Imagine 30,000 Amazonian tribesmen carousing along the street, waving their spears and whooping at the top of their voices in celebration.
They’d taken the petrochemical company Chevron to court and won huge and unprecedented damages.
For over twenty years Texaco, now a Chevron subsidiary, had dumped hazardous waste from its oil drilling enterprise into open lakes of effluent.
Toxins seeped into the groundwater and poisoned over 1,500 square miles used to live and farm by local indians and settlers. Now they’d got payback.
The court case is, in fact, still ongoing and even if they win its unlikely the entire population will travel to Chevron’s headquarters to celebrate. It would, however, send shock waves through the industry.
Dirty … but someone’s got to do it
Oil extraction relies upon cocktails of chemicals known as drilling muds. These are pumped continuously to the drill bit and back to keep it cool, lubricated and cleansed of drill cuttings.
Whenever local laws allowed, many oil companies used simply to dump these drill muds when finished with, rather than putting them through an expensive decontamination process.
While this is not necessarily the case anymore, the fact remains that oil drilling uses an extremely hazardous by-product to achieve results. How is this reported in the CSR sections of company websites?
Dirty … but someone’s got to report it
There are five Oil & Gas businesses in the FTSE 100: BP, Royal Dutch Shell, BG Group, Tullow Oil and Cairn Energy.
Three of these do not report drilling muds as a hazardous by-product of their operations. Cairn Energy has no CSR section to its website and Tullow Oil doesn’t publish figures on how much hazardous waste it produces.
BG Group does publish figures on hazardous waste but with no year-on-year comparison, leading to a frustrating hunt through the website in order to achieve any comparison.
Taking the Long View
Royal Dutch Shell’s website follows one of the golden rules of good website design: “keep it clean, keep it simple”.
It has a single simple page to deal with waste disposal which acknowledges drilling muds as hazardous waste.
It also has ten years’ worth of data of their hazardous waste production and a handy graph to help you digest the data quickly and easily.
The availability of this data shows it pays to take the lead in CSR reporting. With over ten years’ worth of figures they can demonstrate a commitment to environmental responsibility.
It makes their competitors, with only a few years’ worth of data, appear as though they’re uncaring and only doing this because regulations oblige them to.
More data, more transparency
BP also acknowledges that drilling muds (or fluids, as it calls them) are hazardous. In addition, it makes three categorical statements which are far bolder than its competitors:
- for onshore drilling: “our goal is to eliminate the onshore disposal of drill cuttings and fluids to pits and landfills”
- for offshore drilling “we seek to eliminate the discharge of … fluids, cuttings contaminated with such fluids and discharges of all other chemicals”
- in general: “our goal is to manage waste in a manner that will not pose harmful risks to the workforce, local communities or the environment”
The Waste and Water Management page is well laid out and contains another handy graphical representation of the company’s year-on-year waste production. This goes back almost as far as Royal Dutch Shell’s.
Where BP stands head and shoulders above the others is its associated tools. These allow you to drill down to find year-on-year figures for the discharge of drilling muds. They’re the only company to provide this level of detail.
Looking to the Future
All this may seem very arcane. Most industries produce some kind of hazardous waste, why pick on drilling muds specifically?
The answer is Peak Oil. As conventional wells dry up oil companies are starting to look at less accessible sources, such as tar sands and oil shale. Extracting oil from these sources is not only more expensive but also more polluting.
Companies which are not on top of their hazardous waste reporting may soon be in a situation where investors start to withdraw their support as the extents of their liabilities is deemed to be opaque or even evasive.
Conversely, any company which is on top of its hazardous waste reporting should find it easy to maintain that transparency and attract the increasingly sustainability orientated investor of the future.
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