Powerful v. the Masses: Big Oil and the Environment

What side will Arnold come down on?

That is the question posed by Pablo Fajardo, an attorney for the 30,000 Amazonian settlers and indigenous people, who call themselves Los Afectados—the Affected Ones. They are suing Chevron for the destruction of their rain forest and the creation of "one of the world's most contaminated industrial sites". Chevron has hired a bevy of well heeled lawyers from high-priced firms in Quito and DC, racking up millions of dollars in annual legal costs.

Fajardo just sent a letter to Schwarznegger requesting he help out with the lawsuit. LAT:

"I would like to invite you personally down to Ecuador to look at what Chevron has done to the rain forest here," wrote Pablo Fajardo, the attorney. "I would plead with you to bring your friends who are executives at the company so they can explain to you what they have done here. And finally, I am asking for your public help in supporting the fight against this company."

Fajardo added: "I have faith because I know you are a man of the environment."

Fajardo has a lot more faith in the governor than I do. Next week Fajaro is traveling to California and hopes to meet with Arnold. The governor's staff refused to comment on the letter since they claimed they have not yet received it. Shall we take bets on whether the governor meets with Fajaro? Yeah, thought not.

Arnold has received about $566,000 from the company in the last few years and another $250,000 to the CA Republican party.

Chevron laughably trying to claim they are bipartisan donors. They give 89% of their contributions to Republicans, so yeah, they are about 11% bipartisan. Oh and they are trying to cry that they are the real victim in all of this. Vanity Fair has a fantastic article about the lawsuit, long but really well done.

Chevron objects vociferously, and presents itself as the victim here. Its attorneys have repeatedly claimed that the company is being extorted for "two juicy checks," one to be divided among the plaintiffs and the other to enrich their North American lawyers. The North American lawyers are indeed working on a contingency basis, but unapologetically so, and for a percentage significantly lower than the norm in high-risk cases; they would like to be well compensated for their efforts, but as much, they say, to encourage other lawyers to bring similar suits elsewhere in the world as to pad their personal bank accounts. The most active among them is a New York–based Harvard Law School graduate named Steven Donziger, who has invested 14 years in the case and would certainly be more secure had he pursued a conventional career involving the preservation of wealth. He counterclaims that Chevron's lawyers are the real mercenaries here. It is a philosophical quarrel that will never be resolved.

As for the plaintiffs themselves, under Ecuadorean law they are not suing individually, and personally may never see a dime. They have sued to seek compensation for past damages and to force Chevron to clean up the residual mess that continues, they believe, to taint the soil and water today. It is unclear how a cleanup would proceed and to what extent it could succeed, but over decades the cost might run to $6 billion or more—making this potentially the largest environmental lawsuit ever to be fought. And fight is the word. The case has become emotional for both sides, with few signs of willingness to compromise. Worldwide the oil industry is watching. Lago Agrio is a forsaken little town where something rather large is going down.

With the whole world watching, Chevron refuses to back down. They have the money to settle, but refuse and continue to fight tooth and nail.

Were Chevron to settle out of court, it could probably get away for a lot less than the $6 billion the plaintiffs are seeking. And the truth is that Chevron could afford the bill, which would be spent over a decade or more. In 2005, a single year, Chevron posted earnings of $193.6 billion and cleared $14.1 billion in profit. The first figure is more than six times the entire gross domestic product of Ecuador. But Chevron shows no sign of giving up.

And why would they do that? Well, just look at the math.

Steven Donziger once explained to me the cold logic of delay. Take $6 billion as a figure, he said. Simply by sticking the money into a savings account Chevron could make $300 million for every year it doesn't pay. That sum multiplied by the four years of the trial so far would amount to $1.2 billion, which is far more than, say, $50 million spent on legal fees, even if Chevron now loses the case. And what if Chevron wins—what would the calculation be then?

The company is claiming it has done nothing wrong, but you do not have to even scratch the surface to find serious environmental problems. A well known as Laro Agrio No. 2 that had been drilled in 1967 and was active for many years, producing over five million barrels of crude. They shut it down after 20 years, pulled out all of the pipes and machines and left it as a clearing in the forest. A company called Woodward-Clyde remediated its pits in 1996.

Apparently, a subcontractor took the waste, dumped it in the forest, covered over the scar with 150 truckloads of red dirt, and planted 31 trees at intervals of nine feet. A T.P.H. of 5,000 or less? You bet. Lago Agrio No. 2 passed the test with flying colors, and the government of Ecuador did not challenge the results. Nine years later the circus came to the site: during the judicial inspection, in November 2005, the plaintiffs found contamination off the scale. In the remediated pit No. 1, for instance, they measured a T.P.H. of 324,771. They also measured levels of dangerous polycyclic aromatic hydrocarbons (P.A.H.) more than four times greater than present Ecuadorean standards, and of excessive levels of carcinogenic chromium 6, one of the additives used in well maintenance. Chevron found much less. When it measured for T.P.H., it came up with a value of only about 960, indicating that the remediation had been performed extremely well.

The reporter took a visit to the well one day and he found obvious signs of severe contamination.

I got out of my truck and went down into the forest, chasing the roar of a chain saw. It was an old man, cutting wood; he turned out to be the original settler. He took me to see what had happened to his land, and to the pits that were said to have been remediated. The 31 trees were stunted or dead, and oil seeped through the dirt all around. The old siphon pipe was there, as filthy as ever, and now sheltering a wasps' nest. He said, "If you go down two feet, you'll find nothing but oil and drilling muds." We followed a stream wasted by oil and completely dead. That stream led to a larger one, where the only fish that survive are tough, scrawny things that taste of diesel when they're fried. The settler said, "I used to have 50 acres for grazing. But then my livestock would emerge from the forest all covered in oil. They didn't die, but they wouldn't fatten up anymore, or give milk, and they aborted too. They drank this water. It's kind of salty, and they got poisoned and sick. So I lost all my livestock.

Contrast that to what Chevron's spokesman said to the LAT:

The spokesman said that after Texaco left the country, a state-owned company called Petroecuador came in and racked up "a disastrous record of environmental neglect."

"We view these claims as entirely without merit and without any factual or legal basis," Campbell said.

They refuse to admit any blame and are attempting to bury the system with legal paperwork and manuverings. Over a million pages of documents have already been produced in the last four years. They are hoping Fajardo will go away. What will Arnold do? He can simply try and ignore it, trying to placate Fajardo without doing anything. Or he could hop on his private jet and go out to see for himself. I am sure they could find some room for a few Chevron executives on board.