Rio Puelo dam, one of twenty-two planned for Southern Chile - Argentina fights back

Dams spark resistance on both sides of the border

Hydroelectric plants would damage natural water flows in pristine south.

Llanada Grande is located in a bucolic spot deep in the Chilean south, near Cochamó, 200 kilometers south of Puerto Montt, and 1,200 kilometers south of Santiago.

This small village, like others in the foothills of the Andes, has a historical relationship with Argentina across the border for family and economic relations.

Now, communities on both sides of the border are standing up to the El Portón hydroelectric plant planned on the Puelo River.

These lands at the 42nd parallel have a microclimate that allows crops to grow — conditions that are not found wholly adverse in other parts of the southern Region X — such as fine fruit, as well as and beekeeping.

The pristine rivers, lakes and forests here have also turned the area into a major tourist destination.

As of now, the residents of the Puelo River basin have received no information from the company heading the project, Endesa Chile — an affiliate of the Spanish company of the same name — and only have figures from a study conducted by the nongovernmental organization Geoaustral of Puerto Montt.

According to the report, the dam’s construction would flood 5,000 hectares and displace at least 80 families.

Organized resistance

In February, the residents here began to meet and in September formed the Citizens’ Committee of the Puelo Basin.

They say that the dam would change the climate and contaminate the waters with the putrefaction of the eventually submerged forest and the new river flow, which will be regulated by the company’s energy needs.

This will affect the entire water system of the area, which begins in the El Bolsón village and Los Alerces National Park, in Argentina, up to Chile’s Reloncaví estuary.

“The lake that is going to form with the dam is going to affect the entire Puelo River and can also affect the Puelo Lake,” which is located in Argentina, said Kent Schoenawer, a tour operator from Argentina.

“When there are very big surges, which occur every 4 to 5 years, the lake will rise up to 7 meters, it will merge with the Puelo Lake and the Inferior Lake [in Chile] and the Puelo River.

We’re talking about a lot of water. If there is a dyke, I don’t know if it could let the water through fast enough and even if it does, there could also be problems on the other side of the dyke.”

“When they have to open the doors there are big floods. Last year in the town of Hualqui [in the VIII Region] there was a flood that covered more than 2,000 houses, something that has never happened before.

In the summer, the Bio Bio River [where the Endesa-constructed Pangue and Ralco hydroelectric plants are located] there’s almost no water, they’re pure beaches, the river’s entire life was lost and that’s what’s going to happen with the Puelo,” warned Pedro Soto Oyarzo, president of the Neighborhood Organization of the Puelo River, a neighboring village of Llanada Grande.

“The Puelo feeds the Reloncaví estuary, it brings oxygen to the sea water and takes out a little of its salinity. That’s how the companies that are there with their salmon and mussel crops can survive.

Once this oxygen is stopped, the estuary’s life ends. So, it’s a rather serious problem. It will cause unemployment in addition,” said Marcial Aguirre, a resident in nearby Puerto Varas.

But some farmers impoverished because of low production believe that this project will change their fate, not because it will directly improve the economy, but because it will allow them to look for work in other sectors.

“If they build the dam and they pay me well, I have no problem in selling. I was born here and I was brought up working brutally.

This winter, 32 sheep died on me and there is no money coming in. What you plant here, that’s what you live on.

There’s some seasonal work, but it’s not enough to live on more or less,” said Toribio Ortega, whose property is near the proposed dam site.

Energy crisis

“We have an urgent need as a country, which is to ensure an electricity supply, and in this sense, what we’re doing is advancing the proceedings, not only environmental ones but also in other areas,” said Minister of Energy and Mines Karen Poniachik, to the Santiago Diario Financiero in September 2006. She added that the government would not lower environmental requirements, however.

The sector most endangered by the crisis is mining, according to the National Statistics Institute, which says that it consumes 40 percent of the country’s electricity.

The state-run National Copper Corporation, CODELCO — a pillar of public financing — uses approximately 15 percent of the country’s electricity and predicts it will double that in 9 years. Hydroelectric plants generate about 70 percent of the national energy supply.

El Portón, which would generate 320 megawatts, is only one of seven plants that Endesa Chile would build in the southern part of the country, four of them in partnership with the local company Matte.

According to the Jóvenes Tehuelches group of the Chilean town of Aysén, a total of 22 dams are currently being proposed in the southern region by different companies.

Mapuche and campesino communities, as well as protected natural areas, will be affected by flooding or electricity grids. These natural areas cross over into Argentine territory, and comprise the greatest cold-weather biodiversity in the world.

The Mapuche say that the dams do not only end with the newen, or force in Mapuche, of the rivers and lakes, but also of plants and animals as the equilibrium between different elements of nature, among them man, or che, will be broken.

According to the country’s Water Code, which was written in 1981 during the dictatorship of Augusto Pinochet (1973-90), the state could cede “rights to water usage” to private companies, which that way acquire wide powers to exploit the economic potential of Chile’s rivers and lakes.

Endesa Chile has rights to approximately 80 percent of the country’s waters and controls 13 hydroelectric plants.

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Chile's Puelo River: Diminishing water volumes impact residents and Endesa dam proponents.

(Oct. 29, 2007) A recent study confirmed that the volume of water in Region X’s Puelo River dropped by 16 percent in the last 60 years – a finding that could have implications for a hydroelectric dam planned for the river.

The Puelo River is among the most important rivers in Chile, with an average volume of 644 cubic meters per second. Energy giant Endesa has announced plans to build a hydroelectric dam project on the river, even though only 33 percent of the Puelo’s 8,817 km sq river basin belongs to Chile. The rest belongs to Argentina.

The importance of the area has prompted studies from various Chilean universities, including Universidad Austral and Universidad de Chile. A research team led by forestry engineer Antonio Lara reconstructed the river’s volumes since the year 1600 by carefully studying tree rings, which provide a natural record for water levels well before measuring stations were established in the area.

“Measurements were taken from about 100 trees, and the result is a zig-zag which shows an overall decrease,” said Lara.

The decrease in volume can be attributed to various factors, but appears mainly due to declining rainfall. “The pattern of decline is directly associated with the decrease in precipitation measured by meteorological stations since 1993,” said Rocío Urrutia, a researcher with the Núcleo Cientifico Forecos of the Universidad Austral. “This pattern is also supported by data from the Intergovernmental Panel on Climate Change (IPCC), which notes a 30 percent decrease in precipitation between 1900 and 1999.”

Although some decreases (and subsequent increases) in the river’s volume is a natural part of riparian cycles, the intensity of the Puelo River’s most recent lows could be cause for concern for both residents and dam proponents. In 1992, the river’s average volume registered at 347 cubic meters per second, the river’s lowest in the last 400 years. “These changes are associated with climate change,” said Urrutia.

The big question is whether these findings might have implications for current plans to build a hydroelectric dam on the Puelo River. The Endesa electricity company owns water rights for 850 cubic meters per second on the Puelo River, when the actual average is 644. “It seems there may not be enough water for them,” said Lara.

*(The problem of dimishing water and galciers in the Andes is becoming a concern throughout South America: When Ice Turns to Water , As glaciers melt, Chile's future uncertain .)

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Environmentalists Demand Changes as Crisis Looms

SANTIAGO, Apr 26 (IPS) - Chile's new government is attempting to forestall a possible energy deficit caused by cuts in the supply of natural gas from Argentina, sky-high oil prices and low rainfall forecasts for this year. But environmentalists are critical of the strategy being adopted.

To alleviate the coming crisis, environmentalist Sara Larraín, director of the non-governmental Sustainable Chile Programme, proposes that in the short term, two or three power stations should be built, fuelled by coal (using the latest technology to minimise pollution), oil, natural gas or geothermal energy.

At the same time, energy sources and power companies should be diversified, and the country should embark on a major programme of energy savings, she explained in an interview with IPS.

"We are in a highly vulnerable situation, due to the unfavourable energy planning legacy of the Ricardo Lagos administration," she said. "In Chile, the private sector has the initiative in energy matters, and it always prefers the cheapest fuel of the day," she added.

However, Larraín praised some laws enacted by the Lagos government, which promote efficient energy use and allow unconventional renewable sources, such as solar, wind and geothermal energy, to be used, even though these have not yet been fully regulated.

President Michelle Bachelet requested a report from the National Energy Commission (CNE) as soon as she took office on Mar. 11, and met last week with her minister of Mining and Energy, Karen Poniachik, the manager of the state National Petroleum Corporation (ENAP), Enrique Dávila, and the executive secretary of CNE, Pablo Serra, to analyse different possible scenarios.

Their conclusions were not very promising, although Bachelet did receive some good news: the discovery of large natural gas reserves in the Lake Mercedes basin, in the Magallanes region of Tierra del Fuego in the far south, which could supply the area for 20 years.

At present, the Central Grid System (SIC) which supplies nine out of the 13 regions of the country, and serves 93 percent of the total population of 15 million, is mainly fed by hydroelectric power (59 percent), followed by natural gas (24 percent), coal (12 percent), oil and biomass.

Hydroelectric power is at the heart of the controversy at the moment, because Endesa Chile, a subsidiary of the Spanish transnational corporation of the same name, plans to build four large hydropower stations in Patagonia, 2,000 kilometres south of Santiago. The Aysén Hydroelectric Project would involve a three billion dollar investment and the construction of dams on the Baker River - which has the largest water flow of any river in Chile - and the Pascua River. Some 10,000 hectares of pristine wilderness would be flooded, destroying a number of wetlands and having a negative impact on the habitats of endangered species.

"We are opposed to the Endesa project for several reasons: because of the potentially devastating local impact, because it means continuing our country's terrible energy policy, and because it's simply more of the same in terms of the development model," Juan Pablo Orrego, director of Ecosistemas, a local environmental group, told IPS.

"We are stuck in the production of raw materials: copper, fishmeal, and pine and eucalyptus chips. These are the most polluting industries, and the most intensive in terms of water and energy consumption," said the environmentalist, who is one of the leaders of the coalition seeking to block the Endesa project.

For her part, Larraín said she hopes "that the Bachelet administration will identify the real needs of the country, and not let itself be carried away by the marketing and publicity of companies like Endesa, which has the whole country talking about a project that hasn't even been formally presented to the authorities yet."

Orrego and Larraín believe that giant hydropower stations do not present a sustainable in-depth solution to the country's energy needs. On the contrary, they argue that if the Endesa project is carried out, it will glut the market for years, suppressing the development of other energy sources that are beginning to make an appearance on the local market.

In November 2001, the first wind park was installed in Aysén, with three windmills generating 660 kilowatts each. Meanwhile, prospecting to exploit geothermal energy is being carried out around Chile.

As for the government, its hopes are pinned on the Liquefied Natural Gas (LNG) project that ENAP has backed since 2004.

The project is being developed by the transnational British Gas, and envisages building the necessary infrastructure to import LNG from different countries and distribute it in Chile in gas form, from 2008. The investment required is 400 million dollars. First, ENAP sought out a "pool of consumers" that would ensure sufficient demand to make the project economically viable. Among them were Endesa and the local companies Metrogas, AES Gener and Colbún, but the last two have opted out of the project in order to invest in thermal and hydroelectric power stations, respectively.

In fact, Colbún, owned by the powerful Matte family, is negotiating a possible partnership with Endesa Chile to build the four power stations in Patagonia.

"Some people are saying that Endesa is striking a deal: it will participate in the LNG project in exchange for the government facilitating Endesa's hydroelectric power stations in Aysén, a business project that is 10 times bigger, of 3,000 to 4,000 megawatts," Francisco Aguirre, a partner at Electroconsultores and former director of the SIC's Economic Load Dispatch Centre, told the local newspaper El Mercurio.

Orrego also sees murky connections between the public and private sectors in the energy business.

"Jaime Estévez, minister of Public Works in the Lagos administration, was named director of Endesa by the pension fund companies (AFP), who are one of the main shareholders. It took only six days for this gentleman, who had access to privileged government information, to find a position in the private sector" after Lagos' term came to an end, the environmentalist said.

"And we could go on and on. Eugenio Tironi, a communications adviser to the former government, is now head of marketing at Endesa, and Jorge Rosenblut, the present chairman of Chilectra (also owned by Endesa), was fundraiser for Bachelet's presidential campaign," he added.

"As Chile has no clearly defined lobbying laws, a short-circuit is occurring between public and private interests. An influence-peddling system is being set up, which is very dangerous for the future of this country," Orrego said.

Experts also say that a strong energy efficiency programme is essential. "Chile can maintain its level of development and quality of life using the same amount of energy, by managing demand and creating a culture of energy savings in homes and businesses," Larraín said.

Nicola Borregaard, the head of the Energy Efficiency Programme which was created in 2005 under the jurisdiction of the ministry of Economy, acknowledged at a seminar on Apr. 11 that Chile needs to catch up and learn to use energy efficiently in every sector: residential, commercial, transport, industrial and mining.

"The country has not managed to uncouple economic growth from energy consumption," she said.

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Chile's Puelo River Project Draws Argentine Critics

Plans by Spanish-owned electricity company Endesa to dam Region X’s Puelo River have so far generated little public attention here in Chile. The project has, however, become quite a hot topic in neighboring Argentina, where activists and even a provincial legislator are threatening to turn the hydroelectric scheme into a major international conflict.

The Patagonia Times reported earlier this month that Endesa, already at the center of a major controversy over its so-called Aysén Project (a US$2.5 billion plan to dam Region XI’s Baker and Pascua Rivers), is now turning its attention to the Puelo River (PT, June 4). The Puelo, which begins in Argentina’s Lake Puelo and flows west to the Pacific Ocean, is Chile’s second most voluminous river – after the Baker.

The company’s plans include a large, 320 MW dam on the Puelo River, an accompanying 5,000-hectare (12,300-acre) reservoir, plus two smaller “run-of-the-river” dams to be built along the nearby Manso River. In total the project would produce roughly 720 MW and could cost as much as US$650 million.

Though still at an early stage, Endesa’s latest hydro scheme has attracted a handful of Chilean critics who worry about its possible environmental impact. As with all large-scale dam-reservoir complexes, the Puelo river project would involve major flooding that in addition to displacing residents, would also drown native forests and permanently alter the area’s existing ecosystem.

The project could also affect Region X’s Reloncaví Sound, a large bay into which the Puelo River flows. According to Mauricio Fierro of the Puerto Montt-based environmental group Geoaustral, the river provides about 60 percent of Reloncaví’s oxygen. That oxygen, in turn, sustains the area’s lucrative aquaculture industry which, if the river is dammed, could suffer dramatically.

“If the flow is cut, who knows what could happen,” Fierro told the Patagonia Times. “All the salmon and shellfish farms could disappear because they wouldn’t have oxygen… Everything that’s down there could die.”

Despite Fierro’s concerns, the Puelo River plan – unlike Endesa’s high-profile Aysén Project – has not grabbed the attention of Chile’s mainstream press. Nor has the issue yet become a topic of discussion within political circles.

That’s not, however, been the case in neighboring Argentina, where people in places like El Bolsón – located approximately 20 kilometers north of Lake Puelo – have been organizing an increasingly visible campaign against the project.

Why, if the project is slated for Chile, does it matter to people across the border?

For starters, Endesa is planning to dam a river that for all intents and purposes is Argentine – at least that’s where the Puelo begins. The project also threatens to alter the climate on both sides of the border, argue opponents like Alejandro Nebbia of the Argentine Network of Environmental Educators. Of particular concern is the proposed reservoir, a massive artificial lake that – through the natural evaporation process – will change nearby weather patterns and humidity levels.

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Endesa Narrows in on Chile's Puelo River in UNESCO Reserve

A new front appears to be opening in an ongoing struggle over the fate of Chile’s southern rivers. For more than a year now Spanish-owned electricity giant Endesa has been at the center of a major conflict over its plans to build four massive hydroelectric dams in Chile’s far southern Region XI, an area of Patagonia also known as Aysén.

Endesa’s partner in the so-called Aysén Project is Chilean firm Colbún. While the companies insist the project, slated for the Baker and Pascua Rivers, is a necessary step toward meeting Chile’s growing electricity needs, opponents say the proposed dams will be socially and environmentally devastating for the pristine region.

What began as a local movement against the proposed dams has since become a high-profile campaign attracting the attention of celebrities, politicians and even a pair of influential U.S. environmental groups: the Natural Resources Defense Council and more recently the Sierra Club.

But while the Aysén Project is certainly the most well known of Endesa’s controversial endeavors, it is by no means the only one. As a national debate continues to rage over whether or not the government should eventually approve the polemical project, Endesa is already beginning to lay the groundwork for yet another series of hydroelectric dams – this time along Region X’s Puelo River.

Last month, on Endesa’s behalf, a woman named Maria Teresa Cañas Pinochet – niece of Chile’s recently deceased former dictator Augusto Pinochet – filed more than 50 mining exploration petitions that together correspond to 12,600 hectares of land in the vicinity of the Puelo. The river, which begins in Argentina’s Lake Puelo and flows west, eventually depositing in the Pacific Ocean, happens to be Chile’s second most voluminous river, after the Baker River.

War Drums Against Endesa

The move has immediately put area environmentalists on alert. According to Mauricio Fierro of the Puerto Montt-based environmental group Geoaustral, in obtaining those exploration rights, Endesa is taking a classic step toward exerting control over the river valley.

"What normally happens in Chile with any project, whether it’s real estate development, or constructing a hotel or building, whatever, is that people ask first for a mining exploration right and later an exploitation right. Why? In order to have control over the property and so that no one can come and stop what you’re doing," says Fierro.

Not coincidentally, Cañas Pinochet filed similar mining petitions last year for territory in Aysén’s Baker and Pascua river valleys.

"It’s all based on something called the Mining Code…It’s the most important and powerful law that exists in Chile," says Fierro. "To put it simply, anyone who has those rights, who pays for the licenses, can enter on a property and look around, excavate, do whatever they want on the property. That’s why Endesa uses that method for taking control of properties."

Endesa’s interest in the powerful Puelo is nothing new. The company, which has held the river’s water rights since 1990, at one point contemplated building what would have been Chile’s largest dam and reservoir, a project so grand it would have dwarfed Region VIII’s Ralco dam. Currently the biggest in the country, the 690 MW-Ralco dam is also owned by Endesa.

Last year, however, the Spanish company hinted it now plans to construct one large dam and reservoir, plus two smaller "run-of-the-river" dams. The large, 320 MW-facility would dam the Puelo River and hold back an estimated 5,000-hectare reservoir. The smaller, non-reservoir dams would be built along the nearby Manso River. In total the project would produce roughly 720 MW and could cost as much as US$650 million.

Although the plans are still at a relatively early stage, Mauricio Fierro and other area activists have been quick to raise their objections.

"From here on there’s going to be a mounting battle against Endesa. And it’s going to be more complicated than Aysén… The war drums against Endesa are sounding," says Fierro.

We Can’t Pretend We’re Gods

For starters, the project would have tremendous environmental consequences on both sides of the border, say critics. As with all large-scale dam-reservoir complexes, the Puelo river project would involve large-scale flooding that in addition to displacing residents, would also drown native forests and permanently alter the area’s existing ecosystem.

The project could also affect Region X’s Reloncaví Sound, a large bay into which the Puelo River flows. According to Fierro, the river provides about 60 percent of Reloncaví’s oxygen. That oxygen, in turn, sustains the area’s lucrative aquaculture industry which, if the river is dammed, could suffer dramatically.

"If the flow is cut, who knows what could happen," says the environmentalist. "All the salmon and shellfish farms could disappear, because they wouldn’t have oxygen… Everything that’s down there could die."

The project has become quite a hot topic in neighboring Argentina as well. According to Alejandro Nebbia of the Argentine Network of Environmental Educators project, the project threatens to alter the climate on both sides of the border. Of particular concern is the proposed reservoir, a massive artificial lake that – through the natural evaporation process – will change nearby weather patterns and humidity levels.

"What you need to know is that this is a lake zone that has a certain average humidity and is home to many tree and bush species. All of that came about over the course of 60 million years and we can’t just come along, pretend we’re gods and from one day to the next put in a lake just like that," says Nebbia.

"This whole area, just like anywhere else in the world, is a system based on a delicate balance that’s very sensitive to any change. We’re not talking about chopping down a few trees. We’re talking about creating a 5,000-hectare lake that will put humidity levels, animal habitats, seed cycles, everything at risk."

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