The pros and cons of oil drilling

Dear Editor,

There has been much written about this topic both by those in favor and those vehemently against. While the viewpoints are usually well substantiated, I have not seen what I consider a business assessment of the pros and cons. In line with this objective, I list issues below for consideration:

Pros:  

— Provide a diverse source of income to the government.

— Provide a revenue to allow the government to repay its debt.

 Cons: 

– Climate change – Paris Accord.

— Price of oil; demand for oil.

— Potential for oil leakage.

Pro items are as outlined above – i.e. provides another revenue source as opposed to relying on tourism. This revenue stream will, in turn, allow the government to repay its high-level of debt.

Both of the above pros, however, do not necessarily lead to positive benefits for the country. Specifically look at Venezuela and note the state of its economy.

The result of the management of its oil revenues has been disastrous with many social programs funded out of sale of future oil production with an end-product of colossal debt to the point of the country being in default and many of the nation’s people living in abject poverty and conditions, as essential imports cannot be acquired and paid for.

Con items are more clearly defined and quantified. The Bahamas was a signatory to the Paris Accord on climate change, an understandable position as an increase in the current ocean levels would put large parts of the country under water.

The essence of the Paris treaty was to obtain global efforts to reduce and eliminate the use of fossil fuels. The impact of these initiatives has resulted in a sharp reduction in the price of the commodity.

This will result in The Bahamas receiving less revenue than it may have anticipated. The reduction in the price of oil has been due to the lack of global demand.

Again, we have been advised that there is a significant shift – e.g. motor vehicles being propelled either by electric batteries and or hydrogen.

Similarly, generating power plants are changing from fossil fuels to sun power, wind power, nuclear fusion etc. As a result, demand for oil is going to continue its downward trend for the foreseeable future.

Drilling for oil is subject to the potential for leaks which cannot be entirely eliminated.

In fact, the likelihood is increased as The Bahamas will not be able to “live” off the flow of only one well – it would not be economically viable. For commercial purposes several wells would have to be drilled thereby exponentially increasing the odds of spillage.

Without a doubt, tourists are attracted to The Bahamas for the sun, sand and clarity of our turquoise waters.

I have had the fortune of visiting many other locations in the Caribbean which cannot compare.

Many of the larger Caribbean islands have internal rivers which result in the washing of silt and debris into the ocean. The conclusion therefore is straightforward. With the nebulous pros and definitive cons there is no other sane conclusion than to disallow drilling.

Yours,

Fair and Balanced

The post The pros and cons of oil drilling  appeared first on The Nassau Guardian.

source https://thenassauguardian.com/the-pros-and-cons-of-oil-drilling/