Is There A Trade-Off Between Economic and Environmental Factors in Traditional Oil Mine Management?

Abstract

Oil mining that is managed by the public can increase local income but on the other side inflict environmental damage. The aim of this research is to analyze the link between the environmental, economic, and social factors and to test whether there is a trade-off between economic and environment factor for traditional oil mining in Wonocolo Village, Kedewan Sub-district, Bojonegoro Regency. The respondents are 84 traditional oil miners in Wonocolo Village.  The method of collecting data is by using questionnaire. The analysis tool for analyzing the data is using Factor Analysis by Principal Component Analysis method. The variables consist of Income, Education, Age, Distance from home to mine, and Willingness to Pay (WTP). The result shows that income and education are related positively to WTP which means the higher the income and education, the bigger the WTP. Age and distance from the mine are related negatively to WTP which means the older and the farther the house from the mine, the smaller the WTP. The higher the income, the bigger the WTP shows that there is no trade-off between economic and environment factors for traditional oil mining. Policy implications is that trade-off does not happen between economy and environment quality which means mining activity in Wonocolo is still doable to increase GDRP without degrading the quality of environment. However, this activity needs evaluation especially on how rapidly crude oil reserves depleted and to prepare about green technology that can substitute non-renewable natural resources such as crude oil.