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The Ecuador Lawsuit.

Trial Lawyer Finally Tells the Truth about Remediation Costs

Date: Dec 10, 2009

“It will be very expensive to clean up, but far less than the profits they took out of Ecuador.” – Steve Donziger, lead trial attorney.  Commondreams.org: 10/29/09.

Mr. Donziger’s math is finally adding up and, perhaps unintentionally, Mr. Donziger has exposed one of the most fraudulent aspects of the Ecuador trial – the $27 billion damage recommendation known as the “Cabrera Report.”

The assessment developed by the plaintiffs’ representatives and delivered to the court by mining engineer Richard Cabrera looks to hold Chevron liable for more than $27 billion in damages. In part of the dubious $27 billion claim, Cabrera recommends Chevron pay damages of $2.743 billion for pit remediation.  In comparison, Petroecuador, the government-owned oil company responsible for the current condition of Ecuador’s oil fields, remediates pits to current laws and standards at a cost of $85,000 per pit. Cabrera’s estimates imply a per-pit remediation cost of up to $3 million per pit. This recommendation is more than 30 times higher than the cost the state pays for pit remediation.

Meanwhile, Texaco Petroleum made less than $500 million during the days of the consortium.  The vast majority of the proceeds, approximately $25 billion, went to the government of Ecuador.  And, at the conclusion of the consortium, Texaco Petroleum performed remediation work at 108 of 321 well sites – work that corresponded with the company’s 37.5% stake in the consortium. The remaining remediation is the admitted responsibility of Petroecuador.

So, no matter how you slice it, Mr. Donziger has finally conceded the truth about remediation costs.  Any realistic assessment of the conditions in Ecuador clearly shows that the remediation work for which Petroecuador is responsible would cost a fraction of what Mr. Donziger and his colleagues have contended.  Now, if they would only focus their efforts on the responsible party rather than the deep pockets, some solutions might actually occur.