THE BLOG
03/28/2010 05:12 am ET Updated Dec 06, 2017

Gas Money: Where is it Really Going?

When you stand at the gas pump and watch the numbers tick away, do you ever wonder where the money goes? While we feel the pinch in our pockets, citizens of oil-producing countries are often not seeing any benefits. Oil companies collect large profits, despite the social and environmental impacts of their operations in developing countries.

Imagine if a company paid the government to mine for gold or drill for oil in your backyard -- but didn't ask for your permission, pay you, or give you important information about the project. Right now, oil, gas, and mining companies are doing this around the world, often in the poorest countries.

Oxfam America has launched a campaign calling on major oil, gas, and mining companies to respect people's "right to know" all the facts about how oil, gas, and mining projects affect their communities. More often than not, oil, gas and mining contracts and payments from companies to host governments are kept secret. This lack of accountability facilitates embezzlement, corruption, and revenue mismanagement, and has contributed to the industry's frequent failure to contribute to poverty reduction in countries where it does business.

Both companies and government have a role to play in promoting transparency and accountability. It is wrong, for example, that companies are allowed to negotiate secret contracts with governments for the right to extract resources. Companies should support the disclosure of legitimate payments to host governments, and governments of developing countries should reform laws to increase transparency and accountability and strengthen the right of communities to decide what kinds of development are most appropriate for them. If they are consulted in advance, local people can decide whether they want companies to begin or expand operations on their land. And if they know how much companies are paying their government for their natural resources, they can call for a fair share of the profits to go to community needs like education, health care, and jobs.

So what can we do? We can make a difference by supporting the passage of legislation called the Energy Security Through Transparency Act, which would require all oil, gas, and mining companies registered with the US Security and Exchange Commission to publicly disclose payments made to foreign governments. The Energy Security Through Transparency Act was introduced by a bipartisan group of Senators -- led by Senators Lugar and Cardin -- in September 2009. A companion bill is expected to be introduced in the House of Representatives in the coming weeks.

With enough attention and support, this legislation could become law and represent a landmark victory for communities around the world clamoring for more information on how their vital natural resources -- and the money generated -- is being used.

With more than half of the world's poorest people living in countries rich in natural resources, this legislation would provide citizens with vital information to hold their governments accountable for how the money they make from mining and drilling is used.

Check out this short animation that shows where the money actually goes, and how you can let your representatives know that you support the passage of this important bill.