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International NGO Journal Vol. 6(1), pp. 001-009, January 2011
Available online at http:// www.academicjournals.org/INGOJ
ISSN 1993–8225 ©2011 Academic Journals
Article
The up and down sides of oil and gas development in
the Wood Buffalo Region of Alberta, Canada:
Positioning Ghana for progressive gains
Frank S. Arku1* and Cynthia Arku2
1Faculty of Development Studies, Presbyterian University College, Akuapem Campus, Ghana.
2Department of Educational Policy Studies, University of Alberta, Edmonton, Canada.
Accepted 21 September, 2010
Socio-economic benefits and challenges are consequential to oil and gas development, and effective
planning is key to advancing favourable development outcomes. Drawing from Canada’s experience,
this paper indicates that employment opportunities directly related to construction and operation of oil
and gas production plants and indirect spin-off jobs needed to support the sector (e.g., manufacturing,
transportation, accommodation and food, education and recreation) can create an enormous economic
stimulus and revenue. However, the oil and gas production process and its associated population influx
within and to surrounding communities of production sites to provide labour, goods and other services,
come with challenges to develop and maintain the essential infrastructure and services. Also, increased
demand by the industry for both skilled and unskilled labour, coupled with high earnings typical of this
sector have resulted in high cost of living, parents spending less time with children at home due to
intense work schedules, early employment and low school rates arising from easy access to unskilled
jobs. Excessive alcohol and illicit drug uses, family breakdowns, violence and crime are as well evident.
Unfortunately, a reactionary approach to handling these issues has frequently characterized the sector.
Hence, we argue that for oil and gas production in Ghana to enhance its development would require
royalty and tax regimes that are responsive to market conditions for reasonable revenue and yet
support small producers. It also calls for collaborated efforts of all levels of government, industry,
community and other connected stakeholders, in which all parties commit to proactive efforts in taking
advantage of opportunities and addressing emerging issues to foster thriving communities and nation-
wide economic development.
Key words: Ghana, oil and gas development, socio-economic, benefits, challenges.
INTRODUCTION
Oil and gas resources are vital to human kind as
technological advancements have offered them many
valuable uses that promote our economic well-being.
Petroleum, derived from oil and gas, has a
heterogeneous chemical structure, composed of
hydrocarbon chains of different lengths which allows for
further processing and refinery. By separation of the
hydrocarbons in petroleum through distillation and other
*Corresponding author. E-mail: fsarku@gmail.com.
chemical processes, a variety of products are obtained
which can be used for diverse purposes. The most
common products from petroleum are fuels such as
ethane, diesel fuel, fuel oils, petrol, jet fuel, kerosene,
liquefied petroleum gas (LPG) and natural gas. Other
petroleum products include plastics, lubricants (e.g., light
machine oils, motor oils and greases), wax for packaging
frozen foods and asphalt (U.S. Environmental Protection
Agency, 2000; Natural Resources Canada, 2009). The
gap between production and consumption levels of oil
and gas in various countries is bridged through global
trade. The United States of America (U.S.A) has been
002 Int.NGO.J.
noted for a disproportionate use of oil in relation to their
production levels. For example, in 2006 Saudi Arabia
produced 10.7 million barrels and consumed only 2.1
million daily, whereas production level was 8.3 million
barrels vs. 20.7 million barrels in consumption per day in
the U.S.A. (Energy Information Administration, no date).
Proven reserves of oil and gas are indicative of potential
for production and revenue. In 2007, Nigeria, Canada
and Saudi Arabia had 36.2, 179.2 and 262.3 billion
barrels of proven reserves, respectively (Energy
Information Administration, no date). In 2008 alone
Nigeria realized $ 70 billion in net oil export revenue
(Energy Information Administration, 2010), and Saudi
Arabia oil export revenue was expected to reach $ 260
billion in 2008, accompanied by a high budget surplus of
$ 69 billion (Hanware, 2008).
Although, Ghana’s oil and gas resources are largely in
the discovery phase, it would be hopeful that proven
reserves to be discovered may be substantial. However,
the decision to exploit oil and gas finds is contingent on
several factors among which are the quantities and
quality of finds, prices, global supply, market potential
elsewhere and fiscal terms for producers. High oil prices
a few years ago have encouraged massive production
especially in countries where oil and gas production was
previously regarded commercially unviable. High demand
for products that are dependent on oil and gas and their
large consumption in countries like U.S.A implies that
market exists for oil and gas. Like many sectors,
profitability is the major driver. Increasing research into oil
and gas producing technologies has provided a variety of
cost saving extraction and processing methods, making
the sector attractive to investors. As well, an under-
standing of global economics of the sector has often
informed investment decisions.
The global prices of oil and gas continue to impact this
sector. In 2004, global average price of West Texas
Intermediate (WTI) crude oil - lighter crude oil with high
market value than Alberta’s non-heavy crude oil - was
approximately $ 35 per gallon, rising to $ 86 in 2008, and
plummeting to $ 43 by January 2009. Current estimates
show an average price of $ 55 by 2010 (Beimborn, 2008;
Energy Information Administration, 2009). In response to
the price falls, producing companies are adjusting
production plans. In Canada for example, delays in
constructing expansion projects (e.g., wells and refinery
plants) resulting from budget cuts have been reported
(Cattaneo, 2008; Gilbert, 2009).
Regardless of economic conditions, generating wealth
from the oil and gas sector comes with both favourable
and unfavourable repercussions. The objective of this
paper is to assess the prominent socio-economic benefits
and challenges within the context of the benefits to the
Regional Municipality of Wood Buffalo (RMWB)
jurisdiction of the province of Alberta, Canada, where the
majority of Canada’s oil and gas resources are extracted.
This paper provides an overview of their attempts to
address issues of the sector and impacted communities
and suggests ways to facilitate gainful oil and gas
development in Ghana.
Study approach and purpose
Secondary data reviews were largely employed for this
study as well as participant observation by researchers
while engaging in key informant interviews with residents,
politicians and consultants, staff of the RMWB on various
subject matters concerning oil and gas development. This
study which provides both ‘insiders and outsiders’
perspectives and experiences of what could ensue from
oil and gas development is of value in informing
Ghanaian policies and strategies to promote judicious
exploitation of resources complementary to communities’
and the nation’s well-being.
Background: The regional municipality of wood
buffalo (RMWB)
Among the 13 provinces and territories in Canada is the
western province of Alberta where 3,585,142 of Canada’s
population (33,311,389) reside and encompasses the
RMWB (Statistics Canada, 2008). The RMWB has an
area of 68,454 km2 and is ranked by area as one of the
largest municipalities in North America (Figure 1).
There are 11 communities in the region of which 10 are
small and rural, and one heavily populated urban area
known as Fort McMurray. The city of Fort McMurray
holds approximately 75% of the total population. The
rural communities range from 2 to 1000 in population and
are largely habited by Aboriginal or Native people in
communities namely: Anzac, Conklin, Draper, Fort
Chipewyan, Fort Fitzgerald, Fort MacKay, Gregoire Lake
Estates, Janvier, Mariana Lake and Saprae Creek
Estates (The Regional Municipality of Wood Buffalo,
2005). The RMWB has experienced a dramatic population
growth and extremely diverse population due to oil and
gas activities. Census of RMWB in 2007 indicated a
population (of both permanent and temporary residents)
increase from 42,847 in 1999 to 89,167 by 2007 (52%).
From 2006 to 2007, the population rose by 16.2 5%, and
65% of the growth was from a ‘shadow population’-
temporary people with a home somewhere else. The
early settlers of Canada described as ‘Aboriginal’ people
make up close to half of the population. Water bodies
such as the Athabasca River remain important to their
traditional life ways and cultures (Regional Aquatics, no
date; Coutu, 2002).
THE RMWB’S PETROLEUM ENDOWMENTS
Canada’s Alberta contains the second largest proven
concentration of oil in the world after Saudi Arabia. Of the
Arku and Arku 003
Figure 1. Map and population of RMWB. Source: RMWB, Municipal Census, 2007.
approximately 179 billion barrels of Canada’s proven oil
reserves, 173 billion of it has proven to be recoverable
within current technology and economic conditions
(Government of Alberta, 2007). The RMWB is notable for
its vast stretch of pristine wilderness and for containing
the largest oil and gas deposits in Alberta and Canada at
large (The Regional Municipality of Wood Buffalo, 2003).
Of approximately 70,000 km2 coverage of oil sands – soil
containing heavy black oil - in Northern square
kilometres of it can be found in the Athabasca area within
the RMWB (Oil Sands Discovery Centre, January, 2009
site visit).
The gains from oil and gas development
For over 50 years of oil and gas exploitation in
004 Int.NGO.J.
commercial quantities, Alberta has emerged the fastest
growing population and strongest economy in Canada
where budget surpluses exist. Alberta compared to the
rest of the country had the highest population growth rate
at 3.1% (national, 1%) and lowest unemployment rate for
the fourth consecutive years at 3.5% (national, 6.1%) in
2007. Employment increased by 5.7% (against 2.5%
nationally) from 2006 to 2007 (Statistics Canada, 2007;
Alberta Employment, Immigration and Industry, 2007). Oil
production rates have already reached 1 million barrels
per day and labour shortages in the province helped
inflation to reach 5% during this period. Alberta recorded
a total of $ 4.6 billion budget surplus for the 14th cones-
cutive year and massive expenditures on infrastructure
(e.g., municipal infrastructure, highway network, health
facilities and schools) (Government of Alberta, 2008a).
Progress report of 2007 to 2008 showed that Albertans
had an average personal disposable income that is the
highest in Canada - $ 34,494 vs. $ 26,962 nationally.
Over 96% of university and college graduates were
employed two years after their graduation between 2007
and 2008 (Government of Alberta, 2008b; Institute of
Chartered Accountants of BC, 2007). As the hub of the
provinces oil and gas activity, the RMWB has experienced
huge oil and gas investments and growth forecasts are
also significant. From a direct employment by oil sands
industries of 6,600 in 1998, this is expected to triple to
13,700 by 2012 (forecast is based on the general
multiplier for induced and indirect jobs which indicates
that, every one oil sands job induces 3 local and 6
national jobs)(Athabasca Regional Issues Working
Group, 2008).
Business has boomed in all sectors of their economy.
In the RWMB’s service centre of Fort McMurray, several
businesses related to oil and gas production and other
spin off businesses that support the populations have
spawned. In 2001, business and community services
(32%) and mining of oil and gas (28.3%) were their
largest drawers of labour with a fair representation of
support labour from retail and wholesale, manufacturing,
public administration and finance sectors.
The majority of the revenue from oil and gas to the
federal, provincial and local governments is derived from
royalty and tax regimes that provide significant revenue.
Royalty rates have been adjusted progressively over the
past several decades in response to economic situations
(Government of Alberta, 2009a). However, a new and
more vigorous royalty regime based on a review in 2007,
which took into account oil and gas production levels in
the province, world prices, and exchange rates, was in
effect from January 2009. Under the new system, 2010
royalty revenue would increase by $ 1.4 billion - 20%
over what was estimated under the old regime
(Government of Alberta, 2009b). At a price under $ 55
per barrel for WTI crude oil, the royalty rate on net
revenue is 25%, and 40% for a price above $ 120
(Government of Alberta, 2007).
Municipalities are able to obtain revenue from oil and
gas property taxes. Annual property tax rates are
determined by dividing the budgeted cost for meeting the
needs of the region by the value of all property. The
budgeted costs consist of construction and operation
costs of local improvements in infrastructure and programs.
The property tax is charged on non-residential (e.g.,
equipment and machinery for oil, gas and telecommunication,
oil and gas wells and pipelines and railways) and residential
property. The property tax to be imposed is determined
by multiplying the property value by a set tax rate
(Gartner, 2004; Government of Alberta, 2009). In 2008
for example, the non-residential municipal property tax
rate in RMWB was 0.0089672 ($ 8.9672 per $1000 value
of property) in the urban service area and 16.3448 (about
$16 per $1000 value of property) in the rural service area
(RMWB, 2008). Thus, the majority (81.5%) of taxes to the
RMWB came from the rural non-residential areas where
the oil and gas production plants are located (Earley,
2008).
Oil and gas money from companies have also made
their way into community charity projects. An association
of over 20 oil sands producers and 7 other organizations
within the RMWB, referred to as Oil Sands Developers
Group, contributed $ 11.5 million in donations to various
projects (e.g., recreational and leadership development)
in 2006 and more than $ 40 million over the past 10 years
(Athabasca Regional Issues Working Group, 2008). The
charities have helped in dealing with some of the growth
challenges in the region.
Challenges to oil and gas development
Oil and gas development in the RMWB have seen
numerous difficulties ranging from land, infrastructure to
family difficulties. A lack of adequate commercial and
industrial land space has limited business expansion for
years (Interview, 2008). The region has had infrastructure
shortages valued at $1.2 billion in total required from
2005 to 2009, which included: highways ($ 500 million);
health and affordable housing ($ 136 million); post-
secondary educational facilities ($ 236 million); and
water, waste water, road and recreation facilities ($ 353
million) (Athabasca Regional Issues Working Group,
2005). Rural communities have persistently voiced their
deficiency in land access, diverse and affordable housing
choices, and recreation, education, health and long term
care facilities. As well, they lack adequate access to
infrastructure and services to monitor the air quality in
their vicinity as they are close to the sites.
High wages associated with oil and gas production has
meant high incomes and cost of living, particularly arising
from their housing crunch, has led to living difficulties for
those with large families or single working in non-oil and
gas sectors. Based on 2006 Census Canada figures, the
average annual family income for couples in the region
was $ 146,270. However, over 32% of families make
under $ 100,000 annually (Government of Alberta,
2008c). And in 2008, average monthly rent for a two
bedroom dwelling was $ 2,360 in Fort McMurray (Alberta
Employment and Immigration, no date) and in the
provinces’ capital of Edmonton, it was $ 1,034 (Canada
Mortgage and Housing Corporation, 2008).
The high cost of housing has partly led to increased
homelessness. There were a total of 549 people without
a permanent residence in 2008 compared to 441 in 2006 -
an increase by 24.5%. The majority (65%) of the homeless
people were in the age group of 31-54, and mostly males
(76%) (St. Aidan’s Society, 2008). A lack of adequate
housing is a priority issue for the majority of rural
communities of the region. Many homes are in
dilapidated conditions and the few habitable ones are
overcrowded (Interviews, 2008). Efforts to tackle
homelessness have included emergency shelters,
transitional housing and long term supportive housing
facilities (St. Aidan’s Society, 2008). Wood Buffalo
Housing and Development Authority, an arm’s length
organization, which carries out the municipality’s agenda
for affordable housing, has obtained federal and
provincial government grants to expand affordable
housing. This organization has adopted innovative ways
of providing affordable housing; however, the needs are
far from being met as their efforts are constrained by
insufficient serviced lands, delays in processing
development permits, and a lack of political buy-in for
creative approaches to overcoming these barriers
(Interview with Wood Buffalo Housing and Development
Corporation, December, 2008).
Competition for labour between the oil and gas sector
and other sectors has resulted in both difficulties and
creativity. Not only are local and inter-provincial labour
attraction and retention strategies pursued, international
efforts are happening as well through specialized
provincial programs to recruit foreign workers. After many
years of implementing these initiatives, labour is still in
short within several sectors. In a 2007 study of labour
issues of businesses in the RMWB, 62% reported having
the most difficulty hiring from sectors including: retail,
professional, scientific and technical; mining, oil and gas;
accommodation and food services; and non-residential
construction. Notable reasons for the hiring difficulties
were high living costs owing to the housing situation,
competition for wages and benefits to the detriment of
small businesses and public sector with little resources, a
lack of skilled people in specialized fields (e.g.,
millwrights, sheet metal workers, welders, salespersons,
health professionals and teachers) and unsuitable work
shifts due to other job or school commitments. Employers
have had to constantly recruit new employees because of
high staff turnover from quick labour mobility, growth and
attrition. In light of these challenges, expansion of small
businesses is largely affected (Applications Management
Consulting Limited, 2007). Moreover, newcomers from
outside the province coming into the region to alleviate
some of the labour problems have faced many barriers to
Arku and Arku 005
settling into their new environment. They have cited a
lack of recognition for foreign credentials and experience,
language proficiency, transportation, affordable and
suitable housing and child care as fundamental to this
situation (Interviews, January 2009).
High demand for labour has adversely affected
educational levels. Wages and benefits have further gone
up, and people have taken on more than one job and
work longer hours to obtain more incomes since plenty of
work exist. The youth have tended to drop out from
school to take advantage of the readily available job
opportunities (Applications Management Consulting
Limited, 2007). Just over half of students make the
transition to a post-secondary institution within six years
of entering grade 10. And only 46% of rural Albertans
attain a post-secondary credential, compared to 61% for
their urban counterparts. Albertans’ university participa-
tion rate is currently the second lowest in Canada
(Government of Alberta, 2006). Other impacts of the
labour crisis related to stress are apparent in RMWB.
Employees’ stress has increased and so has their
absenteeism.
Students have also been under increased tension as
their parents are constantly pressured because of
excessive work commitments. Family and social life is
almost inexistent (Applications Management Consulting
Limited, 2007). Earley (2008) noted that, in a class of
about 25 students, only five saw their parents at the
same time on a regular basis. Also, schools have
become safe havens for students; even when the
weather is bad and bus services are cancelled, schools
cannot close because chances are that parents may not
be home to care for their children. As well, increased illicit
drug and excessive alcohol uses and crime have become
an issue. Violence and vandalism rates are high. Law
enforcement has improved over the years and arrests of
crime perpetrators have tripled since 2006.
Although, Alberta Alcohol and Drug Abuse
Commission, a governmental organization that provides
preventive education and rehabilitation services, has
augmented its preventative efforts, alcohol and drugs
uses are widespread (Earley, 2008). Indulgence in them
is common among high school students. A high school
student of African descent narrated to his parents “there
was a surprise look on the faces of my colleagues when I
told them I don’t smoke drugs” (Interview, 2008). Yet,
inadequate funds, office space, staff, and limited capacity
for the courts to handle high volumes of cases have
limited the provision of needed services (Earley, 2008).
The combination of high drug and alcohol uses, intense
work schedules of parents and of families living apart due
to the high costs of relocating their entire family into the
region has encouraged family breakdowns. John
Malcolm, a resident of the region’s Aboriginal community
of Anzac described Fort McMurray as “the divorce capital
of Canada”. He put it as “I see all these people struggling
... it’s an important message that families in the Wood
Buffalo region are not all happy” (Christian, 2008).
006 Int.NGO.J.
Any applicable ‘smart’ lessons for oil and gas
development in Ghana?
Whether big or small, lessons can be derived from the
Alberta-RMWB’s oil and gas sectors for a prudent
development of Ghana’s. It is noted that exploration of oil
in Ghana began in the 1970s in modest quantities, and
extraction activities went on for a short period. Prospects
of oil and gas have been recognized in Tano Basin,
Saltpond Basin, Accra/Keta Basin, Voltaian Basin and
Cape Three Points Basin (MBendi Information Services,
2009). Recent oil finds which showed considerable
proven reserves in the Western Region, in addition to its
rich agricultural land, gold, manganese and bauxite, is
remarkable. Estimates are that Ghana will be producing
approximately 120,000 barrels of oil per day, along with
significant quantities of gas by 2011. And with 600 million
barrels of proven reserves and 1.2 billion barrels of
probable reserves in the Western Region’s Jubilee field,
the International Monetary Fund has predicted that,
government revenues from oil and gas in the Jubilee field
alone is capable of reaching a cumulative $ 20 billion
over a production period from 2012 to 2030. Financial
commitment of $ 215 million from The World Bank board
is under consideration to finance its development by two
major companies - Kosmos Energy and Tullow Oil
(Oxfam America, 2009).
Several efforts were made to prepare for oil and gas
production, to obtain reasonable benefits and address
emerging issues associated with their development in
Alberta-RMWB’s case, from which Ghana can learn
lessons spanning the setting of royalty and tax rates to
managing the industry’s growth impacts.
Revenue: royalties and taxes
Though Ghana’s oil and gas sector is largely at a
discovery phase, it is hopeful that market conditions
would make it viable to allow for revenue gains through
fair and ‘smart’ royalty and tax regimes. The appreciable
oil and gas revenue to the Alberta government was
possible as a result of continuous review of their royalty
systems to maintain consistency with economic
conditions locally and globally. Royalty rate of 5% set for
Kosmos and Tullow discoveries in Ghana (Prempeh,
2008), compared to the 2009 Alberta royalty rates
ranging from 25 to 40% on net revenue per barrel when
prices are below $55 and above $120, respectively, is
unsettling. It is only fair for the government and industry
to mutually benefit when prices are high, and for the
industry to be capable of maintaining an ample level of
activity during price falls to prevent potential jobs losses.
Since high royalty rates may not encourage small
producers because they lack the benefits of large scale
production, a discriminatory royalty system to enable
survival and growth of small producers may be required.
Also consideration for municipal property taxes on
private non-residential oil and gas property (e.g.,
pipelines, wells, equipment and machinery) may be
considered. Thus, the government of Ghana might need
to revisit its petroleum agreements to ensure ‘smart’
royalty and tax regimes reflecting economic conditions
(e.g., fluctuations in global oil and gas prices and their
production levels). Pre-determined tax incentives for
periods of deep price slumps to encourage production
and protect the growth of small scale producers are
necessary. Both will help to maintain reasonable
employment and revenue gains.
Infrastructure
Collaborated advocacy efforts among stakeholders can
remedy a government’s lack of attention to the develop-
ment of supportive infrastructure in oil and gas producing
environments. Currently in Ghana’s Western Region,
there is congestion in many houses creating inner-city
slums. Only 32% of homes can access treated pipe-
borne water from either within or outside their compounds
(Ghana Nation.com, 2009). It was clear that a lack of
infrastructure has plagued the RMWB for close to a
decade. In addressing this situation, a team of oil and gas
producing companies, in conjunction with the RMWB and
service providers (e.g., health authority, school boards
and tertiary institutions) developed a compelling business
case in 2005, capturing the infrastructure shortages,
future needs, and potential revenue losses to the
province if the shortages were not settled. Following the
presentation of this case and several petitions to the
provincial government requesting action and intent to
reject production leases by the region’s Mayor, the
provincial government over 3 years has released 2.5
billion to the RMWB to build their infrastructure (Interview,
Oil Sands Producers Group, March 2009).
Unfortunately, chances are that, organizations and
communities in Ghana may be working in silos away from
the oil and gas companies and other sectors. However,
partnership among stakeholders including oil and gas
companies is essential to obtaining the needed infrastruc-
ture. This is because governments often may be more
responsive to unified advocacy efforts, based on
convincing economic parameters such as oil and gas
production and revenue, population growth and infra-
structure budget and shortages, and their forecasts. At
the same time, it is essential for Ghana’s government to
be cautious in placing its priorities right as wealth would
not come without an investment in a ‘wealth generator’.
Labour
Labour shortages in this sector are expected since oil
and gas development is new to Ghana, thereby
warranting a move towards vigorous skills development.
With a population of 1,924,577 constituting 10% of
Ghana’s population and forecasted to double by 2020
based on a growth rate of 3.2%, the Western Region
could provide a large supply of the labour needed
through targeted skills development. While the amount of
labour required for constructing and operating Ghana’s oil
and gas may partly depend on the production methods
used, it is unclear how much labour may be supposedly
needed. However, the government is implored to push for
the use of production methods that would provide
significant local jobs as it negotiates leases with
producers. In order for Ghanaians to benefit from the
employment in the sector would call for concerted efforts
from governments, public and private educational
sectors, and oil and gas industries to ‘grow’ local labour
to meet the needs. Information on labour forecasts for
both direct and indirect jobs may be useful planning tools
for developing the labour.
Given that poverty is widespread in many Ghanaian
households, especially rural households, substantial
financial relief to both young and adult students may
facilitate their educational training. In the Western
Region, unemployment generally is low (under 10%) due
to self-employment, however, it is probable many people
are unable to support a decent standard of living since a
high dropout rate transitioning from elementary to junior
high school is evident (Ghana nation.com, 2009). To
foster a strong economic growth in northern Alberta
where school dropout rates are disproportionately high
and the need for labour is greatest, the government,
through some of its ministries, offers bursaries to assist
students with their post-secondary training. Some of the
bursary programs are on the basis of return service
agreement that require recipients after completion to live
and work (for a period relative to bursary amount)
precisely in northern Alberta. Students training in specific
fields such as nursing, pharmacy and medicine that are
acutely deficient in the region could obtain special
bursary allotments. Other programs such as free tuition,
tax incentives, and increased internships, vacation
employment, and placements that could allow students to
undertake entry-level positions to provide them with some
work experience and facilitate their employment after
school completion, are being examined.
This is an indication that the government of Alberta has
been a major player in labour development through
creativity, which is very important for the government of
Ghana to consider doing as well. Noting that high
demand for labour could further the low post-secondary
school completion and pool of unskilled labour force in
Ghana, policies and programs that support school
completion are critical. This is more so because of the
prevailing self-employment and high dependency ratio of
88.3% in the Western Region, for example, (Ghana
nation.com, 2009) that could potentially make children
Arku and Arku 007
victims of a national labour crunch when oil and gas
production is in process. Policies that would place
restrictions on working age of youth may be appropriate.
Also worth exploring are educational programs that
connect learning to work such as the Youth
Apprenticeship Program piloted in Alberta since 2004.
This program which provides students an exposure to
the practical aspects of the abstracts learned in all
subjects through specialized curricula and experience
at work sites and other learning environments outside
the classroom, has helped to keep potential dropouts in
school. Also, it has kept kinetic or hands-on learners
academically motivated to complete high school
(Personal observation, 2009). A related program that
adapts to the needs of Ghanaian students could be
established.
Alcohol, drug, crime and violence
An important reason why Ghana needs to guard against
alcoholism, illicit drug uses, violence and crime is
because studies have shown that these characteristics
may be related to wealth. In a Canadian Addiction study
of 2005, it was reported that people in higher incomes
were more likely to drink beyond the low-risk guideline
than lower income earners (Canadian Addiction Survey,
2005). Further studies have shown that alcohol
consumption and other drug addictive behaviours are
major contributors to happenings, including: vehicle
accidents; illness and job loss; relationship failure;
disintegration of the family unit; passing on of unhealthy
drinking habits to the next generation; suicide, spousal
abuse and physical assault; and spread of sexually
transmitted infections (STIs) such as HIV/AIDS (Gmel
and Rehm, 2003; Canadian Health Network, 2005).
Thus, preventive programs or measures that provide
community awareness of the implications of alcoholism
and other hazardous drug uses as well as accessible
help resources and centres for victims are vital.
Increased resources for law enforcement agencies to
enable timely information dissemination of unlawful
activities and response, and community involvement in
providing law enforcers with information to deal with
potential criminal activity are relevant. Also by making
affordable housing available, migrant workers with
families wishing to work in and around the communities
of oil and gas activities could afford to relocate in close
proximity to their work places in order to benefit from
family stability and support of both parents to child
rearing. Facilitating the establishment of affordable
housing would entail collaboration among the oil and gas
industries, private housing developers and governments
to support development of housing prototypes that meet
the needs of various family types and are within their
affordable price ranges.
008 Int.NGO.J.
Community involvement
Recognizing communities as partners in resource
development promotes industry-community cohesion.
Communities of the RMWB have frequently been
bypassed in the planning of oil and gas development.
When governments have reiterated their engagement
with communities on leases to companies in their
vicinity, community leaders, especially of the rural
communities have characterized it as ‘information giving’
sessions, short in soliciting and taking into account
community views for decision-making. This has created
resentment in most of their rural communities, suggesting
that an active community engagement in the sector’s
development is indispensable not only for a cordial
relationship among stakeholders, but also to facilitate
shared benefits and cooperation in resolving any
concerns.
CONCLUSION
Oil and gas are valuable marketable resources with high
business growth, employment and revenue potential. The
government of Alberta and the RMWB rely on oil and gas
for considerable revenue from either royalties or taxes.
The province has recorded significant budget surpluses
for the 14th consecutive year in 2008 after spending the
largest in Canada on infrastructure development. Besides
the several socio-economic benefits that the oil and gas
development offers are also challenges. Although the
RMWB is fortunate to be endowed with rich oil and gas
deposits, giving it a strong economic reputation, the
wealth generated from the region often hardly made its
way back to the resource region. Their infrastructure,
services and social programming have been far from
adequate for many years. Competition for labour from a
relatively small pool along with exorbitant housing costs
has resulted in high cost of living and homelessness for
some. Others have resorted to living away from their
families to avoid the high costs of relocating to the region
with their families. Parents barely stayed at home due to
intense work schedules, and low school completion rates
have left many under-skilled.
Students have tended to be under stress as their
stressed parents juggled demanding work commitments.
Many families have disintegrated from a host of job
related factors and alcoholism and illegal drug users, and
violence and crime have become prevalent. It is clear that
the experience of oil and gas development in the RMWB
can provide Ghana with a head-start in developing its oil
and gas. Royalty and tax regimes that match local and
global conditions with stand-by incentives to encourage
production during serious price falls, and regimes that
support growth of small producers and foster local
employment are critical to sustained revenue. The
government is encouraged to commit tangible actions
that would ensure supportive infrastructure, services and
programs needed by the sector and impacted
communities are determined and met in a timely fashion.
Also, forecasts of population growth, production levels
and labour requirements would be important pieces of
information to facilitate a pro-active approach to managing
the sector’s growth. A level of creativity is required in
tooling or re-tooling Ghanaians to take advantage of the
employment opportunities, by breaking down barriers
to education and gainful employment, such as poverty
and teaching that is inconsistent with individual learning
styles. It is expected that stakeholders will collaborate on
projects of mutual interest towards comprehensive ends
– particularly those that will be affected impacted directly
or indirectly by oil and gas production such as: the
government ministries, oil and gas producing companies
and related businesses, local service delivery organiza-
tions (e.g., local districts, private and public educational
institutions, health and not-for-profit organizations),
community associations and community members. In a
nutshell, oil and gas development becomes progressively
gainful, if the infrastructural environment is conducive, if
the sector remains under scrutiny for competitive, fair and
timely fiscal responses, and if emerging issues and
opportunities are pursued in concert with all key
stakeholders while focusing on community and national
well-being.
ACKNOWLEDGEMENTS
The authors are grateful to the staff of RMWB,
Government of Alberta and residents for providing
insights for this study. This paper was presented at the
Conference of Ghana Institutions of Engineers on the
Theme: Engineering the Oil and Gas Industry, in Accra
from March 25-29, 2009
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