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Petrochemical project is huge, but will face major opposition

by Eric Jackson

When a foreign heavy industry conglomerate whose majority owners are Spain's two biggest banks comes to Panama with a proposal to spend $40 billion, by its very nature that's going to be hard to resist.

Energias is a consortium generally composed of unknowns, said to include a bunch of investors from the USA and East Asia. In its dealings with Panama Energias keeps dropping big names that actually are not involved with it, claiming that BP, Total, Suez, Petrobras, Bechtel and the UBS investment bank are "interested."

So is this just another fly by night scam? The identity of the one well known firm that's leading the Energias consortium suggests not. Tecnicas Reunidas SA hails from Spain, where it is the leading engineering firm. It has built more than 900 industrial plants around the world, including petrochemical, steel, electric generation, fertilizer, urban infrastructure and mining projects. Banco Santander Central Hispano, Spain's largest bank, owns 38 percent of its shares. Spain's second largest bank, Banco Bilbao Vizcaya Argentaria (BBVA), owns another quarter of the shares.

The plan is to build a petroleum terminal, storage tanks and a series of petrochemical refineries and factories to make agricultural chemicals and plastics at Maria Chiquita, a few miles east of Colon's city center, run an oil pipeline through Gatun Lake that will come up at a pumping station at Veracruz, just west of the canal, then plunge underwater again and head out to Taboga, where there would be another set of oil storage tanks and, a kilometer and a half south of that island, a major tanker port where some 2,400 ships per year would load and unload their greasy toxic cargoes and head for ports in Asia and on the west coast of North America.

The Ministry of Economy and Finance (MEF) has signed a preliminary agreement for the project to proceed, but that would be subject to a number of other permits, most notably those required from the National Environmental Authority (ANAM).

Dealing with the project for the MEF is Vice Minister Manuel José Paredes, who also happens to be the local representative of Energias promoter Jesús Barderas. Barderas, in turn, paid $10 million to a company called Agroganadera Portobelo for the 500 hectares in Colon province where the Energias petrochemical complex is proposed. Agroganadera Portobelo's owners are former Vice President of Panama Felipe "Pipo" Virzi and Diego García de Paredes, the latter Vice Minister Manuel José Paredes's father-in-law. In an interview with La Prensa, the Vice Minister said "the coincidences are enormous."

In its environmental impact statement, the consortium noted that there would be some degradation of sea water and fresh water resources.

An oil pipeline under Gatun Lake? That central feature of the Panama Canal also happens to be the source of drinking water for most of the people of Panama.

Oil installations on or around Taboga? That "Island of Flowers" a few miles south of Panama City depends on tourism for its livelihood. Its smaller nearby sister island of Taboguilla, however, has long been home to fuel oil tanks --- and when the winds or currents turn the right way, Taboga gets touched by iridescent little slicks from its neighbor or perfumed by petrochemical volatiles.

The people of Taboga and the politicians who represent them immediately protested, and the plan was changed to move the fuel tanks from the south side of Taboga (the side away from the residential area) to Taboguilla. The change has done little to mute public criticism of the plan on that island.

One of the politicians who represents Taboga is legislator Tomas Altamirano, who has been head of the National Assembly's Canal Affairs Committee. He may or may not continue in that post when the assembly elects new officers on September 1, but he told Reuters News that "we won't put the canal's functioning at risk."

But of course, the canal could work perfectly well as an open sewer with an oil slick on top. The problem is that if a canal dredge or something else breaks an underwater oil pipeline in Gatun Lake, the people of Panama may not have any water to drink.

Look for increasingly strident opposition to this project, mainly based upon environmental arguments, and on the other side a massive and slick corporate propaganda campaign promising jobs for economically depressed Colon and prosperity for all Panamanians.