Every week now for the past few months I read and hear more information on how oil and gas companies are being driven to become more sustainable and environmentally conscious. Contrary to what some may think, this drive isn’t coming from the EPA, DEQ, RRC, OCC, DEP, or [insert your regulatory agency here]; these changes are being driven from someone much more capable of forcing change in an organization: the investors. The most recent example of this is a Houston Chronicle article by James Osborne titled “Oil companies rush to prove sustainability bona fides, as investors circle” (see link below). The article, in my opinion, does a great job of exploring how investors are taking a more active approach in oil and gas sustainability, and how oil and gas companies are beginning to listen. Here are a few key takeaways:
- Oil companies can no longer ignore the ESG community as issues like climate change and social justice are becoming more front and center for investors
- Investment firms who provide capital for the industry are taking a more active approach in ESG issues for oil and gas
- Some investors are concerned that oil and gas companies might simply be marketing sustainability, without actually striving to become more sustainable or environmentally friendly
- Organizations like the Sustainability Accounting Standards Board (SASB) are working to develop metrics for investors to use when comparing companies against one another
- Data analytics firms are assisting investors in sifting through the information that is being published, helping investors determine what is legitimate, and what is simply messaging
- And finally, oil and gas companies really love oil and gas, and don’t generally like to discuss other business models
Fortunately for the oil and gas industry, there is a lot of room for improvement when it comes to sustainability and environmental performance if it is properly driven down the chain. Getting oil and gas to buy in to sustainability is not simply a matter of getting the C-suite on board, but the overall mentality of the individual employee and consultant must be changed. While some of this is being addressed through natural attrition, aka “the great crew change,” it will still be necessary to drive change through leadership. Waste management in oil and gas, for example, is often a process that has been relegated to the field level employee. In general, as long as it’s legal and cheap, that’s what is going to be done. But every day, waste management is becoming a more material issue to investors, and oil and gas companies will have to be more diligent in how they manage their wastes.
Drilling waste, or drilled cuttings, is the largest solid waste stream generated by upstream oil and gas. An estimated 392,000,000 bbls of drilling waste were generated in the U.S. in 2014 alone, comparable to that of coal ash. Like coal ash, E&P wastes such as drilling wastes are exempt from federal regulations under the Resource Conservation and Recovery Act, but the USEPA has not reviewed and made a determination on E&P waste since 1988, long before the proliferation of unconventional drilling and oil-based and high performance muds. Many advancements in drilling and drilling fluids have been made in the past three decades, yet old and outdated regulations are still in place. EPA was recently sued by several ENGOs to review the E&P waste exemption, which they have failed to do nine times in the past thirty years.
Scott Energy has been managing drilling waste for over 20 years. We are a professional engineering firm that takes a scientific approach to managing drilling wastes, providing real, sustainable solutions to oil and gas companies. To learn more about how Scott Energy can increase your sustainability, contact us today at firstname.lastname@example.org.
This article was written by Jeffrey Tyson, P.E. © 2018 Scott Energy Technologies LLC