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Why Oil and Gas Companies Should be More Transparent

Fracking Pipe Roads
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When I was a child, I was really moved by the Hollywood blockbuster Erin Brockovich.
 
The movie starred Julia Roberts who played an inexperienced legal assistant who helped to file a case against an electric and gas company, which was allegedly contaminating nearby drinking water supplies.
 
The movie, based on real events, shocked me. I didn’t understand how it could be so easy to contaminate water. But more so, I didn’t understand how companies could hide so much information from the public.
 
Thinking back about that movie, it made me wonder. If oil and gas companies were more transparent about their activities, could a lot of problems be prevented?
 
It has been done before
 
Singapore
 
Recently the Singapore Exchange (SGX) which includes oil and gas companies, made sustainability reporting mandatory.
 
The Association of Chartered Accountants (ACCA) held a sustainability roundtable dialogue about the benefits of sustainability reporting and transparency and predicted a significant number of benefits. A number of sustainability experts believe that sustainability reporting will:
 
1) Help companies think about and define their long term visions and raise awareness of sustainable practices in their organizations
2) Lead to cost reduction for companies on several aspects of operations, particularly in increasing efficiency
3) Increase ability for companies to communicate with investors regarding its social impact and KPIs
 
If more oil and gas companies were more transparent, couldn’t they also reach these goals?
 
United States
 
Recently, American drilling services company Baker Hughes proudly vowed that it will be transparent and declare 100 percent of the chemicals it uses in its fracking operations.
 
This is the first company in the US to do this. (Currently federal laws allow fracking companies to not disclose all of the chemicals they use.) Derek Mathieson, Baker Hughes’ chief strategy officer, believes transparency is important: “Introducing greater transparency about the chemicals used in the hydraulic fracturing process and protecting the ability to innovate are not conflicting goals.”
 
This makes sense as company transparency helps to build trust within a community. It also allows people who are affected by fracking to take precautions to protect themselves.
 
Sure, being transparent may lead to higher initial costs if more sustainable processes need to be put in place, but in the long run it makes more sense for the environment and the economy.
 
What is stopping transparency?
 
There are two sides to the coin when it comes to transparency.
 
The oil and gas industry do not agree that companies should be transparent as they feel it adds a layer of “regulation that is unneeded and cumbersome.”
 
The Independent Petroleum Association of America believes that fracking is safe. In fact they even funded a project called TruthLand Movie and state on the website that: “99 percent of the fluid is composed of water and sand, and the small fraction of what remains includes many common industrial and even household materials that millions of American consumers use every day.”
 
A lobbying group, Energy in Depth, believe that if transparency laws are enforced: “domestic gas production (will) drop by 245 billion cubic feet per year along with four billion dollars in lost revenue to the federal government.” They also believe it is an “unnecessary financial burden on a single small-business industry, American oil, and natural gas producers.”
 
Oil and gas company transparency is a highly complicated topic. On one hand tightening laws could potentially lead to immediate financial losses, but on the other hand if nothing is changed, it could lead to even longer term financial and non-financial losses due to adverse health effects and environmental damage.
 
It takes one company or person to stand up for change. Baker Hughes has started the ball rolling. Who will be the next oil and gas company that will stand up for transparency?
 

0ba8618 Aisha Tejani
Aisha Tejani is a contributing writer of Castagra Products, a storage tank and wastewater coatings manufacturing company that is highly acclaimed for its sustainable coatings and cold weather coating applications. Castagra products are NSF-61 certified and are used by the world’s top water and wastewater contractors.