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COMPARATIVE
ASSESSMENT OF THE SOCIO-ECONOMIC EFFECT OF CRUDE OIL EXPLOITATION
CHAPTER ONE
BACKGROUND
OF THE STUDY
1.1 Introduction
Petroleum is
among the various resources produced by nature. They are used by human to
satisfy their needs such as transportation, cooking, electricity power supply
and others (Mike, 2012). The exploitation of natural resources such as crude
oil is the use of natural resources for economic growth, of sometimes with a
negative connotation of accompanying environmental degradation (Cronin, 2009).
It started to emerge on an industrial scale in the 19th century as the
extraction and processing of raw materials (such as in mining, steam power, and
machinery) developed much further than it had in pre-industrial eras. During
the 20th century, energy consumption rapidly increased.
In the last
fifty-five (55) years, the Niger-delta region has experienced increased
activities in the area of oil exploration and exploitation, refining and
products marketing operations while the same activities have generated immense
finance for the country as a whole, it has created health and environmental
problems to the host communities in the Niger Delta Region. According to
Omajemite (2008), the operation of the oil industries have introduced
pollutants such as liquid discharge and oil spills into the air, land and water
component of the environment. This oil activities though contributed to the
Nigerian economy, notwithstanding the area has been subjected to series of
degradation and the member of the host communities suffering untold hardship.
The whole process of obtaining fuel mineral, from exploration, extraction
processing and transportation as well as storage and consumption generate one
form of pollution or the other. For example, during exploration, drill cutting,
drilling mud and fluids are used for stimulating of crude oil, damage to
pipeline and accident involving road trucks and tankers generate oil and
hydrocarbon emission. These have a far more reaching effect on the environment
(FEPA, 2001). The entire process of oil extraction negatively affects the
environment basically through pollution which invariably leads to other kinds
of problem stated the crude oil is so dangerous that when the oil touches the
leaf of food crops or whatever economic tree in the area, the plants dries off
immediately. This destructive effect of oil exploitation on plants invariable
leads to poor agricultural yield in the region.
The
exploration of crude oil Nigeria has led to a considerable economic growth in
the country. Crude oil was discovered in commercial quantities in the Niger
Delta Region, specifically in the present Oloibiri in 1956 (Omofonwa and Odia,
2009). Since then oil exploration and exploitation as continued resulting in to
what is termed environmental destruction and degradation due to neglect and
less concern of the multinational companies in environmental management in the
area. The first shipment of oil to Europe was in 1956 from a modest production
of 5,000 barrels per day in 1958, it reached a peak of 2.3 million barrels per
day in 1979. By the 1970’s oil has become the fiscal basis of the Nigeria
state, effectively replacing agriculture as the basis of revenue generation in
Nigeria (Mike, 2012). The Central Bank of Nigeria (CBN) in its 1981 annual
report inferred that oil accounted for than 90%of Nigeria Exports by value and
about 80% of total government revenue as
at December 31st 1981, there is no doubt that the Nigeria oil industry has
affected the country in a variety of ways at the same time. On one hand it has
fashioned a remarkable economic landscape for the country. One major pollutant
that has stimulated pollution of crude oil can occur as spillage from on-share
or off-shore operation of the petroleum industry. It is therefore believed that
when these oil spills occur, they affect the flora and fauns aquatic animal
which constitutes major protein resources for man.
In the
course of crude oil exploration various materials are also released into the
environment, such as Benzes and poly-nuclear aromatic hydrocarbon on oil and
water bodies. The toxicity of the oil adversely affects the soil, plants,
animals and water resources. According to Mike (2012) during exploration and
exploitation of oil, rural communities have to the destruction of farm lands
vegetation and pollution of streams. Accordingly, Badego and Nwilo (2005) noted
that the exploration of crude oil is a major environmental problem in Nigeria.
They posited that between 1976 and 1996, Nigeria recorded a total number of
4,835 oil incidents which resulted in a loss of 1,896, 960 barrels of crude oil
to the environment (NNPC Statistical Bulletin, 2015). Between 2006 and 2010,
according to Lawrence, Musari and Okere, (2010), Nigeria recorded a total 23
percent were caused by equipment failure, operational maintenance error and
corrosion while 45 percent had been attributed to sabotage and vandalisms (NNPC
Statistiacal Bulletin, 2015). The remaining 32 percent was attributed to
leakages and other mechanical and human errors.
Previous
studies have focused mainly on oil exploitation and gas flaring activities and
its environmental impacts in Nigeria especially oil producing states but none
have laid emphasis on the socio-economic effect of crude oil exploitation in
Ughelli and Warri. This study therefore seeks to fill the gap that exists in
literature on the topic under consideration.
Due to the
crude oil exploration, the resultant effects on the surrounding environment
have caused significant tension between the people living in the region and
multinational oil companies operating in the area. It is against this
background that this study is conducted to comparatively assess the
socio-economic effect of crude oil exploitation in Ughelli and Warri
respectively.
1.2 Statement of Problem
The
socio-economic effects of crude oil exploitation from the activities of the oil
industry resulting in environmental problems such as degradation cannot be
ignored. The problems associated with oil exploitation as summarized by Olojoba
(2009) include; pollution, environmental degradation, damage to farm produce,
loss of farmlands, economic hardship, among others. These problems have
continued to affect the inhabitants of Warri and Ughelli especially their
source of livelihood and socio-economic life.
In recent
times crude oil exploitation have damaged completely or seriously disorganized
the economic and social activities of the oil producing communities in Ughelli
and Warri. Agriculture, farming and fishing are the basic economic activities
of the people in Ughelli and Warri, but these activities have reduced
drastically due to the effect of crude oil exploration on the environment
(Ejola 2000).
Presently,
oil exploitation has posed serious threat to the socio-economic activities of
various oil producing communities especially in Warri. These socio-economic
activities ranges from trading, farming activities, to various businesses. It
is of no doubt today that, oil exploitation has hindered socio-economic growth
in various oil producing areas (community) since most people depend on the
natural resources for their source of survival and major means of livelihood.
Also the exploitation of oil in Ughelli and Warri respectively have negative
socio-economic impact leading to housing problems, increase in crime rate in
the core city, health issues, educational decay and insecurity as a result of
various conflict that emanate from oil exploitation activities especially among
the youths (Mike, 2012).
Oil
exploration and exploitation has been on-going for several decades in the
Nigeria Delta. It has had impacts on the environment in the region and has
adversely affected people inhabiting that region. The Niger Delta region
especially Warri and Ughelli consists of diverse ecosystems of mangrove swamps,
fresh water swamps, rainforest and is the largest wetland in Africa and among
the ten (10) most important and marine ecosystems in the world (Barry, 2015),
but due to oil pollution the area is now characterized by contaminated streams
and rivers, forest destruction and biodiversity loss in general, the area is an
ecological wasteland. This affects the livelihood of the indigenous people who
depend on the ecosystem services for survival leading to increased poverty and
displacement of people.
This study
is therefore conducted to address the aforementioned problem(s) and suggest
possible ways to solve the problems associated with oil exploitation and its
socio-economic effect on the study areas.
1.3 Aim of the Study
The aim of
this study is to carry-out a comparative assessment of the socio-economic
effect of crude oil exploitation in Ughelli and Warri.
However, the
specific objectives are to;
Ø examine
the socio-economic effect of crude oil exploitation in Ughelli;
Ø examine
the socio-economic effect of crude oil exploitation in Warri;
Ø compare
the effects of crude oil exploitation on socio-economic activities in Ughelli
and Warri; and
Ø postulate
achievable measures to solve the socio-economic effect of crude oil
exploitation in Delta State
.
1.4 Research Hypothesis
There is no
significant difference in the socio-economic effects of crude oil exploitation
between Warri and Ughelli.
1.5 Significance of the Study
The
importance of this study is that it will provide us with the opportunity of
studying oil exploration in Ughelli and Warri; and the major areas in Nigeria
especially in the study areas seriously affected by crude oil exploitation; and
take a deeper look at the effects of oil exploration on the inhabitants of
Ughelli and Warri and proffer solutions to the problems identified because if
problems are not properly looked into and controlled, the situation could get
out of hand and this will not be too good for the inhabitants of Ughelli and
Warri.
The
significance of this study is to find possible solution of reducing gas flaring
within Warri and Ughelli communities during crude oil exploitation activities.
The rate in which the associated gas has been flared within the area, if not
property checked will be worsen and it will continually give rise to
socio-economic problems and environmental degradation.
It will also
help to enlighten and create the awareness to the general public area about
some disease that are associated with oil exploitation and some measures to
check the spread of the disease and the health of the people living around the
refinery on the better ways of preventing themselves and safe guarding their
properties.
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