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Black gold, dark realities: Unpacking the socio-economic and environmental fallout of unauthorized oil extraction (Investigation in East Aceh, Indonesia)

Authors :
Said Musnadi
Ridwan Ibrahim
Zuraida Zuraida
Maulidar Agustina
Mahdani Ibrahim
Source :
Environmental Economics, Vol 15, Iss 2, Pp 64-76 (2024)
Publication Year :
2024
Publisher :
LLC "CPC "Business Perspectives", 2024.

Abstract

Environmental degradation can lead to climate change, air and water quality degradation, and biodiversity loss. The study aims to assess the impact of illegal oil extraction on environmental, social, economic, and public health dimensions in Peurelak, East Aceh, Indonesia. Using proportional random sampling techniques, 245 respondents were selected, representing owners and investors (9), tenant investors (18), workers/laborers (68), melters (6), public figures/community leaders (3), the community (138), and village government officials (3). Data were analyzed using structural equation modeling (SEM) with AMOS software. The results revealed a significant negative effect of illegal oil mining on social, environmental, and health performance (p-values = 0.031, 0.029, and 0.010, respectively, at a 95% confidence level). Additionally, informal leadership and government support were found to positively influence illegal oil mining (p-values = .017 and .035, respectively, below the significance threshold of .05). Furthermore, illegal oil mining significantly affects economic performance (p-value = .021). This paper emphasizes the adverse impacts of unauthorized oil extraction on community well-being while highlighting the collusive role of informal leaders and government authorities. Additionally, the study reveals a worrisome positive relationship between illegal oil mining and economic performance in Indonesia.

Details

Language :
English
ISSN :
19986041 and 1998605X
Volume :
15
Issue :
2
Database :
Directory of Open Access Journals
Journal :
Environmental Economics
Publication Type :
Academic Journal
Accession number :
edsdoj.8367429b75744f85a49b9c316b28b9b4
Document Type :
article
Full Text :
https://doi.org/10.21511/ee.15(2).2024.05