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Matthew Smith

Matthew Smith

Matthew Smith is Oilprice.com's Latin-America correspondent. Matthew is a veteran investor and investment management professional. He obtained a Master of Law degree and is currently located…

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Colombia’s Oil Industry Is An Environmental Disaster

  • Oil spills, flaring, and other environmentally damaging incidents are commonplace and have been so for years in much of South America’s oil patch.
  • The demise of Venezuela’s oil industry has led to an increase in accidents that have harmed the environment.
  • Between 2015 and 2022, there have been more than 2,133 environmentally damaging incidents involving Colombia’s oil industry.

  For decades, the petroleum industry in South America has been dogged by one environmental catastrophe after another. Oil spills, flaring and other environmentally damaging incidents are commonplace and have been so for years. This has weighed heavily on the petroleum industry’s social license in many countries with it seemingly locked in an ever-present state of crisis in Ecuador and Peru. It is the near failure of the Venezuelan state and collapse of PDVSA’s petroleum infrastructure which has sparked an environmental catastrophe in that country. While those countries garner the lions share of attention concerning environmental damage caused by industry operations the hydrocarbon sector in Colombia is among the continent’s worst perpetrators.

For decades Colombia’s national government in Bogota has held out the Andean country's oil industry as a model of success. Despite Colombia possessing meagre proven reserves, totaling 1.8 billion barrels at the end of 2021 with a 6-year production life, the country punches above its weight when it comes to production volumes. For September 2022, Colombia’s average daily oil output was 753,584 barrels per day. While that is far less then the one million barrels per day pumped during 2013 and 2015 it is still significantly higher than neighboring countries like Ecuador that possess larger oil reserves. Data from Colombia’s regulator, the National Hydrocarbons Agency (ANH – Spanish initials) shows there are 447 various oil contracts assigned to energy companies with 233 production contracts currently active with the remainder being at the exploration stage or in a few instances for special projects and technical evaluation. Those numbers illustrate the size of Colombia’s hydrocarbon sector and why the country punches well above its weight when its scant oil reserves are considered.

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The rapid growth of Colombia’s petroleum industry over the last three decades saw oil become a key economic driver, with it responsible for a third of exports by value, 3% of gross domestic product and around a fifth of government revenue. For those reasons, the Andean country despite its paltry reserves is highly dependent on its domestic petroleum industry. While Bogota has been quick to point to the hydrocarbon sector’s successes, historically Colombia’s national government has been less than forthcoming when it comes to disclosing the environmental and social damage the sector causes.

It is difficult to quantify the number of oil spills that occur in Colombia. An investigation by Mongabay, a nonprofit environmental news platform, found that a Colombian government database shows there more than 2,133 environmentally damaging incidents involving the country’s oil industry between 2015 and 2022. That number, which has been difficult to verify because of a lack of government transparency, is particularly startling because Peru, which is garnering considerable international attention for the environmental damage caused by its oil industry, has experienced a far lower incidence of such events. According to a 2022 report by Oxfam and Peru’s National Coordinator for Human Rights (CNDDHH – Spanish initials) there were only 1,002 oil spills in Peru from 1997 until 2021. That is less than half the incidences which have purportedly occurred in Colombia over a far shorter period, although a lack of transparency makes it extremely difficult to verify the data. Colombian social and economic thinktank CrudoTransparente counted 54 oil spills from 2017 to 2021, but there is little other hard data available. This lack of transparency in a country where censorship of the media and the murder of environmental defenders is not surprising. There have been many allegations of collusion between the government, oil companies in Colombia and paramilitary groups, notably the Self Defense Forces of Colombia (AUC – Spanish initials) which officially disbanded in 2006. The various self defense groups that appeared in Colombia that eventually coalesced to form the AUC, which was a U.S. designated terrorist group, evolved from a nexus between business leaders, the Medellin Cartel and civil patrols established by Colombian authorities. While the AUC has disbanded, various neo-paramilitary bands, tracing their origin to that illegal armed group, have emerged. Aside from their involvement in coca cropping and cocaine trafficking they are believed to be heavily involved in intimidating as well as murdering defending environmental defenders with 322 executed over the last decade.

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The number one offender for oil spills in Colombia is the country’s largest hydrocarbon producer, only refiner and owner of the Andean country’s pipelines national petroleum company Ecopetrol. The data reviewed by Mongabay showed that Colombia’s national oil company was responsible for 67% of the environmental incidents, including oil spills, analyzed. Oil spills that occur in Colombia are not only the fault of energy companies operating in the country and caused by poor maintenance, operational failures or human error, in many cases they are the consequence of sabotage and petroleum theft. Sabotage of oil pipelines and assaults on oilfields by illegal armed groups have long been a significant problem in Colombia. Leftist guerillas the Revolutionary Armed Forces of Colombia (FARC – Spanish initials), which demobilized in 2017, and the National Liberation Army (ELN – Spanish initials) regarded Colombia’s petroleum industry as a legitimate target in their armed struggle against the state. The extortion of petroleum companies through threats of sabotage, kidnapping of key employees and hijacking of trucks carrying crude as well as supplies became a substantial source of income for the FARC and ELN during the 1990s. 

While the volume of attacks on industry infrastructure, primarily oil pipelines, which were a key cause of oil spills have diminished considerably since the FARC struck a 2016 peace agreement with Bogota the volume of oil theft is rising sharply. Soaring cocaine production, significantly higher fossil fuel prices and a crackdown by Colombian authorities on fuel smuggling have forced those illegal armed groups manufacturing cocaine to find an alternate cost-effective supply of gasoline. The oil stolen is shipped to primitive clandestine jungle refineries where it is processed into a very crude form of gasoline known as pategrillo or cricket-foot in English, because of its cloudy green color. Illicit demand for gasoline is soaring because it takes extremely substantial amounts, estimated to be 74 gallons to 86 gallons, of the fuel to process enough coca leaves to produce one kilogram of cocaine. It is coca leaves that contain the crucial alkaloid which forms the base of cocaine and must be soaked in gasoline for it be extracted eventually producing a white paste usually around 40% pure.

Colombia’s cocaine production keeps soaring higher, reaching yet another record for 2021 when an estimated 1,400 metric tons was produced representing a 14% increase over the record set a year earlier. As cocaine production grows, fossil fuel prices rise and it becomes increasingly difficult for criminal groups to obtain the copious quantities of gasoline because of monitoring by Colombian authorities the volume of petroleum theft will keep rising. When the crude oil is shipped to a clandestine refinery it is estimated that typically only around 30% to 40% of the petroleum will be processed with the remainder discarded into the surrounding environment. It is for these reasons that oil theft in Colombia is spiraling ever higher. According to data from Colombia’s National Police, obtained by Reuters, the volume of petroleum being stolen has tripled from 2018 to be an estimated 3,447 barrels per day. 

Oil spills and other industry related environmentally damaging incidents are a constant hazard for Colombia’s oil industry. When they occur, they have a disproportionate impact on Colombia’s Indigenous and poor communities with much of the hydrocarbon sector operating in rural regions. The volume of damage is startling, especially when it is considered that Colombia is ranked as the third most biodiverse country globally, after Indonesia and Brazil. A lack of government and regulatory transparency makes it difficult to track the frequency of incidents, volume of spills and resulting environmental damage. It is for these reasons that the social license for Colombia’s petroleum industry is deteriorating and significant opposition to the controversial hydrocarbon extraction technique of hydraulic fracturing exists.


By Matthew Smith for Oilprice.com

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