Countering a corrupt oil boom: Energy justice, Natural Resource Funds, and Sao Tome e Principe's Oil Revenue Management Law

The world's fossil fuels took more than two billion years to accumulate, yet face depletion at a rate that could have them exhausted within one to two centuries. Moreover, their production, extraction, and processing have often occurred with at times devastating consequences for national governments and local communities. After summarizing these concerns, this study presents the notion of prudence, the idea that energy resources ought to be maximized for future use, and utilized to better the communities living near them. It then introduces Natural Resource Funds, a mechanism to both moderate the production and extraction of energy resources and to ensure that energy-related revenues serve the public good rather than merely consolidate corporate profit. Sao Tome e Principe (SIP) offers an excellent case study of how to achieve this balance in practice. STP's Natural Resource Fund moderates oil and gas production and ensure that revenues flow democratically to public projects. Although the country continues to face an array of challenges, these policies have generated much needed government revenue, helped diversify the economy, lowered inflation and rates of poverty, and minimized corruption and the exploitation often associated with oil exploration and production. (C) 2015 Elsevier Ltd. All rights reserved.