The Intersection of Economics and Politics in a Small OPEC Country: the Case of Ecuador, 1990 - March 2014

Today, crude oil remains a vital resource all around the world. This non-renewable resource powers countries worldwide. Besides serving as an energy source, crude oil is also the most important component for different world economies, especially in developing countries. Ecuador, a small member of the OPEC oil cartel, presents a case where its economy is oil dependent. A great percentage of the country¿s GDP and government¿s budget comes from oil revenues. Ecuador has always been a primary exporter of raw materials. In the last centuries, the country experienced three important economic booms: cacao, bananas, and, ultimately, crude oil. In this sense, the country has not been able to fully industrialize and begin to export manufactured goods, i.e., Ecuador suffers from the Dutch disease. The latter has deterred Ecuador from achieving broad-based economic development. Given crude oil¿s importance for the Ecuadorian economy, the government has always tried to influence the oil industry in search of profits and benefits. Therefore, this thesis, explores the question: how and to what extent have political interventions affected the oil industry in Ecuador from 1990 until March 2014? In general, this thesis establishes an economic history context during the last twenty-four years, attempting to research how political interventions have shaped Ecuador¿s oil industry and economy. In the analysis, it covers a period where political instability prevailed, until Rafael Correa became president. The thesis examines Ecuador¿s participation in OPEC, trying to find explanations as to why the country voluntarily left the organization in 1992, only to rejoin in 2007 when Correa rose to power. During the ¿Revolución Ciudadana¿ period, the thesis researches reforms to the Law of Hydrocarbons, variations in the relations with other nations, the controversy surrounding the Yasuní-ITT oil block, and the ¿Refinería del Pacífico¿ construction. The thesis is an Industrial Organization detailed case study that analyzes, updates, and evaluates the intersection of economics and politics in Ecuador¿s crude oil industry during the last 24 years. In this sense I have consulted past theses, newspaper articles, books, and other published data about the petroleum industry, both from a global and Ecuadorian perspective. In addition to published sources, I was able to interview sociologists, public figures, history and economics academics, and other experts, accessing unique unpublished data about Ecuador¿s oil industry. I made an effort to collect information that shows the private and public side of the industry, i.e., from government-related and independent sources. I attempted to remain as objective as possible to make conclusions about the appropriate Industrial Organization policy for Ecuador¿s oil industry, addressing the issue from an economic, social, political, and environmental point of view. I found how Ecuador¿s political instability caused public policy to fail, molding the conduct and market structure of the crude oil industry. Throughout history, developed nations have benefited from low oil prices, but things shifted since oil prices began to rise, which is more beneficial for the developing nations that actually possess and produce the raw material. Nevertheless, Ecuador, a victim of the Dutch disease due to its heavy reliance on crude oil as a primary product, has not achieved broad-based development.

A Surface Displacement Analysis for Volcan Pacaya from October 2001 through March 2013 by Means of 3-D Modeling of Precise Position GPS Data

Volcán Pacaya is one of three currently active volcanoes in Guatemala. Volcanic activity originates from the local tectonic subduction of the Cocos plate beneath the Caribbean plate along the Pacific Guatemalan coast. Pacaya is characterized by generally strombolian type activity with occasional larger vulcanian type eruptions approximately every ten years. One particularly large eruption occurred on May 27, 2010. Using GPS data collected for approximately 8 years before this eruption and data from an additional three years of collection afterwards, surface movement covering the period of the eruption can be measured and used as a tool to help understand activity at the volcano. Initial positions were obtained from raw data using the Automatic Precise Positioning Service provided by the NASA Jet Propulsion Laboratory. Forward modeling of observed 3-D displacements for three time periods (before, covering and after the May 2010 eruption) revealed that a plausible source for deformation is related to a vertical dike or planar surface trending NNW-SSE through the cone. For three distinct time periods the best fitting models describe deformation of the volcano: 0.45 right lateral movement and 0.55 m tensile opening along the dike mentioned above from October 2001 through January 2009 (pre-eruption); 0.55 m left lateral slip along the dike mentioned above for the period from January 2009 and January 2011 (covering the eruption); -0.025 m dip slip along the dike for the period from January 2011 through March 2013 (post-eruption). In all bestfit models the dike is oriented with a 75° westward dip. These data have respective RMS misfit values of 5.49 cm, 12.38 cm and 6.90 cm for each modeled period. During the time period that includes the eruption the volcano most likely experienced a combination of slip and inflation below the edifice which created a large scar at the surface down the northern flank of the volcano. All models that a dipping dike may be experiencing a combination of inflation and oblique slip below the edifice which augments the possibility of a westward collapse in the future.