as it may be locally and in the short-term, will be repaired by a healthy ecosystem especially in the hot humid tropics where biological cycles are fast.
What harms water resources in the longer run is the construction of badly designed canals ("slots") to provide access to well-heads and flow stations, and to provide short-cuts in meandering rivers, in swamps and riverine locations.
Also badly designed roads built by the oil industry can kill swamp and flood plain forests by upsetting local drainage.
15.6.3 ECONOMIC COSTS AND BENEFITS OF OIL EXTRACTION.
The obvious cost is pressure on environmental systems is three-fold:
- Direct pollution such as offshore and on-shore spillage, gas flaring and abandoned installations.
- Alteration of the environment by activities such as the construction of access slots, pipelines, flowlines, roads, drilling sites and wellheads.
- Pollution and alteration of the environment by other primary and by secondary and tertiary industries encouraged by the oil industry.
More insidious costs include the build up of heavy metals in ground-water, changes in soil acidity caused by atmospheric pollution and disruption to local communities and their relationship with their natural resources.
Social disruption and equity imbalance is another major cost of the oil industry, the political manifestations of which are: local political opposition to the oil industry; general lawlessness in the "oil cities" (e.g. Warri and Port Harcourt); fighting between tribal groups; the prevalent spontaneous outbreaks of communal violence against authority; and the well documented massacres of civilians in oil producing areas by the military authorities.
Undoubtedly, to some extent, the problems of communities in the oil belt have to be faced by all communities under-going rapid economic re-adjustment, and also some of the political unrest may be no more than a negotiating position. Nonetheless there does seem to be a local realisation of an imbalance between the local communities who appear to bear a considerable proportion of the economic costs, (omitting the substantial financial investment of the oil industry) and the beneficiaries who are the oil companies, consumers, and the government as the recipient of taxation.
As a measurement of the fairness of the oil industry to the communities in the Niger Delta one could simply compare the economic costs with the economic benefits:
- Costs to the local community beyond what might be expected without the oil industry: as described in 14.6.1 above; loss of the oil asset; increased competition for resources from immigrants; increase in lawlessness; disruption to community life; and the safety hazards of functional and abandoned oil installations.
- Benefits to the local community beyond what might be expected without the oil industry: job and training opportunities; potential increase in allocation of the federal budget; useful assets discarded by the oil industry; improved communications in the oil fields; and availability of industries, services and facilities encouraged by the oil industry.
- A proper cost benefit analysis might suggest a net benefit or a net disbenefit. However, the real test would be to assess what the local communities will have when the oil industry departs: the oil will have gone;
