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 Research 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 and Objectives 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.
1.6 STUDY AREA
The study areas: Ughelli and Warri,
Delta State is located in the South-South Geo-Political zone of the
Niger Delta Region of Nigeria. It is among the oil producing areas of
Delta State.