Canada's Oil Sands as Ethical Oil Sources | Free Essay Example

Canada’s Oil Sands as Ethical Oil Sources

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Topic: Business & Economics
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Introduction

Oil is the most important energy source in the world and it sustains modern life as we know it. Maugeri (2006) declares that it is the most vital resource of our time and it provides the energy needed to run industries and power homes. For this reason, nations that produce oil gain significant monetary benefits from its sale. In the past few decades, Canada has emerged as a major oil producing nation (Falola & Genova, 2008). However, Canada’s oil reserves are not contained in underground reservoirs. Instead, they are held in oil sands available in remote sections on the country. To retrieve the oil from the sand, a mixture of water and chemicals is used. The process is energy-intensive and it leads to significant pollution and massive water consumption (Maugeri, 2006).

The negative environmental impact associated with crude obtained from oil sands has led to this product being referred to as “dirty oil”. While conventional oil drilling is detrimental to the environment, its impacts are less than those of oil sands. Nigeria is one of the countries that rely on conventional drilling to extract oil from the ground. Environmentalists consider oil from sources such as Nigeria “clean” while those from Canada’s oil sands are deemed “dirty”. However, Canadian diplomats are keen on promoting the idea of “ethical oil”. Kalyani (2011) defines this as the idea that oil can be ethical depending on its source country. This paper will argue that in spite of the detrimental environmental effect of Canada’s oil sands, they are more ethical than oil from Nigeria.

Why Oil Sands are more Ethical

To begin with, Canada is a democratic country with low corruption levels in both the public and private sector. As such, the democratically elected government is in charge of awarding mining permits to the most competitive companies. Dufour (2013) notes that Canada’s oil resources are exploited in a transparent manner with the government involving the people in the process. The government publishes the financial records for the revenue obtained from the oil sector (Percy, 2012). These records are available for scrutiny by the public and special interest groups. This increases the accountability of the government in handling oil funds. It also ensures that the government uses the oil revenue to improve the economic well-being of the entire nation. In contrast to this, the Nigerian government is plagued by corruption. While the country is a democracy, government officials are not accountable to the people and there is little transparency in the oil sector. Oronto (2004) notes that Nigerian rulers have for decades used the foreign currency obtained from the sale of oil to enrich themselves.

The wealth obtained from oil has fuelled the corruption that has plagued the African nation. The crisis that has characterised the Niger Delta region for decades is attributed to the corruption of government officials and oil companies in the region. Ikelegbe (2009) declares that the greed of the ruling class and the rampant corruption has fuelled the crisis in the area. The disenfranchised communities have therefore taken to engaging in illegal activities to access the oil resources. Armed militias have emerged who vandalise pipelines and siphon off crude oil for sale in the black market. For this reason, some academics refer to some of the oil obtained from Nigeria as “conflict oil”. Obtaining oil from Canada’s oil sands reduces reliance on foreign oil bought from countries with corrupt governments such as Nigeria. This is ethical since

Canada’s oil sands are ethical since they consider the greater good of the communities in the area where the oil is mined. Oil production has an impact on the communities residing in or near the oil producing areas. In Canada, the interests of these communities are given first priority by the government. The Canadian government has respectful relationships with neighbouring communities and consults them before engaging in mining on their land. Dufour (2013) declares that Canada stands apart as “the oil-rich nation where the state does not confiscate your oil fields” (p.12). The oil industry is required to offer compensation in cases where people have to be displaced. Employment opportunities have also increased in the oil producing areas. At the present, the oil industry in Canada is the largest employer of aboriginal people living in the oil producing areas. Canada has also managed to come up with plans for ensuring the future sustainability of communities that depend directly on oil revenue for their economic survival.

Most governments fail to plan for the future which means that the communities are devastated once the oil production ends. This is not the case in Canada’s oil sands. The government has made elaborate plans to ensure that the society continues to thrive after the finite oil resources are depleted. The OECD (2008) acknowledges that the Canadian provincial government has a surplus management plan that includes putting part of the oil revenues into a Heritage Fund. In contrast to this, the Nigerian government does not consider the interests of the communities residing in the oil producing regions. The distribution of oil resources in Nigeria is based on tribalism and ethnicity. Oronto (2004) notes that the minority ethnic groups living in the oil producing areas have been marginalised by the government. While they reside on the land that is rich in oil reserves, these minorities are denied access to the oil revenues.

Finally, Canada’s oil sands are ethical since they abide by stringent environmental regulations set by the government. Pollution has been the most important issue surrounding the extraction of oil from oil sands. According to Levi (2009), greenhouse gas emissions are the most significant environmental problem confronting the energy sector in Canada. The efforts by the country to reduce its carbon footprint have been hampered by the oil sands project. Even as the country works towards reducing its carbon footprint, the establishment of new oil-sands has hampered these efforts. Research indicates that oil sands create up to 20% more carbon dioxide emissions than conventional drilling (Kalyani, 2011). Even so, the Canadian government has been more active in addressing the environmental issues brought by oil production. The OECD (2008) reports that all oil-sand plants that came into operation during 2012 and later were required to meet stringent target based on the use of carbon capture and storage.

According to the Economist (2014), Canadian oil producing companies have invested in emissions-reducing technologies that have led to significant drops in greenhouse gas emissions from oil sands. Kalyani (2011) confirms that Canada has been able to attract investors since the country has above average environment standards. In contrast to this Nigeria has a poor track record in environmental regulation. The oil extraction process in Nigeria is mired by rampant pollution. The government has failed to implement policies that deter oil producing companies from carrying out harmful practices such as gas flaring. Due to this government negligence, regions such as the Niger Delta are heavily polluted. Okonmah (2008) reveals that rampant oil pollution in Nigeria has threatened the lives of citizens who live near the oil-producing areas. Nigerian oil is therefore unethical since it is produced with little concern for the environment. The government does not take adequate action to ensure that oil production takes place in an environmentally friendly manner.

Conclusion

This paper set out to argue that Canada’s oil sands are much more ethical than oil from Nigeria. It began by highlighting the importance of oil resources to the global community. The paper then recognised the environmental impact of oil drilling. Oil obtained from Canadian oil sands has a higher environmental impact. However, the political and socio-economic issues of the country should be considered when judging the appropriateness of an oil source. When these factors are taken into account, Canada’s oil sands are more ethical than oil produced from Nigeria. The Canadian government is accountable to its citizens and there is transparency in utilising oil resources. In Nigeria, the government is corrupt and unaccountable to its citizens. In addition to this, Canada’s oil sands are used to benefit the neighbouring communities as well as the entire nation. Nigeria’s oil does not benefit the communities in the oil producing areas leading to conflict. Finally, the paper has shown that Canada adheres to stringent environmental regulations while Nigeria does not. With this reasons in mind, it can be argued that Canada’s oil sands are more ethical than oil from Nigeria.

References

Dufour, M. (2013). A Nightmare on Maple Street. Dollars & Sense, 304(1), 11-16.

Falola, T., & Genova, A. (2008). The Politics of the Global Oil Industry: An Introduction. Connecticut: Praeger.

Ikelegbe, A. (2009). The Economy of Conflict in the Oil Rich Niger Delta Region of Nigeria. Nordic Journal of African Studies, 14(2), 208-219).

Kalyani, V. (2011). Is Canada’s oil more ethical than Saudi Arabia’s? Christian Science Monitor, 42(3), 10-12.

Levi, M. (2009). The Canadian Oil Sands: Energy Security vs. Climate Change. Toronto: Council on Foreign Relations.

Maugeri, L. (2006). The Age of Oil: What They Don’t Want You to Know about the World’s Most Controversial Resource. Connecticut: Lyons Press.

OECD (2008). OECD Economic Surveys: Canada 2008. London: OECD Publishing, 2008.

Oronto, D. (2004). Oil and militancy in the Niger Delta: Terrorist threat or another Colombia? NY: John Wiley & Sons.

Percy, K. (2012). Alberta Oil Sands: Energy, Industry and the Environment. Ontario: Newnes Publishers.

The Economist (2014). Canada’s Oil Sands: The Steam from below. Web.