Oil and gas industry struggles to balance costs and environmental pressures
by bshambla on October 16, 2015 - 9:54pm
The goal of this article is to report on some of the oil and gas industry’s present and future projects in reducing environmental impacts, and to reflect on the industry’s current trend towards integrated change for the betterment of environmental and financial performance.The main players in the article are oil and gas companies and organizations involved with the industry. It details that companies need to find new ways to balance environmental initiatives in the weak economy. The article begins by saying that companies, now with dropping oil prices, are changing their ways of doing things. Companies are beginning to look more closely at the environmental initiatives they implement to see if they have the intended impact, rather than using a try something and assess afterwards approach. Continuing, the article explains that companies are turning towards collaborative projects now more than ever, such as energy reduction projects that aim to decrease both environmental impacts and costs. Breakthrough technology is one potential solution for balancing environment and economy, with some companies investing heavily in research, while several oil and industry organizations promote innovation with lucrative competitions and creative, unconventional research. However, some companies cannot afford to invest so much into research, and instead look to increase efficiency in light of the weak economy, mentioning that in the world today, increased efficiency generally goes hand in hand with reduced emissions and environmental impact. This can still very much be seen as positive.
This article also presents some examples of implementation tools. The most obvious example is that of voluntary instruments used by organizations mentioned in the article such as Canada’s Oil Sands Innovation Alliance (COSIA) and the Climate Change and Emissions Management Corp (CCEMC). These organizations put forth challenges towards the industry to curb emissions by innovating new technologies, and they work to collaborate with oil and gas companies on environmental initiatives and investments. There is also a sort of economic instrument in play here. While oil and gas are arguably essential, or basic goods (their demands are constant), with the falling price of oil, the cost efficiency for producing it decreases as well. With this, oil and gas companies are influenced by the market to find ways to cut costs; as the article mentioned, this is has been done through innovation of breakthrough technologies or through increased efficiency. Either option typically means reduced environmental impact, or at the very least a step in the right direction.
Something to note, however, is that the article does seem slightly biased. The oil and gas industry is portrayed as being overly benevolent and environmentally responsible, and does not consider instances where adaption to the weak economy could possibly result in environmentally degrading practices. Nonetheless, the direction the industry appears to be on seems to be positive. The increased focus on breakthrough technologies could eventually generate alternative energy sources or production methods that could make a huge splash in the world of resource management and energy. For now, innovations such as the synthetic sand replacement in fracking mentioned in the article that reduces water and energy usage and helps improve methane capture in the process looks very promising. Innovations such as this will help to mitigate the risks associated with processes such as fracking and could eventually help resolve conflicts over the management of resources.