Bautista, 61, pointing to an oil tanker churning down the Orocue-Yopal road. “There is a permanent curtain of dust and the noise never ends.”

Bautista and other ranchers say the road is often in such bad shape that they can’t get cattle truck drivers to pick up their animals for slaughter. In the rainy season, neighboring rancher Manuel Espinosa says, oil leaking from wells and trucks gets into pastureland, killing cows and crops.

Luz Edith Roldan, who owns a resort called Rancho Fortuna on the scenic Cravo Sur River, says tourism has dropped 80% in the last decade because oil runoff from nearby oil wells has polluted the waterway.

Yopal was a sleepy cattle and farming town until wildcatters first struck oil in the 1980s. But it’s only in the last five years or so that foreign oil companies have rushed in, attracted by improved security and relatively low taxes and royalties.

The boom has had its positive side: the creation of many well-paying if intermittent oil field jobs, as well as additional tax revenue for local governments. But Bautista and other farmers who are still working the land say infrastructure and environmental monitoring are lagging the bonanza.

In November, their patience ran out. Bautista and 2,500 other residents took turns blocking the road for nine days, forcing oil company C&C; Energy to halt shipments. One day, riot police fired tear gas at the demonstrators.

The residents agreed to lift the blockade when the national government promised to pave a 22-mile stretch of the road, a project to be partially financed by oil company contributions. The government also agreed to open an Environment Ministry office here in Casanare state to monitor the effects of rising oil production.

“Although we have no date, we feel confident that they will follow through and pave it in 2011 because we have never gotten this kind of commitment before,” said Giovany Cojo, who represents Bautista’s village, Quebrada Seca, on the Yopal City Council and joined in the blockade.

The oil companies ponied up grudgingly. They had countered that it was the government’s job to pave the roads with the taxes and royalties they pay, which they say eat up 50% of their revenue. But in the end they shelled out to pacify residents and keep the oil flowing.

Yopal Mayor Fernanda Salcedo says that though she receives a share of oil revenue to reinvest in local infrastructure, an amount that in recent years has averaged about $16 million annually, it’s not enough to pave and maintain roads subjected to the wear and tear of the semis hauling 220 barrels of oil each and to deal with other repercussions of the boom.

“The companies that do the damage should pay for the paving,” Salcedo said in an interview. It’s all she can do, she said, to keep up with a more urgent social imperative created by the oil boom: the need for additional schools and clinics.

The demonstrations coincided with a growing controversy over oil and the royalties they generate for the national government.

Declaring that current rules give too much power to local leaders, new President Juan Manuel Santos is pushing for a change that would give him more discretionary power over how royalties are distributed. He says too much of the revenue is squandered in inefficiency and corruption.

An indignant Salcedo says the proposed change, which would channel more of the funds into financing big national infrastructure projects, could result in a 50% drop in cities’ share of oil taxes and royalties, even as Yopal’s population continues to grow at an oil-fueled annual rate approaching double digits.

“As the mayor of a city that has grown from 16,000 inhabitants 30 years ago to 137,000 now, and which has been lauded by the World Bank as among Colombia’s best-run and by civil society groups as among the most transparent, my position is that royalties is not some sort of gift but is a necessity,” Salcedo said.

Among the most critical outlays of oil revenue is funding for primary and secondary education. Last year, it paid for 15,000 vaccinations, bus transportation to schools and 17,000 school lunches per day, Salcedo says.

William Alfonso, a community leader in a nearby village, says little benefit filters down to his constituents.

“The positive side of the boom? I don’t see it,” he said. “The oil companies have brought us problems but don’t resolve them.”

Kraul is a special correspondent.