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Oil Pollution in the Niger Delta: Whose Fault?

Author: John Campbell, Ralph Bunche Senior Fellow for Africa Policy Studies
August 17, 2010
Huffington Post

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Nigerian commentators have been bemused by popular anger in the United States at BP's oil spill in the Gulf of Mexico. They claim that the Niger Delta has suffered spillage equal to an Exxon Valdez each year for many decades with little Western indignation or even notice. For some of them, this highlights Western arrogance and its willingness to subordinate the people of the developing world to fill its own perceived energy needs. However, like the BP oil spill, causes and accountability for this on-going environmental disaster are not straightforward. Petroleum industry mistakes make a contribution, and the international oil companies acknowledge that they paid insufficient attention to the environment during the early days of their operation. However, Abuja's failure to address regional grievances that fuel a low-level insurrection makes it particularly difficult to address the Niger Delta's current ecological predicament.

The actual extent of the ecological disaster in the Delta is uncertain. A 2006 assessment by the Nigeria Federal Ministry of Environment assisted by conservation non-governmental organizations, notably the UK World Wildlife Federation, estimates that oil spilled in the Niger Delta over the past fifty years is in the range of nine million to thirteen million barrels, about fifty times the volume spilled by the Exxon Valdez in Alaska in 1989. This conclusion is often taken at face value by Delta and conservation activists but is not universally accepted. Nevertheless, the region appears in some places to be an ecological disaster.

Despite the common perception that the international oil companies are unfettered in their Nigeria operations, oil and gas is state property, and the government, especially the president, has the whip hand. The multinational oil companies partner with the state-owned Nigerian National Petroleum Corporation (NNPC), which is the majority stakeholder in all oil operations in the country. Above a certain threshold, more than ninety percent of partnership profits (including oil-generated revenue from taxes) go to the federal government, which then distributes by formula a certain percentage to the state and local governments, retaining the largest share for itself. Petroleum provides the government with more than eighty percent of its revenue and more than ninety percent of its foreign exchange. Despite Nigeria's place as a top-ten world oil exporter, the state's oil profits are mostly consumed by ordinary government activities, leaving little left over for development of any kind. Yet, under its partnership agreements, the NNPC is required to share the funding of petroleum industry expansion. The Abuja government often fails to appropriate the funds necessary for NNPC to fulfill in a timely way its partnership obligations because of politicians' other priorities. The Niger Delta Development Corporation (NDDC), a parastatal funded by contributions from the oil industry and the government, and charged with economic development in the Delta, is also starved of required government funding and has largely been ineffective.

Petroleum pollution in the Delta has numerous causes. The industry is more than fifty years old, and aging infrastructure can break down. The Delta's geography is difficult and isolated and leaks can go undetected or unaddressed for a period of time. Mom-and-pop oil theft is also common among the Delta's impoverished population. This often takes the form of puncturing pipes and siphoning off the oil, leaving behind chronic oil leaks and even causing devastating explosions that kill many people. Furthermore, the Delta's wetlands environment inhibits the wave action that can disperse spills, as it apparently has in the Gulf of Mexico. Spilled oil can be visible for a long time in the Delta's swamps.

Overcoming these issues is beyond the capacity of the oil companies and the NDDC. Their resolution requires an end to the decade-old insurrection in the region. This low-intensity conflict incorporates a witch's brew of ethnic and environmental resentments, self-serving criminality and draws support from the nearly universal desire in the region to retain a greater proportion of the oil wealth it produces. Yet, it would be difficult for any Abuja government to meet insurgent demands. Reallocation of oil revenue so that the Delta gets more would mean that other parts of the country and the federal government would get less. The states and local governments in the Delta already receive billions of dollars in oil-generated revenue, more than any other part of the country. But much of the revenue is lost to corruption and overhead, and there is little sympathy in the other states with their own needs for the Delta's reallocation demands. Delta ethnic rivalries are also often a zero-sum game, making difficult adjustments in local government boundaries or distribution of government patronage. And politicians long have been implicated in criminal activities associated with the insurrection to the extent that one respected non-governmental organization characterizes Delta governance as "criminal politics." Illicit revenue from the large-scale theft ("bunkering") of oil, while having smaller environmental impact because it is largely a form of "white-collar" crime involving manipulation of loading manifests and other documents, plays an important role in funding the insurrection but also electoral politics, in the view of credible observers. The insurrection at times has reduced production by up to a third and even contributed to a spike in world oil prices. But militants have never killed the goose that lays the golden egg by shutting-down entirely the industry.

The National Assembly is at present considering legislation that would reform the petroleum industry and, in effect, enable NNPC to function in a way similar to the national oil companies of Brazil and Malaysia, including the ability to raise capital on its own. The proposed legislation is controversial, and the oil companies have complained about the government's sparse consultation with them. Paradoxically, while the legislation would reform NNPC, it may also discourage the international oil companies from increasing their investment, which would be necessary to increase production.

The new legislation does, however, include significant improvements in environmental reporting requirements and, in general, demonstrates a much greater concern about petroleum pollution than in the past. Nevertheless, the legislation does not address the core grievances of the region and oil-theft criminality that would require a fundamental reordering of Nigerian politics beyond petroleum. So long as the insurgency continues, attacks on petroleum infrastructure will likely reduce the hoped-for environmental impact of the new legislation. And many Nigerians will continue to blame the West's insatiable appetite for petroleum as the root cause of the despoliation of the Delta environment.

This article appears in full on CFR.org by permission of its original publisher. It was originally available here.

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