Negative Impact of Oil and Gas Industry

The assignment discusses the negative impact of the oil and gas industry on different stakeholder groups, including environmental and health concerns. It also touches upon the relevant legislations in Australia, such as the Petroleum (Onshore) Act 1991 and the Petroleum (Offshore) Act 1982. The importance of corporate social responsibility and sustainability is emphasized, along with the need for proper measures to control any mishap and curb its negative impact.

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Ethics and Sustainability
Self-Reflection Report
17-Mar-18
(Student Details: )

Ethics and Sustainability
Table of Contents
Overview..........................................................................................................................................3
Background......................................................................................................................................3
Sustainability issues in oil and gas industry....................................................................................4
Conclusion.......................................................................................................................................6
References........................................................................................................................................8
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Overview
Sustainability refers to the socio-ecological process which is characterized by pursuit of a
common goal or a common ideal. Sustainability is the target goal of humanity regarding the
human ecosystem. The concept which is of more significance here is sustainable development,
which is a holistic approach and covers the temporal processes which lead to the end point of
sustainability (Mikkelsen & Langhelle, 2008). The oil and gas industry holds emphasis in the
daily lives of people, as it provides the products for cooking food, machines, commercial
products like fertilizers and plastics, even pharmaceuticals and but of course oil and gas (Tom,
2012).
In this discussion, a reflection has been presented on the sustainability issues in oil and
gas industry, which goes against the principles of corporate social responsibility. The theme here
is to show that there are serious issues in oil and gas industry, which I would not have even
imagined about, had this course not required for finding issues in the manner organizations or
industries conduct business.
Background
As stated earlier, oil and gas industry touches some or other aspect of life of a person.
This is the reason why the negative impact of this industry caused over the environment poses a
huge threat towards sustainable development. I had never paid attention to the workings of oil
and gas industry and had never even imagined ill-effects being caused from this industry.
However, when I started searching for ethical issues in businesses, I came across the incidents
which happened in Deep Horizon oil spill and the companies like BP and Exxon posing a threat
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on the environment due to the activities which were being undertaken by them (Ferrell, Fraedrich
& Ferrell, 2016). The incidents of oil spills, fracking and the other activities are running the
environment. They not only harmed the environment, but also the lives surrounding and
dependent on environment (Noland & Anderson, 2015).
In order to focus on this issue, I started searching for such incidents taking place in
Australia. To my shock, I came across the 10,500 litre spill which took place back in April 2016,
which was kept a secret. The matter was also important due to the matter being kept a secret by
the regulators and the details of the culprits remaining a secret till date. So much protection and
secrecy was present in this matter, which led to the questions being raised on the reasons behind
such secrecy (Slezak, 2017).
Sustainability issues in oil and gas industry
Due to the rampant disregard given by the oil and gas industry, across the nations, the
stakeholders have to bear the most brunt. In the focus of the oil and gas industry to earn profits,
they disregard the environment and hurt the different stakeholders. There are different
stakeholders who are affected due to such actions of the industry. The prime one is environment,
which is degraded. In terms of sustainability, the oil and gas industry is leaving a very polluted
and damaged environment, which would not be able to sustain life forms in the future, due to the
rampant disregard being given to it. This includes the marine life, the water bodies, the flora and
fauna, the wildlife and even the air we breathe in (Anis, 2015). The next stakeholder group is the
individuals who are dependent on environment, to live and to earn their livelihoods. When the oil
and gas industry, takes decision like being indulged in fracking, as a result of which, the marine
life is depleted, the individuals who depend on marine life, for their livelihood and for their food
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stock, have to bear the consequences of the business practices of this industry (Chandrasekaran,
2016).
Another substantial stakeholder group is the investors. When the companies in oil and gas
industry undertake such activities, which case oil spills or other incidents, they are imposed with
penalties. The company loses its reputation and instead develops a negative image of being an
unethical company. Even the public relations do little to help in such situations and are not able
to mend the negative image which such instances create in the mind of the investors and that of
the general community. This results in the company becoming an unfavourable choice to do
business with, losing its investors. And the old investors lose their money, due to plummeting of
stocks and business of the companies (Morris, 2010).
The employees also become a stakeholder group as their expectations, conduct and
morale is brought down, due to the companies with which they associate, being indulged in
unethical acts. This makes it difficult for them to continue being loyal to the company. The
situation is worsened, as the company then losses their talent and also faces difficulty in hiring
tiring, resulting in them being made a stakeholder of their misdeeds. Again, when such happens,
the company loses its corporate reputation owing to the unethical branding by its acts. Even on
an overall basis, the present oil and gas industry is struggling to maintain ethical branding, and is
becoming growingly infamous for its unsustainable acts (Werner, Inkpen & Moffett, 2016).
There are different legislations which govern the onshore and offshore activities
undertaken under the oil and gas industry. These are based on the states or territory where such
instances take place. For instance, in NSW, there is the applicability of Petroleum (Onshore) Act
1991; Petroleum (Onshore) Regulation 2007; Petroleum (Offshore) Act 1982; and Petroleum
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(Offshore) Regulation 2006. There are also regulatory bodies which are meant to regulate such
instances, and these again vary based on onshore and offshore activities (Smith & King, 2013).
Even though these legislations are quiet detailed and stringent, the only problem is that the
culprits are not made public. The example of April 2016 spill is evidence of this act. In order for
the legislation to be effective, there is a need to put provisions, where the guilty are named. This
would enable the stakeholders in knowing that the companies they associate with, is ethical or
not. This is also required for a strict eye to be placed on the workings of such entities, in order to
ensure that they do not indulge in any such action, which would cause such instances to be
repeated. Though, the action undertaken by the regulatory bodies, in timely manner, does show
the efficiency of these legislations.
Moving forward, it is crucial for the companies involved in the oil and gas industry to
work in a manner where they propagate the concepts of corporate social responsibility and
sustainability. It is crucial that any such action which can pose a threat on the different
stakeholders groups identified earlier, and even the ones which have not been discussed here, are
not undertaken by the oil and gas industry. Further, where such actions are necessary, proper
measures have to be taken to control any mishap and to curb its negative impact from creating a
ripple effect.
Conclusion
Thus, in the previous segments, the negative impact posed by the oil and gas industry on
the various stakeholder groups was highlighted. In doing so, the instances where such negative
impact had been caused were highlighted, along with the applicable legislations in the nation on
this industry. This assignment was particularly important as it helped me in gaining awareness on
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the unethical acts being undertaken by the oil and gas industry, which threatens sustainable
development and corporate social responsibility.
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References
Anis, M.D. (2015). Issues Impacting Sustainability in the Oil and Gas Industry. Journal of
Management and Sustainability, 5(4).
Chandrasekaran, S. (2016). Health, Safety, and Environmental Management in Offshore and
Petroleum Engineering. West Sussex: John Wiley & Sons.
Ferrell, O.C., Fraedrich, J., & Ferrell, L. (2016). Business Ethics: Ethical Decision Making &
Cases (11th ed.). Boston, MA: Cengage Learning.
Mikkelsen, A., & Langhelle, O. (2008). Arctic Oil and Gas: Sustainability at Risk?. Oxon:
Routledge.
Morris, K.M. (2010). Guide To Direct Investing In Oil & Gas. New York: Lightbulb Press, Inc.
Noland, D.P., & Anderson, E.T. (2015). Applied Operational Excellence for the Oil, Gas, and
Process Industries. Oxford: Elsevier.
Slezak, M. (2017). Australian oil well leaked into ocean for months – but spill kept secret.
Retrieved from: https://www.theguardian.com/environment/2017/may/18/australian-oil-
well-leaked-into-ocean-for-months-but-incident-kept-secret
Smith, A., & King, J. (2013). Oil and gas regulation in Australia: overview. Retrieved from:
https://uk.practicallaw.thomsonreuters.com/3-531-2165?
transitionType=Default&contextData=(sc.Default)&firstPage=true&bhcp=1
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Tom, R. (2012). Integrated Operations in the Oil and Gas Industry: Sustainability and
Capability Development: Sustainability and Capability Development. Hershey, PA:
Business Science Reference.
Werner, S., Inkpen, A., & Moffett, M. H. (2016). Managing Human Resources in the Oil & Gas
Industry. Oklahoma: PennWell Books.
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