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Nonetheless, in 1994 a group of U.S. attorneys sued Texaco in the U.S. They made novel legal claims for “environmental justice.†Eventually, the case was dismissed in the United States and a new case was filed against Chevron in Ecuador.The Ecuadorean court appointed an “expert witness†to make factual findings and to calculate damages. Turns out that the “expert†is a mining engineer named Richard Cabrera, who has direct financial ties to the plaintiffs and as we learned this week, hidden ties to Petroecuador.Cabrera’s mandate from the Ecuadorean court was to assess environmental damages. To do this, Cabrera hired assistants recommended by the plaintiffs. He transcribed entire passages from plaintiffs’ pleadings into his “reports†And where evidence was lacking, Cabrera made up entire categories of damage out of thin air. Here’s a summary.Cleaning Up Old Oil PitsThe Ecuadorean court asked Cabrera to calculate the cost to clean up old oilfield pits. Cabrera’s number was $2.7 billion, to be assessed against Chevron.Problems abound. Cabrera ignored the fact that Texaco previously cleaned up dozens of pits under its agreement with Petroecuador. Cabrera ignored the release of liability from the government of Ecuador. Cabrera overlooked the fact that Petroecuador is under contract with Texaco to remediate the remainder of the pits.Indeed, according to Cabrera, Chevron should pay to clean up problems that occurred after 1990, caused by Petroecuador’s post-nationalization operations.Even if Texaco (now Chevron) ought to act as some sort of environmental sugar daddy and pay to clean up more pits, can it possibly cost $2.7 billion?Cabrera’s damage estimate is over 150 times the amount Petroecuador estimated for cleanup work. Cabrera counts over 4 times as many pits needing cleanup as does Petroecuador. And his cost estimate per pit is over 30 times the Petroecuador number. In short, Cabrera’s $2.7 billion number for cleaning the pits is sheer fantasy.Groundwater CleanupCabrera’s report assesses $3.2 billion in damages against Chevron for groundwater remediation. Yet there’s no evidence for the claim. Cabrera’s report includes no samples from streams, wells or other water sources.Cabrera’s only basis for the water claim is a small number of samples that come from oil pits currently operated by Petroecuador. The claim for groundwater remediation is entirely specious.Surface DamagesCabrera included a damage claim for $1.7 billion for “deforestation.†That is, Cabrera slams Chevron because Texaco built roads, drill pads, pipelines and other facilities within the Amazon jungle.It’s Catch-22. In the 1960s and 1970s, Texaco wanted to develop the oil concession without building an extensive road network. Texaco wanted to use helicopters for logistics. However, from the outset, the Ecuadorean government insisted that Texaco build roads. Now Cabrera’s report recommends assessing damages for the roads.The entire footprint of former Texaco operations in Ecuador totals under 44 square kilometers — including 37 square kilometers of government-mandated roads. The total disturbed area is about 1% of the total 4,400 square kilometer oil concession.Cabrera’s damage calculation comes to over $38 million per square kilometer. It’s just astronomical. Cabrera has turned these roads and oil pits into some of the most valuable real estate in all of South America.
