Environmental Engineering Reference
In-Depth Information
no emerging leadership on these issues. Some op-
portunities may lie in collective efforts to establish
the conditions for a low carbon transition. This
type of collaboration does exist but are restricted to
some marginal and non-strategic aspects. Whereas
technical innovation will need to remain in the
hands of companies as a source of differentiation,
they may find new benefits in gathering efforts
around eco-conception and collective efforts to
foster supply-chain transformation to make eco-
designed products the norm. New models can also
rely on a transition to a “functional economy”
(where the sale relates not to the product but to
the usage), with new business models to invent
around the concept of “t-shirt leasing' that will
allow the companies to master the entire lifecycle
of the products and impact more radically the
consumption behaviours.
The fact that oil companies control substantial
technological, financial and organisational re-
sources is a motive to identify them as a potential
key lever for the transformation of the whole
energy chain. Climate change is however an issue
that has provoked strong controversy within the oil
industry. Oil companies have adopted contrasted
reactions as regards their responsibility towards
climate change and the ways to address this issue.
Many oil companies in the US have strongly lob-
bied their government in the late 90s ending with
a non-ratification of the Kyoto protocol.
This raises several questions:
•
What are the factors that pushed compa-
nies to diversify or not their core-business?
•
How did they embed the low carbon
economy challenge in their diversification
process?
•
What is companies' perception of oil fu-
ture? How does it impact their vision on the
need to reconfigure or not their businesses?
CASE STUDY ENERGY
This case study will focus on the energy sector,
in particular on the upstream industry (oil and
gas companies). Environmental impacts of oil
companies encompass:
•
Is their market receptive to a low-carbon
transition? Does it provide a relevant driv-
er to transformation?
The Emergence of Environmental
Concerns in the Oil Industry
•
Direct impacts related to Exploration &
Production (E&P) and petrochemical ac-
tivities: Greenhouse Gases (GHG) emis-
sions due to flaring10,
10
, venting and refining
processes but also air, water pollution and
ecosystems damages due to the exploi-
tation of oil shale reserves or in the oc-
currence of accidents (oil spills, pipeline
corrosion…)
The Exxon Valdez oil spill in 1989 was decisive
to initiate reporting on environmental behaviors in
the US (starting with Exxon and Texaco), followed
a few years later by companies like BP and Shell.
The impact on environment has become increas-
ingly contentious in Europe, peaking with the Erika
oil spill (Total in 1999). The divergent behaviors
of companies to more or less aggressively tackle
broad environmental issues can be explained by
a large set of factors including corporate his-
tory of profitability and geographical location,
organizational factors, market assessments, or
stakeholder involvement (Kolk and Levy, 2001).
The authors show that a US-European comparison
presents differences in the overall socio-cultural
•
Indirect impacts: of CO
2
emissions linked
to the consumption of petroleum products
in the economy. Indeed, the combustion of
fossil fuels is omnipresent to sustain the de-
velopment of our economies, in all sectors
(heavy and manufacture industry, power
production, transportation, agriculture…).
