Negotiating through nature: The resistant materiality and materiality of resistance in Bolivia’s natural gas sector

Geoforum 39 (2008) 1734–1742

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Negotiating through nature: The resistant materiality and materiality of resistance in Bolivia’s natural gas sector Brent Z. Kaup University of Wisconsin – Madison, Department of Sociology/Rural Sociology, 350 Agricultural Hall, 1450 Linden Drive, Madison, WI 53703, United States

a r t i c l e

i n f o

Article history: Received 25 April 2007 Received in revised form 27 March 2008

Keywords: Natural gas Bolivia Nature Regulation Materiality

a b s t r a c t Over the past two decades, the natural gas of Bolivia has been a point of international interest and internal contention. Materially and discursively using Bolivia’s natural gas to express their demands, transnational energy firms, the Bolivian state, and Bolivia’s social movements have made the country’s natural gas into an object of profit and protest. In this paper, I examine how these actors have used the country’s natural gas to both secure and disrupt processes of capital accumulation. Extending regulation approaches that take into account the materiality of nature, I argue that the differential abilities of transnational energy firms, the Bolivian state, and the country’s social movements to materially and discursively use Bolivia’s natural gas have provided each of these actors with differential mediums through which to express their often times contradictory interests, and thus to the challenge or stabilize existing regulatory frameworks. Within this context, the Bolivian state has been forced to continually balance the tensions surrounding its natural gas in an attempt to secure a stable regime of accumulation. Ó 2008 Elsevier Ltd. All rights reserved.

1. Introduction On May 1, 2006, Evo Morales announced to the Bolivian people that ‘‘El gas es nuestro”.1 Taking steps seemingly counter to the neoliberal trends of privatization and economic liberalization that swept much of Latin America over the past 25 years, Morales proclaimed to nationalize Bolivia’s hydrocarbon sector. While a Wall Street Journal (2006) editorial labeled the nationalization ‘‘another Latin craze: the abrogation of contracts,” the Morales government called the move a ‘‘nationalization without expropriation”. Understanding the multifaceted material, political, and social difficulties surrounding the extraction of natural gas, the Bolivian state nationalized its natural gas sector under the recognition that it was constrained both by the need for technological and infrastructural investment and by the threat of social uprising. In this paper, I examine the conflicts surrounding Bolivia’s natural gas over the past two decades. I ask: (1) how have transnational energy firms, the Bolivian state, and the country’s social movements worked to materially manipulate and discursively construct the country’s natural gas in order to negotiate the regulatory frameworks surrounding it; and (2) what have been the results of these actions? I argue that the differential abilities of these actors to materially and discursively use Bolivia’s natural gas have provided them with differential mediums through which to express their often times contradictory interests and thus to the challenge

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E-mail address: [email protected] El gas es nuestro = the gas is ours.

0016-7185/$ - see front matter Ó 2008 Elsevier Ltd. All rights reserved. doi:10.1016/j.geoforum.2008.04.007

or stabilize existing regulatory frameworks. While transnational energy firms and states with the necessary financial capacity can materially manipulate natural gas by rapidly investing in the fixed capital required to extract and transport it, the people living around natural gas reserves and pipelines have the potential to materially manipulate natural gas by cutting off supplies. Furthermore, while transnational energy firms and states can discursively construct natural gas as a profitable commodity that leads to enhanced development, states and their people can also discursively construct the natural gas as a symbol of national patrimony and its distribution as a symbol of uneven development. Exploring how the transnational energy firms, the Bolivian state, and Bolivia’s social movements have used natural gas to express their demands, I build upon efforts to bring political economic theorizations of the materiality of nature into regulationist thought. While scholars using regulation approaches have begun to incorporate such theories, they often overlook how the physical and chemical properties and processes of nature, or in other words, the materiality of nature, enable and constrain the opportunities of a diversity of actors within extractive economies. Highlighting how the materiality of nature can be differentially used, I do not mean to over-privilege material explanations. Instead, adding to existing regulationist explanations of crisis and stabilization, I intend to illustrate the necessity of recognizing how nature can be both materially manipulated and discursively constructed by a diversity of actors to disrupt and secure regimes of accumulation. The changing regulations and tensions surrounding Bolivia’s natural gas serve as a lens through which to observe this. As

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transnational energy firms’ unabated exploitation of the Bolivia’s natural gas resulted in windfall profits, these firms failed to take into account the exclusionary effects of their extraction and distribution activities. This allowed leaders of Bolivia’s social movements to link these exclusionary affects to the everyday lives and histories of the country’s people, and thus mobilize segments of Bolivia’s population to challenge the regime of accumulation regulating the country’s natural gas. But while such actions compelled the Bolivian state to nationalize its hydrocarbon sector in an attempt to create a stable regime of accumulation, the Bolivian state must continually balance the tensions surrounding its natural gas, given its long history of uneven development combined with the ability of a diversity of actors to materially manipulate and discursively construct the country’s natural gas. To do this, I use data from archival sources, interviews, and event observation. I obtained archival data about Bolivia’s natural gas industry and the social struggles surrounding it from newspapers and government documents published between January 1990 and December 2007. I conducted 45 open-ended interviews and observed several rallies, protests, and town hall meetings from June to August 2006 and from September 2007 to March 2008. Utilizing a theoretically informed network sampling strategy, I interviewed state government representatives within Bolivia’s state operated oil and natural gas company Yacimientos Petrolíferos Fiscales Bolivianos (YPFB), employees and managers in YPFB, leaders of Bolivia’s petroleum and natural gas workers union, CEO’s and workers within hydrocarbon firms, and mayors and civic committee representatives in several cities within Bolivia’s natural gas producing regions. The rallies, protests, and town hall meetings I attended usually focused upon local or regional issues surrounding the nationalization and use of Bolivia’s natural gas. I observed events that represented a diversity of political viewpoints, being led and attended by local civic committees, indigenous groups, and/or workers unions. These events most often were held to suggest or promote a particular use for the projected revenues from Bolivia’s natural gas sector. Research sites included the cities of La Paz, Cochabamba, Tarija, and Santa Cruz, as well as several smaller towns within two of Bolivia’s natural gas producing departments of Santa Cruz and Tarija.2 2. Regulating nature As Karen Bakker and Gavin Bridge recently noted, ‘‘notions of ‘materiality’ and the ‘material’ are abroad” (2006, p. 5). While researchers adopting political economic approaches to theorizing nature and society have emphasized the importance of recognizing matters of matter for quite some time (Benton, 1989; Bunker, 1985, 1986; Innis, 1933, 1956; Mann and Dickinson, 1978; Merchant, 1983; Mintz, 1985; Smith, 1984; Wittfogel, 1985 [1929]), a material resurgence of sorts has emerged within the social sciences and amongst human geographers more specifically.3 Within this resurgence, scholars have attempted to take a relational approach to examinations of nature and society, working to, as Castree writes, ‘‘take seriously. . . the materiality of nature” while simultaneously acknowledging its social construction (1995, p. 13). Doing so, researchers have highlighted the importance of recognizing the influence of the physical and chemical properties of mat2 As a white male from the United States, interview subjects occasionally spoke to challenge western perceptions of the changes occurring in Bolivia. Furthermore, my presence at some rallies and meetings was occasionally viewed with suspicion. However, often being the only foreigner in a crowd of many and explaining to those attending the meetings why I was there, I do not believe my presence significantly altered the course of these meetings and rallies. 3 See Bakker and Bridge (2006) for a detailed overview of this ‘rematerialization’ of human geography and Goldman and Schuman, 2000) for a broader overview of theorizations on nature and society amongst the social sciences more generally.

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ter, and the physical and chemical processes that transform it, within social processes (see, for example, Boyd et al., 2001; Bunker and Ciccantell, 2005; Goodman et al., 1987; Henderson, 1998; Kloppenburg, 1988). These scholars note that matter is both naturally endowed and socially induced, as nature (re)produces itself and as humans both directly and indirectly intervene with nature. Recognizing the materiality of nature within their observations of social processes, these researchers have shown that while the physical and chemical properties and processes of nature can deter and impinge upon capital accumulation, actors able to overcome such obstacles can turn them into, as Kloppenburg states (1988, p. 8), ‘‘vehicles of accumulation.” Working to overcome these obstacles, actors with access to the capital necessary to control the physical and chemical properties and processes of nature can turn such obstacles into opportunities for capital accumulation by developing new technology and forms of organization within nature-based commodity sectors, which often function to secure, define, and limit the access to certain types of nature and their benefits. Amongst this material resurgence, a recent wave of regulation scholars have begun to acknowledge the importance of recognizing the influence of the materiality of nature in examinations of resource extraction, environmental governance, and environmental change (Bakker, 2002, 2000; Bridge, 2000; Bridge and McManus, 2000; Gibbs and Jonas, 2000; McManus, 2002; Perreault, 2006). Following regulationist thought, they recognize how stable regimes of accumulation temporarily link accumulation systems and modes of social regulation. An accumulation system is composed of the technological and organization forms that surround the production and consumption of commodities. The mode of social regulation functions to secure processes of accumulation by accommodating, mediating, and normalizing tensions resulting from the accumulation system (Peck and Tickell, 1992). In the context of nature-based commodities, accumulation systems work to facilitate the extraction, production, and transport of such commodities. The accompanying modes of social regulation function to stabilize and legitimate the accumulation systems by managing the possible tensions that may be created through, for example, the exclusion of certain segments of society from a nature-based commodity or its benefits and/or the negative environmental impacts resulting from the extraction, production, and/or transport of such commodities (Bakker, 2002, 2000; Bridge and McManus, 2000; McManus, 2002). The regimes of accumulation linking accumulation systems and modes of social regulation are the result of constant struggle and negotiation between ‘‘conflicting groups with heterogeneous objectives and unequal possibilities for action” (Aglietta, 1979, p. 26). Regulation scholars examining questions of nature have highlighted these struggles and negotiations in several ways. For example, Bridge and McManus (2000) and McManus (2002) have illustrated how environmental movements’ concerns and discursive constructions of sustainability have affected the modes of social regulation surrounding timber and mining sectors. Furthermore, Perreault (2006) has demonstrated how the human need for resources such as water and the discursive constructions surrounding resources such as natural gas have propelled social movements to challenge the exclusionary tendencies of naturebased accumulation and accompanying regimes of accumulation. However, while these scholars usefully highlight how struggles and negotiations affect and are affected by nature-based accumulation and accompanying regimes of accumulation, they often underemphasize how the material properties and processes of nature influence these struggles and negotiations. As a result, most regulation scholars have only begun to acknowledge how a diversity of actors can negotiate through nature and have largely overlooked how the materiality of nature can be used to expand, secure, and disrupt forms of nature-based accumulation and their

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accompanying regimes of accumulation. In addition to other potential sources of crisis and resolution identified by regulation scholars, regimes of accumulation that are heavily dependent upon natural resource commodities must account for how the ability of firms, states, and less-powerful actors to manipulate the materiality of nature can contribute to such crisis and resolution. To do so, regulation approaches can draw from some of the insights of scholars theorizing the influence of the materiality of nature within social processes. These scholars have demonstrated how the physical and chemical processes and properties of nature shape technological and organizational structures surrounding the extraction, production and transport of nature-based commodities and how actors with the ability to finance, construct and/or use the technological and organizational mechanisms necessary to manipulate the materiality of nature can turn nature’s material obstacles into opportunities for capital accumulation (see, for example, Boyd et al., 2001; Bunker and Ciccantell, 2005). But as Bunker and Ciccantell (2005) also note, the extraction, production, and transport of raw materials often requires states and firms to sink costs into fixed capital such as roads, railways, and/or pipelines. Doing so, they become geographically bound to certain sites of production and routes of circulation. Over time, these sites and routes yield diminishing returns and inhibit states’ and firms’ abilities to maintain and augment their opportunities for capital accumulation. In regulationist terms, the necessity to use fixed capital within an accumulation system in order to extract and transport raw materials can, as Bridge and McManus note, provide a means for ‘‘economic growth while simultaneously generating tensions within the system that can produce tendencies towards crisis” (2000, p. 19). But crisis rooted in the materiality of nature can emerge from other sources as well. As Bakker and Bridge have recently noted, ‘‘materiality matters. . . because of the way its heterogeneity differentially enables, constrains and or disrupts the social practices through which resource regulation is achieved” (2006, p. 21). While firms and states are able to turn the material obstacles of nature into opportunities for capital accumulation, a range of other actors – including relatively marginal ones – are able to turn the material obstacles of nature into opportunities through which to negotiate within or challenge regimes of accumulation. In particular, the obstacles posed by the material properties and processes of nature do not necessarily disappear once the required technological and organization structures are in place to make different types of nature into viable commodities. Furthermore, such technological and organizational structures can also create new and amplify existing material and social tensions that serve as obstacles to the incorporation of nature into processes of capital accumulation. As Watts notes in his examinations of oil, certain commodities have an ‘‘enclave character. . . and there are certain tactical points for holding up supply” (2004, p. 53). As a result, marginalized actors can also prevent certain regimes of accumulation from properly functioning by negotiating through nature, be it in a naturally occurring or already manipulated form. Thus, in this context of struggle and negotiation, efforts to stabilize regimes of accumulation must take into account the materiality of nature. To secure these regimes of accumulation, the coupling of an accumulation system and a mode of social regulation must ensure that the extraction, production, and transport of nature-based commodities occur largely undisturbed. To do so, firms and/or states engaging in nature-based commodity sectors must both develop the technological or organizational means to make the production, extraction, and transport of a nature-based commodity less disturbable and negotiate with those living around such production, extraction, and transport in order to make such a disturbance undesirable. By recognizing how a diversity of actors can discursively construct and materially manipulate nature, regulation approaches can better identify how firms, states, and

individuals use the sociomaterial aspects of nature to express their demands. Furthermore, such an approach offers a more complex understanding of regulation in general, illustrating another potential mechanism that can lead to crisis and be used in processes of stabilization. 3. The nature of natural gas in Bolivia Natural gas has a particularly difficult nature. As Gavin Bridge (2004) recently pointed out, it could be labeled what Karen Bakker (2004) calls an ‘‘uncooperative commodity”. In its raw form, natural gas exists as a mixture of hydrocarbon gases. As a hydrocarbon, it is highly flammable. As a gas, it dissipates when not carefully contained. And, when extracted, it is sometimes ‘‘sour”, containing high levels of sulfur and carbon dioxide and making it highly corrosive. To use natural gas, humans must overcome these material difficulties as they extract, transport, and process it. In Bolivia, the country’s difficult topographic terrain and peculiar geographic positioning enhance these material difficulties, making its natural gas stranded in most conventional uses of the term.4 As a landlocked nation, Bolivia has no access to the ocean. Furthermore, the majority of Bolivia’s natural gas is located within the remote anticlinal slopes at the eastern base of the Andes. To sell it, firms must either transport the natural gas west through the rugged Andean mountains, northeast through the dense Amazon forest, east through the wetlands of the Bolivian Pantanal, or south through the arid brush and sparsely populated Chaco (Zapata Quiroz, 2006). To borrow a phrase from Bridge (2004), a ‘‘search and rescue” mission must be undertaken to viably bring this stranded natural gas into the market. But growing global demands for natural gas as a source of clean energy have enhanced the opportunities surrounding Bolivia’s natural gas extraction and transport. On an international level, more natural gas is being exported to satisfy ever-growing global energy demands and some experts predict that the proven gas reserves of the United States, the worlds’ largest user of natural gas, have already peaked (Darley, 2004; Victor et al., 2003). In Bolivia, this demand has so far largely come from its neighbors, with Brazil alone consuming close to 65% of the natural gas extracted in Bolivia (La Razon, 2007). However, other uses have been discussed. In 2003, Bolivia contemplated shipping its gas north to United States as liquefied natural gas (LNG) (Perreault, 2006), the end-product of a conversion process in which natural gas is chilled into a liquid to make it easier for transport (Marcano and Cheung, 2007; NaturalGas. org, 2004). Furthermore, the Bolivian state has talked of constructing a gas to liquid (GTL) separation and conversion plants, both as a cheaper alternative to pipeline construction and to satisfy the country’s liquid petroleum gas (LPG) needs and diesel deficits (Rodríguez, 2007).5 The material uncooperativeness of natural gas thus appears to have a certain affinity with large-scale capital investment. The material difficulties of natural gas extraction and transport have 4 Reserves are technically classified as stranded if they are (1) too small in size or located in remote places where delivery and investment costs outweigh potential profits; (2) in places where other reserves provide enough or a surplus supply of gas to surrounding markets; and/or (3) located in landlocked countries without a large enough internal or regional market to justify investment (Thackeray and Leckie, 2002). 5 GTL separation processes separate out the different kinds of gases in raw natural gas. The number one gas obtained from this process is methane. Secondary products include propane, ethane, and butane, to name a few. Bolivia’s exporters largely desire methane to feed their energy plants. Bolivia uses a significant amount of LPG to satisfy their internal demand for cooking gas, which most Bolivians by in carafes. In addition, GTL conversion processes are promoted as economically scalable for small reserves and the end- product can be blended with or used as a replacement for petroleum based fuels such as gasoline or diesel (Marcano and Cheung 2007; Thackeray and Leckie 2002).

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shaped the structure of Bolivia’s natural gas industry, as they require large amounts of fixed capital and technological innovation in extraction and separation processes, pipeline construction, and LNG and GTL conversion. Furthermore, as I will elaborate below, the requirements of such large amounts of capital have shaped the relationships between transnational extraction firms and the people and places in which natural gas is extracted. Since the material obstacles of nature, in this case natural gas, make extraction and transport into a capital intensive industry, individuals and states with limited capital, such as Bolivia, have limited capacities to utilize and commoditize natural gas on their own. The material obstacles of natural gas have thus created obstacles for some and opportunities for others. 4. Regulating natural gas in Bolivia 4.1. From material constraint to financial opportunity: capitalization as a form of regulation For over 400 years, the rich natural resource base of Bolivia has been a site of international interest and contestation. The natural gas of Bolivia is no exception. In the early 1990s, attempts to rescue Bolivia’s stranded natural gas escalated. As the Bolivian government altered the political and economic regulations, and thus the mode of social regulation, surrounding the country’s natural gas, transnational firms began to construct an accumulation system to accrue windfall profits. At this time, while the state owned and operated oil and gas company, Yacimientos Petrolíferos Fiscales Bolivianos (YPFB), lacked the technology of some of the world’s larger transnational energy firms, they were a fully functioning and respected oil and gas extraction company. As several interview subjects told me, YPFB supplied Bolivia’s internal demand for natural gas and was working on contracts to export natural gas to Brazil. From 1988 to 1994, YPFB’s net profits totaled over US$4 billion, of which over US$2.5 billion went to the Bolivian state and its regional departments. Despite this, international lending agencies, as well as the Bolivian media, began to exert pressure on the Bolivian state to privatize its publicly operated enterprises by labeling YPFB an inefficient rentier arm of an over-centralized state. In 1996, this discursive victimization of YPFB, combined with threats from the IMF and World Bank to cut Bolivia’s international loans, paved the way for the Bolivian state to open up its hydrocarbon sector to private investment by approving the new Law of Hydrocarbons 1689. Under this law, royalty and taxation rates were significantly lowered and investors in Bolivia’s hydrocarbon sector were given complete control of the gas and oil they extracted once it was removed from the ground.6 Whereas previously YPFB had complete control over the commercialization of the country’s hydrocarbons, the new law allowed Bolivia’s transnational investors to choose their buyers and set their prices (Ley, 1689 1996). A year later, the Bolivian government also fulfilled its plan to capitalize YPFB. Doing so, they auctioned off YPFB in three parts for a total of US$835 million under the stated belief that such a maneuver would lead to enhanced exploration and industrialization of the industry and thus more job opportunities and economic stability (Kohl and Farthing, 2006). The primary shareholders involved in the purchase of Bolivia’s oil and gas holdings included BP Amoco, Enron, Shell, YPF-Repsol, and Petrobras (Kohl and Farthing, 2006; Kohl, 2002; Villegas Quiroga, 1997, 2002). 6 Taxation rates were changed from a set 50% on all reserves to 50% on existing reserves and 18% on new reserves. However, after the Bolivian state officially recognized its investors’ contracts, the majority of actually existing reserves were classified as new reserves.

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Under the capitalization scheme put forward by the Bolivian government, investment and exploration in the country’s natural gas sector increased substantially. According to the Bolivian Ministry of Hydrocarbons and Energy (2005), investment rose from around US$270 million to US$604 million during the first year after capitalization. By 2000, firms had invested close to US$2 billion (Kohl and Farthing, 2006). Furthermore, proven and probable natural gas reserves increased from approximately 9.82 trillion cubic feet (Tcf) in 1997 to 54.9 Tcf by 2003 (Bolivian Ministry of Mining and Hydrocarbons, 2005). With the financial capacity and necessary technology for extraction, foreign firms quickly took advantage of the capitalization bargains and low taxation rates. Whereas YPFB’s investments in the infrastructure necessary to overcome the material obstacles of natural gas were constrained by the Bolivian state’s lack of capital, transnational firms had the money to materially overcome these obstacles and incorporate Bolivia’s stranded reserves into the market quickly. But the mode of social regulation represented by these new laws and meant to secure the economic growth resulting from the expansion of Bolivia’s exploration and extraction activities did not reduce the country’s economic problems. Instead, it led to new tensions. While transnational energy companies reaped large profits from the country’s natural gas, the ways in which these profits were achieved were both materially and economically exclusionary. The ability of transnational firms to sell to the natural gas to the clients of their choosing directed Bolivia’s natural gas towards more profitable markets, primarily in Brazil. As a result, the transnational investors in Bolivia’s hydrocarbon sector constructed the transport infrastructure necessary to move Bolivia’s natural gas abroad, not to satisfy increasing internal demand. Furthermore, the new royalty and taxation rates directed money away from the Bolivian state and to its transnational investors. While the exact amount of profit accrued by the firms who bought out segments of Bolivia’s hydrocarbon sector is unknown, Kohl (2002, p. 460) notes the financial losses of the Bolivian state due to royalty and taxation changes alone were in 1997 estimated to be more than US$4 billion over the following 20 years, a number derived before the known volume and extent of Bolivia’s gas reserves had increased by more than 800%. The trickle down promises of new jobs resulting from increased investment in the country’s hydrocarbon sector also went unfulfilled. As scholars researching primary commodity sectors illustrate, the material characteristics of nature shape the organizational structures and employment opportunities within nature-based commodity sectors (Barham et al., 1994; Boyd et al., 2001; Bridge, 2000). While the windfall investment in Bolivia’s natural gas sector did lead to a temporary increase in industry employment, the material characteristics of natural gas that make the industry capital intensive also make it non-labor intensive. As explained to me by an engineer and union representative for YPFB in one of Bolivia’s largest natural gas producing regions, the privatization of Bolivia’s oil and gas industry led to an eventual depletion of jobs in the sector. The extraction of natural gas is only labor intensive when first attempting to contain the gas. Firms need workers to construct the infrastructure necessary to remove the gas from the ground and transport it to sites for processing and use. However, when the infrastructure is in place, these same firms only need a few engineers to insure the gas continues to flow properly and to turn it off when it does not. Once extraction firms contain the natural gas, its continued extraction is largely dependent upon the chemical and physical properties of the gas, the subsurface geology, and the continuing operation of the infrastructure. As a result, the changing regulatory climate of Bolivia, combined with transnational extraction firms’ ability to overcome the material difficulties of the country’s natural gas, acted as exclusionary

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regulatory mechanisms. While the Bolivian state and people struggled to benefit from the capitalization of the country’s hydrocarbon sector, transnational extraction firms took advantage of the favorable regulatory climate and their access to capital and technology to turn the obstacles of Bolivia’s natural gas into opportunities for accumulation. Working within and manipulating the regime of accumulation within Bolivia, these firms were, at least temporarily, able to overcome the ‘stranded-ness’ of the country’s natural gas. But in doing so, they tested the ability of Bolivia’s mode of social regulation to quell potential crises, resulting both from an unequal distribution of the country’s gas and its profits and from years of uneven development. 4.2. Mobilizing matters: a crisis in capitalization as a form of regulation Having the ability to extract natural gas does not necessarily guarantee its incorporation into the market, and a market demand does not always lead to the successful commoditization of a stranded supply. Incorporation requires both undisturbed extraction and transport and a means of insuring that such extraction and transport will continue to go undisturbed. But like the physical properties of natural gas, the people in the places in which natural gas is located can also be uncooperative. While technological advancement and global shifts toward unregulated markets have provided transnational firms with the means to access stranded reserves, such firms have not always taken account of the social dynamics of the places in which their investments are made. Not fully accounting for the fragile coupling of accumulation systems and modes of social regulation, these firms sometimes fail to recognize, and in some cases fail to survive, the consequences emerging from the exclusionary institutional forms that secure their capital accumulation. In October 2003, hundreds of thousands of Bolivians undermined the stability of the regulatory framework surrounding the country’s natural gas sector. Calling to question who was benefiting from the regime of accumulation rolled out by the capitalization reforms, they took to the streets in what became known as the Guerra del Gas. However, the uprisings surrounding Bolivia’s natural gas were more than struggles over scarce resources. They were a result of a long history of uneven development combined with what Perreault points to as questions about the implications resource access and control have for ‘‘conceptions of livelihood, democracy, and development” (2006, p. 154). The Guerra del Gas was sparked by plans to export the country’s natural gas through Chile to the United States and Mexico. Pacific LNG, a group of Bolivia’s largest natural gas investors, spearheaded this export plan in 2002. While Bolivia’s gas could have been exported westward through Peru, the possible Chilean ports put forth in the plan were closer to Bolivia’s major reserves. As several interview subjects involved in project told me, Pacific LNG favored exporting the gas through Chile to reduce the sunk infrastructural costs necessary to materially manipulate natural gas when transporting it over great distances. Furthermore, a pipeline through Chile would have brought natural gas to an energy-starved region where it could be sold at higher price to satisfy the demands of northern Chile’s mining sector. However, Pacific LNG’s plan ignored the tenuous historical relationship between Chile and Bolivia stemming from the 1870 War of the Pacific, in which Bolivia lost its last remaining access to the coast. While Bolivia’s defeat occurred over 100 years ago, strong nationalist resentment still exists amongst both Bolivians and Chileans. As a result, Pacific LNG’s plan, combined with a decade’s worth of unfulfilled promises stemming from the capitalization, served as a catalyzing factor that fed previously existing tensions within Bolivia’s regime of accumulation and thus brought Bolivia’s already highly mobilized popula-

tion to the streets.7 While the crisis was created by the intersection of various tensions in the regime of accumulation, the Bolivian people specifically mobilized through their perceptions of how country’s natural gas should be used to force a renegotiation of the country’s regime of accumulation. As Perreault (2006, p. 162) notes, community organizations and union leaders were able to mobilize campesino groups and give broader meaning to their struggles by highlighting how they used animal dung for cooking while the government and transnational energy firms wanted to export Bolivia’s natural gas abroad. This, combined with a long history of resource exploitation, allowed Bolivia’s social movements to link the country’s natural gas to national patrimony as well as to their everyday experiences and hardships. As a result, social movement leaders were able to use Bolivia’s natural gas as a crucial discursive tool to bring people into the streets. While many of the Bolivians involved in this struggle lived hundreds of miles from the country’s natural gas reserves and had no actual daily access to the gas, this discursive construction of the country’s natural gas led them to feel as if the gas was, or at least should be, theirs. The pressure from Bolivia’s social movements in the Guerra del Gas resulted in the eventual resignation of then President Gonzalo Sánchez de Lozada. Vice-president Carlos Mesa ascended to the presidential post, and, in response to the demands of the social movements, Mesa put forward a referendum vote in July 2004 to decide the future direction of Bolivia’s hydrocarbon sector. The Bolivians voted for the state to regain control of its hydrocarbon sector and to end favorable taxation and royalty rates for transnational corporations. Ninety-two percent of votes cast were in favor of nationalizing all of the country’s hydrocarbons and 86% of votes were made in favor of canceling the Hydrocarbons Act 1689 that had lowered the royalty and taxation rates for extraction firms (IFES, 2004).8 But Mesa’s tenure was short-lived. While he attempted to satisfy the demands from Bolivia’s social movements by agreeing to rewrite Bolivia’s hydrocarbon laws, to put forward a referendum on how to govern Bolivia’s hydrocarbon sector, and to form an elected Constitutional Assembly, he was not able to meet these demands fast enough. In June 2005, Mesa resigned under pressure from Bolivia’s social movements. Six months later in December 2005, the Bolivian populace went to the polls to elect a new president. With an unprecedented simple majority of the popular vote, Evo Morales was elected Bolivia’s first indigenous president under the expectations that he would be able find a solution to Bolivia’s ongoing crisis and follow through on the demands expressed by the referendum vote of 2004. On May 1, 2006 Morales responded to the social movements’ demands and nationalized Bolivia’s hydrocarbon sector. After issuing a nationalization decree, the Bolivian government gave all of the investors 180 days to renegotiate their contracts with the Bolivian state. By November 1, 2006, almost all of Bolivia’s investors had complied. As a result, Bolivia’s social movements and the Morales government forced transnational extraction firms to face not only the material constraints of natural gas, but to some extent the economic and social realities of the majority of the 7 While it is beyond the scope of this paper to address how varying indigenous identities and identity claims have affected Bolivia’s current political climate, it is important to note that Bolivia’s indigenous groups have diverging interests over how the profits obtained from the countries natural gas should be used and distributed. These interests are often defined by the geographic region in which the different groups are centered. However, these groups do not necessarily align with the dominant political perspectives of the region of the country in which they live. For example, some indigenous groups in eastern Bolivia believe that they should receive a higher proportion of benefits from the country’s natural gas extraction, but they do not support the free-market ideologies some politicians and right-wing social movements advocate in the eastern regions. 8 The Bolivian population is estimated to be around 8,724,156. Approximately 51% of the Bolivian population is registered to vote and 60% of registered voters (2,670,213) voted on the 2004 Gas Referendum (IFES 2004).

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country’s people. While these firms’ strategies to alter the regulations of Bolivia’s hydrocarbon sector aided their ability to accrue profit from the extraction and transport of Bolivia’s natural gas, their strategies did not aid their ability to regulate the historical context of Bolivia. As a result, segments of Bolivia’s social movements were able to link the use and the distribution of profits from the country’s natural gas to its to long-standing problems of uneven development. Doing so, the Bolivian people took to the streets and forced a renegotiation of the country’s regime of accumulation. 4.3. Nationalization: the re-regulation of Bolivia’s natural gas While the nationalization of Bolivia’s hydrocarbon sector forced transnational extraction firms to recognize the social constraints and difficulties of place, the Bolivian government had to take into account the implications of nationalizing its hydrocarbon sector by recognizing its place in a regional and global context. While internal social movements demanded the nationalization of Bolivia’s natural gas sector, pre-existing social and material regulatory structures set the parameters for the nationalization. Not being able to use and benefit from its natural gas supply on its own, the Bolivian government had to keep the gas flowing so as to retain the support of investors, buyers, neighboring countries, and the international community while simultaneously satisfying the demands of its own social movements. In other words, the Morales government had to find a way to balance the delicate coupling of an accumulation system inherited from the neoliberal capitalization of the energy sector with a voting public strongly opposed to such reforms by developing a workable mode of social regulation for the country’s natural gas sector. Morales thus nationalized Bolivia’s natural gas proclaiming that ‘‘el gas es nuestro” while simultaneously labeling the move a ‘‘nationalization without expropriation”. Discursively constructing Bolivia’s natural gas and its nationalization in this way, Morales attempted to quell the demands of the country’s social movements while simultaneously addressing the concerns of the country’s transnational investors. To satisfy these seemingly contradictory claims, the Bolivian state used its nationalization to change the mode of social regulation surrounding its natural gas sector in three primary ways. First, they purported to regain control of the commercialization of the country’s hydrocarbons.9 Second, the Bolivian state followed through on the referendum vote of 2004 and reverted royalty and taxation rates to the levels they were at prior to the sector’s capitalization. And third, the Bolivian state declared that it would return control of YPFB’s previously capitalized assets to the state.10 Regaining control of the commercialization of Bolivia’s hydrocarbon sector, Morales fulfilled his proclamation that ‘‘el gas es nuestro.” Whereas the laws passed in the 1990s gave Bolivia’s transnational investors inalienable control of the country’s natural gas at the point of extraction, the nationalization decree and the new Law of Hydrocarbons 3058 stated that the Bolivian state retains inalienable control of the natural gas until the point of sale. As a result, the Law of Hydrocarbons 3058 required that all the transnational investors within Bolivia’s natural gas sector sign new contracts of operation, in which they technically performed a service by extracting and transporting the country’s natural gas for the Bolivian state.

9 Here I say purported because, while the Bolivian state did technically regain control of the commercialization of its hydrocarbons, pre-existing contracts with Brazil, and to a lesser extent Argentina, largely dictated to whom and for how much Bolivia could sell its natural gas. 10 Here I say declared because at the time this article was written, only Bolivia’s refineries had been returned to state control.

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The nationalization without expropriation was exercised in two manners. First, Morales and his administration took advantage of the peculiar form of the capitalization reforms rolled out in the 1990s. Under these reforms, Bolivia’s state operated enterprises were technically only partially privatized. The Bolivian state had sold 50% of each industry to the highest bidder while reallocating 49% to the state pension system and 1% to employees of the former state owned and operated industries (Kohl and Farthing, 2006; Kohl, 2002; Perreault, 2006). Under this arrangement the state retained minority public ownership of the capitalized components of YPFB. As written in the nationalization decree, the Bolivian state merely wanted majority control of these assets, or 51% of the shares. Before the nationalization decree was passed, the state implemented legislation placing the shares supposedly generating profit for the Bolivian pension system into the hands of a revamped YPFB. When the nationalization decree was issued, the Bolivian state thus only needed to ‘nationalize’ a small percentage of YPFB’s previously capitalized assets to become a majority shareholder. While the Bolivian state has yet to become a majority shareholder in all of the assets capitalized in the 1990s, it has so far financially reimbursed the owners of the capitalized assets for the shares they have lost through the nationalization process.11 Bolivia’s nationalization also occurred without expropriation when taking into account that the Bolivian state only intended to place the commercialization of the country’s hydrocarbons and YPFB’s previously capitalized assets under the control of the state. In other words, they did not intend to regain control of the sites of natural gas extraction and production. In 2005, the capitalized sectors of YPFB controlled the rights to a mere 6.3% of Bolivia’s natural gas reserves. Transnational energy firms controlled the rights to the rest of Bolivia’s reserves, which were either discovered after the capitalization of YPFB or outside of the exploration blocks included in the sale of YPFB (Campodónico, 2007).12 While the Bolivian state required transnational hydrocarbon firms to sign contracts of operation and more than doubled taxation and royalty rates, they gave these firms the option to retain exclusive exploration and extraction rights to their blocks of operation. The Bolivian state’s interest in nationalizing its natural gas sector without expropriating the property of its investors was also linked to maintaining its relationship with the primary buyer of its natural gas. As previously noted, the material make-up of natural gas and the geographic location of Bolivia constrain the country’s natural gas market potential. With Brazil buying the majority of Bolivia’s natural gas and Petrobras, Brazil’s state operated oil and gas firm, producing close to 50% of Bolivia’s natural gas (Campodónico, 2007), the survival of Bolivia’s natural gas industry is dependent upon maintaining amicable relations with its neighbor. This dependency becomes even greater when taking into account that Brazil is rapidly developing its own natural gas reserves and has the potential to import natural gas from overseas. Furthermore, as a landlocked nation with little excess capital, the Bolivian state is forced to use the natural gas transportation infrastructure it has acquired, with its major pipelines traveling to Brazil. Bolivia’s lack of capital also increases its economic and technological dependency upon its neighbor’s transnational and other transnational firms in order to overcome the material

11 At the time this was written, YPFB had become a minority shareholder in all of the companies that originated from its capitalization in the 1990s. They took majority control of the refineries after reaching an accord to reimburse Petrobras for their loss. However, they have yet to take majority control of YPFB’s other previously capitalized assets. The state had publicly declared that it intends to retake control of these assets in 2008, but no known action had been taken to do so. 12 Discovered here is actually a debatable term. As noted above, many reserves know to exist by YPFB were classified as new, and thus discovered, after the capitalization.

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constraints of its natural gas in processes of exploration, extraction, and processing. While Bolivia’s nationalization has been shaped by the country’s geographic location, the material properties of natural gas, and the regional and global economic framework in which these unfold, the nationalization has served as a stabilizing regulatory mechanism. In order for extraction to continue, extraction firms had to be able to retrieve and move the natural gas to its point of use. To do this, they needed a way to overcome both the social and physical difficulties surrounding Bolivia’s natural gas. The nationalization, in both its material and discursive deployment, has at least temporarily quelled some of the demands of the social movements that removed Sánchez de Lozada and Mesa from power. Furthermore, transnational extraction firms have continued to export natural gas to Brazil without much interruption. While the details of most contractual negotiations between the Bolivian state and transnational extraction firms are yet to be released, all of Bolivia’s transnational investors have signed new production contracts. 4.4. Post-nationalization: the challenges to regulation and the frictions of fixed capital Decisions to regulate the social and ecological constraints of natural gas extraction can be made and influenced by an array of actors. Transnational extraction firms can lobby state governments to change financial regulations in order to make natural gas exploration and extraction possible and more profitable. Social movements can shut down cities and force presidents to flee the country. States can change regulations to quell social unrest and redistribute the profits received from natural gas extraction while still making investments attractive. But while regulatory frameworks can be used to temporarily stabilize the conditions necessary for natural gas extraction, such frameworks both create and are the result of conflict. The Bolivian town of Camiri sits above and around several natural gas reserves. As the self-proclaimed ‘‘Petroleum Capital of Bolivia” and the site of YPFB’s first extraction and processing activities, Camiri has a long history of hydrocarbon extraction dating back to the 1920s. However, the capitalization of Bolivia’s hydrocarbon sector had a disproportionate effect upon the Camiri’s residents. While YPFB’s operations in Camiri had been diminishing since the 1980s, a strong union had kept many of Camiri’s residents employed in YPFB’s hydrocarbon exploration and production operations. But, as told to me by a representative of the ex-petroleum workers union, the capitalization of YPFB in late 1990s eliminated many of the jobs held by local engineers. As a representative of the Camiri Civic Committee13 further described the situation: All of the business occurs in Santa Cruz. We don’t really see the transnationals except for their names hanging on a fence... They do not negotiate with us. They only send people out here every now and again to look at the pipelines (interview translated by author). While the extraction activities of the late 1990s increased the amount of natural gas coming from the foothills surrounding Camiri, the resources have brought little new local investment or employment opportunities. Once extracted, the gas is sent by pipeline elsewhere for further processing and use. However, the people of Camiri believe they should receive some of benefits from the natural gas. While many of the residents see the nationalization of Bolivia’s hydrocarbon sector as a positive

13

The city of Camiri has the only democratically elected Civic Committee in Bolivia.

step, they do not believe it goes far enough. In July 2006 at town meeting discussing the use of the hydrocarbons that rest below the soil around Camiri, several residents stated that they believed the Morales administration was not following through on its word. These residents felt as if they had provided much needed support from the east during the Guerra del Gas and aided Morales’ rise to power. However, they thought that the city of Camiri was not benefiting from the nationalization plans, noting that only a few of the natural gas reserves around Camiri were subject to the taxation rate changes proposed by the government. The reserves surrounding Camiri were relatively small compared to Bolivia’s megagas fields farther south, and the Bolivian government’s nationalization plan applied different regulations to gas reserves of different sizes. While the people of Camiri saw the gas around their city to be as valuable as the gas farther south, their grievances and demands largely surrounded the lack of viable and stable employment opportunities in what was once a relatively vibrant and prosperous city in Bolivia. As another member of the Camiri Civic Committee stated: We believe the nationalization is for all Bolivian people but we don’t believe the people in Santa Cruz should be getting our jobs. We have engineers and a university to train more engineers. We can provide the people if they [the Bolivian government] provide a processing or manufacturing plant. While also mobilized by the discursive notion that ‘‘el gas es nuestro”, the meaning of this discourse for residents of Camiri was less about development and national patrimony and more about their right to earn a living. For the people of Camiri, the nationalization was supposed to bring what the capitalization took: jobs. But the question was how to get them. While representatives of the Civic Committee had put forward to the state and departmental governments several different proposals detailing job creation strategies both before and after the nationalization of Bolivia’s hydrocarbon sector, their requests and proposals were largely unsuccessful. As a result, the distinct history of Camiri as an oil and gas producing city combined with an accumulation system that materially directed the regions natural gas to Santa Cruz created tensions within Bolivia’s newly formed regime of accumulation. In late January 2007, Camiri residents decided to challenge the newly stabilized mode of social regulation by physically immobilizing the natural gas moving through their town. Taking advantage of the material volatility of natural gas, and the technology used to manipulate this volatility, the Camiri residents occupied the local offices and grounds of the natural gas transportation company, Transredes, and the natural gas holding firm, Compania Logistica de Hidrocarburos de Bolivia (CLHB). After several hours the residents forced two Transredes engineers to shut off the natural gas pipeline that went to through the town. With the occupation lasting several days, the Bolivian government eventually agreed to talk with Civic Committee leaders to address the city’s demands. The pipeline closure was estimated to cost the Bolivian state US$35,000 an hour (Business News America, 2007). In the negotiations between the Bolivian state and Camiri Civic Committee representatives, an agreement was reached to place a YPFB exploration and production office and to build a US$100 million GTL gas separation plant in Camiri (Business News America, 2007; Rodríguez, 2007). The actions of Camiri’s residents illustrate how discursive constructions can invoke pre-existing tensions that can in turn result in actions to materially manipulate resources in order to express certain demands. As the discursive construction of the country’s natural gas resonated with the people of Camiri and intersected

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with their local history and recent economic downturn, their geographic proximity to several natural gas reserves and transport lines enhanced their ability to cut off the natural gas flowing through their city and allowed them to negotiate their position within Bolivia’s natural gas sector. The extraction and transport of the region’s natural gas depends upon a stabilized coupling of an accumulation system and a mode of social regulation. While the transnational investors need the Bolivian state to create the social conditions necessary for natural gas extraction, the Bolivian state needs to meet its local communities’ demands to make natural gas extraction viable. Furthermore, while the local communities need the Bolivian state to provide them with the opportunity to take part in the country’s gas production, the Bolivian state needs transnational investment to provide them with the technological means and fixed capital to extract the gas.

5. Conclusion Natural resource extraction today presents an intriguing paradox. As global firms attempt to free resources from the constraints of place, the fact that raw materials are held in the earth’s subsoil makes these firms dependent upon place. As firms attempt to appropriate and move these resources, they must take into account of both the social and physical characteristics of the resource and the places in which the resource is held. However, no monopoly exists on the ability to mobilize through nature. While extraction firms have the financial capital and technological capacities to make the material obstacles of nature into accumulation opportunities, they are not able to move it through uninhabited space. As a result, firms must not only account for the material difficulties of the resource and the physical constraints of the place, they must also negotiate the sociopolitical dynamics of the people in the places in which the resource is extracted from and transported through. Attempts to make nature into a viable commodity, in this case natural gas, requires more than the fixed capital necessary to extract and transport it. In Bolivia, the changing regulatory structure surrounding the capitalization of the country’s natural gas combined with the technological and financial capacity of transnational extraction firms allowed these firms turn the material obstacles surrounding Bolivia’s natural gas into opportunities for capital accumulation. But, such regulation and the resulting opportunities were exclusionary. Linking this exclusion to broader tensions within the national economy, Bolivia’s social movements were able to discursively construct the gas as belonging to the people in order to bring part of Bolivia’s populace into the streets. To insure the continued extraction of the country’s natural gas, the Bolivian state nationalized its natural gas sector as a stabilizing mode of social regulation to quell social unrest. However, without the technology or financial capacity to invest in the fixed capital necessary to overcome the material obstacles of natural gas, the Bolivian state proclaimed its nationalization a ‘‘nationalization without expropriation” in order to continue and expand extraction activities through transnational partnerships. But, as Bolivia’s social movements have shown, many can discursively construct natural gas. Furthermore, as the residents of Camiri illustrated, those who live above and around natural gas can attempt to materially manipulate it in order to express their demands. As a result, the social demands of these people must be accounted for in order for Bolivia’s natural gas extraction to continue unabated. Using a regulation approach to examine how a diversity of actors can negotiate through nature can help scholars better explain the regimes of accumulation surrounding nature-based commodities and why these regimes of accumulation provoke certain social responses. In attempts to commoditize nature, a coupling between the social and physical regulations of matter must exist to success-

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