oil – Medill National Security Zone http://nationalsecurityzone.medill.northwestern.edu A resource for covering national security issues Tue, 15 Mar 2016 22:20:28 +0000 en-US hourly 1 Oxfam says lack of SEC rule contributing to oil-fueled corruption http://nationalsecurityzone.medill.northwestern.edu/blog/2015/07/15/oxfam-says-lack-of-sec-rule-contributing-to-oil-fueled-corruption/ Wed, 15 Jul 2015 18:29:45 +0000 http://nationalsecurityzone.medill.northwestern.edu/site/?p=22707 Continue reading ]]> WASHINGTON–A bureaucratic delay in carrying out a rule requiring U.S.-listed companies to disclose payments to foreign governments for getting access to oil, gas and minerals has contributed to corruption in those countries and harm to investors at home, says a report by nonprofit Oxfam America.

At issue is the implementation of a key section of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which is approaching its fifth anniversary next week.

“That is five years of payments for oil projects without adequate transparency and citizen oversight. Five years of corruption and poverty in oil-rich countries. Five years with investors not having access to this critical data,” the report says.

The provision requires oil, gas and mining companies to disclose payments to the Securities and Exchange Commission for things such as taxes, permits and licenses needed for development overseas.

Oil production in developing countries including Angola, Nigeria, Indonesia, Sierra Leone is estimated to have generated approximately $1.55 trillion for such governments in the five years since Dodd-Frank Act was enacted, and much of it has flowed to governments with limited or no transparency, according to the report by Oxfam America, the U.S. branch of the international charity working to find solutions to poverty around the world.

The federal rule would also have “serious impact on investors and their bottom line,” said Isabel Munilla, Oxfam America’s senior policy advisor.

“Oil, gas and mineral development has destabilized a lot of countries,” Munilla said in a phone interview. Despite generating a lot of money, the development often leads to conflicts in local communities, where many remain poor despite the windfall, she added.

“And when communities protest to stop a mining or oil drilling project, the company can loose millions of dollars in a day,” Munilla said.

The report also indicates that American Petroleum Institute and 10 of its members have spent over $360 million on lobbying and political contributions in the U.S. between 2010 and 2014. Most notably among their efforts, was an oil industry lawsuit led by the API that resulted in the overturn of a “strong final rule” issued by the SEC in 2012.

The U.S law, when implemented, will “shine a light on payments made by more than 1,100 companies”, many of which constitute the world’s largest oil, gas and mining businesses, including Chinese and Brazilian state-owned companies, says the report.

In a March filing the SEC has indicated that it may not issue the new rule until spring of next year.

Oxfam has asked the U.S. District Court in Massachusetts to compel the SEC to finish the rule by the close of 2015. The court’s decision is still pending but “should come out any day from now,” said Munilla.

“With payments for oil and mining projects out in the open, citizens can demand their governments spend these funds in the communities where drilling is taking place – using it to fight extreme poverty and build roads, schools, and hospitals,” said Raymond Offenheiser, president of Oxfam America.

Facing aggressive lobbying and legal challenges by trade groups like the API and oil industry giants like Shell and Chevron, the SEC has already delayed its rule making “at least seven times,” Munilla said.

An SEC spokeswoman declined to comment on the report or the rule-making process.

The Dodd-Frank provision has inspired 30 countries to adopt similar laws and regulations requiring payment transparency of oil, gas and mining companies, the report says. As a result, U.S.-listed companies including Shell and BP, even though not yet required by the SEC to disclose payments, will soon have to do so as these companies are also covered by the European and Canadian regulations.

Not all companies in the oil, gas and mining industry oppose the disclosure rule. Oil companies including Statoil and Kosmos Energy have already begun disclosing their payment information. Statoil, an API member, has publicly distanced itself from the lawsuit against the SEC, the report says.


Published in conjunction with MarketWatch Logo

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Economic calculations vs. national security strategy in the East Asian oil market http://nationalsecurityzone.medill.northwestern.edu/blog/2015/06/11/economic-calculations-vs-national-security-strategy-in-the-east-asian-oil-market/ Thu, 11 Jun 2015 15:26:32 +0000 http://nationalsecurityzone.medill.northwestern.edu/site/?p=22463 Continue reading ]]> WASHINGTON- Less than a year ago, brent crude oil, the international benchmark, was around $115 per barrel. Today, it’s $65.32 a barrel.

And the oil industry continues to be volatile due to unconventional oil production, geopolitical conflicts and oil sanctions on Iran, according to an April 2015 report by OPEC, the Organization of the Petroleum Exporting Countries. The major actors in East Asia- Japan, China, South Korea and ASEAN, which are all heavily dependent importers of oil from the Middle East, should temporarily ease the historic friction these nations harbor, for the sake of their economies.

“Asian policy elites are putting up this one-way firewall to politicians separating economic calculations on the one hand and national security strategy on the other,” said Van Jackson, a visiting fellow at Center for a New American Security.

For example, the relationship between Japan and South Korea has been tumultuous. In World War II, the Japanese government colonized the Korean peninsula and exploited South Korean women as comfort women, which the Japanese government currently minimizes, according to the Council of Foreign Relations records. The tense relationship continues today.

Despite the lack of trust, intensifying competition and historical rivalries, their paradoxical warm economic relationship and frigid geopolitical tensions allows for burgeoning trade relations. The multidimensional issues relating to energy include both economic and security, and are extremely complex and multi-faced.

Experts convened at the Atlantic Council last month to discuss new strategies to establish a stable oil infrastructure, despite uncertain global energy markets and unstable relationships.

Edward Chow, a senior fellow at the Center for Strategic and International Studies, said East Asian countries avoid collaborating with neighboring states that also need oil, and instead pivot toward the Middle East to buttress their economies.

However, their dependence on imported oil became a concern when the oil market in the Middle East quivered from civil unrest.

Without their market, Asian countries would struggle in producing enough energy.

In order to address oil volatility, Jackson argued that these nations shouldn’t solely depend on the Middle Eastern oil market. Instead, they should yield historic tensions as bygones for the sake of economic prosperity.

Last year, China passed the United States as the largest net oil importer in the world, heavily importing from the Middle East, according to the U.S. Energy Information Administration. Japan is the third largest net importer of oil globally, behind the United States and China, and has limited domestic energy after its Fukushima plant incident.

“Japan and Korea have both made explicit their intention to diversify away from Middle East imports in favor of U.S. imports to the extent that they can,” Jackson said. “So the U.S. is the supplier of choice for both Japan and Korea, and they’ve put their money where their mouth is to some extent.”

However, Asia’s demand for oil is so high that optimistic projections of U.S. export capacity may not be capable of eliminating their dependence on Middle East oil, he said.

Experts agreed that there needed to be an interconnected regional energy infrastructure among Asian countries.

The reason this hasn’t occurred is because geopolitics and historical tensions trump market incentives and collective interests.

“My concern is that whatever optimism there is on the horizon,” arising in Japan and Korea energy security, “that optimism is taking place within a context of Asian nationalism, pervasive mistrust, and strategic and military competition,” Jackson said.

As oil prices have marginally rebounded this year, both countries’ energy strategy plans encourage their respective companies to increase energy exploration and development projects around the world, according to the EIA.

“Japan and Korea are more of a litmus test for what is possible for the entire region,” Jackson said. “If Japan and Korea can’t cooperate for a common energy problem that they have, I don’t know what hope there is for the region.”

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Assessing a Venezuelan threat http://nationalsecurityzone.medill.northwestern.edu/blog/2010/08/17/assessing-a-venezuelan-threat/ Tue, 17 Aug 2010 14:11:12 +0000 http://medillnsj.org/?p=2967 Continue reading ]]> WASHINGTON–Venezuelan President Hugo Chavez threatened to cut off oil supplies to the United States if his nation were to be attacked by U.S. ally Colombia. Though the oil markets barely responded to the threat, suggesting the private sector wasn’t too moved, it still raises the question: should we be worried?

Probably not, energy consultants say.

“For the U.S., energy security means having access globally to competitive low cost energy supplies,” said Alan Hegburg, senior fellow in the energy and national security program at the Center for Strategic and International Studies.

That means ­it is unlikely that Venezuela’s manipulation of the market would have an effect on this access, he says.

Hegburg suggests that the oil market is flexible enough and well supplied enough to withstand a decline in supply of Venezuelan oil. ­

“Because the oil market is a global one, whether the United States imports oil from a country or not, makes no difference to U.S. national security,” said Keith Crane, director of the environment, energy and economic development program at the RAND Corporation, via e-mail.

Canada is actually the largest exporter of oil to the United States. It is followed by Mexico, Saudi Arabia and then Venezuela, according to the Global Post. Nigeria, Angola and Iraq come next in line.

However, one theory factoring into the oil and national security paradox suggests oil wealth allows countries to operate counter to the U.S. “The control over enormous oil revenues gives exporting countries the flexibility to adopt policies that oppose U.S. interests and values,” says a report by the Council on Foreign Relations.

In the case of Venezuela, with the U.S. importing most of the oil the nation is exporting, it seems Chavez would be cutting off his nose to spite his face.

According to a report from the RAND Corporation, the U.S. imported $38.8 billion worth of petroleum and refined oil from Venezuela in 2007. And, it might prove difficult for the president to do things like expand Venezuelan influence throughout Latin America, support the destabilization of neighboring governments and beef up Venezuela’s military were he almost $40 billion in the hole.

But, as Crane points out, if we stopped importing oil from Venezuela, someone else would buy it. So, the question becomes, how much of a threat is Venezuela in general?

Says the RAND report, “increased oil revenues have given Chavez more freedom to pursue policies antithetical to U.S. interests, but have not permitted him to become a serious threat to U.S. national security.”

It suggests he is not well respected by his neighbors, being unable to buy—despite all his oil revenues—influence on their political and economic policies. Nor does Venezuela pose a military threat to the U.S.

Sorry, Chavez.

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Would even “a few good men'' really help in the Gulf? http://nationalsecurityzone.medill.northwestern.edu/blog/2010/08/09/a-few-good-men-%e2%80%94-really-any-men-will-do/ Mon, 09 Aug 2010 17:56:39 +0000 http://medillnsj.org/?p=2869 Continue reading ]]> WASHINGTON–Louisiana Governor Bobby Jindal was quick to defend himself against reports that only a small fraction of the National Guardsmen called up to fight the oil spill in the Gulf of Mexico had been deployed, blaming bureaucratic red tape. But what he didn’t say is that even full deployment may not be what the oil-soaked coast needs.

“The military can’t do anything other than provide manpower to clean beaches or string up nets, and that manpower can come from anywhere,” said Dakota Wood, senior fellow at the Center for Strategic and Budgetary Assessments in Washington.

Wood said Americans are eager to call in the troops in times of domestic crisis, relying on the military to offer security or resources that aren’t readily available. Because the oil spill hasn’t created problems with looting or power outages, for example, he said there is no particular need for military support — other than as a ready source of manpower.

“Folks just want it fixed, and when you wanted something fixed, there’s a knee-jerk reaction to call in the military,” he said.

In June, CBS News reported that Jindal had deployed a little more than 1,000 of the 6,000 National Guardsmen made available by the Defense Department with costs covered by BP.

“We spend more time fighting red tape and bureaucracy than we ever should have to if the federal government understood this oil spill as the war that it is,” Jindal said in a statement.

Looking at the four Gulf states, Louisiana’s number of deployed Guardsmen was relatively high. Mississippi had deployed just 58 of its 6,000, according to CBS.

Without a clear need for the National Guard’s capabilities, Wood said cleaning up BP’s mess in the Gulf is better left to private labor with specialized training.

“It’s an extremely technically challenging problem, and the companies that can actually do this are BP, Shell and maybe just a handful of others,” he said.

Michael O’Hanlon, who is a senior fellow at the Brookings Institution, said the federal government overestimated BP’s ability to manage the spill.

“That judgment that the private sector should be expected to take the lead on this is the primary problem,” O’Hanlon said.

Accusations about underutilization of the National Guard struck a nerve with Jindal five years after the response to Hurricane Katrina sparked similar questions.

In 2005, the Department of Defense approved about 50,000 members of the National Guard to respond to Hurricane Katrina, but there were gaps between the responsibilities of the states and the federal government. Some states initially delayed requesting troops, likely contributing to the state of chaos in which New Orleans was looted and residents died waiting for medical attention.

Among other problems, the government did not consider past crises in shaping its military response plans before Katrina, according to a 2006 report from the Government Accountability Office, the congressional investigatory agency.

“Without detailed plans to address these factors, [Defense] and the federal government risk being unprepared for the next catastrophe,” the GAO reported.

But Wood said the latest Gulf crisis would not have been alleviated by following the GAO’s recommendations to improve military planning and training for domestic crises after Hurricane Katrina.

“The thing is, looking at the Gulf spill, what is it that you would want the military to do under those circumstances?” he said. “The problem is 5,000 feet under the surface of the ocean. The military does not have the capability to deal with that problem.”

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Has the U.S. got its eye on the right ball in Kyrgyzstan? http://nationalsecurityzone.medill.northwestern.edu/blog/2010/07/26/has-the-u-s-got-its-eye-on-the-right-ball-in-kyrgyzstan/ Mon, 26 Jul 2010 21:14:32 +0000 http://medillnsj.org/?p=2446 Continue reading ]]> WASHINGTON – When opposition forces toppled Kyrgyzstan’s government in April, many Americans would have been hard-pressed to find the country on a map, despite the fact it’s home to an American air base that provides a key supply line to troops in Afghanistan.

Simply looking at a map would tell you how disjointed U.S. policy in the region is, says Paul Goble, an expert on Eurasian issues who has served in various capacities in the Central Intelligence Agency and the U.S. State Department. Although U.S. efforts have remained fixated on Russian influence in the former-Soviet region, the country does not in fact share a border with Russia – but it does with China.

“There is a very large geopolitical switch going on that Americans are not ready for,” Goble said. “China is simply going to be the biggest player in the region. Russia doesn’t have the leverage it once did.”

With its booming population and industry hungry for raw materials, China is roaming the world in search of energy supplies and minerals. In its backyard of Central Asia, it is investing billions in infrastructure including pipelines, railroads and highways.  Earlier this year the first segment of an oil pipeline stretching from Turkmenistan to China opened up. The project signifies what many experts say is a shift in the region’s petroleum resources away from Russia and toward China.

“Economic interests are the Chinese entryway into Central Asia and Eurasia,” said China expert Russell Hsiao of the Jamestown Foundation. “Kyrgyzstan is a pretty crucial piece in the whole of the puzzle.”

In the near-term, most analysts agree that Russia poses the greatest threat to America’s primary interest in the region – the Manas Air Base, which provides a critical link in the supply chain to U.S. operations in Afghanistan. Last year, the now-deposed president Kurmanbek Bakiyev agreed to end the U.S. contract for the air base after receiving a promise for more than $2 billion in aid from Russia. Bakiyev later reversed, after receiving the initial installment of Russian aid, when the U.S. agreed to pay more than three times the original rent for the base. Now, there is wide speculation that Russia supported the revolution that deposed Bakiyev in early April.

But, while a heavy-handed media blitz tends to accompany Russia’s tactics, Chinese policies are subtler. The flood of top provincial party leaders that travelled to the bordering Chinese province of Xinjiang in the days after the revolution, and the reported financial support China has lent the provisional government, underscore the Chinese leadership’s vested interest in the country.

In addition to being a hinge in China’s plan for expansion into Central Asia and Eastern Europe, Beijing fears that Kyrgyzstan raises the specter of unrest on its borders. Their particular concern is that the unrest could spread to the Muslim Uighur population, which makes up more than half of Xinjiang province, and which has members in Kyrgyzstan.

Chinese economic interests and the country’s desire for stability in the region do not directly conflict with U.S. goals in Kyrgyzstan. Satiating the Chinese appetite for oil with resources in Central Asia, in fact, could prevent the country from undertaking measures that conflict more directly with U.S. interests. Analysts warn, though, that Chinese economic policy lacks the ideological prerequisites that the West has come to expect.

“They’re willing to bribe, they’re not concerned about human rights violations, their businesses can deal with corrupt practices that our businesses can’t,” Goble said.

And while Chinese leadership is not directly threatened by the revolution, some authoritarian leaders in the region such as Islam Karimov of Uzbekistan and Nursultan Nazarayev of Kazakhstan – with whom China has vested economic relationships – are.

“If they’re able to hold free and fair elections, which has never happened in this region before, then it’s going to be a huge threat to some countries in this region,” said Erica Marat, a Eurasia expert. “None of them want Kyrgyzstan to become a good example.”

As the U.S. navigates relations with the provisional Kyrgyz government – a task made more difficult by allegations that the American military knowingly purchased corrupt fuel contracts that benefited the deposed leader’s family – regional experts warn that policy makers should keep an eye on the East as well as the West.

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Natural gas for national security? http://nationalsecurityzone.medill.northwestern.edu/blog/2010/06/07/natural-gas-for-national-security/ Mon, 07 Jun 2010 21:17:44 +0000 http://medillnsj.org/?p=2228 Continue reading ]]> WASHINGTON–National security is T. Boone Pickens’ primary reason for coming up with a plan to end America’s dependence on foreign oil, specifically oil from the Organization of the Petroleum Exporting Countries.

The U.S. imports 12 millions barrels of oil a day and five million come from OPEC, and the oil tycoon believes that makes the United States essentially a financier of terrorism that emanates from oil-producing countries in the Persian Gulf and elsewhere.

“We are paying for the Taliban by purchasing oil from OPEC,” Pickens said. “That’s the oil that I am focused on.”

Pickens, founder and chairman of BP Capital Management, spoke at a town hall meeting at the National Defense University in Washington on May 19. He spoke to a crowded room about the “Pickens Plan,” and focused on the importance of converting the nation’s fleet of 18-wheelers from diesel to natural gas.

In 1970, the nation imported 24 percent of the oil it used. Today, it imports more than 65 percent, according to Pickens. Fifty-seven percent of all oil consumed in the U.S. is imported and 70 percent of all oil consumed in the U.S. is used for transportation, according to the U.S. Energy Information Administration.

In his speech at the NDU, Pickens alluded to an April 15 Wall Street Journal article by the former director of the Central Intelligence Agency, R. James Woolsey, stating it as a good description of why our dependence on oil is a security issue.

Woolsey writes:

“Oil profits enhance the ability of dictators and autocrats to dominate their people. This is one reason that eight of the top nine oil exporters (Norway is the exception) are dictatorships or autocratic kingdoms, as are virtually all of the 22 states that depend on oil and gas for at least two-thirds of their exports.”

Richard Andres, energy security policy chair at the National Defense University, also said in an interview that countries that are most dependent on oil for income are often dictatorships. His concern is the enormous amount of money we are sending to these countries. In 2008, the U.S. spent $475 billion on foreign oil.

“Many of those countries are very vocal about their disagreements with the U.S. and are using the money to fund military– often indirectly to fund terrorists groups,” Andres said. “By relying on foreign oil, the U.S. is supporting both sides on the war on terror.”

Pickens described how his plan to convert the eight million 18-wheelers, buses, delivery trucks and utility vehicles to run off of natural gas would cut the nation’s dependence on OPEC oil in half. Nearly 33 percent of every barrel of oil we import is used by 18-wheelers moving goods across the country.

“Any vehicle which returns to the “barn” each night where refueling is a simple matter, should be replaced by vehicles running on clean, cheap, domestic natural gas rather than imported gasoline or diesel fuel,” Pickens states on his website PickensPlan.org.

Some question Pickens’ motives, since he is the founder and largest shareholder of Clean Energy Fuels Corp., the biggest provider of natural gas for transportation needs in the U.S.

The Pickens plan is a part of the Senate climate bill introduced by Sen. John Kerry, D-Mass., and Joe Lieberman, I-Conn., earlier this month and Pickens said his part of the plan has bipartisan support.

North American has at least a 120-year supply of natural gas and that supply is growing, according to a June 2008 study by Navigant Consulting.

“The only way to solve the problem is to get on your own resources. It’s the only way. Either that or quit driving,” Pickens said. “I like wind, solar, but they don’t move vehicles.”

He explained that he would like to see more electric cars on the road as well, but he is pushing for 18-wheelers because they are too large to run off current battery technology.

Ron Bengtson, the founder of American Energy Independence, said that the Pickens Plan will not deliver since personal vehicles will not be able to run off natural gas. You can get an automobile converted to run off natural gas, he said, but currently there are no filling stations.

“What we really need in place is not to shift from gas to natural gas,” Bengston said, “but to have existing gas engines run on alcohol fuels.” He added that there are many other options besides corn ethanol, such as methanol.

Andres said that the military is already taking steps to run off of alternative fuels. He said that the military has certified all aircraft in the Air Force and half of the Navy fleet to run off of alternative fuels.

“No one has the money to be first mover in industry to take on new expensive fuel or alternative technology,” Andres said. “But if the military can start those industries moving, the prices will drop radically once the technology is ready.”

Andres supports Pickens’ idea to convert 18-wheelers and other heavy vehicles to natural gas. He also said algae biofuel is very promising as an alternative fuel.

Pickens criticized Barack Obama and other U.S. presidents in the past 40 years for not coming up with a solid plan to end our dependence of foreign oil, warning that China already has a plan. Pickens has spent millions of his own dollars promoting his plan.

“I am really truly inspired by Pickens on his own, trying to push through something that in the end is good for the country,” Andres said. “This requires a visionary, someone outside the beltway who is not worried about getting re-elected.”

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Can Ghana avoid the "curse of black gold"? http://nationalsecurityzone.medill.northwestern.edu/blog/2010/05/11/can-ghana-avoid-the-curse-of-black-gold/ Tue, 11 May 2010 19:25:30 +0000 http://medillnsj.org/?p=1198 Continue reading ]]> “The oil discovery is a good thing for Ghana. We can make it a blessing instead of a curse.” Ghana National Petroleum Corporation, July 2008.

WASHINGTON — They found oil … in Ghana.

In 2007, UK-based Tullow Oil and U.S.-based Kosmos Energy and Anadarko Petroleum discovered a large accumulation of crude oil at an exploration well off the Western Atlantic coast. Soon after, Ghana’s then-President John Kufuor addressed a crowd of journalists and public officials at the Osu Castle government seat in the capital of Accra.

Reportedly, Kufuor was holding a glass of champagne in one hand, happy.

One BBC correspondent quoted the president as saying, “…you come back in five years, and you’ll see that Ghana truly is the African tiger, in economic terms of development.”

Since then, the Jubilee Oil field has become a major find. The International Monetary Fund gave a total revenue estimate of $20 billion from 2012 to 2030. By 2030, the reserves are expected to reach depletion, after reaching a 500-600 barrel mark.

Certainly, oil revenues will surpass those from gold and cocoa, which are the nation’s main commodity exports. With some 120,000 barrels of oil to be extracted per day at its peak, the country’s proven reserves will be near the reserves of its neighbor, Ivory Coast which are at 100 million barrels, according to the IMF. Peak production will be from 2011 to 2016 and is expected to generate nearly $1 billion a year.

Kosmos Energy, founded in Dallas in 2003, is an international, independent oil and gas exploration company. The company’s Ghanaian affiliate, Kosmos Energy Ghana HC, signed its first petroleum agreement with the country in 2004.

Now, ­negotiations and contracts to begin drilling have been signed and President John Atta-Mills has articulated the government’s goals for increased structural development. Not surprisingly, dozens of scholars and think tanks have released reports on how Ghana should properly manage its potentially vast—and lucrative–oil resources.

Many of them say that if Ghana can find a way to make its oil a curse and not a blessing, it will be a great boost—not just to its own people, but  to the continent of Africa and beyond.  Otherwise, they say, the consequences will be dire.

“If Ghana fails to manage its resources well, then, there’s no hope for Africa,” said Howard University professor, Wilfred David. In an interview, he said Ghana’s government must do everything it can to not follow Nigeria’s poor example of oil management.

“The country must look at the needs of the rural poor and urban poor in providing the basic sectors for the people,” said David, who was a senior economist at the World Bank where he researched African development policy and economics before becoming a professor in 1979 at the reputable historically African-American university.

­There are many indications that Ghana could be a good steward of its newfound resources.

Since its independence, Ghana has not had a civil war.  The occasional ethnic rivalries have been contained for the most part. Its first president, Kwame Nkrumah, put in place a basis for nationalism and patriotism with the implementation of a number of social programs and economic stimulus initiatives, most notably- the Akosombo Dam, which supplies Ghana with hydroelectric power and forms Lake Volta. Although the country did experience economic downturn in the 1980s with many of its patriots fleeing abroad and to neighboring countries, especially Nigeria, signs of recovery emerged in the mid- 1990s. The progress has continued since then.

Many view Ghana as ­the hope of Africa in terms of development and democratic sustainability. The World Bank reported that the country has become a “stable state.” The World Bank also reported that Ghana, unlike Nigeria, has effectively monitored corruption and government effectiveness. It has had five successive presidential democratic elections.

When President Barack Obama visited the West African nation last July, he said he was proud that Ghana was the first sub-Saharan African nation he had visited as President and that oil will bring many opportunities.

“Here in Ghana, you show a face of Africa that is too often overlooked by a world that sees only tragedy or the need for charity,” he said in an address to Ghana’s parliament, “the people of Ghana have worked hard to put democracy on a firmer footing.”

­But Ghana must also learn the lessons of some of its neighbors, which have  found that managing their oil reserves can become what the locals call the “black curse.”

Throughout Africa, the discovery and subsequent exploitation­ of natural resources have brought the good, the bad and the ugly. Too often, the political elite usually enjoy a disproportionate share of the revenue of natural resources. While these tiny percentages of the population live luxurious lifestyles, the majority live in penury.  The dreams of how the minerals, cocoa, diamonds and other natural resources will uplift the country too often turn into hellish nightmares as civil wars often erupt and impoverished people live under authoritarian rule riddled with corruption.

Nigeria has been a vital supplier to the U.S. For more than three decades, it has led oil production in sub-Saharan Africa and as the continent’s most populous nation, it is also one of the world’s 10 largest oil- producing countries. Its highly prized crude oil is light and sweet, which means that it is low in impurities such as sulphur.

However, violence in the oil-rich, Niger-Delta region has been more than problematic. Kidnappings, brutal murders, and civil upheavals have occurred frequently in recent years as local residents demand that the oil revenue trickle down to the needy populace. The situation had gotten so intense and so unpredictably volatile that even Royal Dutch Shell reduced oil production in the region by nearly half a few years ago. ­

In their 2009 report, researchers Todd Moss and Lauren Young, with the Center of Global Development, an independent, non-profit research organization, explained that civil conflicts, government corruption, economic instability, increased poverty, authoritarianism and the destruction of the social contract are directly linked to the exploitation of natural resources.

In an interview, Lauren Young said these negative outcomes usually arise when the interests of the governments of these natural resource- dependent nations are not in sync with those of the people.

In the end, says David, ­

“You judge the society by how your people are doing.” ­

­In Ghana, the increased flow of money should help bring its residents ­to middle- income status, thus reducing poverty. And Ghana may reach the United Nations Millennium Development Goals (MDGs) by the 2015 deadline.  These comprehensive development goals supported by every UN member state and several international organizations, target chronic poverty around the world. Some of the eight UN’s MDGs include: ensure environmental sustainability, develop a global partnership for development, achieve universal primary education and eradicate extreme hunger and poverty.

With a growing middle class, Ghana will ­attract more business, as Obama noted in his speech to the country’s parliament.

“If people are lifted out of poverty and wealth is created in Africa,’’ Obama said, “new markets will open for our own goods.’’

­

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