Ecuador's energy transition at risk: Privatisation, environment, and the upcoming election

As Ecuador approaches its presidential elections on 13 April, we are once again faced with critical choices about the future of the country. The energy transition is at a crossroads, and the decisions made today will shape the nation's economic stability, environmental future, and social justice for years to come. Unfortunately, the current state of affairs reveals troubling signs of mismanagement, particularly concerning the privatisation of natural resources and the government's inadequate response to environmental disasters. If these are the actions taken during a political campaign, what can we expect from the next administration if they win?

Privatisation of natural resources: the Sacha field deal

On 28 February, Ecuador’s Ministry of Energy and Mines recommended a 20-year participation contract for the Sacha oil field to a consortium composed of Petrolia Ecuador (a subsidiary of Canadian New Stratus Energy) and Amodaimi Oil Company S.L. (a subsidiary of Chinese state-owned Sinopec). This decision, made without a public bidding process, has raised significant concerns about transparency and fairness. Critics argue that the contract will result in minimal gains for Ecuador, with the government receiving only a fraction of the profits while the foreign companies stand to benefit enormously.

The Oil Front and the Association of Energy and Petroleum Company Workers (ANTEP) have filed legal actions to challenge the deal, citing potential losses of millions of dollars for the country. Both groups argue that the state-owned Petroecuador could manage the Sacha field more profitably, and allowing the concession to proceed would be a serious setback for Ecuador's economic sovereignty.

This move reflects a broader trend in the current government’s handling of natural resources, where privatisation is favoured over investment in state-owned companies to have a better distribution of benefits. At a time when the world is shifting toward clean energy, Ecuador’s reliance on extractive industries is deepening its vulnerability to global commodity price fluctuations and reinforcing inequality.

Environmental crisis in Esmeraldas: A neglected tragedy

While Ecuador faces uncertainty about the future of its oil reserves, an even more pressing issue occurred on 13 March in Esmeraldas, where the worst oil spill in recent memory has devastated the local environment and community. At least 300,000 people have been without access to safe drinking water since crude oil contaminated the Esmeraldas River. The spill, caused by a rupture in the Trans-Ecuadorian Oil Pipeline System (SOTE), has led to unprecedented ecological damage and exposed the frailty of the country’s ageing infrastructure.

Esmeraldas, one of Ecuador's poorest provinces, is home to a significant Afro-Ecuadorian population, and many residents feel abandoned by the government. This disaster could have been avoided with proper infrastructure maintenance and preparedness, but instead, the people of Esmeraldas are left to bear the brunt of the spill with little recourse. This neglect represents a pattern of environmental injustice, where marginalised communities are disproportionately impacted by environmental hazards. Esmeraldas is a hub of oil exports, yet its residents suffer from poverty, pollution, and now, the catastrophic consequences of a government that prioritises profit over people.

The human cost of the energy crisis

Beyond these two glaring examples of mismanagement lies a broader issue: Ecuador’s energy transition is being handled in a way that neglects the needs of its most vulnerable citizens. Over the past 15 months, Ecuador has experienced severe energy shortages, with 14-hour power cuts plunging the country into literal and figurative darkness. Businesses were forced to close, families were left without access to basic services, and many Ecuadorians had to purchase expensive diesel generators, further delaying the shift toward clean energy.

The government's adherence to International Monetary Fund (IMF) policies and austerity measures has deepened economic inequality. VAT increases, rising fuel prices, and the privatisation of public services disproportionately impact working-class Ecuadorians, who are already struggling to recover from the effects of the COVID-19 pandemic. Meanwhile, wealthier sectors are less affected, and their ability to afford backup generators or private solutions means they remain insulated from the worst of the crisis.

Ecuador’s energy transition cannot succeed unless the country addresses these deep-seated social and economic inequalities. A just transition must prioritise the needs of all citizens, not just the privileged few.

What can we do?

As we approach the presidential elections, it is critical for voters to scrutinise the proposals of candidates beyond personalities and ideologies. The privatisation of the Sacha oil field and the lack of accountability in the Esmeraldas oil spill are stark reminders of the consequences of unchecked political power. Ecuadorians must demand more from their leaders—more transparency, more accountability, and more commitment to social and environmental justice.

The upcoming elections on 13 April are not just a vote on candidates; they are a referendum on the future of Ecuador’s energy, economy, and society. Will we continue to see the privatisation of our natural resources, the neglect of environmental disasters, and the marginalisation of vulnerable communities? Or will we demand a government that invests in its people and protects its environment?

Voters have the power to demand a shift in priorities, particularly toward social investment and sustainable development. The future of Ecuador’s energy transition and its ability to create a just, equitable society depends on the choices made in this election. By staying informed, engaged, and holding politicians accountable, we can shape a future where energy justice and social progress go hand in hand.

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