Stories from Guyana, USA and south west Africa illustrate the local dangers of oil and gas developments, while oil companies globally are struggling. Stories from Nicaragua, Cambodia, India and Lizard Island about the effects of climate change on communities and nature.
Developing nations tend to see the discovery of oil and gas as a passport for the journey from rags to riches. Guyana, a South American country of 780,000 people, is certainly hoping that commercialising its recently discovered reserves will lead to national prosperity and rising living standards for its citizens. Guyana will need to manage the journey better than Angola, however. Angola (pop. 32 million) has been producing 1-2 million barrels of oil a day for the last twenty years but it currently has a national debt of US$76 billion, a junk bond credit rating, a weak undiversified economy, and a reputation for corruption. More than half of its inhabitants live on less than US$1.90 a day. The major beneficiaries of Angola’s oil and gas reserves seem to have been the who’s who of international companies that have been doing the mining and exporting – and a few ‘lucky’ Angolans, I imagine.
And look out Namibia and Botswana. A Canadian oil exploration company, ReconAfrica, is planning to search for new oil and gas fields in 34,000 km2 of the Kavango Basin. ReconAfrica already has a licence to proceed in Namibia and is starting exploratory drilling about now; it has a 25 year production licence. There are multiple environmental and human problems associated with opening up this phenomenal wildlife region to mining which I will let you explore in the linked article. What I want to highlight is that ReconAfrica estimates that there may be 31 billion barrels of oil underground. Sounds a lot but actually it’s enough to satisfy the USA’s current consumption for only four years. The search for short term profits at any cost has gone mad! First, the climate crisis demands that we restrict fossil fuel supply, not just the demand, if we are to limit global warming to anything moderately safe – this includes not opening up new fields. Second, if ReconAfrica finds oil and gas, hundreds of wells will be sunk (some possibly involving fracking) and roads, pipelines, plant, offices, accommodation, etc. will be built in the region. This will permanently damage the Kavango’s World Heritage- and Ramsar-listed unique ecosystems and compromise traditional communities and lifestyles. All this long term carnage for what? … enough oil to keep one country going for four years. This is crazy.
It’s not only in developing nations that local communities miss out on the bonanza. The story is similar in the USA. Twenty-two counties in West Virginia, Pennsylvania and Ohio have had a gas fracking boom since 2008. Jobs and riches were promised and GDP in the involved counties has grown but there have been few local benefits. Jobs growth has been weak (some counties have lost jobs), populations have declined and the region’s share of national income has fallen.
Looking at the global picture, the (pinkish) Financial Times graph below shows a roller-coaster ride for the price of oil during 2020, cresting at US$70 a barrel in January before plummeting to US$15 a barrel in April, levelling off at US$40-50 between June and November and then rising again. It’s about US$63 this week. Temporary glitch for the industry or terminal decline?, that’s the question with no clear answer. On the one hand, major oil companies are writing off billions of dollars of assets and are becoming a decreasingly significant part of stock markets (blue and white graph) but on the other they are still making minimal investment in renewable energy, less than 1% of their total capital investment.
Notwithstanding oil companies’ investment preferences, many investors are favouring renewables over fossil fuels for economic rather than (or perhaps in conjunction with) environmental reasons. In the jargon, renewables are deflationary – no exploration costs, just build the infrastructure and harvest the free wind and sun and let improving technology and economies of scale keep bringing down the price. Fossil fuels, however, are inflationary – the easiest to access, cheapest reserves are explored and exploited first and so production gets more difficult and more expensive over time. On top of which, mining is a risky process: risky investments, risky production, risky for workers, risky for local communities.
After two strong hurricanes hit Haulover, an Indigenous village on Nicaragua’s east coast, in quick succession late last year, not only their homes were destroyed. This six minute video paints a graphic picture of the effects of climate change on traditional communities, their local ecologies and their means of subsistence, challenging their whole way of life and capacity to continue living on traditional lands.
40% of Cambodia’s population work in farming. This two minute video shows how climate change has reduced Cambodia’s rice harvest from twice to once per year but it also highlights some helpful government responses.
Like me, you’ve no doubt seen pictures of the fatal ‘glacial flood’ in northern India subsequent to an event in the Himalayas involving global warming, chunks of glaciers breaking off, blocked streams, glacial lakes, waters bursting through, and dams and hydropower stations built in the wrong places. Like me, you may also have struggled to understand exactly what happened. This brief report pulls these threads together to create as clear a picture as I have seen, accepting that it’s still not that clear exactly what did happen.
The picture below was taken by Lyle Vail (Joint Director of the Australian Museum Lizard Island Research Station) on February 13th in two metres of water off Lizard Island in far north Queensland. Pretty, isn’t it. Regrettably, all is not as it looks. The hyper-real colours of the corals are signs of corals under stress. The brightness is a precursor to another possible episode of coral bleaching caused by high sea temperatures. The graph under the photo shows the water temperature 0.6m below the surface at Lizard Island from February 8-19th. There are too many days with water temperatures around 30oC for coral comfort until the 17th. Cooling in the last couple of days will bring some relief.
Photo: Lyle [email protected] Museum Lizard Island Research Station