Pipe dreams: the 500km pipeline that transports oil from Lago Agrio to the port of Esmeraldas, on the Pacific Coast. The oil discovery destroyed the area. Photograph: Remi Benali/Corbis
American biologist Kelly Swing thwacks a bush with his butterfly net and a dozen or so bugs and insects drop in. One is a harvester, or daddy-long-legs, another a jumping spider which leaps on to a leaf where two beetles are mating.
This is the Tiputini research station, on the edge of the Yasuni national park in Ecuador, where the foothills of the Andes meet the Amazonian rainforest right on the equator. Swing and I are searching for unidentified creatures and within a minute or two of looking we may well have found several. The daddy-long-legs, the spider, possibly the beetles on the leaf, even the bee that, disturbed, flies out of the undergrowth to bite Kelly on the neck, may well be unnamed by science, says Swing. Yasuni is terra incognita, one of the beastliest, lushest, most fecund, abundant but unknown places on earth. Up to 100 people from two tribes of warlikeHuaorani Indians live there in voluntary isolation and, within a kilometre of where we are standing, it has been estimated, live 150 frog, 120 reptile, 600 bird and 200 mammal species, including nearly 100 species of bat. To give a sense of scale, there are only 18 bat and six reptile species in the whole of Britain.
Yasuni has astonished biologists, who say it could have the greatest concentration of species on the planet, having been a refuge during the last ice age. So far, nearly 1,500 species of plants and 400 fish species have been found in the 1.2m sq km national park. More species of frogs and toads have been recorded than are native to the US and Canada combined; more birds than in all of Europe. But when it comes to insects, says Swing, Yasuni is world class. "There are perhaps 10 million insect species in the world, of which one in 10 could be living here. It would take a team of scientists possibly 400 years just to identify them all, and a book of 10,000 pages to record them in," he says.
A walk in this Garden of Eden is revelatory, like going to the supermarket via the chemists' and the zoo. These berries make soap, those plants are good contraceptives, this leaf is good for kidney and heart diseases. There are troops of spider and woolly monkeys, frogs smaller than a fingernail, tapirs the size of horses, as well as ants which taste of lemon and berries so poisonous you could die in seconds if you ate one. Most amazing is the "walking tree" which follows the light, hitches up its roots and moves 7m or more.
Last month, some Yale University undergrads stumbled across a mushroom capable of eating polyurethane plastic. It could revolutionise landfills. "Frankly," says Swing, "no-one knows what is here."
It wasn't until he and a colleague from San Francisco University in Quitopaddled their way here 20 years ago to set up the science research station that anyone really understood the true abundance of life in Yasuni.
And it wasn't until 2007, when 960m barrels of oil were discovered in one part of the Yasuni park, that people realised that the most biodiverse place on earth could be totally destroyed. The oil under Yasuni, it was calculated, would earn Ecuador $7bn but would last the world just 10 days.
Ecuador's first barrel of oil sits in a corner of the Temple of Heroes in a military museum in Quito, alongside the bones of fallen combatants in old independence wars, British machine guns and German torpedoes. It is surprisingly small. It was discovered by the Gulf and Texaco oil company on 29 March 1967. Five years later, when the area was exploited, Ecuador's military dictatorship paraded this barrel through the streets. Old film footage shows people trying to touch it for luck.
It was touted as the start of a new era of development: Ecuador joined Opec and borrowed massively. In the first years, oil built hospitals, schools and roads. But 45 years later, Ecuador has just half of its reserves left – 4.5bn barrels, of which 20% lies below Yasuni.
Albert Acosta was the oil and mines minister when the Yasuni find was made. Today he is a radical ecologist, and will stand as a presidential candidate for a group of leftwing parties in next month's election.
"The reality is that oil has not brought development," this charismatic academic tells me, when we meet in his office at Flacso university, Quito. "It has helped our infrastructure, but it has brought us immense contamination and environmental destruction. Oil has not solved the problems of Ecuador."A bird in the hand: Huaorani Indian children playing with two scarlet macaws in the Yasuni National Park. Photograph: Alamy
While most politicians would have immediately sent for the drillers, Acosta hesitated. He knew that the find presented the country with perhaps its last chance to develop in the traditional way, but he also knew it would push the oil frontier deeper into the Amazon, release 400m tonnes of climate-changing gases and make the destruction of a vast and pristine area inevitable. To extract oil from Yasuni would need wells, ports, pipelines, roads and villages. "And because this is a particularly heavy crude oil," he adds, "vast amounts of water will have to be injected back into the earth, inevitably leading to pollution.
"I knew the oil industry. I used to work in it. I could see the monster from the inside. I began to think we were poor because of our resources. I called it the curse of abundance."
Working with NGOs and academics, Acosta prepared two options – "Plan A", as it became known, was a revolutionary scheme to leave the oil in the ground in perpetuity in return for half of its value (around $3.6bn). Plan B was to send in a Chinese company. For the first time in history, a nation seriously considered not exploiting oil.
"We should be an intelligent country," says Acosta. "Oil is unsustainable. We must see it in the long term. Climate change is a limit and we can't continue to keep burning oil. Perhaps we must change our model of life. We cannot live without nature but nature can live without us."
Plan A has received overwhelming support, with polls showing 95% of Ecuadoreans want Yasuni preserved as a jewel of nature, like the Galapagos, and in 2010 president Rafael Correa guaranteed not to extract its oil if the world gave Ecuador $3.6bn over 13 years. The UN has now set up the Yasuni fund and, led by a $50m donation from Germany, more than $300m has been offered or received from national, regional and local governments, individuals, companies and institutions in Europe, Japan and the US. This alternative "aid" money is not touched by Ecuador's government, but is administered by a trust to develop renewable energy projects and conservation.
And it seems to be working. "So far, so good," says Ivonne Baki, secretary of state for the Yasuni initiative and Ecuador's former ambassador to the US, when I ask her how the project is going. "The world is watching. If this succeeds it may open a new era of conservation. If it fails, it will discourage developing countries from adopting bold climate measures."
To see what could happen to Yasuni if the oil there is exploited, I travel toLago Agrio, Texaco's base camp in the 1970s, now an oil-rush town. The great primary forests have long gone. Waves of settlers have moved in and Lago Agrio and the area around it is a social and ecological disaster zone, after the company allegedly spilled nearly 17m gallons of crude oil and dumped 20bn gallons of drilling wastewater between 1964 and 1990. Guerilla groups, drug traffickers and criminal gangs pour over the nearby Colombian border into what is now an industrialised landscape; pipelines snake within feet of houses; companies flare gas night and day from refineries; and the pollution, while far better than it was in the 1970s, continues.
I meet Luis Yanza, a local community leader who was 16 when his family moved to Lago Agrio from the pristine south of Ecuador. "It was the wild west, just oil and prostitutes when it started," he tells me. "It was like going to hell. We would see huge smoke clouds – they used to spill the oil into pits and when they were full set fire to them. The water smelled of oil. We had an oil pipeline right by our house, which was close to the main Texaco camp, and we all had spots on our faces." Yanza is one of a number of residents who has spent 20 years suing Texaco (bought by Chevron in 2001) to clean up the forests, through the Ecuadorean and US courts. Last year the communities won $18bn damages, but Chevron has refused to pay, claiming corruption in the Ecuadorean courts.
My guide round the oil fields is Diego, a half-Huaorani, half-Kechwa man in his 40s. He is distraught at the changes he has seen in 30 years. There is little primary forest left and most of the land is farmed. Roads built though the forest by the oil companies have allowed in waves of settlers, farmers, timber companies and bushmeat hunters. New oil wells are still being drilled, and villages that only a decade ago were little more than a few houses are now small towns with street lighting, parks, restaurants and shops.Net assets: biologist Kelly Swing with author John Vidal. Photograph: Jenny Bates for the Observer
We reach Shushufindi, a town of 30,000 where Texaco used to dump oil and which is now the site of a refinery, billowing black smoke and flames. "Look," says Diego. "I remember this when it was forest. Now it's wrecked. Even years ago the pollution was terrible – we used to swim in oil. Now, we can't breathe because of the air pollution." He does not want to stop the car for fear the refinery guards will try to arrest him.
Like many indigenous people in Ecuador, Diego was educated by evangelical missionaries from the American Summer Institute of Linguistics (Sil) who came in 1952 to "convert" the forest tribes and translate the Bible into their languages. The military dictatorship gave them charge of all Huaorani health and education but it was later claimed that the missionaries were collaborating with the oil companies to pacify and then relocate the Indians out of the oil-rich forest. Sil was expelled from Ecuador in 1980 at the request of the indigenous peoples.
Although Diego has heard the stories that his teachers worked with the oil companies, he won't hear a word against them. "When you are young you do not know these things. What I know is that they were good people." His godmother, he tells me, was Rachel Saint, the sister of Nate Saint, one of five missionaries attacked and speared by the Huaorani in 1956 after entering Huaorani territory. Rachel forgave them and then set up a "protectorate" for them where she lived until she died in 1994. Ironically, her work allowed Texaco to build a road deep into the forest and resulted in a flood of people moving in and destroying more than 2m hectares (4.94m acres) of forest.
Diego loves, but fears for, Yasuni. "I spend up to five months at a time there. When I am alone, I see all the animals. I walk quietly. I take a small kayak, I see electric eels, dolphins. The real treasure of Yasuni is not the oil, but the forest itself. I don't want to think about oil coming to Yasuni. It would be a catastrophe. There will be money in the short term. But there will be no more Yasuni jungle."
Back in the deep forest at the Tiputini research station the primatologists tell me they now hear oil company planes flying overhead and say that the animals show signs of fear. Opinions at Tiputini are divided over whether Yasuni will be sooner or later exploited. The station's resident director, biologist Diego Mosquera, fears it cannot hold out for long. "Who owns the oil has the power," Mosquera tells me. "Oil is 100 times bigger than anything else in Ecuador. Honestly, I don't think the companies can be stopped."
But Kelly Swing is more optimistic. "Yes, we are very nervous that all this will be lost and that Yasuni will become like Lago Agrio," he says. "But this time we have a unique chance to save a lot of nature for very little. If we can't justify saving a place that has more species per square inch than anywhere else on the planet, then what hope is there for anything? What then do we keep? What then can we save?"