Despite concerns over the environmental impact of industrial mining and the contribution that fossil fuels make to global warming, resource extraction continues to be a major source of revenue for both developing countries and wealthier nations alike. In fact, the amount of resources being pulled from the earth has tripled since 1970, though the global population has only doubled in that time.
Global efforts to reduce carbon emissions as part of climate change diplomacy notwithstanding, fossil fuels remain among the most prized extractives, for a simple reason: Global demand combined with the wealth they generate have historically given some countries, including members of the Organization of the Petroleum Exporting Countries, outsized global influence.
The lucrative contracts associated with the extractive sector help to explain why resource extraction remains central to many developing countries’ strategy to grow their economies. But the windfalls don’t come without risks, most prominent among them being the “resource curse” that can plague countries that fail to diversify their economies to generate alternate sources of revenue. Corruption can also thrive, especially when government institutions are weak. When the wealth generated from resource extraction isn’t fairly distributed, it can entrench a permanent elite, as in Saudi Arabia, or fuel persistent conflicts, as in the Democratic Republic of Congo. And the environmental damage caused by the extractive industries has decimated local communities and driven social protest movements around the world.
The environmental impact of fossil fuels, particularly with regard to climate change, is driving some changes, in particular a push to develop renewable energy sources, such as wind and solar, whose long-term financial viability has become clearer. But as the green energy transition gathers steam, the impact of mining the critical minerals required for the technologies that will enable it is also attracting more attention.
WPR has covered a broad range of issues regarding energy and resource extraction, and continues to examine key questions about future developments. As renewable energy sources become more prevalent, what will it take to make sure the green transition doesn’t amplify the destructive impact of the extractive industry? How will the war in Ukraine affect the geopolitics of global energy markets? What will the shift away from fossil fuels mean for the development trajectories of oil-exporting countries as well as the Global South? Below are some of the highlights of WPR’s coverage.
Our Most Recent Coverage
Chile and Argentina Are Playing Against Type on Lithium Mining
Over the past two decades, Chile has been a place where businesses can operate in a regulatory environment shaped by steady and fair rules, while Argentina’s extensive regulations on prices, taxes and capital controls have made business difficult. However, when it comes to the lithium industry, that narrative has just been flipped.
The Human and Environmental Costs
The wealth produced by the extractive industries comes at great cost, both to local communities and the environment. Despite initiatives to boost transparency, involve affected communities in planning and minimize environmental impact, mining projects continue to drive social conflict and cause serious injustices.
- Why a major oil pipeline project has Uganda’s farmers up in arms, in Uganda’s EACOP Pipeline Is Pitting Farmers Against Big Oil
- Why Senegal’s energy windfall is an existential threat to its fishing communities, in An Offshore Energy Bonanza Spells Doom for Senegal’s Fishermen
- How the green energy transition can avoid reproducing the mining sector’s existing flaws, in The Green Energy Transition Has an Extractivism Problem
- How Australia’s status as a fossil fuels exporter undermines its renewed claims to climate leadership, in Australia’s Newfound Climate Ambitions Ignore an Inconvenient Truth
Infrastructure and the Global Energy Market
In addition to generating lucrative business deals, the global energy market also shapes international diplomacy. Oil and gas pipelines serve as infrastructure that physically joins participating countries, while nuclear energy deals can create industrial and scientific partnerships that span a generation. Meanwhile, competition for markets can also fuel strategic competition and conflict, even as conflicts—like the war in Ukraine—can have a major impact on markets.
- What the war in Ukraine means for the global nuclear energy market, in The Nuclear Power Revival May Need to Slow Down
- How Germany weaned itself off of Russian gas without causing a financial meltdown, in Germany Cut Russian Gas and Kept the Lights on This Winter. Now What?
- Why the U.S.-Europe energy partnership could end up being a short-term marriage of convenience, in Europe’s Energy Partnership With the U.S. May Not Last
- Why reducing its dependence on Russian energy supplies was such a divisive issue for Europe, in The EU Is Still Struggling for Unity on Russian Energy Imports
Oil and OPEC
Though OPEC still retains significant influence, its power is waning. The growth of the United States as an oil-exporting country and the rise of renewable energy have chipped away at its control over the global energy market, and the coronavirus pandemic flattened demand and clouded the oil sector’s already uncertain future. Now the war in Ukraine has upended energy markets, causing a spike in prices, but also generating greater urgency to accelerate the transition to renewable energies.
- How AMLO’s energy policy is hollowing out Mexico’s state-owned oil company, in Mexico’s Pemex Could Be Another Casualty of AMLO’s Energy Nationalism
- Why reaching the Paris Agreement’s goals will require decisive supply-side action on fossil fuels, in Momentum for a Fossil Fuel Phaseout Is Building
- Why the focus on oil prices is obscuring the roots of the growing U.S.-Saudi divide, in The U.S.-Saudi Spat Is Over More Than Just Oil Prices
- How the EU reached consensus on its Russian oil ban, in The EU Finally Approves a Ban on Russian Oil
Many developing countries see resource extraction as a path to growing the economy and improving livelihoods. But experts argue that extraction must be part of a broader plan for how and where to invest resources, bolstered by transparent reporting and governance systems, if it is to be an effective development strategy.
- Why an OPEC for lithium producers is easier said than done, in A South American Lithium Cartel Faces Long Odds
- Why Bolivia’s natural gas-funded development model can’t last, in Bolivia’s Economic Model Is Running Out of Gas
- What’s missing in Western news coverage of energy-based development in Africa, in African Development Can’t Be a Casualty of Climate Change Policy
- What’s driving Trinidad and Tobago’s shift away from oil and gas, in COVID-19 and Climate Change Prompt an Energy Rethink in Trinidad and Tobago
The Resource Curse
Resource extraction can go from a blessing to a curse when it fuels corruption or entrenches an elite, robbing citizens of the financial benefits while causing environmental damage. Countries that fail to diversify their revenue sources also risk an economic collapse and social unrest when the resource becomes scarce or global prices drop.
- What newfound oil wealth means for Guyana, in Guyana’s Oil Wealth Comes With Some Strings Attached
- How the West can leverage Myanmar’s dependence on its energy sector to pressure the military junta to return to civilian rule, in To Support Myanmar’s Protesters, Sanction Its Oil and Gas Sector
- Why Cambodia’s population may not benefit from the country’s newfound oil revenues, in Who Will Benefit From Cambodia’s New Oil Wealth?
- Why Guyana’s pending oil revenues might end up in the hands of a patronage network, in Guyana’s Pending Oil Boom—Or Bust
Illegal and Informal Mining
Globally, illegal mining has become a major social and environmental concern. In the Amazon, researchers describe illegal mining for gold as an “epidemic,” encroaching on indigenous communities and destroying vast swathes of the rainforest. The efforts are often funded by organized crime or major industries, who recruit local workers but do not offer them the training or protection formal mining industries do.
- How Bolivia became South America’s gateway for contraband mercury, in Bolivia’s Gold Mining Industry Is Poisoning South America
- How illegal and informal mining helps fuel insecurity in West Africa, in Formalizing West Africa’s Mining Sector Could Pay Security Dividends
- What’s driving the surge in illegal gold trading in Uganda, in Uganda’s Illegal Gold Market Is Bustling
- Why Bolivia’s government is struggling to rein in gold mining, in Gold Fever Grips Bolivia, but at What Cost?
Editor’s note: This article was originally published in June 2019 and is regularly updated.