Environmental and Social Impacts of the Venezuelan Oil Industry - Case Study Example

ENVIRONMENTAL & SOCIAL IMPACTS OF VENEZUELAN OIL INDUSTRY By Student’s Name Code + Course Name Professor’s Name University Cite, State Date Background Information The exploration of the oil industry in Venezuela resulted from the discovery of hydrocarbons by the Spanish in 1499 (European Commission, 2013). They used the hydrocarbons just they had learnt from Indians; used it to caulk their respective ships as well as for purposes of lubricating most of their weapons. However, come 1535, Gonzalo Fernandez de Oviedo y Valdes identified and publicized the Venezuelan oil seepages and referred to it as the “nectar from Cubagua” indicating that it had medicinal values especially in treating such diseases as gout (European Commission, 2013). In 1811, and after the independence of Venezuela, Simon Bolivar explored the oil seepages and put down a decree in Quito to national ownership of these seepages. Later, in 1878, there was a first oil company that was established known as the Nacional Petroloa Del Tachira (European Commission, 2013). At this initial stage, oil was harvested in buckets but later, Antonio Pulido; the founder of the company introduced a drilling rig that was received from the United States of America. The industry continued to grow especially in 1908; a year for which General Juan Vicente Gomez assumed political power and allowed for massive foreign investments in the oil sector (European Commission, 2013). Presently, oil industry boasts of about 78 billion reserves of crude and a further 148 trillion cubic feet of natural gas. The advancements of the oil exploration lead to intensive impacts hence the focus of paper is on trying to examine the environmental and social impacts that arise from the oil industry in Venezuela. Environmental Impacts of the Oil Industry The Venezuelan oil industry accounts for more than 80% of its total exports revenues hence perceived as an important sector of the country’s overall GDP (European Commission, 2013). Taking this into consideration, there has been a number of environmental-based impacts that have resulted from this resource. The current on and off-shore oil exploration, drilling and extraction in Venezuela has resulted to imminent effects as it has allowed invasion hence affecting the existing ecosystems, human health as well as cultures of the people. It is important to note that the current Venezuelan Ministry of Environment engages in the formulation of numerous strides meant to improve on the environmental protection strategies within the country especially from effects oil exploration activities. For instance, the government agency held a crucial environmental summit for which more than 22 Latin America countries agreed to cooperate on matters related to protection of environmental-based operations (European Commission, 2013). However, with the recent increases in the levels of pollution of such important water bodies as lakes emanating from the oil industry has now contributed to the endangering of the environment within the country. In regards to the existing strengths of environmental-based protection, the Venezuelan Ministry of Environment has embarked on implementing numerous conservation operations that is set to protect at least a third of the country’s, which is indeed the highest in the entire Americas region (European Commission, 2013). The government agency has vehemently engaged in reforestation campaigns for substantial periods as a way of ensuring that the forest cover and the entire ecosystem does not disappear. A perfect example of this campaign can be traced back to the 2008 project dubbed “tree mission” that sought to successfully undertake reforestation of more than 500 hectares of land in the state of Aragua (European Commission, 2013). Given the success of this plantation activities, the agency has also set out a much more recent campaign; “Mission Plar”, which is predetermined to be undertaken under the supervision and implementation of sustainable development (European Commission, 2013). The fundamental objective of this campaign formulation is directed towards improving the quality of life of the citizens as a whole while still promoting the aspect of environmental sustainability. Following this line reasoning, it can be noted that the environmental protection operations within Venezuela as a whole are entirely directed to attainment of a sustainable development and conservation of oil resources. In essence, the physical changes of environments that emanates from intensive exploration and extraction of oil in Venezuela is deemed to be greater especially due to oil and urban pollution of such areas as Lago de Maracaibo (European Commission, 2013). It is important to note that exploration activities needs moving heavy equipment into the remote areas of the country. The process has led to intensive clearance of land for construction of roads and other platforms, which has in turn, resulted to extensive deforestation and soil erosion in most parts of the oil-mining areas. There has also been numerous complaints that most of the oil companies in the country have resorted to discharging contaminated water from the oil exploration areas into the environment especially water bodies that has resulted to poor health amongst the citizens. In fact, these discharges generates into chemical contamination of land and water from petroleum-based products and waste as well as other by-products of drillings. As European Commission (2013, p.27-33) notes; the overall environmental effects that emanates from the immediate exploitation of natural ecosystems as well as the immediate chronic effects resulting from the processess of drilling and production of mud and discharge of water on bottom-dwelling human populations as well as marine animals is deemed to be a catastrophic environmental consequence for the entire habitat (European Commission, 2013). Notably, the oil exploration and extraction process within this industry has resulted to immense urban and industrial levels of pollution especially along the entire Caribbean coast (European Commission, 2013). The release of the drilling wastes directly into the waters has resulted to a significant reduction in marine animals as well as tourism activities as the water bodies remain intoxicated for most parts of the year. The citizens living closer to these oil exploration companies have suffered continued soli degradation. Taking into account that Venezuela agricultural sector is still developing, the degradation of the soil has led to incapacitation of the sector as a whole. Following this negative environmental impacts of oil industry, most organisations both government and non-government based have embarked on formulation of decrees and policies that will set to protect the environment as well as demand these foreign-based oil exploration companies to practice almost safe activities for the sake of human populations as well as the marine life. The Venezuelan Ministry of Environment has ensured to develop policies aimed at compelling oil companies to engage in oil exploration that meet the international standards (European Commission, 2013). Research indicates that Venezuela is deemed to be one of the most developed economies within the Andean region in relation to environmental legislation (Intelligence Report, 2014). Most distinctively, the country has made efforts to ratify the environmental conventions like the Kyoto Protocol as well as the UN Convention to Combat Desertification (European Commission, 2013). Although there has been significant strides made in regards to these conventions, there still exists visible gaps between the already laid-out frameworks and the immediate political willingness to enforce environmental performances as well as achievements. Markedly, there have been issues relating to deforestation, desertification as well as insufficient management of oil wastes and the massive pollution caused by the oil industry as a whole (European Commission, 2013). In addition to this, the concentration of a high population centres within the oil-rich areas has especially in the north-eastern coastal section has resulted to intensive pollution and prevent efficient disposal mechanisms. Recently, both government and non-government agencies came up with an observation that noted a connection between poverty in Venezuela and activities related to environmental degradation with most of the poor population living closer to the oil-affected regions (European Commission, 2013). Land degradation from oil spillage and unattended oil mines has also added a significant issue to the poorest of the environmental degradation. Social Impacts of Venezuelan Oil Industry The Venezuelan oil industry, which is mostly explored by foreign-based companies, has resulted to a significant economy transformation especially because of its incorporation into the global provider of a valuable natural resource to such countries like the United States of America (European Commission, 2013). Economically, the country’s GDP by 2005 stood at $ 106 billion making it the largest in Latin America while the per capita income was placed at $4,020 position it within the upper section of the middle-income class (Intelligence Report, 2014). It is noted that the country’s overwhelming economy is significantly dependent on its vibrant oil industry that accounts for more than 30% of GDP and 90% of government-based export earnings. Due to its vibrancy, the Venezuelan government has resulted to formulation of expansive policies in order to fund social programmes as well as deploy significant investments in the infrastructure of the country. Due to the Venezuelan agencies resorting to diversification of the oil industry, it has made stringent efforts to tackle the poverty and social exclusion through development of such effective initiatives as Misiones (Intelligence Report, 2014). As much as there has been an intensive doubt made towards the initiative, it is without doubt that they have resulted to generation of significant opportunities particularly within the marginalised sections of the population. The appropriate agencies have embarked on a journey to accomplish most of the UN’s Millennium Development Goals mostly within the 2003 and 2004 era (Intelligence Report, 2014). Despite data showing that poverty still remains a menace amongst a substantial section of the population, especially in rural and indigenous communities, there has been a significant stride made in order to reduce the percentage to manageable levels. On the contrary, the country’s labour agency indicate that unemployment is still positioned high and above the 15% mark while aspects of underemployment and employment within the most sections of the informal sector remain distinctively higher with workers within the industry accounting for nearly half of the economy’s workforce. Notwithstanding, Venezuelan’s income distribution is unequal with a GINI coefficient that has continuously been positioned between 0.45 and 0.50 for a period exceeding 30 or so years (Intelligence Report, 2014). In spite of the aforementioned issues, it can be noted that the entire situation of Venezuela in relation to social developments still remains high and above in comparison to the Andean neighbours in such areas as high school graduation, infant mortality rates as well as health matters and an immediate access to clean water (Intelligence Report, 2014). Statistically, the country is positioned at number 58 in the UNDP gender-related development ratings. The country’s constitution, as a result of efficient income from the oil industry, has ensured to enshrine a right to public health service for all of its populations resulting to an immediate fall of the infant mortality rate to a low of 21 per every 1000 children by the year ending 2002 (European Commission, 2013). Reform Process As Initiated by the Venezuelan Government to Tackle Social & Environmental Impacts The fundamental operative point of the government’s immediate policy agenda rests with a distinctive focus on empowering the poorest as well as the marginalised regions of the country. In essence, the Venezuelan authorities have devised and implemented the Misiones initiatives that is set to fairly redistributes export revenues that emanates from the oil industry to such areas like education, health as well as overall living standards of the entire population (European Commission, 2013). Significantly, there have been intensive restricting processes made by the government in an effort to ensure that the population enjoys favourable environment for purposes of diversification into such notable economical areas as agriculture. So far, the government has also ensured to effectively update on its policies to meet international standards. References List European Commission 2013, Venezuela country strategy paper; 2007-2013.Retrieved on October 29, 2015 from http://eeas.europa.eu/venezuela/csp/07_13_en.pdf Intelligence Report 2014, How Venezuela’s economic and political distress impact the oil sector. Securing America’s Future Energy, vol.6, no .2, pp.2-9 Read More