Energy Ink

Is industry responsible enough?

Not surprisingly, one environmentalist thinks the oil and gas sector must do more

Guest Post

March 24, 2011

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Attending industry-sponsored awards ceremonies can be a nauseating experience for working journalists. The self congratulatory vibe and backslapping that tends to permeate these events leads to a lot of eye-rolling moments for members of the fourth estate, who know they are invited to these things (and fed for free) in hopes they will write glowing stories about the event.

On Wednesday night, the Canadian Association of Petroleum Producers (CAPP) held its 2011 Responsible Canadian Energy Awards. To the industry’s credit, they kept the backslapping to a minimum. But I don’t want to write about that today. Instead, I’ll focus on a couple of points made by Nature Conservancy of Canada (NCC) president and CEO John Lounds, who delivered the event’s keynote speech.

While Lounds was very gentle in the way he went about it, he made it clear that industry needs to do more – lots more – in order to be considered responsible energy producers by Canadians.

The social license to grow

We often hear industry talk about obtaining its social license to operate. But Lounds thinks it must also obtain its “social license to grow.” What does this mean, exactly? Well, as the oil patch tries to tap into, for example, Alberta’s 169.9 billion barrels of oil sands reserves, it is going to get harder to convince the public that the rewards are worth the risks.

This is important because more and more of the hydrocarbons the industry will be chasing in the coming years will be from unconventional sources and places – the oil sands, shale gas, the Arctic. Accessing these resources will be technologically challenging and environmentally risky. If the public isn’t kosher with those activities, opposition will grow, governments will get nervous and work could get shut down.

Lounds didn’t offer any specifics on how the industry can gain its social license to grow. But he did indicate that industry needs to be more open about what its does, and what it plans to do, if it wants to obtain its license.

Environmental net benefits

The second theme of the talk was to challenge the petroleum sector into thinking differently about the environmental impact of its work. Rather than use the standard of no net loss to the environment from oil and gas exploration and production, Lounds says the industry should be looking for its work to provide net benefits to the environment. “What are you doing for land and nature?” Lounds asked the packed crowd at one point.

One thing Lounds thinks oil and gas companies could do is take five cents from the profits made from selling a barrel of oil and use it towards conserving land within Canada. The NCC is in the business of conserving ecologically significant land from development, so this practice would obviously jibe with its goals. I’m not so sure it works for the oil and gas sector, which tends to frown on lands being off limits to development.

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One Response to “Is industry responsible enough?”

  1. Andrew Stiles says:

    To make a clarification to your last line, the Nature Conservancy of Canada is not opposed to oil and gas development and recognizes the fact that mineral holders have the right to develop their resources. Where NCC owns the land, they ask for high environmental standards and work to find win/win development options.