The Bolivian Gas War (Spanish: ''Guerra del Gas'') or Bolivian gas conflict was a
social confrontation in
Bolivia
Bolivia, officially the Plurinational State of Bolivia, is a landlocked country located in central South America. The country features diverse geography, including vast Amazonian plains, tropical lowlands, mountains, the Gran Chaco Province, w ...
reaching its peak in 2003, centering on the exploitation of
the country's vast natural gas reserves. The expression can be extended to refer to the general conflict in Bolivia over the exploitation of gas resources, thus including the 2005 protests and the election of
Evo Morales as president. Before these protests, Bolivia had seen a series of similar earlier protests during the
Cochabamba protests of 2000, which were against the
privatization
Privatization (rendered privatisation in British English) can mean several different things, most commonly referring to moving something from the public sector into the private sector. It is also sometimes used as a synonym for deregulation w ...
of the municipal
water supply
Water supply is the provision of water by public utilities, commercial organisations, community endeavors or by individuals, usually via a system of pumps and pipes. Public water supply systems are crucial to properly functioning societies. Th ...
.
The conflict had its roots in grievances over the government's economic policies concerning natural gas, as well as
coca eradication policies, corruption and violent military responses against
strikes.
The "Bolivian gas war" thus came to a head in October 2003, leading to the resignation of President
Gonzalo Sánchez de Lozada (aka "Goni"). Strikes and road blocks mounted by
indigenous and
labour groups (including the
COB trade union) brought the country to a standstill. Violent suppression by the Bolivian armed forces left some 60 people dead in October 2003, mostly inhabitants of
El Alto
El Alto (Spanish for "The Heights") is the List of Bolivian cities by population, second-largest city in Bolivia, located adjacent to La Paz in Pedro Domingo Murillo Province on the Altiplano highlands. El Alto is today one of Bolivia's fastest- ...
, located on the ''
Altiplano
The Altiplano (Spanish language, Spanish for "high plain"), Collao (Quechuan languages, Quechua and Aymara language, Aymara: Qullaw, meaning "place of the Qulla people, Qulla") or Andean Plateau, in west-central South America, is the most extens ...
'' above the seat of government
La Paz
La Paz, officially Nuestra Señora de La Paz (Aymara language, Aymara: Chuqi Yapu ), is the seat of government of the Bolivia, Plurinational State of Bolivia. With 755,732 residents as of 2024, La Paz is the List of Bolivian cities by populati ...
.
The governing coalition disintegrated forcing Goni to resign and leave the country on October 18, 2003. He was succeeded by the vice president,
Carlos Mesa, who put the gas issue to a
referendum
A referendum, plebiscite, or ballot measure is a Direct democracy, direct vote by the Constituency, electorate (rather than their Representative democracy, representatives) on a proposal, law, or political issue. A referendum may be either bin ...
on July 18, 2004. In May 2005, under duress from protesters, the Bolivian congress enacted a new hydrocarbons law, increasing the state's royalties from
natural gas
Natural gas (also fossil gas, methane gas, and gas) is a naturally occurring compound of gaseous hydrocarbons, primarily methane (95%), small amounts of higher alkanes, and traces of carbon dioxide and nitrogen, hydrogen sulfide and helium ...
exploitation. However, protesters, who included
Evo Morales and
Felipe Quispe, demanded full
nationalization
Nationalization (nationalisation in British English)
is the process of transforming privately owned assets into public assets by bringing them under the public ownership of a national government or state. Nationalization contrasts with p ...
of
hydrocarbon
In organic chemistry, a hydrocarbon is an organic compound consisting entirely of hydrogen and carbon. Hydrocarbons are examples of group 14 hydrides. Hydrocarbons are generally colourless and Hydrophobe, hydrophobic; their odor is usually fain ...
resources, and the increased participation of Bolivia's indigenous majority, mainly composed of
Aymaras and
Quechuas, in the political life of the country. On June 6, 2005, Mesa was forced to resign as tens of thousands of protesters caused daily blockades to La Paz from the rest of the country. Morales' election at the end of 2005 was met with enthusiasm by the social movements, because he was, as the leader of
left-wing
Left-wing politics describes the range of Ideology#Political ideologies, political ideologies that support and seek to achieve social equality and egalitarianism, often in opposition to social hierarchy either as a whole or of certain social ...
MAS, one of the staunchest opponents to the exportation of the gas without corresponding industrialization in Bolivia. On May 1, 2006, President Morales signed a decree stating that all gas reserves were to be nationalized: "the state recovers ownership, possession and total and absolute control" of hydrocarbons. The 2006 announcement was met by applause on La Paz's main plaza, where Vice President
Alvaro Garcia told the crowd that the government's energy-related revenue would jump US$320 million to US$780 million in 2007,
continuing a trend where revenues had expanded nearly sixfold between 2002 and 2006.
Background
Gas reserves of Bolivia
The central issue was Bolivia's large natural gas reserves and the prospect for their future sale and use. The Bolivian gas reserves are the second largest in
South America
South America is a continent entirely in the Western Hemisphere and mostly in the Southern Hemisphere, with a considerably smaller portion in the Northern Hemisphere. It can also be described as the southern Subregion#Americas, subregion o ...
after
Venezuela
Venezuela, officially the Bolivarian Republic of Venezuela, is a country on the northern coast of South America, consisting of a continental landmass and many Federal Dependencies of Venezuela, islands and islets in the Caribbean Sea. It com ...
, and exploration after the privatization of the national oil company
YPFB showed that proven natural gas reserves were 600% higher than previously known. The cash-poor, state-owned company could not afford the exploration costs. These reserves mainly are located in the southeastern
Tarija Department, which contains 85% of gas and petrol reserves. According to the
United States Department of Energy
The United States Department of Energy (DOE) is an executive department of the U.S. federal government that oversees U.S. national energy policy and energy production, the research and development of nuclear power, the military's nuclear w ...
, another 10.6% is located within the department of
Santa Cruz and 2.5% in the
Cochabamba Department.
After further exploration from 1996 to 2002, the estimated size of the probable gas reserves was calculated to be 12.5 times larger, passing from to . This number has declined somewhat to probable reserves. The proven reserves are .
With the declining importance of
tin mines, those reserves accounted for the majority of foreign investment in Bolivia.
The price which Bolivia is paid for its natural gas is roughly US to
Brazil
Brazil, officially the Federative Republic of Brazil, is the largest country in South America. It is the world's List of countries and dependencies by area, fifth-largest country by area and the List of countries and dependencies by population ...
and $3.18 per million BTU to
Argentina
Argentina, officially the Argentine Republic, is a country in the southern half of South America. It covers an area of , making it the List of South American countries by area, second-largest country in South America after Brazil, the fourt ...
.
Other sources state that Brazil pays between $3.15 and $3.60 per million BTU, not including $1.50 per million BTU in
Petrobras extraction and transportation costs.
As a comparison, the price of gas in the US as a whole in 2006 varied between US,
although some years earlier the price of natural gas spiked at $14 per million BTU in
California
California () is a U.S. state, state in the Western United States that lies on the West Coast of the United States, Pacific Coast. It borders Oregon to the north, Nevada and Arizona to the east, and shares Mexico–United States border, an ...
due to lack of pipeline capacity to and within California as well as due to electricity outages.
While according to ''
Le Monde
(; ) is a mass media in France, French daily afternoon list of newspapers in France, newspaper. It is the main publication of Le Monde Group and reported an average print circulation, circulation of 480,000 copies per issue in 2022, including ...
'', Brazil and Argentina pay US$2 per thousand cubic meter of gas, which costs from $12 to $15 in California.
In 1994, a contract with Brazil was passed, two years before 1996's privatization of the 70-year-old, state-owned ''Yacimientos Petroliferos Fiscales de Bolivia'' (YPFB). The construction of the
Bolivia-Brazil gas pipeline cost US$2.2 billion.
A consortium called Pacific LNG was formed to exploit the newly discovered reserves. The consortium comprised the
British
British may refer to:
Peoples, culture, and language
* British people, nationals or natives of the United Kingdom, British Overseas Territories and Crown Dependencies.
* British national identity, the characteristics of British people and culture ...
companies
BG Group and
BP, and
Spain
Spain, or the Kingdom of Spain, is a country in Southern Europe, Southern and Western Europe with territories in North Africa. Featuring the Punta de Tarifa, southernmost point of continental Europe, it is the largest country in Southern Eur ...
's
Repsol YPF. Repsol is one of three companies that dominate the gas sector in Bolivia, along with Petrobras and
TotalEnergies.
A plan costing US$6 billion was drawn to build a pipeline to the
Pacific
The Pacific Ocean is the largest and deepest of Earth's five oceanic divisions. It extends from the Arctic Ocean in the north to the Southern Ocean, or, depending on the definition, to Antarctica in the south, and is bounded by the cont ...
coast, where the gas would be processed and
liquefied before being shipped to
Mexico
Mexico, officially the United Mexican States, is a country in North America. It is the northernmost country in Latin America, and borders the United States to the north, and Guatemala and Belize to the southeast; while having maritime boundar ...
and the
United States
The United States of America (USA), also known as the United States (U.S.) or America, is a country primarily located in North America. It is a federal republic of 50 U.S. state, states and a federal capital district, Washington, D.C. The 48 ...
(
Baja California
Baja California, officially the Free and Sovereign State of Baja California, is a state in Mexico. It is the northwesternmost of the 32 federal entities of Mexico. Before becoming a state in 1952, the area was known as the North Territory of B ...
and California), through a Chilean port, for example
Iquique. The 2003 Lozada deal was opposed heavily by Bolivian society, in part because of nationalism (Bolivia feels resentment after the territorial losses of the
War of the Pacific
The War of the Pacific (), also known by War of the Pacific#Etymology, multiple other names, was a war between Chile and a Treaty of Defensive Alliance (Bolivia–Peru), Bolivian–Peruvian alliance from 1879 to 1884. Fought over Atacama Desert ...
in the late 19th century, which deprived it of the
Litoral province and hence access to the sea).
Government ministers hoped to use the gas profits to bolster the sagging
Bolivian economy and claimed the money would be invested exclusively in health and education. Opponents argued that under the current law, the exportation of the gas as a raw material would give Bolivia only 18% of the future profits, or US$40 million to US$70 million per year. They further argued that exporting the gas so cheaply would be the latest case of foreign exploitation of Bolivia's natural resources, starting with its silver and gold from the 17th century. They demanded that a plant be built in Bolivia to process the gas and that domestic consumption had to be met before export. As ''
Le Monde
(; ) is a mass media in France, French daily afternoon list of newspapers in France, newspaper. It is the main publication of Le Monde Group and reported an average print circulation, circulation of 480,000 copies per issue in 2022, including ...
'' puts it, "two reasons plead for the industrial exploitation of the gas, which the multinational companies now have the capacities of doing. The first is related to the necessity of satisfying the Bolivians' energy needs. The second demonstrates the interest of exporting a more profitable product rather than selling raw material". According to the French newspaper, only La Paz, El Alto,
Sucre
Sucre (; ) is the ''de jure'' capital city of Bolivia, the capital of the Chuquisaca Department and the sixth most populous city in Bolivia. Located in the south-central part of the country, Sucre lies at an elevation of . This relatively high ...
,
Potosí
Potosí, known as Villa Imperial de Potosí in the colonial period, is the capital city and a municipality of the Potosí Department, Department of Potosí in Bolivia. It is one of the list of highest cities in the world, highest cities in the wo ...
,
Camiri and
Santa Cruz are now connected to the gas network; making an interior network which would reach all Bolivians would cost $1.5 billion, notwithstanding a central gas pipeline to link the various regions together. According to Carlos Miranda, an independent expert quoted by ''Le Monde'', the best industrialisation project is the
petrochemical
Petrochemicals (sometimes abbreviated as petchems) are the chemical products obtained from petroleum by refining. Some chemical compounds made from petroleum are also obtained from other fossil fuels, such as coal or natural gas, or renewable s ...
complex proposed by the Brazilian
Braskem firm, which would create 40 000 direct or indirect jobs and cost $1.4 billion. This figure is equivalent to the amount so far invested by Repsol, TotalEnergies and Petrobras.
Santa Cruz autonomy movement
The eastern departments of
Santa Cruz,
Beni,
Tarija, and
Pando recently had been mobilizing in favor of autonomy. An important issue was opposition to the seizure of resources though nationalization. Community leaders are supported by the Comite Pro Santa Cruz, local co-ops, and by business organizations such as cattle ranchers and farmers. A strike against the new constitution was recently held which was observed in Santa Cruz, Beni, Tarija, and Pando. Tensions have been raised by the cultural and philosophical rift exposed by the push for a new constitution. As a basis for a new constitution, the western,
Altiplano
The Altiplano (Spanish language, Spanish for "high plain"), Collao (Quechuan languages, Quechua and Aymara language, Aymara: Qullaw, meaning "place of the Qulla people, Qulla") or Andean Plateau, in west-central South America, is the most extens ...
-based MAS party envisions a "council of indigenous peoples" along with a curtailment of private ownership, while Santa Cruz looks to
western culture
Western culture, also known as Western civilization, European civilization, Occidental culture, Western society, or simply the West, refers to the Cultural heritage, internally diverse culture of the Western world. The term "Western" encompas ...
and
capitalism
Capitalism is an economic system based on the private ownership of the means of production and their use for the purpose of obtaining profit. This socioeconomic system has developed historically through several stages and is defined by ...
.
Cultural divisions exist because people in eastern Bolivia, called "Cambas" (meaning "friends" in
Guarani), are primarily of
mestizo
( , ; fem. , literally 'mixed person') is a term primarily used to denote people of mixed European and Indigenous ancestry in the former Spanish Empire. In certain regions such as Latin America, it may also refer to people who are culturall ...
descent (mix of European and several native tribes the largest of which are the Guaraní), while the western Altiplano is dominated by a small white elite and a historically oppressed Quechua and Aymara majority.
The first signs of the modern autonomy movement occurred in 2005 when a march for autonomy was attended by hundreds of thousands of people. A result of this was the change in law to allow the election of departmental prefects. Another area of tension was the result of ongoing population shifts and the resulting demands for proportionally greater representation in Bolivia's Congress to reflect these shifts by Santa Cruz. A compromise was reached to allow Santa Cruz to receive some of the seats warranted by population growth, and for the highlands to keep seats despite population losses.
Left-wing intellectuals
Walter Chávez and
Álvaro García Linera (former Bolivian Vice President and MAS party member) published an article in the ''
Monthly Review
The ''Monthly Review'' is an independent socialist magazine published monthly in New York City. Established in 1949, the publication is the longest continuously published socialist magazine in the United States.
History Establishment
Following ...
'' asserting that autonomy has been historically a demand of the Santa Cruz region, "contemporarily imbued with far-right, populist sentiments." They also qualified Santa Cruz autonomy as a "bourgeois ideology" of the "free market, foreign investment, racism, etc.", which pits the "modern", "whiter" Santa Cruz elite against the short, dark-skinned and
anti-capitalist
Anti-capitalism is a political ideology and Political movement, movement encompassing a variety of attitudes and ideas that oppose capitalism. Anti-capitalists seek to combat the worst effects of capitalism and to eventually replace capitalism ...
Aymara and Quechua peoples of the western region of Bolivia.
Dispute over pipeline route
The dispute arose in early 2002, when the administration of President
Jorge Quiroga proposed building the pipeline through neighboring
Chile
Chile, officially the Republic of Chile, is a country in western South America. It is the southernmost country in the world and the closest to Antarctica, stretching along a narrow strip of land between the Andes, Andes Mountains and the Paci ...
to the port of
Mejillones, the most direct route to the
Pacific Ocean
The Pacific Ocean is the largest and deepest of Earth's five Borders of the oceans, oceanic divisions. It extends from the Arctic Ocean in the north to the Southern Ocean, or, depending on the definition, to Antarctica in the south, and is ...
. However, antagonism towards Chile runs deep in Bolivia because of the loss of Bolivia's Pacific coastline to Chile in the
War of the Pacific
The War of the Pacific (), also known by War of the Pacific#Etymology, multiple other names, was a war between Chile and a Treaty of Defensive Alliance (Bolivia–Peru), Bolivian–Peruvian alliance from 1879 to 1884. Fought over Atacama Desert ...
(1879–1884).
Bolivians began campaigning against the Chilean option, arguing instead that the pipeline should be routed north through the
Peru
Peru, officially the Republic of Peru, is a country in western South America. It is bordered in the north by Ecuador and Colombia, in the east by Brazil, in the southeast by Bolivia, in the south by Chile, and in the south and west by the Pac ...
vian port of
Ilo, 260 km further from the gas fields than Mejillones, or, better yet, first industrialized in Bolivia. According to Chilean estimates, the Mejillones option would be $600 million cheaper.
Peru, however, claimed the difference in cost would be no more than $300 million. Bolivian proponents of the Peruvian option say it would also benefit the economy of the northern region of Bolivia through which the pipeline would pass.
Supporters of the Chile pipeline argued that
U.S. financiers would be unlikely to develop processing facilities within Bolivia.
Meanwhile, the
Peruvian government, eager to promote territorial and economic integration, offered Bolivia a special economic zone for 99 years for exporting the gas at Ilo, the right of free passage, and the concession of a 10 km
2 area, including a port, that would be exclusively under Bolivian administration.
President Jorge Quiroga postponed the decision shortly before leaving office in July 2002 and left this highly contentious issue to his successor. It was thought Quiroga did not want to jeopardize his chances of re-election as president in the 2007 elections.
After winning the 2002 presidential election
Gonzalo Sánchez de Lozada expressed his preference for the Mejillones option but made no "official" decision. The Gas War led to his resignation in October 2003.
Escalation
]
The social conflict escalated in September 2003 with protests and road blockages paralyzing large parts of the country, leading to increasingly violent confrontations with the Bolivian armed forces.
The insurrection was spearheaded by Bolivia's indigenous majority, who accused Sánchez de Lozada of pandering to the US government's "
war on drugs" and blamed him for failing to improve living standards in Bolivia. On September 8, 650 Aymaras started a
hunger strike to protest against the state detention of a villager. The man detained was one of the heads of the village, and was imprisoned for having sentenced to the
death penalty
Capital punishment, also known as the death penalty and formerly called judicial homicide, is the state-sanctioned killing of a person as punishment for actual or supposed misconduct. The sentence ordering that an offender be punished in s ...
two young men in a "community justice" trial.
On September 19, the National Coordination for the Defense of Gas mobilized 30,000 people in
Cochabamba
Cochabamba (; ) is a city and municipality in central Bolivia in a valley in the Andes mountain range. It is the capital (political), capital of the Cochabamba Department and the list of cities in Bolivia, fourth largest city in Bolivia, with ...
and 50,000 in
La Paz
La Paz, officially Nuestra Señora de La Paz (Aymara language, Aymara: Chuqi Yapu ), is the seat of government of the Bolivia, Plurinational State of Bolivia. With 755,732 residents as of 2024, La Paz is the List of Bolivian cities by populati ...
to demonstrate against the pipeline.
The following day six Aymara villagers, including an eight-year-old girl, were killed in a confrontation in the town of
Warisata. Government forces used planes and helicopters to circumvent the strikers and evacuate several hundred foreign and Bolivian tourists from Sorata who had been stranded by the road blockades for five days.
In response to the shootings,
Bolivia's Labor Union (COB) called a general strike on September 29 that paralyzed the country with road closures.
Union leaders insisted they would continue until the government backed down on its decision.
Poorly armed Aymara community militias drove the army and police out of Warisata and the towns of Sorata and Achacachi, equipped only with traditional Aymara
sling shots and guns from the 1952
Bolivian National Revolution.
Eugenio Rojas, leader of the regional strike committee, declared that if the government refused to negotiate in Warisata, then the insurgent Aymara communities would surround La Paz and cut it off from the rest of the country — a tactic employed in the
Túpaj Katari uprising of 1781.
Felipe Quispe, leader of the
Indigenous Pachakuti Movement (MIP), stated that he would not participate in dialogue with the government until the military withdrew from blockaded areas. The government refused to negotiate with Quispe, claiming that he did not have the authority to represent the ''
campesino'' movement.
As the protests continued, protesters in
El Alto
El Alto (Spanish for "The Heights") is the List of Bolivian cities by population, second-largest city in Bolivia, located adjacent to La Paz in Pedro Domingo Murillo Province on the Altiplano highlands. El Alto is today one of Bolivia's fastest- ...
, a sprawling indigenous city of 750,000 people on the periphery of La Paz, proceeded to block key access routes to the seat of government, causing severe fuel and food shortages. They also demanded the resignation of Sánchez de Lozada and his ministers,
Yerko Kukoc, Minister of Government, and
Carlos Sánchez de Berzaín, Minister of Defense, who were held responsible for the Warisata massacre. Protesters also voiced their opposition to the
Free Trade Area of the Americas agreement that was at the time under negotiation by the US and
Latin America
Latin America is the cultural region of the Americas where Romance languages are predominantly spoken, primarily Spanish language, Spanish and Portuguese language, Portuguese. Latin America is defined according to cultural identity, not geogr ...
n countries (since the November 2005
Mar del Plata Summit of the Americas, it has been put on stand-by).
Martial law in El Alto
On October 12, 2003, the government imposed
martial law
Martial law is the replacement of civilian government by military rule and the suspension of civilian legal processes for military powers. Martial law can continue for a specified amount of time, or indefinitely, and standard civil liberties ...
in El Alto after sixteen people were shot by the police and several dozen wounded in violent clashes which erupted when a caravan of oil trucks escorted by police and soldiers deploying tanks and heavy-caliber machine guns tried to breach a barricade.
On October 13, the administration of Sánchez de Lozada suspended the gas project "until consultations have been conducted
ith the Bolivian people" However, Vice President Carlos Mesa deplored what he referred to as the "excessive force" used in El Alto (80 dead) and withdrew his support for Sánchez de Lozada. The Minister of Economic Development, Jorge Torrez, of the MIR party, also resigned.
The
United States Department of State
The United States Department of State (DOS), or simply the State Department, is an United States federal executive departments, executive department of the U.S. federal government responsible for the country's foreign policy of the United State ...
issued a statement on October 13 declaring its support for Sánchez de Lozada, calling for "Bolivia's political leaders
opublicly express their support for democratic and constitutional order. The international community and the United States will not tolerate any interruption of constitutional order and will not support any regime that results from undemocratic means".
On October 18, Sánchez de Lozada's governing coalition was fatally weakened when the ''New Republic Force'' party withdrew its support. He was forced to resign and was replaced by his vice president, Carlos Mesa, a former journalist. The strikes and roadblocks were lifted. Mesa promised that no civilians would be killed by police or army forces during his presidency. Despite dramatic unrest during his time in office, he respected this promise.
Among his first actions as president, Mesa promised a referendum on the gas issue and appointed several indigenous people to cabinet posts. On July 18, 2004, Mesa put the issue of gas nationalization to
a referendum. On May 6, 2005, the Bolivian Congress passed a new law raising taxes from 18% to 32% on profits made by foreign companies on the extraction of oil and gas. Mesa failed to either sign or veto the law, so by law Senate President
Hormando Vaca Diez was required to sign it into law on May 17. Many protesters felt this law was inadequate and demanded full nationalization of the gas and oil industry.
The 2005 Hydrocarbons Law
On May 6, 2005, the long-awaited Hydrocarbons Law was finally approved by the Bolivian Congress. On May 17 Mesa again refused to either sign or veto the controversial law, thus constitutionally requiring Senate President
Hormando Vaca Díez to sign the measure and put it into effect.
The new law returned legal ownership to the state of all hydrocarbons and natural resources, maintained royalties at 18 percent, but increased taxes from 16 to 32 percent. It gave the government control of the commercialization of the resources and allowed for continuous government control with annual audits. It also ordered companies to consult with indigenous groups who live on land containing gas deposits. The law stated that the 76 contracts signed by foreign firms must be renegotiated before 180 days. Protesters argued that the new law did not go far enough to protect the natural resources from exploitation by foreign corporations, demanding a complete
nationalization
Nationalization (nationalisation in British English)
is the process of transforming privately owned assets into public assets by bringing them under the public ownership of a national government or state. Nationalization contrasts with p ...
of the gas and process in Bolivia.
Due to the uncertainty over renegotiation of contracts, foreign firms have practically stopped investing in the gas sector. Foreign investment virtually came to a standstill in the second half of 2005. Shortages in supply – very similar to those observed in Argentina after the 2001 price-fixing – are deepening in diesel, LPG, and begin to be apparent in natural gas. The May–June social unrest affected the supply of hydrocarbons products to the internal market, principally LPG and natural gas to the occidental region. Brazil implemented a contingency plan – led by the Energy and Mines Minister – to mitigate any potential impact from gas export curtailment. Although the supply was never curtailed, the social unrest in Bolivia created a strong sensation that security of supply could not be guaranteed. Occasional social action has continued to affect the continuity of supply, especially valve-closing actions.
Carlos Mesa's June 2005 resignation
The protests
Over 80,000 people participated in the May 2005 protests. Tens of thousands of people each day walked from El Alto to the seat of government
La Paz
La Paz, officially Nuestra Señora de La Paz (Aymara language, Aymara: Chuqi Yapu ), is the seat of government of the Bolivia, Plurinational State of Bolivia. With 755,732 residents as of 2024, La Paz is the List of Bolivian cities by populati ...
, where protesters effectively shut down the city, bringing transportation to a halt through strikes and blockades, and engaging in street battles with police. The protestors demanded the
nationalisation of the gas industry and reforms to give more power to the indigenous majority, who were mainly Aymaras from the impoverished highlands. They were pushed back by the police with
tear gas
Tear gas, also known as a lachrymatory agent or lachrymator (), sometimes colloquially known as "mace" after the Mace (spray), early commercial self-defense spray, is a chemical weapon that stimulates the nerves of the lacrimal gland in the ey ...
and
rubber bullets, while many of the miners involved in the protests came armed with
dynamite
Dynamite is an explosive made of nitroglycerin, sorbents (such as powdered shells or clay), and Stabilizer (chemistry), stabilizers. It was invented by the Swedish people, Swedish chemist and engineer Alfred Nobel in Geesthacht, Northern German ...
.
May 24, 2005
More than 10,000 Aymara peasant farmers from the twenty highland provinces came down from ''
El Alto
El Alto (Spanish for "The Heights") is the List of Bolivian cities by population, second-largest city in Bolivia, located adjacent to La Paz in Pedro Domingo Murillo Province on the Altiplano highlands. El Alto is today one of Bolivia's fastest- ...
s Ceja neighborhood into La Paz to protest.
On May 31, 2005, residents of El Alto and the Aymara peasant farmers returned to La Paz. More than 50,000 people covered an area of nearly 100 square kilometers. The next day, the first regiment of the National Police decided, by consensus, not to repress the protests and were internally reprimanded by the government.
On June 2, as the protests raged on, President Mesa announced two measures, designed to placate the indigenous protesters on the one hand and the Santa Cruz autonomy movement on the other: elections for a new constitutional assembly and a referendum on regional autonomy, both set for October 16. However, both sides rejected Mesa's call: the
Pro-Santa Cruz Civic Committee declared its own referendum on autonomy for August 12, while in El Alto protesters began to cut off gasoline to La Paz.
Approximately half a million people mobilized in the streets of La Paz, on June 6, and President Mesa subsequently offered his resignation. Riot police used tear gas as miners amongst the demonstrators traditionally set off dynamite in clashes near the presidential palace, while a strike brought traffic to a standstill. However, Congress failed to meet for several days owing to the "insecurity" of meeting as protests raged nearby. Many members of Congress found themselves unable to physically attend the sessions. Senate President
Hormando Vaca Díez decided to move the sessions to Bolivia's capital,
Sucre
Sucre (; ) is the ''de jure'' capital city of Bolivia, the capital of the Chuquisaca Department and the sixth most populous city in Bolivia. Located in the south-central part of the country, Sucre lies at an elevation of . This relatively high ...
, in an attempt to avoid the protesters. Radical farmers occupied oil wells owned by transnational companies, and blockaded border crossings. Mesa ordered the military to airlift food to La Paz, which remained totally blockaded.
Vaca Diez and House of Delegates president,
Mario Cossío, were the two next in the line of succession to become president. However, they were strongly disliked by the protesters, and each declared they would not accept succession to the presidency, finally promoting
Eduardo Rodríguez, Supreme Court Chief Justice, to the presidency. Considered apolitical and hence trustworthy by most, his administration was a temporary one until
elections
An election is a formal group decision-making process whereby a population chooses an individual or multiple individuals to hold public office.
Elections have been the usual mechanism by which modern representative democracy has operated ...
could be held. Protesters quickly disbanded in many areas, and like many times in Bolivia's past, major political upheavals were taken as a normal part of the political process.
Caretaker President Rodríguez proceeded to implement the Hydrocarbons Law. The new tax IDH has been levied from the companies that are paying 'under reserve'. A number of upstream gas companies have invoked Bilateral Investment Protection Treaties and entered the conciliation phase with the state of Bolivia. The treaties are a step towards a court hearing before the
International Centre for Settlement of Investment Disputes (ICSID), dependent of the
World Bank
The World Bank is an international financial institution that provides loans and Grant (money), grants to the governments of Least developed countries, low- and Developing country, middle-income countries for the purposes of economic development ...
, which could force Bolivia to pay indemnities to the companies.
Concerns of possible US intervention
A military training agreement with
Asunción
Asunción (, ) is the capital and the largest city of Paraguay. The city stands on the eastern bank of the Paraguay River, almost at the confluence of this river with the Pilcomayo River. The Paraguay River and the Bay of Asunción in the north ...
(
Paraguay
Paraguay, officially the Republic of Paraguay, is a landlocked country in South America. It is bordered by Argentina to the Argentina–Paraguay border, south and southwest, Brazil to the Brazil–Paraguay border, east and northeast, and Boli ...
), giving immunity to
US soldiers, caused some concern after media reports initially reported that a base housing 20,000 US soldiers was being built at
Mariscal Estigarribia
Mariscal Estigarribia () is a town in the Boquerón, Paraguay, Boquerón Department of Paraguay. It is home to Dr. Luis María Argaña International Airport (IATA code: ESG).
Strategic importance
The airport was constructed by Paraguayan milit ...
within 200 km of Argentina and Bolivia, and 300 km of Brazil, near an airport which could receive large planes (
B-52,
C-130 Hercules
The Lockheed C-130 Hercules is an American four-engine turboprop military transport aircraft designed and built by Lockheed Corporation, Lockheed (now Lockheed Martin). Capable of using unprepared runways for takeoffs and landings, the C-130 w ...
, etc.) which the Paraguayan Air Forces do not have.
[US Marines put a foot in Paraguay](_blank)
, El Clarín, September 9, 2005 According to the ''
Clarín'', an Argentinian newspaper, the US military base is strategic because of its location near the ''
Triple Frontera'' between Paraguay, Brazil and Argentina; its proximity to the
Guarani aquifer; and, at the same "moment that Washington's magnifying glass goes on the ''
Altiplano
The Altiplano (Spanish language, Spanish for "high plain"), Collao (Quechuan languages, Quechua and Aymara language, Aymara: Qullaw, meaning "place of the Qulla people, Qulla") or Andean Plateau, in west-central South America, is the most extens ...
'' and points toward Venezuelan
Hugo Chávez — the regional demon according to
Bush's administration — as the instigator of the instability in the region" (''Clarín''
).
Later reports indicated that 400 US troops would be deployed in Paraguay over 18 months for training and humanitarian missions consisting of 13 detachments numbering less than 50 personnel each. The Paraguayan administration as well as Bush's administration denied that the airport would be used as a US military base, or that there would be any other US base in Paraguay.
Other countries
The social conflicts paralyzed Bolivia's political life for a time. The unpopularity of the neoliberal
Washington consensus
The Washington Consensus is a set of ten economic policy prescriptions considered in the 1980s and 1990s to constitute the "standard" reform package promoted for Economic crisis, crisis-wracked developing country, developing countries by the Was ...
, a set of economic strategies implemented by Gonzalo de Lozada's administration, set the stage for the 2006 election of president Evo Morales.
In the meantime, Chile promptly started to build several coastal terminals to receive shipments of
liquefied natural gas
Liquefied natural gas (LNG) is natural gas (predominantly methane, CH4, with some mixture of ethane, C2H6) that has been cooled to liquid form for ease and safety of non-pressurized storage or transport. It takes up about 1/600th the volume o ...
from
Indonesia
Indonesia, officially the Republic of Indonesia, is a country in Southeast Asia and Oceania, between the Indian Ocean, Indian and Pacific Ocean, Pacific oceans. Comprising over List of islands of Indonesia, 17,000 islands, including Sumatra, ...
,
Australia
Australia, officially the Commonwealth of Australia, is a country comprising mainland Australia, the mainland of the Australia (continent), Australian continent, the island of Tasmania and list of islands of Australia, numerous smaller isl ...
and other sources.
Other South American countries are contemplating other ways to secure gas supplies: one project aims at linking the
Camisea gas reserves in
Peru
Peru, officially the Republic of Peru, is a country in western South America. It is bordered in the north by Ecuador and Colombia, in the east by Brazil, in the southeast by Bolivia, in the south by Chile, and in the south and west by the Pac ...
to Argentina, Brazil, Chile,
Uruguay
Uruguay, officially the Oriental Republic of Uruguay, is a country in South America. It shares borders with Argentina to its west and southwest and Brazil to its north and northeast, while bordering the Río de la Plata to the south and the A ...
and
Paraguay
Paraguay, officially the Republic of Paraguay, is a landlocked country in South America. It is bordered by Argentina to the Argentina–Paraguay border, south and southwest, Brazil to the Brazil–Paraguay border, east and northeast, and Boli ...
. Linking
Pisco (south of Peru) to
Tocopilla (north of Chile) with a 1200 km pipeline would cost $2 billion. However, experts doubt the Camisea reserves are enough for all the
Southern Cone countries.
Another 8,000 km gas pipeline (
Gran Gasoducto del Sur) has been proposed that would link
Venezuela
Venezuela, officially the Bolivarian Republic of Venezuela, is a country on the northern coast of South America, consisting of a continental landmass and many Federal Dependencies of Venezuela, islands and islets in the Caribbean Sea. It com ...
to Argentina via Brazil. Its cost is estimated between $8 and $12 billion.
While Argentina and Chile are large consumers of gas (50 percent and 25 percent respectively), other South American countries are a lot less dependent.
Nationalization of natural gas industry
On May 1, 2006, president Evo Morales signed a decree stating that all gas reserves were to be nationalized: "the state recovers ownership, possession and total and absolute control" of hydrocarbons. He thus fulfilled his electoral promises, declaring that "We are not a government of mere promises: we follow through on what we propose and what the people demand". The announcement was timed to coincide with Labor Day on May 1. Ordering the military and engineers of
YPFB, the state firm, to occupy and secure energy installations, he gave foreign companies a six-month "transition period" to re-negotiate contracts, or face expulsion. Nevertheless, president Morales stated that the nationalization would not take the form of
expropriations or
confiscation
Confiscation (from the Latin ''confiscatio'' "to consign to the ''fiscus'', i.e. transfer to the treasury") is a legal form of search and seizure, seizure by a government or other public authority. The word is also used, popularly, of Tampering w ...
s. Vice President
Álvaro García Linera said in La Paz's main plaza that the government's energy-related revenue will jump to $780 million next year, expanding nearly sixfold from 2002.
Among the 53 installations affected by the measure are those of Brazil's
Petrobras, one of Bolivia's largest investors, which controls 14% of the country's gas reserves. Brazil's Energy Minister,
Silas Rondeau, reacted by considering the move as "unfriendly" and contrary to previous understandings between his country and Bolivia. Petrobras, Spain's
Repsol YPF, UK gas and oil producer
BG Group Plc and France's
Total are the main gas companies present in the country. According to
Reuters
Reuters ( ) is a news agency owned by Thomson Reuters. It employs around 2,500 journalists and 600 photojournalists in about 200 locations worldwide writing in 16 languages. Reuters is one of the largest news agencies in the world.
The agency ...
, "Bolivia's actions echo what Venezuelan President
Hugo Chávez, a Morales ally, did in the world's fifth-largest oil exporter with forced contract migrations and retroactive tax hikes — conditions that oil majors largely agreed to accept." YPFB would pay foreign companies for their services, offering about 50 percent of the value of production, although the decree indicated that companies at the country's two largest gas fields would get just 18 percent.
Negotiations between the Bolivian government and the foreign companies intensified during the week leading up to the deadline of Saturday October 28, 2006. On Friday an agreement was reached with two of the companies (including
Total) and by the deadline on Saturday the rest of the ten companies (including
Petrobras and
Repsol YPF) operating in Bolivia had also come to an agreement. Full details of the new contracts have not been released, but the objective of raising government share of revenues from the two major fields from 60 percent to 82 percent seems to have been achieved. Revenue share for the government from minor fields is set at 60 percent.
During the six month negotiation period talks with the Brazilian company
Petrobras had proven especially difficult. Petrobras had refused raises or reduction to a mere service provider. As a result of stalled talks Bolivian energy minister
Andres Soliz Rada resigned in October and was replaced by
Carlos Villegas. "We are
obligated to live with Brazil in a marriage without divorce, because we both need each other", said
Evo Morales in the contract signing ceremony underlining the mutual dependency of Brazil on Bolivian gas and of Bolivia on Petrobras in gas production.
Reaction
On December 15, 2007, the regions of Santa Cruz, Tarija, Beni, and Pando declared autonomy from the central government. They also moved to achieve full independence from Bolivia's new constitution.
The Protesters
Miners
Miners from the Bolivian trade union ''
Central Obrera Boliviana'' (COB) have also been very active in the recent protests. Recently they have been active against propositions to privatize pensions. They have been known for letting off very loud explosions of dynamite in the recent protests.
Coca farmers
Shortly after the law passed,
Evo Morales, an Aymara Indigenous, ''cocalero'', and leader of the opposition party
Movement Towards Socialism (MAS), took a moderate position calling the new law "middle ground". However, as the protests progressed, Morales has come out in favor of nationalization and new elections.
Protesters in Cochabamba
Oscar Olivera was a prominent leader in the 2001 protests in
Cochabamba
Cochabamba (; ) is a city and municipality in central Bolivia in a valley in the Andes mountain range. It is the capital (political), capital of the Cochabamba Department and the list of cities in Bolivia, fourth largest city in Bolivia, with ...
against the privatization of water in Bolivia and has also become a leading figure. Specifically the protesters in Cochabamba, Bolivia's fourth largest city, have cut off the main roads in the city and are calling for a new Constituent Assembly as well as nationalization.
Indigenous and peasant groups in Santa Cruz
Indigenous people in the eastern lowland department of Santa Cruz have also become active in the recent disputes over nationalization of the gas and oil industry. They are composed of indigenous groups such as the
Guaraní,
Ayoreo,
Chiquitano and the
Guyarayos, as opposed to the highland Indigenous people (Aymara and Quechua). They have been active in recent land disputes and the main organization representing this faction is known as the "Confederacion de pueblos indigenas de Bolivia" (CIDOB). The CIDOB after initially offering support to MAS, the party of Bolivia's new president, have come to believe that they were deceived by the Bolivian government
The MAS, which is based in the highlands, is no more willing to grant them voice than the previous governments whose power was also based from the highlands. Another smaller more radical group called the "Landless Peasant Movement" (MST) which is somewhat similar to the
Landless Workers' Movement in Brazil, and is composed mainly of immigrants from the western part of the country. Recently, Guaraní people from this group have taken oil fields run by Spain's
Repsol YPF and the United Kingdom's
BP and have forced them to stop production.
Felipe Quispe and peasant farmers
Felipe Quispe was an Aymara leader who wished to return control of the country from what he saw as the "white elite" to the indigenous people who make up the majority of the country's population. Therefore, he was in favor of an independent "Aymaran state". Quispe is the leader of the
Pachakutik Indigenous Movement, that won six seats in the Congress and the secretary general of the
United Peasants Union of Bolivia in the 2002 Bolivian elections.
See also
*
Cochabamba anti-privatization protests
*
Geology of Bolivia
*
Bolivian gas referendum, 2004
References
External links
Democracy in Crisis in Latin America. Bolivia and Venezuela Test the International Community's Democratic Commitment, SWP-Comments 26/2005 (June 2005)Bolivia's top Court chief takes Presidency AP (Yahoo news)
Main Protest Groups in Boliviafrom
Dollars & Sense magazine
Bolivia Information ForumInformation on oil and gas in Bolivia
The Distribution of Bolivia’s Most Important Natural Resources and the Autonomy Conflicts Center for Economic and Policy Research
Black October, ''Miami New Times''
Dignity and Defiance: Stories from Bolivia’s Challenge to Globalization– video report on ''
Democracy Now!''
โบลิเวียโมเดล กับ การปฎิรูปพลังงานไทย สร้างความมั่นคงทางพลังงานให้กับประเทศจริงหรือ?– in Thai ''
Pantip''
{{DEFAULTSORT:Bolivian Gas Conflict
21st-century conflicts
Politics of Bolivia
Protests in Bolivia
Natural gas in Bolivia
Evo Morales
Bolivia–Chile relations
Natural resource conflicts
Energy policy
2000s in Bolivia
Labor disputes in Bolivia