Oil Production and Environmental Damage



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RESEARCH PAPER NUMBER: 15

RESEARCH MNEMONIC: XOILPR14

RESEARCH NAME: Oil Production Cases



I. Abstract

Most countries depend on oil. States will go to great lengths to acquire an oil production capability or to be assured access to the free flow of oil. History has provided several examples in which states were willing to go to war to obtain oil resources or in defense of an oil producing region. States have even become involved in conflicts over areas which may only possibly contain oil resources. This trend is likely to continue in the future until a more economical resource is discovered or until the world's oil wells run dry. One problem associated with this dependence on oil is the extremely damaging effects that production, distribution, and use have on the environment. Furthermore, accidents and conflict can disrupt production or the actual oil resource, which can also result in environmental devastation. One potential solution to this problem is to devise a more environmentally-safe resource to fuel the economies of the world.

Draft Author:

W. Corbett Dabbs (December 1996)

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II. Issue Background



Although much of the world depends on the production or the trade of oil to fuel its economies, these activities can cause severe damage to the environment, either knowingly or unintentionally. Oil production, and/or transportation, can disrupt the human population, and the animal and fish life of the region. Oil waste dumping, production pollution, and spills wreak havoc on the surrounding wildlife and habitat. It threatens the extinction of several plants, and has already harmed many land, air, and sea animal and plant species.

The effects of oil on marine life are cause by either the physical nature of the oil (physical contamination and smothering) or by its chemical components (toxic effects and accumulation leading to tainting). Marine life may also be affected by clean-up operations or indirectly through physical damage to the habitats in which plants and animals live. The animals and plants most at risk are those that could come into contact with a contaminated sea surface: marine animals and reptiles; birds that feed by diving or form flocks on the sea; marine life on shorelines; and animals and plants in mariculture facilities.

Runoffs from petroleum processing and petrochemical plants have dumped tons of toxic wastes into nearby waters. Gas and oil pipelines have stanched many creeks and rivers, swamping prime pastures and cropland. Furthermore, entire bays and lagoons along coasts have been fouled by oil spills and runoff of toxic chemicals.

The environmental damage that is a result of oil retraction and production can also directly effect human life in the region. Damage can include pollution of water resources and contamination of the soil. Humans are effected by environmental devastation because it is damaging to vegetation, livestock, and to the health of the human body itself. Oil spills can interfere with the normal working of power stations and desalination plants that require a continuous supply of clean seawater and with the safe operation of coastal industries and ports.

Environmental damage can also be a result of conflict over oil-producing regions. Environmental harm associated with oil resources can either be attributed to a side effect of conflict, or, in some cases, it is associated with military aggression that is intended to damage the natural resources of the region.

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III. Relevant TED Cases

The eight following case studies were selected to demonstrate the damage that oil production and/or conflict over oil resources can have on the environment. Ecuador, Nigeria, Columbia, Azerbaijan, and Kazakhstan are only a few examples of countries where oil production has had, or most likely will have, damaging effects on the environment. These regions have also been chosen to be examined because they are situations in which production and social unrest have, or could, result in environmental devastation or environmental terrorism. Furthermore, some instances in which oil has been a factor in conflict over a region include: the Falkland Islands Dispute, the Spratly Islands Dispute, and the Persian Gulf War.



CASE LISTINGS AND BRIEF DESCRIPTIONS

Ecuador

Fifty percent of Ecuador's national budget is funded by oil earnings and continued oil exploration and production is thought to be necessary to ensure the countries' well being. The country plans to increase production and holds auctions to increase foreign investment. Dependence on oil revenue has hindered Ecuador's environmental enforcement, which in turn has caused damaging consequences to indigenous tribes living in the Amazon region and to the environment in the eastern (Oriente) part of the country. The Indians of Ecuador, located in the Amazon region of Oriente, have joined forces for the past 20 years to resist oil exploration and demand rights to their ancestral lands.

Many of the indigenous tribes in the Amazon region that once numbered in the thousands have been reduced to the hundreds as a result of the pollution generated by oil exploration and other assaults. Water contamination has led to increased risks of cancer, abortion, dermatitis, fungal infection, headaches, and nausea. Their drinking, bathing, and fishing water contain toxins much higher than the safety limits set by the US Environmental Protection Agency.

The oil companies that drilled in the rain forest were responsible for "felling thousands of acres of trees, dynamiting the earth, spilling vast amounts of oil, destroying habitats, and fouling rivers." Fish have died from water pollution and the game the tribes once hunted have retreated deeper into the jungle as a result of the deforestation. The Rainforest Action Network found that Texaco alone spilled 17 million gallons of crude oil, abandoned hundreds of unlined toxic waste ponds, and constructed oil roads that opened more than 2.5 million acres of the forest to colonization. As a result, Ecuador's rain forests are being cut down by oil companies and settlers at a rate of approximately 340,000 hectares a year. The wood is used for construction, roads, fuel, and furniture.

The exploration for oil has created numerous environmental problems of all types in the Amazon region. The Amazon basin in Ecuador has the greatest number of plant species of any South American country. The Sierra highlands have been almost completely deforested. Also, the Oriente is a species rich jungle with numerous mammals in danger of extinction. Oil that was placed on roads to cut dust has flowed into rivers. Oil waste in the past was placed in holes in the ground that contaminated the forests and the rivers. Ecuadorian officials estimate that ruptures to the major pipeline alone have discharged more than 16.8 million gallons of oil into the Amazon over the past eighteen years (compared to the 10.8 million-gallon Exxon Valdez spill).

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Nigeria

Oil has been an important part of the Nigerian economy since vast reserves of petroleum were discovered in Nigeria in the 1950s. For example, revenues from oil have increased from 219 million Naira in 1970 to 10.6 billion Naira in 1979. Shell Oil operates many of its oil facilities in the oil-rich Delta region of Nigeria. The Ogonis, an ethnic group that predominate in the Delta region, have protested that Shell's oil production has not only devastated the local environment, but has destroyed the economic viability of the region for local farmers and producers. The Nigerian Federal Government, on the other hand, has been charged with failing to enact and enforce environmental protections against oil damage by Shell and other oil companies. Furthermore, many Ogonis have been harassed and even killed by the Federal government for organizing protests and threatening sabotage of oil facilities.

Oil production in Nigeria has had severe environmental and human consequences for the indigenous peoples who inhabit the areas surrounding oil extraction. Nigeria's export of 12 million barrels of oil a day comes from 12% of the country's land, and indigenous minority communities in these areas receive no economic benefits. Indigenous groups are actually further impoverished due to environmental degradation from oil production and the lack of adequate regulations on multinational companies, as they become more vulnerable to food shortages, health hazards, loss of land, pollution, forced migration and unemployment.

The social and environmental costs of oil production have been extensive. They include destruction of wildlife and biodiversity, loss of fertile soil, pollution of air and drinking water, degradation of farmland and damage to aquatic ecosystems, all of which have caused serious health problems for the inhabitants of areas surrounding oil production. Pollution is caused by gas flaring, above ground pipeline leakage, oil waste dumping and oil spills. Approximately 75% of gas produced is flared annually causing considerable ecological and physical damage to other resources such as land/soil, water and vegetation. Gas flares, which are often times situated close to villages, produce soot which is deposited on building roofs of neighboring villages. Whenever it rains, the soot is washed off and the black ink-like water running from the roofs is believed to contain chemicals which adversely effect the fertility of the soil. Gas pipelines have also caused irreparable damage to lands once used for agricultural purposes. These pipes should be buried to reduce risk of fracture and spillage. However, they are often laid above ground and run directly through villages, where oil leaks have rendered the land economically useless.

Oil spills and the dumping oil into waterways has been extensive, often poisoning drinking water and destroying vegetation. According to an independent record of Shell's spills from 1982 to 1992, 1,626,000 gallons were spilt from the company's Nigerian operations in 27 separate incidences. Of the number of spills recorded from Shell - a company which operates in more than 100 countries - 40% were in Nigeria.

Shell is also being accused of engaging in "widespread ecological disturbances, including explosions from seismic surveys, pollution from pipe-line leaks, blowouts, drilling fluids and refinery effluents, and land alienation and disruption of the natural terrain from construction of industry infrastructure and installations". For example, oil spill contamination of the top soil has rendered the soil in the surrounding areas "unsuitable for plant growth by reducing the availability of nutrients or by increasing toxic contents in the soil" . Gas flaring, on the other hand, "has been associated with reduced crop yield and plant growth on nearby farms, and disruption of wildlife in the immediate vicinity". Shell and other oil companies have developed an easy and inexpensive way to deal with by-products from oil drilling: "indiscriminate dumping".

The crisis over environmental pollution and economic marginalization from the oil industry reached a peak in January 1993 when 300,000 Ogoni protested against Shell Oil. This organized protest was followed by repeated harassment, arrests, and killing of Ogonis by Federal government troops.

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Colombia

The Andes mountains in Colombia have become the newest oil hot spot with several international companies drilling in the region. Oil drilling is a profitable business for the exploring corporation as well as the Colombian government which receives a large sum of money for each barrel of oil recovered. However, the process is not without violence nor criticism from environmental groups. The Marxist guerrillas repeatedly interrupt production through the use of terrorist tactics including bombings and kidnappings. Environmental groups challenge Colombian laws regarding environmental degradation due to the methods of oil exploration and extraction primarily caused by foreign corporations.

In 1993, British Petroleum and its partners located oil beneath the eastern plains in the Andes Mountains. The company predicted "it could be worth $3 billion a year in exports -- the government hopes for $5 billion -- by 1997." The Colombian government also "commissioned British Petroleum to continue exploring for oil in its frontier areas" in 1995.

Not everyone in Colombia is pleased that the oil companies are drilling more and more in their country. The drug cartels, peasant groups and paramilitary groups have wrecked havoc on the oil-pumping stations. Many of the oil wells are located in the "stomping ground" of the Medellin drug cartel as well as its competitors. The area is also the home to "the less publicized `emerald wars' (Colombia produces 60 percent of the world emerald supply), to three separate groups of Marxist guerrillas and to an increasingly terroristic national police force seeking to quell the turmoil."

One reporter described a British Petroleum drilling site in the eastern foothills of the Andes as "an armed camp, swarming with khaki-clad, rifle-toting guards and surrounded by machine gun emplacements and two rows of flood-lit razor wire." The fortress is necessary in order to quell some of the violence caused by the Marxist guerrillas in the region who are protesting the eradication of coca crops. As it is difficult to halt the coca eradication process, the guerrillas attack the oil sites and pipelines as a demonstration of their dissatisfaction with the government's actions. During the last nine years, "leftist guerrilla squads have dynamited Colombia's main oil pipeline 346 times, spilling slightly more than 1.2 million barrels of crude oil. The guerrillas seek publicity, rural development, and nationalization of the oil industry." The guerrillas also demand increased spending "for social programs in areas where the oil is produced."

Colombia's Environment Minister said that "no one has ever calculated how much the FARC owes" due to fears that the calculation would encourage the guerrillas to increase their destructive actions. During the past ten years, pipeline attacks by the guerrillas are estimated to have cost Colombia "about $1 billion in lost oil sales." Ministry studies examining the years 1989 through 1991 "found that guerrilla pipeline bombings polluted 375 miles of creeks and rivers and fouled 12,500 acres, ranging from tropical wetlands to Andean watersheds."

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Azerbaijan

On 20 November 1994 a consortium of oil companies signed a contract with the government of Azerbaijan. The consortium, led by British Petroleum, is to invest $8 billion for oil production over a period of 30 years. The consortium believes it can extract up to 4 billion barrels of oil from three wells in the Caspian Sea. However, a problem has developed dealing with the route the oil will take to the world market. In addition, there are many environmental aspects to the issue. They all basically deal with the possibility of damage or destruction of the pipelines. This is due to the fact that this is a politically volatile region of the world.

Before the consortium could finally have the agreement signed, there was a problem that required immediate attention. Their plan is to sell the oil on the world market. As such, the oil must be transported from Baku, the Azerbaijani port of origin to potential world clients by way of the Turkish port of Ceyhan. There were 3 possible routes to be taken. The first involves constructing a pipeline from Baku to the west in neighboring Georgia. From there it would be shipped to Ceyhan. A second would involve constructing a pipeline that would travel south through Armenia into Turkey to Ceyhan. Finally, an existing pipeline could be used by sending the oil north to the Russian port of Novorossiysk, from there it would be shipped to Ceyhan.

The choices to be made are thus influenced by a myriad of details. However, there is one rather important issue which has not been discussed, the environment. The environment serves to be severely damaged if any number of very likely events occur. Firstly, the threat of terrorism on every possible pipeline route is very high. The first route is through Georgia, which has not yet rid itself of the horrors of civil war. Thus there is the possibility of the pipeline being targeted by the combatants. The second route, through Armenia, is the sight of an almost 7 year clash with Azerbaijan over the disputed Nagorno-Karabakh region. The final route through Russia directly traverses the Chechen war zone. In addition, the Russian oil pipelines are in a horrendous state of upkeep, with over 700 spills per year. There is also the likely possibility that the Caspian Sea itself will be polluted by any number of possible mishaps. Finally, if one of the first two oil routes were chosen, oil would have to be shipped to Turkey through the already overcrowded Bosporus Sea channel. Thus animal or fish life, and the very ecosystem itself, could be adversely affected by pipeline or shipping spills.

These options leave much to be desired environmentally. The outcome of an accident such as an oil spill in the area of the Caspian or Black Sea, or in the pipeline system on land would undoubtedly have a high impact on and effect both the composition and scale of the wildlife and its habitat.

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Kazakhstan

According to petroleum scientists, the Caspian Sea region contains the third largest reserve of oil and natural gas in the world, behind the Gulf region and Siberia. Western firms for decades had longed to be given the opportunity to exploit the former Soviet empire's massive oil reserves, and the end of the Cold Was has allowed this possibility. There are environmental concerns associated with drilling for oil in the Caspian region, in addition to the already well articulated effects from drilling itself. The major issue regarding oil exploration in the region is a question of how best to deliver the oil to world markets. The Caspian Sea area is landlocked, thus the only way to efficiently transport the oil to world markets is via pipeline. The exact route of such a pipeline is as of yet undecided, and may prove to be the single most important factor in determining the ultimate success of oil exploration in the region.

The region, however, is not without its own political turmoil. Developing oil fields in Kazakhstan and Azerbaijan present unique difficulties and extricating the oil from the region will be even more tenuous. According to Chevron and oil analysts, a pipeline is imperative to justify an increase in production. But an increase in output would be economically irrational unless there is a more efficient method of transport. The route that the proposed pipeline would traverse is probably the most difficult aspect of the whole issue because there are several political "hot spots" in the region that make a pipeline a difficult proposition.

Heavy tanker traffic thorough the Mediterranean, Red Sea and Persian Gulf have already alerted states to the polluting effects of such activities. Increased production in the Caspian region will increase the above effects, no matter which pipeline route is eventually chosen. Unique to the Caspian region however, is the fact that the Caspian Sea is rising. It could rise possibly three meters in the next twenty-five years. Resultant environmental damage would be immense. More damaging to the environment is the potential flooding of refineries on the coastal plains of the region. These regions are some of the most polluted areas in the former Soviet Union, according to US Embassy reports.

Existing oil drilling in the sea is a major cause of pollution. The US Embassy in Baku reports that one can see an oily film on the sea's surface. Another problem is the flaring of natural gas; about 4.5 million cubic meter a day. Natural gas flares, however, can be contained with the appropriate western technology. While the sea is less polluted than the Black Sea, much needs to be done to lessen the harmful environmental effects of oil drilling, and the potential disastrous effects of the rising Caspian Sea.

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Falkland Island Dispute

The Falkland/Malvinas Island War of 1982 seemed to be a war over islands with an economy based on a couple of thousand sheepfarmers. Since Britain has re-established itself as the controlling power of the Falkland Islands, discoveries of large oil reserves and tremendous fish stocks in the surrounding waters of the islands have made them a valuable commodity. Argentinean claims of sovereignty over the islands continues unabated, although recent dialogue over the future of the potential oil fields in the Southern Atlantic have begun. Not only will the economic impact be immense on the inhabitants of the small islands, but also on the delicate ecological system in place on the still somewhat pristine environment.

These seemingly insignificant islands in actuality are quite a prize. The fishing and oil industries of the islands have enabled the islands to become self sustaining (with the exception of military assistance from the United Kingdom). Although the fishing industry is now the principle source of revenue in the Falkland islands, this may eventually change in favor of oil. ( see SQUID case)

The Falkland Islanders are concerned about the impact of oil exploration on their unique environment. Although they profess a hatred of the Argentines since the April 1982 invasion, the Falklanders said their overriding concern is to maintain the special ecological habitat of the South Atlantic archipelago. There are no longer any land mammals indigenous to the Falkland Islands. The indigenous wild fox became extinct about 100 years ago. There are some 65 different species of birds that occupy the islands at various times throughout the year. These include the black-browed albatross, Falkland pipit, peregrine falcon, and striated caracara breed. The islands are also breeding grounds for several million penguins. These include the Rockhopper, Magellanic, Gentoo, King and Macaroni penguins.

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Kuwait War

During the Persian Gulf War, from the fall of 1990 to early 1991, Iraq embarked on a systematic destruction of Kuwait's oil industry, and Iraqi forces set fire to 789 individual Kuwaiti oil wells. The attendant results were catastrophic both from an economic and ecological standpoint. Kuwait's economy suffered a precipitous drop in export revenues immediately after the Gulf War, due to the inability to make up the production differences from the damaged oil wells. The ecological landscape of Kuwait and the Persian Gulf was irrevocably damaged due to the destruction unleashed by the burning oil wells, and it may be generations before this environment is restored to its pre-war balance.

At the beginning of the crisis, little attention was devoted to the potential impact of a sustained, combined arms form of warfare on the regional environment. However, many environmentalists and concerned scientists soon began to discuss the potential ramifications of such activity, given the scale of the oil holdings in the Kuwaiti theater of operations (KTO). By December 1990, experts began to postulate as to the exact magnitude a deliberate plan of eco-terrorism by Iraq, and analyses varied that this action would cause the release of anywhere from three million to almost ten million barrels of oil per day.

By February 1991, reports indicated that up to 190 oil wells had been set ablaze by Iraqi occupation forces in Kuwait, and after the coalition forces ejected Iraqi troops from the KTO in mid March 1991, almost 800 oil wells had been given similar treatment. It was soon estimated that six million barrels of oil were burning per day circa March 1991 in Kuwait, and the initial assessment of the environmental impact was staggering. Concerns ranged from across a wide variety of environmental disasters. The amount of soot generated was one such cause of concern, as one gram of soot can block out two-thirds of the light falling over an area of eight to ten square meters. Accordingly, scientists calculated that the release of two million barrels of oil per day could generate a plume of smoke and soot which would cover an area of half of the United States. Weather patterns and climactic conditions could have carried such a plume great distances so as to severely hamper agricultural production in remote areas of the world.(See Montreal case)

As a result of the Iraqi scorched earth policy, it was estimated that 250 million gallons of oil - more than 20 times the amount spilled in the Exxon Valdez disaster in Alaska - flowed into the Gulf, causing irreparable harm to the biological diversity and physical integrity of the Gulf. Oil soaked over 440 miles of Saudi Arabia's coastline. Due to the Gulf's sluggish circulation system, it will take years before the oil is swept away by the natural forces of the water.(See Exxon case)

By November 1991, the last of the burning oil wells had been capped, but the scale of damage to the Kuwaiti economy and ecological environment was just beginning to be assessed. Hundreds of miles of the Kuwaiti desert were left uninhabitable, due to the accumulation of oil lakes and of soot from the burning wells. The impact of the oil spillage on the biodiversity of the Gulf has yet to be fully assessed, yet based on the biologics that inhabited the region prior to the Gulf War, it can be adduced that they are now at serious risk. One to two million of migratory birds visit the Gulf each year on their way to northern breeding grounds, and it has been documented that thousands of comorants, migratory birds indigenous to the Gulf region, died as a result of exposure to oil or from polluted air.

The fishing industry in the Gulf was deleteriously affected by the oil spillage into the Gulf, which was important due to the fact that it is one of the most vibrant productive activities in the region after the production of oil. As an example of the vibrancy of this industry, prior to the Iraqi invasion of Kuwait the Gulf had yielded harvests of marine life of up to 120,000 tons of fish a year; after the oil spillage, these numbers significantly dropped. In addition to this degradation to an economic activity, many people living on the Gulf coast depend on fishing as purely a subsistence activity, and the oil spillage has disrupted the spawning of shrimp and fish. Other species effected by the oil spillage included green and hawksbill turtles (already classified as endangered species), leatherback and loggerhead turtles, dugongs, whales, dolphins, migratory birds like comorants and flamingoes, and sea snakes.( See Green Bill Turtles case)

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Spratly Islands Dispute

The Philippines made their first claim in the area--which they refer to as the Kalayaan islands--in 1975 and has been developing oil in the region between the Spratlys and the island of Palawan since 1976. There are currently about 1,000 Marines stationed on the islands. In 1979, the Philippines stated that it only wanted control of the seven islands under its control and administration and not the rest of the archipelago.

Malaysia has been involved in the dispute since 1979. It currently has control over three of the islands but claims the whole chain. Malaysiaws case is based on the fact that the islands are part of its continental shelf. This gives it right to the islands under the Law of the Sea Convention. Brunei's claims to the island also rest on the Law of the Sea. It states that the southern part of the Spratly chain is actually a part of its continental shelf and therefore its territory and resources.

Taiwan has maintained a garrison on the biggest of the islands since 1956. Its claims to the island are based on its assertion that Taiwan and its Kuomintang government are the true China. Both Taiwan and the People's Republic of China say that the islands were discovered by Chinese navigators, used by Chinese fishermen for centuries, and under the administration of China since the 15th century. Further, the Kuomintang sent a naval expedition to the islands and took formal possession in 1946. It left a garrison on the largest island of Itu Aba. However, since Taiwan claims to be the true China, it believes the islands belong to it and not to the PRC. Its main concern is that China alone or China and Vietnam will gain control and thus, have a monopoly on the South China Sea.

China and Vietnam are the main protagonists in the dispute. Vietnam claims to the islands--which they call the Truong Sa islands--are part of the empire of Annam, Vietnam's ancestor, in the l9th century. In 1815, an expedition sent by King Gia Long to chart sea lanes occupied and settled the islands. The French, who were Vietnam's colonial rulers, annexed the Spratlys in 1933, so Vietnam says the islands are theirs as the inheritors of the French possessions. In September 1973, Vietnam declared that the Spratlys were part of the Phuoc Tuy province. It has since stated that the Philippines are occupying part of its territory. Vietnam currently holds three islands.

China's claims to the island are based on the same history as Taiwan's claim. The PRC government maintains that it is the legitimate Chinese government and that, therefore, the islands-- which they call the Nansha islands--are their territory. They have been the most belligerent in pursuing their claim. The dispute between China and Vietnam picked up in 1988. Chinese naval vessels sailed into the Spratlys in January 1988 and Chinese marines started building defenses on one of the largest islands--the first time China has settled soldiers on the islands. In March, fighting broke out between Vietnam and China and China sunk two Vietnamese ships. While they have moved to more political means of dealing with the dispute, tensions remain high in the area. Confrontation surfaced again when China contracted with a US firm to begin testing for oil sights, even though the territorial issue remains far from solved. Occasional harassment of fishermen by all sides continues as well. Each of the six countries maintain its claim to all the islands. The protagonists have been discussing the possibility of shelving the sovereignty issue to undertake joint development of its resources and have sent a joint scientific team to run tests on resource potential.

Although the dispute over the oil resources of these islands has yet to have a damaging effect on the environment, that possibility is likely in the future. Armed conflict could directly damage the oil production and extraction process which would result in environmental devestation, both on land and in the sea.

Go to Spratly Islands Dispute case


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COMPARISON AND CONTRAST


Yes

CASES OF ENVIRONMENTAL DAMAGE FROM OIL RESOURCES

CaseProduction Pollution?Human Impact?Conflict Damage?
Ecuador
Yes
Yes
No
Nigeria
Yes
Yes< /center>
No
Colombia
Yes
Yes
Azerbaijan
No
No
Yes
Kazakhstan
Yes
No
Yes
Falkland Islands
Maybe in future
No
Maybe in future
Kuwait War
No
Yes
Yes
Spratly Islands
No
No
Maybe in future

These eight case studies are all instances in which the desire for oil resources or an increase in oil production has had an adverse effect on the environment. Specifically, the impact on the environment is, or could be, the result of extraction, accidents, terrorism, or conflict. These cases give examples of situations in which there is both willful and unintentional damage caused to the environment.

The Ecuador, Nigeria, Azerbaijan, Kazakhstan, and Falkland Island cases are all illustrations of how oil extraction and production can directly damage the surrounding environment. There are examples of wildlife and habitat devastation through pollution, including oil waste dumping, and accidents, such as oil spills. Although the oil production is willingly performed by governments and private companies, the actual damage caused to the environment is not intentional. This is a situation in which the companies might be willing to pursue other forms of energy resources; however, their entire organizations depend on oil production as a means of business.

Likewise, the Ecuador and Nigeria cases clearly exemplify the direct negative impact that oil production can have on human beings living in the region. In Ecuador alone, hundreds of indigenous tribes have been eliminated due to the oil exploration. There should be great societal and environmental concern when an industry has contaminated the water and land resources that the population depends on. Although more attention needs to be placed on damage that is done to the wildlife, pollution that directly effects the health of human beings must be immediately dealt with.

The effects that oil pollution has had on human society has led to anti-government movements and uprisings in many areas. As a result of the damaging impact that oil production has had on the Indians in Ecuador for the past 20 years, the Indians have protested the government by resisting oil exploration and demanding rights to their ancestral lands. In addition, the situation in Nigeria has led several hundred of thousand Ogoni people to protest the government's actions.

There are also political uprisings steming from environmental concerns. In Columbia, Marxist guerrillas have interrupted oil production through terrorist acts, such as bombings and kidnappings. These attacks on oil sites and pipelines have reportedly spilled more than 1.2 million barrels of crude oil. In both Azerbaijan and Kazakhstan the concern over which oil routes to pursue stems from the fear that the political situation or terrorism will disrupt the pipelines.

International conflict over oil resources and lands with potential oil resources is also an issue of concern. Disputes over sovereignty of the Falkland and Spratly Islands could have grave environmental impacts in the future. The delicate environments in both of those areas could be severely disrupted due to oil spills or direct attacks on production as a result of future fighting.

In most cases of international conflict, direct assaults on resource production is not common. However, in the Kuwait case this was just the opposite. During Iraqi's control of Kuwait in the Persian Gulf War, the Iraqi government deliberately set many of the Kuwaiti oil fields on fire. Although international cooperation eventually put an end to the crisis, more than 250 million gallons of oil flowed into the Persian Gulf and many species of animals died as a result of exposure to the oil or from the polluted air. This could be an example of conflict in the future; countries may damage the natural resources of others rather than attempting to defeat the country militarily.

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IV. Policy Implications

Through these cases and several large oil spills that have happened in recent years, the world is beginning to realize the environmental consequences that arise from the economic dependence on oil resources. However, under the existing conditions, there is only so much that can be achieved. Even if companies and governments would make a total effort towards environmental safety, significant accidents will still occur. Industries can make strides toward reducing the damage on resources that people use and on the wildlife and habitats. Industries cannot, however, completely prevent accidents, such as an oil spill into rivers or oceans, from happening. See the Oil Spill Analysis

Furthermore, environmental damage that occurs as a result of conflict cannot be completely prevented either. If oil resources are present during fighting, then they may be accidentally or deliberately damaged. In fact, deliberate attacks on oil resources and production, with resulting environmental devastation, could be common in future international conflicts. The recent Iraqi burning of oil fields during the Kuwait War could be an prelude to future international aggression.

One proposed method of reducing the amount of oil production is the imposition of an oil tax. A tax would increase the price of oil, and it has been predicted that this would reduce the world demand for oil by about 2.6 million barrels per day (b/d) and 5.3 million b/d in the respective years 2000 and 2010. Although this plan is designed to reduce the amount of gas emissions, it could also be useful in reducing the amount of environmental damage that stems from oil production. However, it could be argued that a tax that discriminates against oil is not only unfair to oil producing countries, but also is unlikely to be efficient for reducing gas emissions and oil production. One reason for the inefficiency is that a probable energy substitute is coal, which is even more environmentally damaging.

OIL TAX


Demand Reduction (barrels per day)

Year
2000
2010
Reduction
2.6 million
5.3 million

The ultimate solution may be the discovery and production of a new energy resource to replace oil. A new energy resource that is environmentally-safe and cheaply accessible could solve many of the problems associated with oil production. Surveys of the American public dating back to 1979 show that the populace favors research and development for renewable energy technologies and energy conservation over research and development for nuclear energy, petroleum, and coal. This new resource would be especially useful for countries such as the US, which are heavily dependent on oil resources that are found outside its borders. In addition, universal access to this resource could help to alleviate the international conflicts that have thus far arisen over natural resources. This new path is a possibility within the US if the government puts full effort into acquiring a new energy resource; although, without action from the government, no current company would be interested in pursuing another resource other than low- cost oil.

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V. Other Sources

Related Sites



Bibliography

Ali, Javed, "The Economic and Environmental Impact of the Gulf War on Kuwait and the Persian Gulf," ../../KUWAIT.HTM

Althaus, Dudley, "Black Gold; Trouble in Tabasco." The Houston Chronicle, July 14, 1996, p.A1

Armstrong, Angela G. and Vallejo, Marlon, "Ecuador Oil, Trade, Environment, and Human Rights," ../../ECUADOR.HTM

Bonner, Vincent P., "Kazakhstan and Oil," ../../KAZAKH.HTM

Cooper, Keri, "Colombian Coca Case," ../../COLOMOIL.HTM

"Effects of Marine Oil Spills," December 11, 1996, http://www.itopf.com/effects.html

Goulet, Michael, "Oil Consortium Agreement with Azerbaijan," ../../AZERI.HTM

Ismail, Ibrahim A.H., "Capital limitations, environmental movements my interfere with expansion plans." Oil & Gas Journal, May 9, 1994, p.60-68

Moesinger, Kerstin and Maglio, Amy, "Nigeria Petroleum Pollution in Ogoni Region," ../../OGONI.HTM

"Oil Outlook, Public Perception Discussed at EIA Forum." Octane Week, April 8, 1996

Ross, David J., "Falkland Islands Oil Dispute," ../../FALKOIL.HTM

Tanaka, Shugo, "Spratly Islands Dispute," ../../SPRATLY.HTM


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