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Gulf Oil Spill: The Development Edition

Vijaya Ramachandran and Julia Barmeier of the Center for Global Development are among the many commentators now looking at the development angle of the continuing, horrifying oil spill in the Gulf. They write:

Spills of this magnitude are not new to the developing world. Take Nigeria, for example. Due to poor regulation and pervasive corruption, we do not know for certain how much oil has leaked into the Niger Delta region. In 2006, it was reported that 47 million gallons of oil—a quantity not that different from the new estimates of the Gulf leak –has been spilt in the Delta over the past 50 years. The Nigerian National Petroleum Corp estimates that some 650,000 gallons of oil were spilled in 300 separate incidents each year; other reports indicate that Shell (which is now looking to drill in the Arctic) spilled nearly 4.5 million gallons of oil into the Niger Delta in the last year alone.

A widely-cited article in the UK’s Guardian (hat tip @cblatts) quoted the Nigerian head of an international environmental group on double-standards for corporations operating in rich and poor countries:

We see frantic efforts being made to stop the spill in the US but in Nigeria, oil companies largely ignore their spills, cover them up and destroy people’s livelihood and environments. The Gulf spill can be seen as a metaphor for what is happening daily in the oilfields of Nigeria and other parts of Africa.

As America and other rich countries import oil from faraway places, we are effectively exporting the risk of disastrous oil spills and the responsibility to enforce regulation and cleanup to countries even less well-equipped to deal with those spills than the US has turned out to be. As a recent New York Times op-ed put it:

All oil comes from someone’s backyard, and when we don’t reduce the amount of oil we consume, and refuse to drill at home, we end up getting people to drill for us in Kazakhstan, Angola and Nigeria — places without America’s strong environmental safeguards or the resources to enforce them.

Kazakhstan, for one, had no comprehensive environmental laws until 2007, and Nigeria has suffered spills equivalent to that of the Exxon Valdez every year since 1969. (As of last year, Nigeria had 2,000 active spills.) Since the Santa Barbara spill of 1969, and the more than 40 Earth Days that have followed, Americans have increased by two-thirds the amount of petroleum we consume in our cars, while nearly quadrupling the quantity we import. Effectively, we’ve been importing oil and exporting spills to villages and waterways all over the world.

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  1. Thanks for highlighting our blog post on the Gulf spill. My CGD colleague Todd Moss points out that criminals are often responsible for oil spills in Niger. Todd says “Nearly all of the spills in the Niger Delta are from bunkerers (oil thieves tapping into the pipelines), not the company. And these are typically not poor villagers trying to eke out a living by stealing a barrel or two, but rather organized criminal syndicates like the mafia.” This comment raises an interesting question–who ultimately bears responsibility for these spills? Is it Shell’s responsibility to prevent criminal activity? Is it the Nigerian government’s responsibility? Are the US and Nigerian governments to blame for lax oversight of oil companies? Or in the end–it is us, the consumers–who simply want more and more and more oil? The Gulf’s spill so far is a mere 2.5 percent of US daily consumption, which is now 20 million barrels per day!

    Posted June 3, 2010 at 9:57 am | Permalink
  2. Laura Freschi wrote:

    Vijaya, Thanks very much for your comment and for raising those questions.

    In researching this post I came across a fascinating article in the Virginia Quarterly Review from 2007 describing the rise of pipeline attacks and illegal bunkering (the theft of industrial quantities of crude oil):

    These criminal activities are a tragic but in many ways unsurprising outcome of the injustice and corruption of Nigeria’s oil industry, which as you rightly point out is ultimately driven by consumer demand.

    Posted June 3, 2010 at 10:37 am | Permalink
  3. Rebecca Burlingame wrote:

    Just knowing what has happened in Nigeria changes everything. I feel for the people there, who wonder why oil companies respond to the rich countries but not to them. Perhaps this is why the oil companies are lowering prices at the pump now, as they knew how the public would feel about broken promises, and now the Gulf coast also loses livelihoods.

    It wan’t always this way. I grew up next to an oil refinery and Phillips Petroleum took care of the people in their community. In my twenties I worked for Shell and it is hard to imagine the different Shell, in Nigeria. But if people who steal oil in Nigeria can’t be controlled, how can anyone be for sure control is always possible in advanced economies? Today, security is, thankfully, tight around refineries. But security in more economically advanced countries benefits from the relatively secure economic conditions around those refineries. As more people are loosed from money based economies, might such security be threatened?

    Posted June 3, 2010 at 10:49 am | Permalink
  4. Very interesting, thanks for this link, Laura. Today’s blog post by Andrew Revkin in the New York Times, comparing the Gulf spill to events in Kuwait in 1991, is also a reminder of our unending thirst for oil.

    Posted June 3, 2010 at 11:07 am | Permalink
  5. We here have a problem of criminality not being addressed by government. It might be that the government is corrupt leading to a feeling that “if they can do it so can I”. Is there a solution? I think so but it will require that the Nigerian government first make sure that their dealings are above reproach. The next is to implement stringent measures that will ensure that the refineries act responsibly. After which the general population should be taught the value of the resource they have and to respect and use it for their own development. Criminality only takes place when the so-called “have-nots” do not benefit from the resources that they know exist.

    The problem in Africa is there are many good men that do nothing, thus everything goes to waste. Until African people develop a sense of the future and use their resources to make that future possible, corporate citizenship will never be a high priority. This will then not require foreigners to show their corporate citizenship either leading to the problems described in the above article. It should be mandatory for large companies that exploit resources in Africa to ensure that they spend a portion of their local profits for the development of entrepreneurial skills and training of locals to respect their resources.

    Posted June 7, 2010 at 5:33 pm | Permalink
  6. Anita wrote:

    Everyone is concerned about oil these days!!

    Posted June 10, 2010 at 6:39 am | Permalink

4 Trackbacks

  1. […] This post was mentioned on Twitter by William Easterly, William Easterly, Josh Ruxin, Eric Omanga, @mikegechter's RSS and others. @mikegechter's RSS said: Gulf Oil Spill: The Development Edition: Vijaya Ramachandran and Julia Barmeier of the Center for Global Developme… […]

  2. By Oil Spill « Daniel Joseph Smith on June 3, 2010 at 9:29 am
  3. […] magnitude have happened before and not even been a blip. Nigeria seems to be the prime example, and AidWatch pulled a quote from the NYT that notes (horrifyingly) that Nigeria has experienced a spill on the […]

  4. […] if the Gulf Oil Spill happened in Africa? Oh, wait, it already […]

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    The Aid Watch blog is a project of New York University's Development Research Institute (DRI). This blog is principally written by William Easterly, author of "The Elusive Quest for Growth: Economists' Adventures and Misadventures in the Tropics" and "The White Man's Burden: Why the West's Efforts to Aid the Rest Have Done So Much Ill and So Little Good," and Professor of Economics at NYU. It is co-written by Laura Freschi and by occasional guest bloggers. Our work is based on the idea that more aid will reach the poor the more people are watching aid.

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