Proposed dams to be Chile's next environment battle

RIO BAKER, Chile, June 18: On the banks of the Rio Baker, Cecilio Olivares worries his days of guiding tourists on horseback through the magnificent Patagonian scenery could be over if power companies build a series of dams on the striking, turquoise-coloured river.

Olivares has lived his 59 years on the Baker, which flows through Chile's wild and remote Aysen region. The Baker's swift waters -- it has the strongest flow rate of any Chilean river -- have attracted the nation's largest power generators.

Endesa Chile, a unit of of Endesa Spain, and Colbun are proposing a joint, billion project to build four dams on the Baker and Pascua rivers in the rugged region some 1,000 miles (1,600 km) south of the capital Santiago, to produce 2,400 megawatts of power.

''I hope it doesn't hurt us much,'' an unshaven Olivares, wearing sheepskin trousers, a poncho and a thick wool hat, told Reuters in a resigned tone.

Tourism in Aysen -- which attracts hikers and wilderness adventurers -- has grown in the past decade and tourism activity rose 11 percent in the first three months of this year, compared with the same period last year.

Olivares earns his living farming, raising sheep and guiding tourists -- mostly Europeans -- on hiking, fishing and horse-back riding vacations in Chile's south, home to fox, endangered huemul deer and beech tree forests.

Environmental groups are already lining up against the power project, and the dams look to become the next major environmental battle in one of Latin America's healthiest and most modern countries.

In recent years Chileans have debated the toll booming development is taking on their wilderness areas. Public opposition has been fierce over big power projects, new mines and wood-pulp plants that produce pollution.

RIVERS TO SAVE, RIVERS TO DAM

The Endesa-Colbun project is one of a flood of new power generation investments being proposed to satisfy leaping power demand as Chile can no longer count on cheap natural gas imports from neighbouring Argentina, struggling to meet its own needs.

President Michelle Bachelet says Chile must balance the need for more electricity with preservation of wildlife areas and has pledged a national zoning project to define river basins to protect and rivers to dam.

''They want to flood thousands of acres to dam the waters of the Baker and Pascua rivers, which will affect not only local residents, but also the environment and tourism, and we won't allow that,'' said Carlos Garrido of the organization Defenders of the Spirit of Patagonia.

Environmental impact studies will not be complete until next year and the first dam would not begin construction until 2008, but Endesa is already working to win over locals and environmentalists.

The company has consulted with local politicians and set up information centres in the cities of Coyhaique and Cochrane, close to where the plants will be built. Endesa executives have also met with Chile's best-known environmentalist, American former clothing magnate Douglas Tompkins, a fierce defender of Patagonia's wild areas.

Tompkins bought more than 714,000 acres (289,00 hectares) of forest in southern Chile and turned it into a park that is now run by a foundation. His wife Kristine's Patagonia Land Trust has purchased a 173,000-acre (70,000-hectare) cattle ranch south of Rio Baker and is planning a park there.

An Endesa executive told local media the meeting with Tompkins, who has been publicly critical of damming rivers in the South, was to give him information the company has given others about the project.

''There are still a lot of questions. We're doing the research right now. We have to take into account that this is a long-term project,'' said a company spokesperson regarding environmental impact studies.

FLOODING NINE SQUARE MILES

One main concern of locals who live off tourism is losing their land if Endesa Chile sticks to its plan to build two dams on the river, Baker I and Baker II.

''People are accustomed to living peacefully. Imagine all the people who will come for the construction. It's not fair that they come here and want to change everything,'' said Patricio Krebs, who left a stressful life in Santiago to manage tourist cabins a few yards from Rio Baker.

A few weeks ago Endesa said it would try to limit flooded areas as much as possible to minimise social and environmental impact. It estimates it would flood some 9 square miles (23 square km) for the Baker I plant alone.

''Let them do their project but without damming the river; let them look for other technologies. The problem is the dams, they're going to kill tourism in the region,'' said Alejandro del Pino of the business organisation Corporacion Costa Carrera.

A few years ago, Endesa faced opposition on the construction of its Ralco dam, which flooded ancient Indian burial grounds in southern Chile. Ralco is up and running, but only after Endesa paid huge sums to communities that were dislocated.

Last year, No. 1 industrial conglomerate Copec was forced to temporarily shut down a huge new wood pulp plant in southern Chile and to take stricter measures to clean up its waste water after the deaths of black-necked swans in a wetland nature sanctuary.

Canada's Barrick Gold is facing opposition from environmental and local groups to its giant open pit gold project Pascua Lama, located high in the Andes mountains on Chile's border with Argentina.

Reuters