Collapse: How Societies Choose to Fail or Succeed (83 page)

many oil fields, as in much of the Kutubu fields, it is now routine to operate
exploration drill sites by means of helicopters rather than by putting in
roads; helicopter use is of course expensive, but road construction and im
pacts are often even more expensive.

These, then, are reasons why Chevron and the handful of other big international oil companies have been taking environmental issues seri
ously. What it all adds up to is that clean environmental practices help them
make money and gain long-term access to new oil and gas fields. But I should reiterate that I am not thereby claiming that the oil industry is now
uniformly clean, responsible, and admirable in its behavior. Among the
most widely publicized persisting and serious problems are recent large
spills at sea from wrecks of poorly maintained and poorly operated single-hulled tankers (such as the sinking of the 26-year-old tanker
Prestige
off
Spain in 2002), belonging to shipowners other than the large oil companies,
which have mostly switched to double-hulled tankers. Other major prob
lems include legacies of old, environmentally dirty facilities, constructed
before the more recent availability of cleaner technologies and difficult or
expensive to retrofit (e.g., in Nigeria and Ecuador); and operations under
the auspices of corrupt and abusive governments, such as those of Nigeria
and Indonesia. Instead, the case of Chevron Niugini illustrates how it is
possible for an oil company to operate in a way that delivers environmental
benefits to an area of operations and to the people there
—especially com
pared to alternative proposed uses of the same area for logging, or even just
for subsistence hunting and farming. The case also illustrates the factors
combining to produce that outcome in the Kutubu oil fields but not in
many other large industrial projects, and the potential role of the public in
influencing outcomes.

In particular, the question remains why I observed indifference to environmental problems in the Salawati oil field of the Indonesian oil company
Pertamina in 1986, but clean practices in Chevron's Kutubu field when I be
gan visiting there in 1998. There are several differences between Pertamina's
situation as a national oil company in Indonesia in 1986, and Chevron's situation as an international company operating in Papua New Guinea in
1998, that may account for the differing outcomes. The Indonesian public,
government, and judiciary are less interested in, and expect less from, the
behavior of oil companies than do their European and American counterparts encompassing Chevron's major customers. Pertamina's Indonesian
employees have had less exposure to environmental concerns than have
Chevron's American and Australian employees. Papua New Guinea is a

democracy whose citizens enjoy the freedom to obstruct proposed develop
ment projects, but Indonesia in 1986 was a military dictatorship whose citi
zens enjoyed no such freedom. Beyond that, the Indonesian government
was dominated by people from its most populous island (Java), looked on
its New Guinea province as a source of income and a place to resettle Java's
surplus population, and was less concerned with the opinions of New
Guineans than is the government of Papua New Guinea, which owns the
eastern half of the same island. Pertamina did not face rising environmental standards from the Indonesian government, such as those that international
oil companies face. Pertamina is largely a national oil company within In
donesia, competing for fewer overseas contracts than do the big international companies, so that Pertamina does not derive an international
competitive advantage from clean environmental policies. Pertamina has
not had CEOs who send out monthly newsletters stressing the environment
as the highest priority. Finally, my visit to Pertamina's Salawati oil field was
in 1986; I don't know whether Pertamina policies have changed since then.

Let's now turn from the oil and gas industry to the hardrock mining indus
try. (That term refers to mines that excavate ores from which to extract met
als, as opposed to mines that excavate coal.) The industry is currently the
leading toxic polluter in the U.S., responsible for nearly half of reported industrial pollution. Of western U.S. rivers, nearly half have sections of their headwaters polluted by mining. In most of the U.S. the hardrock mining industry is now declining towards extinction, largely because of its own mis
deeds. Environmental groups have for the most part not taken the trouble
to learn essential facts about the hardrock mining industry, and declined to
participate in an initially promising international initiative that the indus
try commenced in 1998 to change its behavior.

These and other features of the hardrock mining industry's current sta
tus are initially puzzling, because the industry seems superficially so like the
oil and gas industry that we just discussed, and also like the coal industry.
Don't all three industries involve extracting non-renewable resources from
the ground? Yes, they do, but they have nevertheless unfolded differently, for three reasons: different economics and technology, different attitudes within the industry itself, and different attitudes of the public and govern
ment towards the industry.

The environmental problems caused by hardrock mining are of several
types. One involves disturbance of land surface by digging it up. This prob-

lem especially affects surface mines and open-pit mines, where the ore lies near the surface and is reached by scraping away the earth over it. In con
trast, no one now extracts oil by digging the surface off of an entire oil for
mation; instead, oil companies typically disturb only a small surface area
sufficient to drill a well to tap down into the oil formation. Similarly, there
are some mines at which the ore body does not lie near the surface but deep
underground, and at which tunnels and waste piles disturbing only a small
surface area are dug down to the ore body.

Further environmental problems caused by hardrock mining involve
water pollution by metals themselves, processing chemicals, acid drainage,
and sediment. Metals and metal-like elements in the ore itself
—especially copper, cadmium, lead, mercury, zinc, arsenic, antimony, and selenium—
are toxic and prone to cause trouble by ending up in nearby streams and
water tables as a result of mining operations. A notorious example was a
wave of cases of bone disease caused by cadmium discharged into Japan's Jinzu River from a lead and zinc mine. Quite a few of the chemicals used in
mining—such as cyanide, mercury, sulfuric acid, and nitrate produced
from dynamite—are also toxic. More recently, it has become appreciated that acid draining out of sulfide-containing ores exposed to water and air through mining causes serious water pollution and leaches out metals.
Sediment transported out of mines in runoff water may be harmful to
aquatic life, for instance by covering up fish spawning beds. In addition to those types of pollution, the mere consumption of water by many mines is
high enough to be significant.

The remaining environmental problem concerns where to dump all the
dirt and wastes dug up in the course of mining, consisting of four components: the "overburden" (dirt scraped away to get down to the ore); waste rock found to contain too little mineral to be of economic value; tailings,
the ground-up residue of ore after its minerals have been extracted; and the residues of heap-leach pads after mineral extraction. The latter two types of
residue are generally left in the tailings impoundment or pad respectively,
while the overburden and waste rock are left in dumps. Depending on the laws in the particular country where the mine is located, the methods of
disposing of tailings (a slurry of water and solids) involve either dumping
them into a river or ocean, piling them up on land, or (most often) piling
them up behind a dam. Unfortunately, tailings dams fail in a surprisingly
high percentage of cases: they are often designed with insufficient strength
(to save money), they are often constructed cheaply from wastes themselves
instead of from concrete, and they are built over extended periods so that

their condition must be monitored constantly and can't be subjected to a final inspection declaring them completed and safe. On the average around
the world each year, there is one big accident involving a tailings dam. The largest such accident in the U.S. was West Virginia's Buffalo Creek disaster
of 1972, which killed 125 people.

Several of these environmental problems are illustrated by the status of
the four most valuable mines on New Guinea and neighboring islands, where I do my fieldwork. The copper mine at Panguna on Papua New
Guinea's Bougainville Island was formerly the country's largest enterprise
and biggest earner of foreign exchange, and one of the largest copper mines
in the world. It dumped its tailings directly into a tributary of the laba
River, thereby creating monumental environmental impacts. When the gov
ernment failed to resolve that situation and associated political and social
problems, Bougainville's inhabitants revolted, triggering a civil war that cost
thousands of lives and nearly tore apart the nation of Papua New Guinea.
Fifteen years after the war's outbreak, peace has still not been fully restored on Bougainville. The Panguna mine was of course closed down, has no
prospect of reopening, and the owners and lenders (including the Bank
of America, U.S. Export-Import Bank, and Australian and Japanese sub
scribers and lenders) lost their investment. That history provided a reason
why Chevron worked so closely with local landowners at the Kutubu oil
fields to gain their acceptance.

The gold mine on Lihir Island dumps its tailings into the ocean via a
deep pipe (a method viewed by environmentalists as highly damaging), and
the owners claim that this is not harmful. Whatever the effects of that one mine on marine life around Lihir Island, the world would have a major
problem if many other mines similarly dumped their tailings into the
ocean. The Ok Tedi copper mine on the mainland of New Guinea did con
struct a tailings dam, but experts who reviewed its design before construc
tion warned that the dam would fail soon. It did fail within a few months,
so that 200,000 tons of mine tailings and wastes are now discharged each
day into the Ok Tedi River and have destroyed its fishery. From the Ok Tedi
the water flows directly into New Guinea's largest river with its most valuable fishery, the Fly River, where suspended sediment concentrations have
now increased five-fold, resulting in flooding, deposition of mine wastes on
the river's floodplain, and killing of floodplain vegetation over an area of
200 square miles so far. In addition, a barge carrying barrels of cyanide for the mine up the Fly River sank, and the barrels have gradually been corrod
ing and releasing their cyanide into the river. In 2001 BHP, the world's

fourth largest mining company, which operated the Ok Tedi mine, sought
to close it, explaining, "Ok Tedi is not compatible with our environmental
values, and the company should never have been involved." However, be
cause the mine accounts for 20% of Papua New Guinea's total exports, the government arranged for the mine to be kept open while permitting
BHP to withdraw. Finally, the Grasberg-Ertsberg copper and gold mine of
Indonesian New Guinea, a huge open-pit operation that is Indonesia's most
valuable mine, dumps its tailings directly into the Mimika River, whence they reach the shallow Arafura Sea between New Guinea and Australia. Along with the Ok Tedi mine and another gold mine in New Guinea, the
Grasberg-Ertsberg mine is one of only three large mines in the world that is
currently being operated by an international company and that disposes of
its wastes into a river.

The prevalent policy of mining companies towards environmental dam
age is to clean up and restore the mined area only after the mine has shut down, rather than follow the coal mining industry's practice of reclaiming
the area as mining proceeds; the hardrock mining industry opposes that
strategy. Companies assume that what is called "walkaway" restoration will
be adequate: i.e., that cleanup and restoration will incur minimal costs, will
go on for only 2 to 12 years after mine closure (whereupon the company
can walk away from the site with no further obligations), and will involve nothing more than resloping of disturbed areas to prevent erosion, applying a growth medium like salvaged topsoil to stimulate revegetation, and treating water flowing out of the mine site for a few years. In reality, this inexpensive walkaway strategy has never sufficed for any major modern mine and regularly leaves water quality standards violated. It is instead necessary to cover and revegetate all areas that could be sources of acid drainage, and
to capture and treat polluted groundwater and surface water flowing out of the site for as long as the water remains polluted, which often means forever. The actual direct and indirect costs of cleanup and restoration have
typically proved to be 1.5 to 2 times mining industry walkaway estimates for
mines without acid drainage, and 10 times those estimates for mines with
acid drainage. The biggest uncertainty in those costs is whether the mine
will produce acid drainage, a problem recognized only recently at copper
mines though appreciated earlier at other mines, and almost never predicted accurately in advance.

Hardrock mining companies facing cleanup costs frequently avoid those
costs by declaring bankruptcy and transferring their assets to other corpo
rations controlled by the same individuals. One such example is Montana's