Sunday, March 16, 2008

The Ecuador oil pipeline landslide

This is a good time to review the impact of the recent landslide in Ecuador that affected the lives of all of us. Once again, there appears to have been little recognition that a landslide was the cause.

The landslide in question occurred on 28th May in Amazonia as a result of heavy rain. Such landslides are not uncommon, but the significance of this one is that it severed 80 m of the Sote oil pipeline, through which the state oil company Petroecuador exports about 400,000 barrels of oil per day. The following day the Ecuador government declared force majeure. The impact of this was to push up global oil prices, which reached a record $103.05 per barrel on 29th February.

Fortunately, the pipeline was quickly restored and oil started to flow again on 4th March, when the Force Majeur was lifted. However, the legacy of this landslide is set to continue. Canada.com reports that Petroecuador has stated that the damage to the environment caused by the leak could take a year to clean up. About 4,000 barrels of oil were spilled, into the swamps of the Coca River. Although Petroecuador has said c.30% of the spill was recovered, the rest will need to be dealt with.

I do wonder sometimes why it is that the oil companies, whith some notable exceptions, don't invest more in good quality landslide assessment for pipelines. The costs of this must be tiny compared with the potential losses from a breakage and spillage.

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