- The Washington Times - Wednesday, June 4, 2008

LAGO AGRIO, Ecuador | Colombian cocaine cartels are tapping into pipelines in neighboring Ecuador, stealing with impunity thousands of gallons a day of “white gas” that can be used to process raw coca into cocaine, Ecuadorean and U.S. officials say.

The black market trade in petroleum ether - a solvent used by clandestine cocaine labs - is undermining U.S.-backed counternarcotics efforts in this low-lying jungle border region spanning northeastern Ecuador and southern Colombia.

Complicating matters, counternarcotics investigators at Ecuador´s National Police, as well as oil analysts and former company advisers, say employees of Ecuador´s state oil firm, PetroEcuador, are complicit in the scheme.

“This is an enormous problem,” said Jaime Atapuma, an investigator in the counternarcotics division of Ecuador’s National Police based in Quito, the capital. “We estimate that of the 10,000 gallons of white gas crossing into Colombia daily, some 70 percent ends up in cocaine laboratories.”

Petroleum ether, a byproduct of oil drilling commonly known as “white gasoline,” can be upgraded to gasoline, but cocaine makers use it in native form as a relatively pure solvent to help turn coca leaves into cocaine.

Ecuadorean police and military officials, who provided The Washington Times with dozens of declassified intelligence photos, said smugglers tap oil pipelines with homemade spigots and rob trucks and facilities owned by PetroEcuador.

Storing the gas in 55-gallon drums, they move the drug precursor chemical across the San Miguel and Putumayo rivers that divide the two countries, or take it directly to the drug laboratories that a 2008 State Department report says are increasingly being set up in Ecuador.

Military officials underscored the extent of the problem.

“Along with armed groups of Colombians inside Ecuadorean territory, the smuggling of white gas and gasoline to drug laboratories is one of our biggest problems at the border,” said Col. Javier Perez of the Ecuadorean 4th Army Division based in Coca, about 50 miles from Lago Agrio.

Mr. Atapuma said the base-line problem is twofold: endemic poverty that draws jungle dwellers into the lucrative trade and failure by PetroEcuador to fix its chemical controls.

He said police and military officials have asked the company to install automated systems that detect variances in pipeline pressure caused by illegal taps, or use inspection tools that spot holes drilled into lines.

“They have made promises in the past to automate their systems,” said Mr. Atapuma, “but nothing happens. They know what is going on and could stop it, but they do nothing because there is corruption.”

Boris Abad, president of an Ecuador-based energy consultancy, is a former manager at ConocoPhillips and former adviser to PetroEcuador. Echoing industry specialists, Mr. Abad said smugglers couldn’t steal white gas without knowing when a batch of the chemical was passing inside pipelines that alternately carry a variety of chemicals such as petroleum and diesel.

“Only PetroEcuador employees can know the sequence and timing of those batches,” he said. “So there is no doubt that company employees are in on it. And it doesn’t take a brain surgeon to know that the stolen gas is going to cocaine laboratories.”

PetroEcuador was contacted numerous times by e-mail and telephone but did not grant an interview for this article.

The problem of white gas smuggling is not new, but the scope is.

The State Department’s annual International Narcotics Control Strategy Report mentioned as far back as 2003 that white gas “has long been trafficked from oil fields in Sucumbios to neighboring Putumayo Department, Colombia, where it is used in cocaine production.”

The same report in 2007 stated that Ecuadorean security forces had closed “the principal diversion points,” seizing 32,445 gallons of the white gas in the first 10 months of 2006, while “traffickers found other vulnerable points in more remote oil fields near the Colombian border.”

But an official at the U.S. Embassy in Quito said recently that Ecuador has been hit with a dramatic increase in drug trafficking and related trafficking of chemical precursors.

The official, who has knowledge of narcotics issues but cannot be identified for security reasons, said seizures of white gas now run in the neighborhood of 100,000 gallons every six months.

He cited the recent seizures of three gas piscinas, or plastic-lined pools, in the Sucumbios region that together contained 19,000 gallons of white gas.

“Of all solvents that can be used in the process, white gas is the cleanest,” he said. “The problem is that here in the northern part of Ecuador it is also abundant and easy to obtain.”

It is that apparent ease that has fueled suspicions of PetroEcuador’s complicity.

Carter Beasley, an oil manager with 25 years of experience working in Ecuador and other parts of Latin America, reviewed photos of illicit pipeline taps provided by the military.

“I have never seen such a brazen example of product theft,” Mr. Beasley said of one photo that shows a smuggler’s line running from an uncoupled tap on a production manifold, a gathering point for lines from many wells.

“This seems to indicate either a complete lack of surveillance or complicity on the part of oil company operations people,” he said.

Mr. Beasley said the tactic requires smugglers to have inside information about the timing of white gas flows, but that it is impossible to know how far up the company chain the complicity reaches.

“There could be a dozen people at one pump station who know or could find out when the line was flowing with white gas,” he said.

The U.S. Embassy official said PetroEcuador’s failure to upgrade security could be a financial issue.

“For PetroEcuador, it could well be a money issue,” he said. “There are lots of things you can do to beef up your basic security or infrastructure, but they are very costly.”

The leftist government of President Rafael Correa appears to be responding to the problem.

In February, the country’s Hydrocarbons Ministry restricted shipments of refined gasoline - which is also bought and smuggled for use in cocaine making - to Orellana and Sucumbios border regions. In March, the ministry requested that soldiers be posted at service stations in the border provinces to determine base-line needs.

“It was done out of concern over contraband in those provinces,” said Patricio Penaherrera, a spokesman at the ministry.

Mr. Correa also has made PetroEcuador the target of an anti-corruption campaign.

*Kelly Hearn traveled to Ecuador on a grant from the Pulitzer Center on Crisis Reporting (www.pulitzercenter.org).

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