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FARC’s Pipeline Attacks Disrupt Colombian Economy, Drive Away Foreign Investment

By Dialogo
February 06, 2012

Guerrillas from the Revolutionary Armed Forces of Colombia (FARC) carried out 40 attacks on oil pipelines last year, causing oil spills and significant environmental damage, says Colombia’s Ministry of Mining and Energy.
FARC already has picked up this year where it left off with a series of attacks, including the coordinated bombing of two different sections of the 770-kilometer Caño Limon, the country’s second-largest oil pipeline. The sabotage — carried out in Norte de Santander on the border with Venezuela — triggered a large oil spill, the ministry said.
Another pipeline attack in the municipality of El Tarra caused a spill in the Catatumbo River. Renzo Zoronado, a representative of Petronorte, which owns the pipeline, told RCN Radio that “we have activated contingency plans in order to control the oil that spilled into the river, but it’s almost impossible. Every time there is an attack, there will always be spilling.”
Repairs to the fractured pipeline were delayed until army reinforcements could be moved into the area to protect oil workers.
FARC attacks cause millions in losses
Of the 40 attacks in 2011 mounted by FARC, 13 involved explosives that were used to blow up pipelines, causing millions of dollars in losses. Government officials say none of the attacks resulted in production being halted. Affected oil companies continued production while their pipelines were being repaired, though they were forced to store crude or transport it by truck.
A resurgence of attacks on Colombia’s energy sector by FARC and another rebel group, the National Liberation Army (ELN) occurred last year. Kidnappings of oil-company workers increased by 25 percent, according to private security consultants. According to government figures, 38 oilfield personnel were seized.
The oil industry wasn’t alone in being targeted by FARC. The country’s power supply also came under attack with bombings of 36 electrical towers — double the number of attacks in 2010, according to government figures.
FARC attacks hurting Colombians
Such acts of sabotage are frustrating both industry and government, and preventing the country’s oil sector from reaching its full potential. At present, Colombia is the third-largest oil producer in Latin America.
Armando Zamora, general director of the National Hydrocarbon Agency, said all Colombians are being made to suffer as a result. On the organization’s website he asserts: “The terrorist acts are causing high costs to the state, to Colombians and to the environment.”
More than 100 domestic and foreign companies are involved in Colombian oil exploration and production; last year, the sector attracted more than $4 billion in foreign investment — a 25 percent jump from 2010 — with 2011 production averaging around 965,000 barrels a day.
With help from oil exports, the Andean nation has become a darling of international investors looking for good returns. Last year, sales of Colombian corporate bonds rose 149 percent to $4.3 billion — the second-biggest jump among major emerging-market countries after the Czech Republic, according to data compiled by Bloomberg.
The considerable security gains in recent years have done much to help lure foreign investors to Colombia. Government officials from President Juan Manuel Santos on down have warned that the targeting of a crucial sector like oil threatens to jeopardize those gains.
At a recent press conference, Santos said the FARC attacks prove the guerrilla movement isn’t serious about negotiations. “Their actions show that all they want to do is damage the Colombian environment and affect the oil industry,” he said.
Santos also criticized FARC for its involvement in illegal mining, which he said is “an important and growing source of financing” for the guerrillas. It also causes environmental damage, say officials at the Ministry of Mining and Energy, while depriving the government of tax revenue.
Last summer, Santos announced new measures to improve highway security in Caqueta state, the location of several FARC attacks against oil company personnel. Yet Zamora said the increase in pipeline attacks is a sign of weakness on the part of FARC.
“They want to create pressure and show they are still alive,” he told Bloomberg in an interview. “What else can they do but attack something essential?”
The Ministry of Defense reports about 80,000 soldiers are deployed nationwide defend mining and energy infrastructure nationwide.
Improvement in recent years
Certainly the security situation has improved dramatically in recent years, thanks to initiatives begun by President Alvaro Uribe and continued by his successor. The late 1990s and early 2000s saw hundreds of pipeline attacks; in 2002, one pipeline alone was hit 171 times.
Back in the 1990s, FARC claimed it was highly concerned about the environment and boasted that it laid down strict environmental rules on farmers, fishermen, hunters and loggers in territory it controlled. International journalists were invited to observe FARC environmentalism first-hand. This included the enforcement of hunting and fishing seasons, the imposition of fines and banishing at the point of a gun those who broke the guerrillas’ rules.
“All units are told to protect watersheds, fauna and especially the fish population,” FARC spokesman Camilo López told the Miami Herald in a 1999 interview. “Go to the riverbank and you will see that the turtles are returning, that other animals are coming back. In some areas of the mountains, deer are coming back.”
But the FARC’s pipeline attacks have caused long-lasting damage to the environment.
“FARC is one of the groups who contribute the most to polluting our country,” Santos said at a news conference. “Their acts against the oil industry just add to the long list of irreparable offenses.”
Environmentalist Gustavo Wilches Chaux, recently told local newspapers it’ll take decades for polluted rivers to recover, and that oil spills had forced affected farmers to abandon their land or bring in fresh, pure water and fertilizers at a very high cost.
To help improve law-enforcement surveillance in the north, where many of the pipeline attacks are being launched, Colombia purchased last year an Israeli unmanned air vehicle, and is considering acquiring at least one more, defense industry officials said.
Israel's Elbit Systems publicly confirmed this month that it had sold a UAV for $50 million to the Colombian national police, and AviationWeek magazine reported that the Colombian army is also interested in procuring a similar drone.