Ecuador's Oily Blackmail

Ecuador's government is asking developed nations (read: the EU) to pay $350 million for them not to drill for oil in a major field in the Yasuni National Park, a UNESCO-designated reserve. The ploy is similar to the establishment of subsidies paid to farmers not to grow crops, a time honored, but silly, practice. The $350 million ransom is about half of what Ecuador could make from drilling the approximately one billion barrels of crude oil underneath the reserve.

European politicians are taking the "request" seriously, but they have to know that any money they pay will be part of an unenforceable contract, and one not likely to last. With all the talk about "peak oil," they should know that at some point in the future, all the oil that can be found will be drilled for. If no viable alternative energy has emerged by the time that oil becomes scarce, Ecuador will be forced to capitalize on the extremely high prices the asset will command. And if that happens, all those Euros will have been for naught.