The High Environmental and Human Costs of Oil Exploitation

As the world watches the scramble to save the shoreline and wildlife trapped in the path of the Beyond Petroleum (BP) oil spill in the Mexican Gulf, many unanswered questions resurface. Notably: what are the true costs of oil exploitation? And do the benefits really outweigh the costs?


The Mexican Gulf spill isn’t the first time that attempts to procure crude oil has wreaked havoc on the environment and on the lives of many individuals in the United States. The human victims of the 1989 Exxon-Valdez oil spill which dumped 10.8 million gallons of crude oil on Alaska’s shores must now experience a sense of déjà vu as they watch the debate over who is to blame, whether the spill could have been prevented, and how much it will cost to clean up the mess. They also watch as the same early promises that were made to them, that is, that the spill could be contained and managed, once again, turn out to be false.

Twenty-one years after the Exxon-Valdez spill, an estimated 20,000 gallons of oil are still unrecovered. That oil spill left in its wake an estimated animal and bird death toll of 250,000 seabirds, 2,800 sea otters, 300 harbor seals, 250 bald eagles, 22 killer whales, and billions of salmon and herring eggs. These losses were hardest felt by the inhabitants of the coastal towns of Alaska, many of whom depended on salmon and herring for their livelihood. The hidden costs of the spill included financial ruin, depression, marital discord, and in the bleakest cases, suicide. As The BP spill is leaking an estimated 200,000 gallons of oil a day into the Mexican Gulf, its environmental and financial toll might far exceed that of the Exxon-Valdez.

The first line of action is to quickly clean up the mess and stem the flow of crude oil into the ocean. The law arising from the Exxon-Valdez spill is that "each responsible party for a vessel or a facility from which oil is discharged" is liable for cleaning up a spill. BP has assumed responsibility for the spill and is taking several measures to curtail the spread of the oil including the construction of a containment dome, the drilling of relief wells, and the use of chemical dispersants. However, keep in mind that the effects of the chemical dispersants on the ecology of the ocean are unknown and could potentially be harmful. Further, President Obama has reassured the local fishermen who relied on the now contaminated oyster and shrimp that they will be fully-reimbursed by BP. However, this promise might come to ring hollow as there is a $75 million limit on BP’s liability. Once that well runs dry, however, there is a federal fund of up to $1 billion dollars, which is derived from a tax on oil.

What comes next after the clean-up? Will this incident serve as a sign that off-shore oil drilling in America should be abandoned? If so, what about oil prospecting in other countries? The fact remains that the U.S. is heavily dependent on foreign oil. Lisa Margonelli, the director of the New America Foundation’s energy initiative notes that for many years, American companies have been drilling for oil in such places as Kazakhstan, Angola, and Nigeria – places where there are no robust environmental laws to protect the citizens and their natural resources She further remarks that as of 2009, Nigeria has 2,000 active spills.

Worse yet are the human rights abuses that stem from the practices of American oil companies in foreign nations. Recently, after a hard-won battle, Shell paid $15.5 million to the Ogoni people of the Nigerian Delta for the environmental decimation of its indigenous lands and to settle future liability claims in regards to Shell’s role in the execution of Ken Saro-Wiwa, leader of the MOSOP, the Ogoni movement in protest of Shell’s abuse of the Delta environment.

However, as long as the U.S. remains dependent on oil energy, there is no guaranteed end to these types of environmental disasters and human rights abuses, whether they occur on American soil or abroad. Margonelli notes that since the Santa Barbara Spill of 1969, an event that prompted the creation of Earth Day, Americans now consume two-thirds more gasoline than before and also import four times the amount of oil as then.

The only safeguard we can have to prevent such man-made environmental disasters is to move away from oil energy and to cleaner, environmentally-friendly energy. For one, as outlined in an earlier post, the U.S. can explore the use of waste-to-energy incinerators as a means of generating fuel. However, if the immediate abandonment of oil as fuel is deemed highly impracticable, then more steps should be taken to ensure that oil is obtained in a way that is safe for the environment.

Margonelli advocates the reform of the Minerals Management Service, which is the federal agency that administers offshore drilling leases and oversees the oil companies’ compliance with environmental laws. She observes that in 2008 said agency was subject to allegations of bribery, cocaine use, and sexual misconduct – bad behavior that she claims stems from their close relationship with the oil industry. Arguably, the agency could be viewed as complicit in this recent disaster as it considered, but ultimately, rejected the idea of mandating the installation of remote-controlled switches (at the mere cost of $500,000) on off-shore drilling rigs to serve as a mechanism to quickly shut down the type of spill BP experienced. That fateful decision may end up costing American taxpayers for many years to come.

Ifeoma Ajunwa obtained an undergraduate degree in Political Science and Sociology at the University of California, Davis where she was a McNair Scholar. She earned her law degree from the University of San Francisco School of Law. She is admitted to the Bar in California (2007) and New York (2008).

Ifeoma has conducted extensive research and advocacy work with such organizations as the NAACP (Washington Lobbying Division) and the United Nations Human Rights Council. She is interested in the connection between corporate social responsibility and social justice. She will be a PhD student in Sociology at Columbia University starting in Fall 2010.