Economic and Social Impacts of the Oil Industry on the Brazilian Onshore

Abstract

Oil wealth can foster social inequality if not properly managed. This is due to the migration of production factors from different economic activities to the oil sector. As a result, unemployment, poverty, political instability, a reduction in development, among other undesirable effects on society, may arise. With that in mind, this research evaluates the government’s role in the socioeconomic development of the oil producing municipalities in Rio Grande do Norte State (RN), the largest onshore producer in Brazil. The research uses panel regression as it allows broad analyses of the space and time dimensions to be performed. In addition, it relies on statistical testing at all stages to make the research analysis more appropriate and consistent. The proposed model revealed better socioeconomic development indicators in municipalities where the local Government made public savings as reserve funds. Furthermore, the results show that appropriate public savings management allows municipal governments to design public policies to provide future generations with socioeconomic benefits, in line with the purpose of royalties.

Assessment of Groundwater Contamination in the Southeastern Coast of Brazil: A Potential Threat to Human Health in Marica Municipality

“…Although some coastal cities in Brazil have moderate groundwater demand, the constant population increase tends to intensify groundwater exploitation [22]. Because of the recent discovery of the huge petroleum reservoir in the oceanic pre-salt layer and oil production expansion, certain Brazilian municipalities located on the southeast coastal zones have benefited from fees charged by the oil extraction industry and are now facing new social and environmental impacts [23]. One of the main results is exponential migration and the resulting increase in population accompanying new job opportunities.…”