Provide discussion related to the oil and gas companies challenges and benefits as they divert their energy sources into renewable energy, and what exactly sustainable development means to them.
Oil companies strive to meet their present needs without compromising future generations abilities for meeting their needs (Barrow, 2006, p. 112) To ensure sustainable development; oil companies have a high degree of concern on the strategies applicable to reduce the adverse effects caused by their operations on the natural environment. The effects of oil and gas production on the environment increases day to day and therefore, should get responsibly managed. Environmentally conscious operations need to be applied so as to promote effectiveness in the business operations all over the globe (Margerum, 2008, p. 500). The purpose of this paper is analyzing alternative means available to ensure the sustainable development of oil and gas industries, and evaluate the measures taken by government and consumers to strengthen sustainability in the oil and gas production industry.
Effects of Energy Production on the Environment
Oil production has adverse effects on the environment, and this remains to be the primary cause of climate change and global warming (Smit & Pilifosova, 2003, p. 9). The following are various adverse effects of energy generation to environmental sustainability.'
Oil and gas production gets accompanied by the emission of harmful gasses such as carbon monoxide, methane, carbon dioxide, volatile organic carbons, and nitrogen oxides. The increased emissions of these toxic substances to the environment results in depletion of ozone layer and this is a threat to the human ecosystem (Redcliff, 2005, p. 220). Establishment of manufacturing sites requires cutting down of trees. Deforestation results in climate changes and an overall cause for global warming a hazard which are harmful to human and animal life.
Socio-economic and cultural effects
Exploration operations in the oil and gasses production induce detrimental effects on the economic, social, and cultural changes in the environment. Waste disposals are harmful to people and animals health while the establishment of manufacturing sites leads to dislocation of individuals from their habitat (Barbier, 1987, p. 108). Transportation systems while moving oil products from one place to another causes noise and accidents thus creating adverse effects on the natural resources. Oil production results to climate changes, and this adversely affects the normal living conditions of people.
Exploration and production operations produce to aqueous waste streams. Poor effluent disposal mechanisms of sewerage water, drilling fluids, domestic wastes, and oil spills in aquatic environments is fatal (Brungs, 1973, p. 2180). Disposal of toxic constituents of the production process in water adversely affects the life of marine organisms. Ocean, lakes and seas discharges of water based mud and cuttings negatively affect benthic organisms from their discharge.
Oil and gas production impacts negatively on the environment. Plants and animals may be directly affected by environmental variations caused by the consequences of oil and gas production. For example, improper disposal of oil effluents in water leads to the death of fish and other animals living in water (Camargo & Alonso, 2006, p. 833). Explosives in the air and soil lead to the ultimate death of animals who survive in that environment. Direct effect on the ecology has secondary implications for the predators, if this gets not controlled, then a potential long-term effect on fauna and flora may be induced.
Physical disturbance from construction and environmental contaminations from spillage and leakage of oil and gas while being manufactured or transported has a great capacity to damage the habitat (Barrow, 1991, p. 2). Poor design of building sites leads to soil erosion due to poor soil structure and topography. Once trees are cut down, land erosion takes place resulting in increased siltation and habitat damage (Camargo & Alonso, 2006, p. 840). Habitat loss reduces the environmental capacity to support any vegetation and wildlife an effect which results in secondary ecological problems.
Benefits of Environmentally Sustainable Development
Environmental sustainable development conserves and enables the community’s natural resources to maintain total life quality. Sustainable development requires effective integration of environmental, social, governmental, and economic considerations in decision-making processes (Pearce & Atkinson, 1993, p. 106). Good environmental management meets the demands of the current ecology without interfering with the ability of future generations. Environmental management for sustainable development has numerous advantages to the ecology some of which include:
- Better and efficient utilization of resources by establishing policies and procedures that reduce unnecessary expenditures.
- Running an excellent environmental management system that encourages better regulatory compliance about the environmental operations.
- The easier raising of investment funds from the banks and other financial institutions to control the environmental effects.
- Environmentally sustainable development assists a company to adequately market their oil and gas products in the market and thereby establishing a firm stance in the market.
Strategies for Ensuring Sustainable Development
Energy crisis threatens the ability to achieve sustainable development for energy producing companies. Addressing challenges that face global sustainable development in oil industries, a worldwide development agenda should be formed to facilitate transformation in the way oil and gas products get produced (Pearce & Atkinson, 1993, p. 108). Another important issue to get addressed is designing sound strategies that govern how management of natural resources in the business environment should get conducted.
Inclusive strategies and technology innovation
Transformational actions need to get taken by developing inclusive and sustainable development policies that caring for all stakeholders' interests in the company. Collaborative strategies should be action oriented and addressed in a method that encourages significance changes in oil production processes (Hekkert, et al., 2007, p. 432). The business environment suffers from negative externalities which result from the actual production of energy products; examples include environmental pollution and population inequities (Barrow, 2006, p. 113). Technology helps in enhancing this sustainable development by factoring in all the crucial changes in the consumption patterns, and creating necessary technological phases that reorganize the entire economy.
The primary goals for sustainable development are poverty alleviation, promotion of sustainable consumption patterns, efficient production, and protection and management of natural resources. Environmental management for sustainable development should be designed to bring a substantial reorganization in the natural environment as well as coming up with strategies that favor society's lifestyles (Redcliff, 2005, p. 225). The global sustainable development changes involve significant price adjustments, firm dedication to natural environment preservation, the introduction of environmental accounting, and strengthening of public spheres of the real economy.
Carrying out sustainable production and consumption
Management authorities should intensify and make it mandatory for producers to apply for cleaner production patent rights that increase efficiency in the production of natural resources as well as decreasing emission of effluents and pollutants to the environment (Barrow, 2006, p. 118). Establishing laws which discourage disposal of harmful effluents to the environment protects the quality ecological environment and people's health for a long-term sustainable development.
Production companies should develop an environmentally friendly consumption strategy or culture. Gradual changes should be made to implement green labels that promote adjacent markets and sensitive community initiatives for sustainable production and consumption (Smit & Pilifosova, 2003, p. 9). Enhancing adequate management for a sustainable environmental development requires the application of policies aimed at limiting unethical consumption, production, and disposal behavior should be made mandatory.
Development of clean and renewable energies that maintain sustainable economic growth
Management should develop green growth models that encourage the establishment of low carbon economy in the business environment. Developing clean and renewable sources of energy helps in establishing a cheap and adequate consumption strategy of power (Camargo & Alonso, 2006, p. 844). The oil and gas industries should gradually implement market-based energy charges that factor in an improved ratio of clean and renewable energy. It is favorable to come up with a system of environmental accounting that add value in ensuring development and sustainability in the natural environment.
The companies should establish an environmentally friendly technology that makes it possible to pursue sustainable development in the industrial sector with the assistance of a well laid professional based structure (Adams, 2003, p. 312). The company should come up with proactive actions that can reduce industrial pollution and develop the green industry to provide priorities in their development agenda of the business environment (Pearce & Atkinson, 1993, p. 103). Transformations channeled in the environmental industry results to the general improvement of the company's investment sector.
Consumer Actions for Sustainable Development
Consumer markets businesses remain the primary challenge to energy industries sustainability in the environment. Users of oil and gas companies adopt business policies that assist them in sustaining both natural and human resources in a rapid phase. Consumers of energy products face the challenge of establishing sustainable corporate practices to useful in delivering services that may curb this problem (Young, et al., 2010, p. 20). Consumer markets of the firms try to come up with initiatives, measures, and adequate reporting procedures that strengthen sustainability in the development of oil and gas enterprises as discussed below.
Climbing the corporate agenda
Consumers of oil products have made a step forward to enhance the company's growth by taking up business plans to raise their opinions on the measures applicable in reducing environmental pollution. Despite harsh economic environment depressions that force the oil industry to focus on the immediate goals, consumers create plans that make this strategy operate on a long term basis (Young, et al., 2010, p. 31). Customers raise concerns on how the companies manage risks associated with sustainability issues, something which impacts significantly on the overall conservation of the environment.
Clients of oil and gas companies adopt sustainability steps that further brand improvement in a manner that influences the sustainability agenda of the millennium development goals. Consumers remain to be the leading influencers of market trends for the companies, and this is important (Young, et al., 2010, p. 30). Customer tastes, preferences, and demands dictate which oil products the company should deliver in the market, meeting customer needs makes a company gain a competitive advantage over the other businesses. Therefore, consumers employ a sustainable objective for energy industries to thrive in the market.
Actions Taken by the Government to Strengthen Sustainable Development
Concerns for reducing oil production effects on the environment and human health remains a point of debate all over the world. Sustainable business climate development involves the application of thriving principles on the enterprise’s day to day operations. The government is one major stakeholder in the industry having unremarkable interests on the performance of the business (Redcliff, 2005, p. 224). For effective reduction of the hazardous effects of oil and gas production, the government takes necessary actions that may help strengthen the business’s sustainability in a going concern as discussed below.
Good government develops and maintains strategies, policies, and programs that help companies to achieve their set goals. Through governmental assistance, oil companies get enabled to make informed decisions that factor in the interests of all their stakeholders (Smit & Pilifosova, 2003, p. 9). The government maintains a democratic system that promotes business sustainability in the environment. Good government supports sustainable economic strategies that enhance the establishment of a healthy business climate.
The government plays major roles in establishing sustainable development of firms in the ecological environment some of which include:
- The government attempts to fund the basic science infrastructure required by the companies for renewable energy and renewable resource technology.
- The government establishes tax systems and other financial tools. Taxes get charged to ensure that businesses carry out only activities which they are entitled to operate. The government encourages companies to invest in renewable energy and other sustainability concepts for the oil industries.
- The government establishes regulations governing the use of land by business institutions in attempts of the minimizing destruction of ecosystems (Watson, et al., 2010, p. 33). The government sets and enforces environmental laws to protect the environment and maximize resource efficiency.
States require advanced sustainability policies for business development. Oil companies have poor strategies for implementing their investments in renewable energy resources sector. Poor strategies remain to be a significant threat that creates difficulties in promoting sustainable developments in the business environment. This results in the release of waste effluents to the environment and thus posing a major challenge for climate change and at extreme circumstances leading to global warming (Redcliff, 2005, p. 227). Climate changes pose major sustainable development challenges for it affects the agricultural sectors, aquatic resources, food security, natural disasters, and other concerns of sustainable development.
Government actions, effective regulations and enforcement, and inclusive planning remain critical to sustainable development. Promoting sustainable development needs the legislative authorities to formulate laws that put the public sector services at heart. Consumer actions may act as a reliable source for enhancing a sustainable development of oil companies in the business environment (Smit & Pilifosova, 2003, p. 9). Therefore, actions should be taken to mitigate climate change and reduce greenhouse gas emissions as well as coming up with strategies that the oil industry can apply to adapt to climate changes in case they happen in future.
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