Is it really cheaper?

Has anyone done a study of security costs for oil & gas extraction?

Once again wondering this after reading an interview with Joe Berlinger, director of 'Crude'. He addresses the legal and moral implications, and documents an indigenous lawsuit against Chevron. You can read it here

There is no effective insurgency in Ecuador against oil companies, but it certainly raises the issues common to all such projects, and questions of legal and moral responsibility.

Conventional wisdom has it that these firms are so flush with cash that whatever security measures have to be taken can. But operating costs of increased exponentially over the last few years, as well as maintaining security systems and personnel, and often paying for military personnel to protect and even conduct campaigns around oil installations.

Some costs have fallen thanks to the crash in oil prices and other major commodities. However the need to provide security to facilities and personnel is growing in some key producing countries.

In Nigeria, oil workers can no longer have their families with them, must live in thick-walled, heavily guarded compounds, and can even be kidnapped on route to onshore and offshore facilities. One friend in Brussels was required to commute to Nigeria weekly FROM BRUSSELS due to security concerns.

Supposedly, Chevron, Shell and other majors operating there have preferred to flare off the gas produced as a byproduct of oil extraction because that is cheaper than channeling it to local communities to provide electricity. I would assume doing so would require brand new infrastructure to be built as well, thus adding to the cost.

But I wonder if investing in local energy would have stabilized soft security around onshore and by extension offshore facilities by aiding development. This may have reduced the need and therefore cost of security.

I'm not sure the firms should have been stuck with the responsibility for building the infrastructure, but it also could have ensured corrupt federal and local politicians didn't divert the money.

The conflict in the Niger Delta has been going on for decades and continues to escalate. It may be too late for such measures now, but I would love to see some cost analyses on these issues.

Joseph Stieglitz, maybe this should be your next project!