Issues Impacting Sustainability in the Oil and Gas Industry

Abstract

This research paper explores the concept of sustainability and the role played by O&G industry in achieving sustainable development. The authors bring a rational approach in defining the key issues for the O&G sector that affect sustainability as well as try to devise the inherent risks as well as mitigation approaches adopted by these companies. Sustainability is a topic gaining fast repute today. As new conventional oil and gas sources decline, unconventional sources, including shale gas in the US, oil sands in Canada, coal seam gas in Australia, and deep-water offshore wells in Brazil, West Africa and Asia have been identified as key areas with significant reserves potential. Despite the growth potential, sustainability risks such as climate change, safety risks, and community disagreements exert pressure on the economic feasibility of these opportunities. The three components of sustainable development: economic, environmental and social, often referred to as the ‘Triple Bottom Line’ or TBL, can be used in evaluating a company’s performance in financial, environmental and social dimensions. These three dimensions of sustainable development, as explained by John Elkington and adopted by Shell’s first sustainability report in 1997, are also commonly referred to as the 3Ps: People, Planet and Profit. The paper also focuses on analyzing the various threats that could obstruct sustainable development being carried out by companies in the oil and gas industry. The importance of sustainable economic growth with regards to the oil and gas industry has also been highlighted. The 3Ps explained above can be used to categorize the key issues/risks that impact sustainability. The researchers concluded that the sustainability programs followed by oil and gas industry are not satisfactory; however there is strong evidence of improvement in near future. Towards the end, the researchers have tried to list the Strategies and Methodologies for enhancing the effectiveness of sustainability strategies and programs for the sector.