Perception of negative externalities emanating from oil and gas exploitation in Nigeria

Abstract

This study investigated the perceived negative externalities emanating from oil and gas exploitation in Nigeria. This study is based on the sampling of 446 respondents from 15 rural communities in the oil producing areas of Southern Nigeria. The ordered probit regression analysis was used to estimate the statistical model that describes the relationship between socioeconomic characteristics of the respondents and their perception of the negative impact of oil and gas resource extraction; on selected natural resource variables such as land, air quality, forest resources and water resources. The descriptive results suggest that people in areas; where natural resources are extracted are exposed to ‘very high impact’ of resource exploitation. This is indicated by the result of the respondents’ ranking of negative impacts of oil and gas extraction on natural resources as; such as land (64.3%), air quality (35.9%), forest (58.7%) and water (59.9%). The model estimates suggest that; in particular, rural farmers and fishermen are most likely to be the most vulnerable groups and perhaps mostly affected by the implications of the resource exploitation. Thus, the study recommends that all stakeholders in the oil and gas industry should play their part towards ensuring mitigation of the resource use impacts in oil producing areas. This would particularly benefit farmers and fishermen in rural communities and coastal areas where resource exploitation mostly takes place. The government should show greater commitment towards ensuring strict compliance of firms towards adhering to standard environmental protection policies and best practice in the oil and gas industry.