Corporate social responsibility has become a prevailing term when examining the responsibilities of businesses, beyond economic and legal obligations, in making decisions. The degree of ethical norms the oil and gas industry is abiding by affects not only the consumers, who may suffer from high petrol prices, but also the environment, such as from oil spills. This paper will first describe the situation of the oil drilling programme in Arctic waters, which has raised a controversial dispute. In addition, its impacts on stakeholders will be discussed.
Beyond concerning the key stakeholders, the ethics of Shell Petroleum in its new project are being reviewed by justifying its code of conduct. Finally, three approaches are suggested along with evaluation. The case 1 The situation and key facts In July 2012, Royal Dutch Shell, one of the oil giants, implemented an offshore drilling project in the Arctic Ocean’s Chukch and Beaufort seas. Peter Slaiby, the vice-president of Shell Alaska, outlined that the hydrocarbon reserves in the Arctic contained nearly 27 billion barrels (Biger, 2012).
However, the issue was disputed by Greenpeace (n. d.) in a campaign named ‘Save the Arctic’ which claimed that oil spills could not be entirely avoided. The Pew Environment Group NGO (n. d. ) explains that the hostile weather conditions double the manual error significantly. Moreover, for geographical reasons, no connections like roads, airports and ports could help buffer the influx of equipment and personnel. Therefore, a blowout would be a catastrophe (ibid). 2 The key stakeholders and their involvement Different groups are interested in and concerned about the Arctic drilling issue in different ways.
According to the Pew Environment Group (n.d. ), since Arctic people, such as Inupia Eskimo and Gwich’in, hunt bowhead whales as a sacred hunting culture and use marine sources for their subsistence, there is a direct link between the health of indigenes and the quality of the water which is vulnerable to oil spills (ibid). Besides, Shell shareholders are interested in the potential profit brought by the drilling project while weighing the cost. For example, Shell’s profitability in new reserves depends on the prevailing oil prices and drilling costs, like criticism from environmentalists destroying the company’s reputation (Birger, 2012).
Moreover, the regulation authorities like the Department of Interior and the Environment Protection Agency are in charge of amending required regulations (Walsh, 2012). Furthermore, for consumers, an increase in the supply of petrol helps lower the oil price, but they might suffer from deteriorating air quality due to accelerating climate change (ibid). 3 The ethics and values of the case Shell’s code of conduct (2010, pp. 4-6) states that the projects they undertake are innocuous to people and minimise disruptions to the community.
Nevertheless, the Pew Environment Group (n. d.) maintains that Arctic habitants could undergo a social and economic upheaval from a great amount of migrating workers and equipment. Not only does it threaten indigenes’ subsistence way of life, but also indigenous people’s immune system may not be capable of coping with the exotic bacteria brought by outside workers. Moreover, Shell promised in their code of conduct (2010, p. 6) to preserve the environment by maintaining biodiversity and lowering emissions. However, the Pew Environment Group (n. d. ) disputes that the rigs overlap the vital seasonal migration routes for marine creatures.
This evidence suggests that the company has not taken care of the wildlife. In addition, the NGO Clean Air Task Force (CATF) (cited by Walsh, 2012) reveals that methane and black carbon will be significantly emitted once drilling starts. More importantly, Walsh (2012) indicates that the airborne black carbon aerosol absorbs greater heat, which intensifies global warming. Besides the social and environmental conducts that are being violated, health and safety regulations are also infringed by the pipeline’s operator, Alyeska Pipeline Service Company (cited by Birger, 2012).
It is suspected that corrosion and cracks are likely to occur during winter and, given that the oil will flow more slowly in the pipeline, this may present a greater risk. Solutions As oil exploration in the Arctic creates a dilemma for the Arctic’s conservation work, three possible solutions are suggested and divided into three aspects, which are ‘before oil drilling’, ‘after oil spill’ and ‘respecting the Arctic indigenes’. 1. Solution one In response to minimising the negative externalities before oil drilling, an all-embracing scientific assessment should be provided by federal resources management agencies (the Pew Environment Group, n.d. ).
The complete scientific plan should maintain a deeper understanding of environmental conditions, ecosystem structures and different marine species, as well as the impacts of oil spills. A similar recommendation by the United States Arctic Research Commission (USARC) (2012) suggests that the collected data can be used to tailor an accurate range of operation conditions, which reduce human errors.
Hence it will be possible, at least, to mitigate blowouts. 1. Solution two With the consideration of environment groups, once an oil spill occurs, stopping the flux of crude oil as soon as possible is crucial to minimising environmental damage. In respect to this, Shell Arctic (n. d. ) mentioned that response systems and technologies could be established and enhanced in order to reduce the risk and alleviate the impact. For instance, the in situ burning system is adopted by Shell, which removes free-floating oil on ice-covered waters. By implementing it, it will take a shorter buffering time (less than 5 days) and the effectiveness will be greater (over 90% efficiency manifested) (ibid).
Moreover, the oil spill response systems also consist of the use of chemical dispersants which aim to break up oil into tiny droplets and remove large amounts of oil from the sea’s surface rapidly, as explained in the Shell’s oil spill prevention note (Shell, n. d. ). The same document outlines that a recently developed spray atomiser enables the use of dispersants in 80%-90% ice coverage.
1. Solution three A successful operation requires the consideration of local communities. Accordingly, the Arctic region manager, Robert Blaauw (n. d.), highlights in the company website, ‘Not just for the advancement of our project, but out of respect for those who will live off the ocean long after we are gone. ’ In other words, they want to preserve indigenous sustainable lifestyle. With regard to other stakeholders, this approach has mutual benefits to inhabitants and Shell’s shareholders. By cooperating with local residents, scientists can easily access the traditional ecological knowledge that contributes valuable perceptions of the ecosystem, as well as delivers an antecedent early warning system before environmental disasters occur.
Apart from that, this invaluable information helps analysts compare the data from laboratory studies and daily operations (Shell, n. d. ). Therefore, it reduces the cost of undertaking research. Evaluation 1. Evaluation one Basically, the comprehensive scientific assessment, mentioned in the plans of the Pew Environment Group (n. d. ), could enhance the awareness of the marine ecosystem and the environmental conditions. By utilising this information, serious impact on the Arctic environment and indigenous lifestyle could be largely reduced.
To a larger extent, the plan is a first step to guarantee the drilling programme is responsible towards the environment and local communities. 1. Evaluation two It is doubtful whether the oil spill response measures are reliable and can really ease the environmentalists’ concerns. The first justification is that, while burning the oil, toxic smoke will be created. Under high wind conditions, the poisonous substance will spread. Thus, a wide range of species, which live along the coast and waters, would suffer (The Pew Environment Group, n. d. ).
In addition, although the chemical dispersants sprayer indicated by Shell (n.d. ) is much more efficient than before, the Pew Environment Group (n. d. ) argues that it is a trade-off between short-term detriments to offshore marine life and potential long-term effects on the coastal wildlife habitat if the oil slick reaches the land carried by the ocean currents. Even though oil spill is inevitable and the counter measures do jeopardise the wildlife, it is better than taking no precautionary action. 1. Evaluation three After examining the solutions to the environmental hazards, some suggestions are going to be reached concerning the impact on indigenes.
Shell Arctic (n. d.) claims that the oil drilling programme can create new jobs or other fringe benefits. Yet, as the Pew Environment Group (n. d. ) suspected, it could indeed cause upheaval for local communities and indigenous cultures. For example, the immune systems of the Arctic’s inhabitant might not be able to cope with the exotic bacteria brought by an influx of workers, causing health problems and affecting the way they live. Besides, owing to the oil development, natural resources would be either occupied by the petroleum company or polluted by the drilling process. This would force natives to change their original lifestyle in order to survive.
Conclusion In conclusion, as the Arctic is a pristine and vulnerable environment, not only does the oil drilling programme affect the indigenous subsistence lifestyle, it also lowers the environmental quality and endangers the majority of marine species. Thereby, suggestions are mainly on preparation work and precautionary measures which, however, have different limitations. Rather than taking consideration of pursuing more and more fossil fuel, it appears it would be a better idea for Shell to develop renewable energy to satisfy future energy demands, energy which is environmentally responsible and financially sustainable.