Researchers say 2nd energy boom underway in Peru

LIMA (Reuters) - Peru, which is working to become an exporter of oil and natural gas, is in the early stages of a second energy boom and on track to hand out concessions covering up to 70 percent of its resource-rich Amazon jungle, researchers said on Tuesday.

The new study, published in the Environmental Research Letters journal, found that Peru had 52 active concessions in the Amazon at the close of last year -- just off a record high of 56 contracts hit in early 2009.

Between 2005 and 2009 42 of the 52 lots were awarded, the study said, suggesting the country is on the cusp of an energy boom.

Peru had its first energy explosion in the mid-1970s.

The current push is part of Peruvian President Alan Garcia's goal to use the country's vast and untapped wealth of natural resources to spur economic growth.

Peru's economy surged nearly 10 percent in 2008 and was one of the few in South America that posted positive growth last year during the global crisis. This year, growth is expected to reach around 5 percent as prices for metals exports rebound and energy outlays are forecast to hit $1.5 billion.

But Garcia's campaign faces stiff opposition.

"The first hydrocarbon boom of the early 1970s brought with it severe negative environmental and social impacts. Unfortunately, all indications are that this second boom will as well," said Marti Orta-Martinez, a doctoral student at the Universitat Autonoma de Barcelona, who co-wrote the study.

Environmentalists and indigenous communities worry energy work in the ecologically sensitive Amazon will damage the environment and expose remote tribes to new and deadly diseases -- risks that rise with increased activity.

Peru is slated to auction another 18 lots this year that -- taken with the blocks under technical evaluation -- would increase the total area of the Peruvian Amazon under oil and natural gas concession to around 70 percent, the study said.

Peru's government has predicted production of oil and natural gas liquids could jump as much as 185 percent by 2015.

Among the energy firms with operations in Peru right now are Spain's Repsol, Paris-based Perenco, Argentina's Pluspetrol, Brazil's Petrobras, U.S.-based Maple Energy and Peru's state energy company, Petroperu.

ESCALATING SOCIAL CONFLICT

Matt Finer, a scientist at the U.S.-based environmental group, Save America's Forests, who co-wrote the study, said most energy lots in Peru overlap with sensitive areas -- either nature reserves, lands titled to indigenous people or places where tribes living in voluntary isolation are thought to be.

That fact might help explain why the surge in development has run against tough opposition.

An independent arm of the government that tracks protests reported 260 social conflicts in January, up from 211 in the same month a year ago. Of that total, nearly half are attributed to disputes over social-environmental factors.

Protests came to a violent head in June, when police clashed with tribal demonstrators opposed to the government's push to open their lands to energy and mining investment.

Some 34 people, including police and protesters, died.

The clashes quickly become the biggest political crisis of President Garcia's term, forcing him to shuffle his Cabinet and repeal two controversial land laws that promoted investment.

But indigenous groups have said they want a more significant backtrack on development plans and will likely launch new protests if they don't get what they want.

"Nearly 90 percent of the 52 active oil and gas concessions in the Peruvian Amazon overlap titled indigenous lands. However, there is currently no law in Peru that ensures their free, prior and informed consent ... This is a recipe for increasing social conflict," said Finer.

(Reporting by Dana Ford; Editing by Lisa Shumaker)