Oil as a Resource Where does it come from? How does it affect development? What issues surround oil as a resource? What is the future?

Starter… “What if there was an oil shortage? Starting today? How would your life change?”

Since the invention of the internal combustion engine, oil has transformed the way we live. Cars, aircraft and other forms of transport make up more than half of today’s oil consumption. There are now 500 million cars on the road, but this could increase by five times over the next 20 years. Fifty years ago, people used 11 million barrels of oil a day. Today, 75 million barrels are used daily.

Oil is so much more than fuel though…. Ink Toys Dolls Tires Tents ShoesGlue Skis Dyes Cameras Combs Dice Mops Purses Dresses Pajamas Pillows Candles BoatsCrayons Balloons Curtains Milk jugs Putty Tool racks Slacks Insect repellent Roofing shingles Shower curtains Plywood adhesive Beach umbrellas Faucet washers Antihistamines Drinking cups Petroleum jelly Tennis rackets Wire insulation Ballpoint pens Artificial turf Artificial limbs Shaving cream  Telephones Antiseptics Deodorant Sweaters Floor wax Model cars Soap dishes Clothesline Tights Oil filters Upholstery Cassettes House paint Ammonia Hair curlers Eyeglasses Ice chests Ice buckets Fertilizers Toilet seats Life jackets Golf balls Detergents Sun glasses Bandages Nail polish False teeth Golf bags Perfume Shoe polish Cortisone LP records Vaporizers Parachutes Dishwashing liquids Unbreakable dishes Car sound insulation Motorcycle helmets Refrigerator linings Electrician's tape Roller-skate wheels Permanent press clothes Soft contact lenses Food preservatives Transparent tape Disposable diapers Sports car bodies Electric blankets Car battery cases Synthetic rubber Vitamin capsules Rubbing alcohol Ice cube trays Paint brushes Insecticides Fishing lures Linoleum Paint rollers Plastic wood Trash bags Hand lotion Shampoo Fishing rods Anesthetics TV cabinets Salad bowls Awnings Safety glass VCR tapes Movie film Loudspeakers Credit cards Water pipes Fishing boots Garden hose Umbrellas Rubber cement Cold cream Hair coloring Guitar stringsToothpaste Toothbrushes Folding doors Shower doors Heart valves Hearing aids Wading pools Telephones Antiseptics Deodorant Sweaters Floor wax Model cars Soap dishes Clothesline Tights Oil filters Upholstery Cassettes House paint Ammonia Hair curlers Eyeglasses Ice chests Ice buckets Fertilizers e.t.c!

Q) Describe: Where is the oil?

Q) What do you notice about the producers and the consumers? With oil so valuable to modern day life, it can bring huge wealth and power but many people in oil-producing regions see little of the benefits. Note which ten countries produce the most oil, and which ten countries use the most on the following map... Q) What do you notice about the producers and the consumers?

Oil as a resource Where does it come from? How does it affect development? What issues surround oil as a resource? What is the future?

NO!! See article for details! But surely locating an oil source in an LEDC is good, it will provide them with a source of income and improve development… won’t it? NO!!   Development in Ecuador Before Oil Development in Ecuador With Oil Level of poverty 50% 70% Share of the country’s resources owned by the poorest 20% 6% Unemployment 15% 71% Public Debt $0.24 billion $16 billion Source: New Internationalist, June 2001. See article for details!

Answer in 5 sentences… Q) WHY? Our dependence on oil means that new discoveries can lead to huge wealth. Many of the oil reserves are found in LEDCs. But compared to LEDCs with more diverse economies, the countries that rely on selling oil have higher levels of poverty. Six of the world’s oil-dependent states are classified by the World Bank as highly indebted poor countries. Answer in 5 sentences… Q) WHY?

What links these pictures? What is the hidden message? If the price of oil falls, the country has less money to spend on education, healthcare and other basic needs. Corruption in some countries means that a few people become very rich, leaving little for the rest of the people. People living in oil-rich areas may be forced off their land regardless of their livelihoods and culture The oil industry is capital intensive, employing few people.

Annual revenue in US $ billion (2001) Transnational Corporation Annual revenue in US $ billion (2001) 1st Walmart 220 2nd Exxon-Mobil 192 3rd General Motors 178 4th BPAmoco 174 5th Ford Motor 162 6th Enron 139 7th DaimlerChrysler 137 8th Royal Dutch/Shell 135 9th General Electric 126 10th Toyota Motors 121 11th Citigroup 112 12th Mitsubushi 106 13th Mitsui 101 14th Chevron Texaco 100 15th Total Fina Elf 94 Source: Fortune, July 22nd 2002 Transnational corporations have the infrastructure to drill, transport and refine the oil in poorer countries. By getting a license to extract the oil, transnational corporations can make enormous profits.

Oil as a resource Where does it come from? How does it affect development? What issues surround oil as a resource? What is the future?

Q) Why do oil spills happen? Can you come up with 3 Reasons… The threat of pollution is an important side-effect of our thirst for oil. Burning oil in power stations or using petrol to run cars and other forms of transport adds to atmospheric pollution. The transport of oil over enormous distances by pipelines and tankers means that oil spills on land and at sea are always a risk. Q) Why do oil spills happen? Can you come up with 3 Reasons… Deliberate acts during conflict (Gulf War, 1991). Old or badly maintained pipelines and tankers and accidents (e.g. Exxon Valdez). Human error or carelessness. Natural disasters or hurricanes.

Oil as a resource Where does it come from? How does it affect development? What issues surround oil as a resource? What is the future?

What does this Cartoon Mean? Come up with 2 separate interpretations with a partner…go!

The future – Q) How long do you think the Oil will last? The graph shows three forecasts based on different rates of oil production, although all three predict a decline in the future. This could bring about major changes in the way we live over the next 50 years...

Which of these futures are the most likely in your view? Which future would you prefer? What changes would be needed today in order to make your preferred future more likely? Do you think your preferred future would be different if: You lived and worked for the US government? You ran a factory in a poorer country that has to import all its oil? You were from Saudi Arabia and worked in the oil industry? Is there another future you would like to see?

Oil as a resource Where does it come from? How does it affect development? What issues surround oil as a resource? What is the future?