RIASSUNTO
Abstract
When frontier region communities and governments are first faced with oil and gas exploration and development they are often fearful of the implications and largely reactive, trying to stop it or limit its negative social, economic and environmental effects, while at the same time still hoping to achieve some share of any economic benefits. Based on first-hand experience with offshore petroleum activity in Atlantic Canada, Scotland, Norway, the Faroe Islands and the Falkland Islands, as well as with mining, smelter and hydro-electric projects in various parts of the world, this paper explores more proactive and strategic approaches. A number of specific optimization tools, and broader requirements for success in delivering benefits, are discussed.
Introduction
Especially in frontier regions, oil and gas activity is often initially seen as threatening to community well-being. As is now the case with many types of exogenous industrial activity, including mining and hydro-electric projects, it is expected that it will cause boom and bust effects, inflation, social disruption and damage to traditional industries. It is also thought that it will leave a negative social, economic, cultural and biophysical legacy, while benefiting only a small minority of local people and companies. In part reflecting and reflected by this, community economic development theory and practice now largely reject inward investment in major industrial projects and instead advocate small-scale, community-based and ‘bottom-up' initiatives.
As a consequence, communities and governments faced with petroleum activity are often largely reactive, trying to stop it or limit its negative social, economic and environmental effects, while hoping to achieve some share of any economic benefits. Even in the case of regions that are generally ‘pro-development,' the maximization of the local benefits is often ignored or treated less diligently that the mitigation of negative environmental, social and economic effects. This paper explores the use of more proactive and strategic approaches that are based on cooperation and collaboration between the local residents and the industry, and recognize and seek to optimize the wide range of socio-economic and biophysical effects. This includes reducing or eliminating the negative impacts, creating and enhancing the positive ones, and contributing to sustainable local economic and social development.
The paper provides, first, a review and discussion of common frontier regions' expectations of large-scale industrial activity. This is followed by a call for more proactive approaches and the presentation of case studies of how offshore oil and gas activity can deliver substantial benefits, including economic diversification and sustainable economic and social development. A number of optimization tools, and broader requirements for success in delivering benefits, are then discussed. The concern throughout is with the benefits resulting directly and indirectly from petroleum activity, rather than with royalties and taxes that may result.
Attitudes Towards Large-Scale Development
A number of stereotypical expectations are found in many frontier regions facing the prospect of petroleum or other types of large-scale industrial activity. These expectations are often based on past experiences of such projects locally or elsewhere and commonly include a belief that:
Most benefits will accrue to non-local corporations and their shareholders, with any local benefits being concentrated in the hands of few highly specialized and already prosperous companies and individuals.
There will be ‘boom-bust' effects during construction activity, likely including housing shortages, traffic congestion, wage and cost of living inflation, and crime and other social problems.