While petroleum producers can proactively improve impacts, markets are not equipped to address externalities. Sustainable transportation fuel systems will require government policies to ensure petroleum companies adopt social and environmental management systems. In addition to limiting emissions, produced water should be treated or injected into confined aquifers. These practices will greatly improve oil and gas practices. This article will explore some of the issues facing the oil and gas industry today.
Environmental health and safety
The oil and gas industry has made tremendous strides in recent years to improve their workplaces and protect workers from hazards. In the UK, for example, there were 21 fatalities in the oil and gas sector between 1996 and 2007 compared to just five deaths in 2017 and eight in 2018. This is a result of industry leaders continuing to improve their practices and seek new safety standards. Some of this might be motivated by altruism, but other factors are also at play, such as financial repercussions or the threat of lawsuits.
These practices can pay off in the form of immediate economic benefits. Pollution is often worse in lower-income neighborhoods, and oil and gas operations near schools can endanger children. In fact, a proposed oil and gas operation is causing protests in a Latino community. Originally, the operation was planned near a predominantly white school, but a significant pushback from parents forced the oil and gas company to move it to a Latino neighborhood. Because oil and gas production poses a serious health risk, it’s important to avoid these types of operations on public land.
While there are a lot of risks associated with unconventional oil and gas drilling, many scientists have identified several factors that affect health and safety. These risks include worker safety, air pollution, and methane leaks. Additionally, these risks may lead to climate change and other issues affecting communities. Environmental health and safety are reasons why oil industry should follow sustainable practices. So how can oil and gas companies improve their practices?
In addition to reducing their costs, companies that follow sustainable practices also contribute to society. The cost of environmental compliance can be significant. The costs of ensuring compliance with environmental standards can have a direct impact on competitiveness and future generations. But companies should not let this prevent them from making these changes. It is in their best interests to follow sustainable practices and help the environment. The oil and gas industry is a leading example of responsible action.
Inconsistency in communication between oil and gas companies
One of the biggest challenges facing the oil and gas industry is public distrust, which has been growing for many years. With their inconsistent environmental records and their experiences with resource exploitation and corruption, the industry’s contributions to global economic growth have often been undermined. Recent controversies have included protests against the Keystone XL pipeline and the Dakota Access Pipeline, both of which are motivated by concerns over disruption of indigenous American lands. The negative public reaction to the oil spill at Exxon Valdez echoes the same concern today.
The industry is under pressure from multiple sources, including public opinion, shareholder demands, and government regulations. At the same time, it is seeing considerable new business opportunities from renewable energy, including coal-to-gas fuel switching and advanced biofuels. To compete in the future energy economy, the oil and gas industry must explain its role in the transition to a lower carbon economy, and position itself as a trusted ally of the transition.
Impact of oil spills on fresh water and marine ecosystems
Every oil spill has a different impact on marine and fresh water ecosystems, but there are certain ways to minimize these effects. Chemicals that break down oil and gasoline can be cleaned by natural processes, such as bioremediation. The addition of nutrients to the contaminated area increases the rate at which these microbes can do their work. Biological processes can also remove trace amounts of petroleum, which may harm benthic animal populations.
The most obvious impact of oil spills on marine and fresh water ecosystems is the spreading of the crude oil onto the water’s surface. Since oil is less dense than water, it spreads rapidly. Lighter crude oils spread more quickly. Warm temperatures and currents may also contribute to the spread of oil. In open-water habitats, the petroleum residues would kill migrating species and remain on the surface for years, causing long-term debilitating damage to the ecosystem.
Freshwater and marine ecosystems can be divided into two different types: flowing and standing water. Flowing water is more vulnerable to oil spills than standing water. However, both types of water may experience significant effects. Standing water will likely be impacted more than flowing water, as the oil tends to accumulate and stay in the water for long periods of time. While oil spills affect marine ecosystems, freshwater habitats will require several years to recover from the damage they have suffered.
Onshore oil spills are an additional source of oil pollution. Over seventy million gallons of crude oil are discharged into the sea annually, ranging from 470,000 to eight million tonnes. This figure varies significantly depending on the severity and frequency of oil spills. There are no precise figures for the total oil pollution, however. Some credible organizations have different estimates. They include emissions from non-point sources, such as industrial runoff and land drainage.
Cost of decarbonizing oil and gas
The cost of decarbonizing oil and gas is high, but companies have several options to reduce their carbon footprint. Carbon reduction can be done in several ways: reducing emissions in the sourcing and design phases; enhancing fleet performance and energy efficiency; and installing carbon capture technologies. These measures could have a material impact on the costs of operating the oil and gas industry, but they also require significant upfront investment. Therefore, the cost of decarbonizing oil and gas can be high, but it is still lower than the costs of upstream operations.
The oil and gas industry is responding to pressure from stakeholders and government agencies to reduce emissions. But to be successful, leaders must develop a roadmap for emissions reduction. They must tie decarbonization to the company’s strategy, identify efficiency gains, factor emissions reduction into operational planning, and create a culture that focuses on decarbonization. Lastly, they must focus on long-term shareholder value. In addition, they must take a systems-based approach to decarbonizing oil and gas.
The oil and gas sector is responsible for around 45 percent of the world’s anthropogenic GHG emissions. Of that, 10 percent of the emissions come from internal operations and the energy purchased to operate the industry. The other 35 percent comes from the combustion of oil and gas products by customers. To address this problem, oil and gas companies must decarbonize their entire production process. And the industry must reduce emissions to the tune of 3.4 gigatons per year by 2050.
The global economy is already facing increasing pressure to cut emissions and reduce the cost of energy. Moreover, the oil and gas sector is already struggling to balance tighter finance conditions and play a positive role in society. Since COP26 in November last year, financiers have been pressuring oil and gas firms to make more robust climate commitments. The Glasgow Financial Alliance for Net-Zero, an initiative with 450 financial firms, has committed to a net-zero world by 2050. At the end of the day, there are no easy answers.
Various initiatives are available to oil and gas companies. By 2050, most of their operations could be electrified and the abatement would amount to 720 tCO2e annually, with a cost of $10 per tCO2e. The costs of each initiative would depend on how much electricity is being generated in the local area. However, the cost of decarbonizing oil and gas will continue to rise.
