Natural Resources: Hidden Curse or Buried Treasure?

Z Geography is out of town this weekend.

A USA Today article (published on 16 January 2014) gushes (no pun intended!) over the continuing development of the Eagle Ford Shale in southern Texas. The article aptly discusses the benefits and problems associated with major natural resource discoveries. Besides the variety of ways physical geography influences natural resources (accessibility, availability, to name a few) human geography also influences (and is influenced by) natural resources.

Over the short term, the article highlights the sudden influx of money into an otherwise struggling, predominantly rural belt in the state of Texas. In an accompanying article, USA Today reports that one county sitting atop the shale had to give $300,000 back to the state last year (under Texas law, more affluent districts return “a percentage” of their revenue in order to fund poorer ones). This year this particular district is projected to return $28 million. This money, derived from a variety of links with the shale’s oil (land royalties, spiking land prices, greater sales), facilitates the district’s acquisition of technology to enrich public school education. In addition, the funds have also allowed for upkeep and maintenance on existing facilities. To illustrate this boom, according to the article 70% of the district’s students qualify for free or reduced-price lunches. Through these oil-generated funds, all 1,300 students in the district of access to new iPads, new school buses, and free school supplies.

Of course, there also a number of short term (and long term) problems associated with this boom. There are the deleterious effects of being located so close to production sites with some residents reporting nose bleeds and head aches, in addition to the terrible smell (described as rotten eggs) as trapped natural gases are burned (flaring). The city of San Antonio has recorded higher-than-normal ozone levels since the drill began, according to the article. In addition to negative health effects, these gases will also contribute to a changing climate. In addition to negative health and environmental effects, there have been other second-order effects. Prostitution and traffic have both increased as “man-camps” of oil workers are established throughout the region. This unforeseen geographic clustering is taxing for small, local police services. The massive (though ultimately temporary) increase in population is also straining regional water supplies and raising concerns of potential contamination of groundwater supplies.

A shale skeptic, quoted in the article, discusses another long term pit fall – the end of the oil. He estimates that, at current extraction rates (which are likely to rise), the Eagle Ford Shale has “five to 10 years” of production. These predictions (as dedicated followers of the “peak oil” debate will know) should be taken with a large grain of salt (or sand). As technology, and prices, change it is impossible to predict (especially with great accuracy) when the end will occur. As the article notes, the technology being employed in shale exploitation has been used for natural gas extraction. The difference came with crude oil reaching $100 a barrel and advances in technology. In short, it became profitable. Despite this a geographically-wider reading of oil economies is useful.

The United Arab Emirates, particularly Dubai, provides one method of preparing for time when oil extraction becomes unprofitable. Dubai has been investing much of it’s profits from oil into becoming a financial hub of the Middle East, in addition to catering to high price tourism. These activities ensure a diversification of the local economy that should endure once physical extraction of natural resources end.

The local and state governments also have a positive role to play, and should. Nigeria is enduring a decades-long insurgency in the Nile Delta where locals accuse the central government of failing to redistribute oil revenues fairly. Then there is the case of the Democratic Republic of Congo where extensive natural resource endowment, and extraction, provides little (or no benefit) to locals thanks to a contracted state, persistent political and social violent instability, and corruption. While southern Texans unlikely to turn violent over the various negative health effects associated with production, local governments (backed by the state government) have the ability to mitigate these effects (if not wholly control them).

Natural resources can contribute to conflict (both violent and nonviolent), identifying places where these conflicts can occur is paramount to the geographer. For a transportation geographer, it may be the identification of critical intersections that are most likely to serve as bottlenecks or prone to traffic accidents. For medical geographers, it may be the delimiting of the extent to which serious health issues may arise, the proximity of people to production activities and prevailing winds. While knowing these, and other, answers are unlikely to solve underlying conflicts that can be used to more cost-effectively target solutions.

Thus, the development of the Eagle Ford Shale is “a gift” to an underdeveloped region of Texas. However, as discussed in the USA Today article and this post, the region faces serious long-term and short-term challenges. Properly managing, administering, natural resources is the corner stone of long term stability.

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